Health care policy experts are largely resigned to waiting until health care reform legislation passes to learn who the next CMS administrator will be, but some are dismayed that 10 months into a new administration, no permanent appointee has been named to lead the world's largest and most influential health care payer.

Following the November 2008 presidential election, some Washington insiders expected the incoming administration would quickly fill the top CMS post (¹ Also see "CMS Administrator Watch: Policy Professionals Consider When And Who" - Medtech Insight, 1 December, 2008.).

"We're talking about an agency with spending that amounts to about 3% of the gross national product," said Tom Gustafson, senior policy advisor at Arnold & Porter. "It seems a little odd that they haven't gotten someone confirmed and in charge over there."

Gail Wilensky, a senior fellow for Project Hope and a former administrator at the Health Care Financing Administration, now CMS, agreed.

"It's a mystery to me why an administration that is placing as much importance on health care and health care reform would allow this much time to pass without having an administrator in place," said Wilensky. "There has not been a confirmed administrator since the fall of 2007."

Wilensky surmised that some early candidates for the CMS post may have reconsidered accepting an appointment once Tom Daschle's name was withdrawn from the Secretary of Health and Human Services nomination.

"Well, that's a long time ago," Wilensky said, "so honestly, I find it completely bizarre" that the CMS position is still open.

While sources interviewed for this story were reluctant to single out top candidates, some names that had been mentioned earlier in the process seem to keep resurfacing as possibilities.

"Some of them seem highly plausible and then turn out to be completely manufactured by rumor," said Sean Tunis, director of the Center for Medical Technology Policy and a former chief medical officer at CMS. "I would say that no new name has surfaced that I would want to add to any potential game of telephone."

Gustafson called the current talk surrounding the search for a CMS administrator an information vacuum.

"Those that are in the know are not likely to be talking to anybody about it, and those who are talking about it probably don't know much," he said.

Pending Legislation Could Be Slowing Nomination

Although a spokesman for HHS could not comment on the status of the timing for an announcement on a new CMS administrator, some observers suggested that the administration could have its hands full with the health care reform debate.

"My instinct would be that the administration is not likely to want to create any issue that could raise any concerns or distract anyone either in Congress or in the public away from getting health care reform passed," said Ed Dougherty, senior vice president at B&D Consulting.

"I would have told you three or four months ago that it was really important to get somebody there," said Tunis, "but it's three or four months later, and nothing catastrophic has occurred, so it seems to me like the timeframe of getting to some resolution on health reform is not so far in the future that it's unreasonable to do it after that."

Tunis added that as time goes on, it becomes more unlikely that a CMS administrator would be named before health care reform is resolved.

AdvaMed Senior Executive VP David Nexon does not think it makes sense to delay the CMS nomination process until health care reform passes.

He acknowledges that at this point, because the Senate Finance committee is "pretty absorbed" with health care reform, it might be difficult to get an immediate hearing to confirm a new CMS administrator.

However, Nexon said, "they ought to be sending the nomination up; there is a lot of clearance and all kinds of things that need to be done after the person is named before they can actually be appointed."

The partisan fighting over health care reform "will probably spill over into the confirmation process" for a CMS administrator, Nexon predicted. He hopes, however, "that both parties would see that there is a strong public interest in getting a qualified, capable administrator confirmed as promptly as possible."

Wilensky does not think waiting for health care reform to pass is necessary to the confirmation process, given that the party in the White House also controls 60 votes in the Senate.

"I would think it would be pretty much a no-brainer that anyone who is a reasonable candidate would be supported," Wilensky said. "Now you not only have a majority, but you have a very strong majority."

CMS May Need Stronger Role In Pending Changes

Some health care policy experts are concerned that there has been no permanent CMS administrator in place to play an active part in policy discussions that will impact the Medicare agency if health care reform legislation is enacted.

"You would think that the kind of caliber you would expect the Obama administration to be able to attract would very much want to have their sleeves rolled up and be part of the solution from as early a stage as possible," said Gustafson.

Wilensky said the administration was able to gain some insight from former HCFA administrator Nancy-Ann DeParle, now director of the White House Office of Health Reform, but "she's not the person who's going to have to actually run the agency."

"So while it's better than if she hadn't been there, it's not like you have the person running the agency there," Wilensky explained.

Still, whoever is named to the top post at CMS will likely be impacted by changes now being debated, including an increased focus on bundled payments, which call for new demonstration projects and pilot programs to support them.

"The Medicare payment systems are still largely resource-based, fee-for-service kinds of mechanisms that don't allow for a lot of flexibility to link reimbursement to outcomes or to value, and yet that is clearly what a lot of policy rhetoric is moving towards - solutions that link payment to outcomes," said Tunis.

Assuming that a health reform bill passes, Tunis said, "there's going to be a lot of new work, additional work, to get those demonstration projects in play, and in the meantime, all the old work still has to happen under the old rules."

Industry Has Interest In Next Leader's Background

The medical technology industry is concerned not only with the timing of the next CMS administrator's appointment, but it also wants to make sure that that person will be industry-friendly.

"Ideally we would like somebody with a policy background but also with an industry background that does have that perspective as well," said Tom Novelli, director of federal affairs at the Medical Device Manufacturers Association.

He noted that with Medicare's growing movement towards bundling and packaging, payment issues are a real concern for the device industry.

"We think it's terribly important to have somebody who appreciates the role of reimbursement or payment policy in fostering or hindering medical progress," said AdvaMed's Nexon.

"We're in a new century of life sciences," Nexon continued, "but to realize that promise, you really need a reimbursement climate that rewards innovation and doesn't penalize it, particularly in this era where cost control is so important."

"It's very important that you know how to thread that needle, and that the administrator be somebody who's got a commitment to medical progress and an understanding of the relationship between reimbursement and medical progress," Nexon said.

Tunis suggested that in some ways, industry has the same priorities in a candidate that everyone else has, including transparency, predictability and a willingness to interact and listen.

"I do think there is generally a need for CMS to continue to raise the bar in terms of scientific, technical and clinical expertise just because of the way health care continues to evolve," Tunis said.

Tunis would like to see in the next permanent CMS administrator "someone who comes in with a clear and well-articulated vision and has the kind of leadership to communicate that and convey it throughout the agency; a vision that really fits well with where the new reform legislation is taking us would be important."

Tunis added that although CMS also needs a skillful manager, that role could be filled with a deputy administrator "who can really run a shop, like a chief operating officer, and then have the administrator really show the path forward."

Gustafson said the position requires someone with "sufficient vision to be able to understand where the programs need to be a decade from now, but not so wrapped up in that vision that they can't recognize that the programs are in a particular place today and need to be moved gradually to some aspirational goals."

Other health policy experts said the administration may be looking for someone with operations experience at an integrated health care services provider or with expertise in cost containment and quality control.

Names that continue to surface as possible contenders include Donald Berwick, CEO of the Institute for Healthcare Improvement in Cambridge, Mass.; George Halvorson, CEO of Kaiser Foundation Health Plan; Glenn Steele, CEO of Geisinger Health System; and George Isham, chief health officer at Health Partners Inc. in Minneapolis, although sources suggested that some of the early candidates may have declined offers or taken their names out of the running.

In the meantime, those running the show at CMS, including acting administrator Charlene Frizzera, as well as Jonathan Blum, director of Medicare Management, and Cindy Mann, director of the Center for Medicaid and State Operations, have earned a good deal of respect "for keeping the trains running on time."

"It's actually kind of a testament to the strength of the career staff that the agency can proceed without significant disruption for as long as it has without major problems," Gustafson noted.

Still, most agree there are certain policy-level decisions that are likely not being made at the agency pending a permanent administrator.

"And it's not just having the administrator," Tunis said, "but then the administrator has a whole policy team that they bring in."

Bringing in new talent to CMS will be crucial as the agency continues to lose many senior-level people to retirement, Tunis added.

Is Challenge Of Job Scaring Off Candidates?

Tunis noted that the role of CMS administrator is one of the most complex positions in government.

"It's just one hell of a big job just holding onto your tail feathers and keeping going," echoed Gustafson.

"The fact that we might also be on the verge of one of the most dramatic changes in health insurance in two generations will probably add to the complexity and the difficulty of the job," Tunis said.

Wilensky agreed that even without massive change, the CMS administrator has a "very, very relentless job."

However, Wilensky does not believe that every potential nominee has been scared away by such a challenge.

"There are lots and lots of Democrats who are interested in health policy," she noted. "Some of them may even have some operations experience, which would be useful. I don't know what the problem is."

Tunis said he suspects the administration has "lots of really, really good candidates," and it knows that selecting a nominee is something that needs to be done sooner rather than later.

"My guess is as soon as they can get to it, they'll take care of it."

- Monica Hogan ( ² m.hogan@elsevier.com )

Top CMS Job Remains Empty Despite Big Medicare Changes On The Horizon

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