Department of Health and Human Services, Administrator, Centers for Medicare and Medicaid Services

Department/Agency: Department of Health and Human Services

Position:

Administrator, Centers for Medicare and Medicaid Services

Executive Schedule: Executive Level IV - Presidential Appointment with Senate Confirmation

Major Responsibilities:

Runs the $650 billion Medicare and Medicaid programs that serve 92 million Americans, including nearly all the elderly and many of the poor and those with disabilities
Seeks to transform and modernize the U.S. health care system to allow doctors and patients to make informed decisions about the most effective medical care
Promotes efforts to improve the quality of health care and the efficiency of its delivery
Works with other Federal agencies, the States, nongovernmental organizations and the private sector on efforts to expand coverage and improve the delivery of health care for all Americans

Key Competencies and Preferred Qualifications:

Extensive background in health care policy
Understanding of how health care financing and delivery systems interact
Experience running an academic medical center, a statewide health program or other major responsibility in the U.S. health industry
Ability to communicate well both with Congress and the public

Insight:

Budget: $650 billion (FY 2009)
Staff: 4,100

Few government programs touch the lives of people more directly and deeply than those run by the Centers for Medicare and Medicaid Services (CMS). It provides health coverage for more than 92 million customers through Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP) and is the country’s largest health care purchaser. The size and scope of its $650 billion budget puts CMS at the center of debates in Congress and across the nation about the rising burden of health care costs in a country that spends 16 percent of the gross domestic product (GDP) on health yet still has 45 million people without medical insurance. That debate will intensify in the Obama administration, especially with enormous deficits in the overall federal budget and the day of reckoning moving closer for the Medicare hospital insurance trust fund. According to the Congressional Budget Office, health spending has doubled as a share of GDP in the past three decades and could double again by 2035. The 2008 Medicare trustees’ report forecast that the hospital insurance fund will be depleted by 2019.

The administrator of the Centers for Medicare and Medicaid Services – formerly called the Health Care Financing Administration (HCFA) – must deal with both the day-to-day operations of these enormous health insurance programs and look to their future. By budget but not staff, CMS is the largest component of the Department of Health and Human Services. Its headquarters are in the Baltimore suburb of Woodlawn, Maryland, next to the Social Security Administration, which it was once a part of. Social Security, now an independent agency, still plays a significant role in determining eligibility for Medicare, especially for those under 65 seeking disability coverage.

The Bush administration, both in the regular Medicare program and in tailoring the Medicare prescription drug benefit launched in 2006, sought to give private health care companies and insurers a larger role in delivering coverage to seniors and disabled workers, and to limit Medicare’s ability to bargain directly with pharmaceutical companies over drug prices, much as the Veterans Administration has long done. That may change now with a Democrat in the White House and broader Democratic majorities in Congress. But the next CMS administrator, like his or her predecessor, will still be facing tough choices and difficulties in running the nation’s bedrock health programs for the elderly, the poor, the disabled and children.

Leading CMS requires a firm grasp of the issues at stake in the debates over health care financing and delivery, and it also requires the ability to run an agency which is frequently in the eye of political storms. The Bush administration tapped a health care lawyer-lobbyist and then a prominent medical economist and physician to run Medicare and Medicaid for most of its two terms. In the Clinton administration, the responsibilities were handed to a former Rhodes Scholar and state Medicaid administrator who had experience handling the health care portfolio as an associate director of the Office of Management and Budget.

Former Administrator Nancy-Ann DeParle, who ran HCFA from 1997-2000, told the 2000 Prune Book that the job that requires an ability to make decisions quickly. “If you like writing your own analyses or sitting down and debating health policy, this isn’t the job for you,” she said.

CMS does a lot more than just pay doctors and hospitals. Its inspectors regulate all clinical laboratories. The agency enforces federal safety and quality standards for hospitals, clinics and nursing homes. It enforces health privacy standards and the Health Insurance Portability and Accountability Act of 1996, which gives Americans the right to retain coverage when they change jobs.

Over the past eight years the Bush Administration has expanded the Medicare Advantage plans that offer seniors private coverage as an alternative to traditional Medicare. Democrats in Congress contend that the Republicans were too generous in the terms given private industry. They also chafed at the restrictions on using Medicare’s purchasing clout to drive harder bargains with the drug industry when Medicare added prescription drug coverage to its basic benefits package. In 2003 under former Administrator Thomas Scully, President George W. Bush signed the Medicare Prescription Drug, Improvement and Modernization Act. The bill added Part D to Medicare with greater drug benefits (Medicare Part A covers hospital charges, Part B physician and out-of-hospital services, and Part C is the private Medicare Advantage program that allows seniors to choose managed care rather than fee-for-service coverage).

In his 2003 State of the Union address, President Bush said the drug benefits would cost $400 billion over 10 years. Two years later, the White House projected the costs at $1.2 trillion. However, in the program’s first years drug costs have run lower than expected and the benefit proved immediately popular with seniors, despite a “doughnut hole” or gap in coverage that leave those with high drug bills responsible for 100 percent of the bill above $2,510. Medicare coverage kicks in again when a senior has spent $4,050.

Mark McClellan, a physician, economist and health policy expert, left his job as commissioner of food and drugs in 2003 to become CMS administrator. When he resigned in September 2006, a New York Times editorial praised him for transforming CMS “into a catalyst for reforming the health system.” Kerry N. Weems served as acting administrator for the final two Bush years. He told Congress that the “transformation and modernization” of CMS remained a top priority, including “efforts to improve program efficiency and quality of services through contracting reform and expand competitive bidding for durable medical equipment.”

Despite the popularity of the drug benefits, customer service remains a challenge for CMS. At a recent hearing of the Senate Special Committee on Aging, advocates cited long wait times and misinformation from customer service representatives on calls to CMS’ toll-free phone line, 1-800-MEDICARE. In response, Weems said the agency would improve operator training and allow callers to hang up but keep their place in queue and get a call back.

Key Relationships – Within the Department or Agency:

Deputy CMS Administrator
Four CMS “Consortium Administrators” who oversee regional operations, including traditional Medicare and Medicare Advantage plans as well as Medicaid and the State Children’s Health Insurance program
Secretary of Health and Human Services (also a Medicare trustee)
Deputy Secretary of HHS
HHS Inspector General
HHS Assistant Secretary for Health
Commissioner and Deputy Commissioner of Social SecurityLeaders of other HHS health agencies, including the Centers for Disease Control and Prevention, Indian Health Service, Health Resources and Services Administration and Public Health Service

Key Relationships – Within the Government:

Secretary of Labor (Medicare trustee)
Secretary of the Treasury (chair of Medicare trustees)
Secretary and Deputy Secretary of Veterans Affairs
Leadership of the Department of Defense health programs
State and local health officials

Key Relationships – Outside the Government:

The Association of State and Territorial Health Officials
National Association of State Medicaid Directors
The Joint Commission on Accreditation of Healthcare Organizations
American Hospital Association
Federation of American Hospitals
American Medical Association and other providers’ group
America’s Health Insurance Plans
Pharmaceutical Research and Manufacturers Association
Patient advocacy groups such as the National Cancer Society and The Alzheimer’s Association
AARP
The American Public on Health Care: The Missing Perspective

Nomination Referred to:

Senate Committee on Finance

Current Position Profile:

1. Kerry N. Weems, M.B.A. (Acting 2007-Current). Former Acting Assistant Secretary for Budget Technology and Finance; former Deputy Chief of Staff; and former Chief Financial Officer at the Department Health and Human Services. Career civil servant and member of the Senior Executive Service. Spent two years as a Senate staff member.

Recent Position Profiles:

2. Mark McClellan, M.D., Ph.D. (2004-2006). Former Commissioner of the Food and Drug Administration; former member of the President’s Council of Economic Advisors; and former Deputy Assistant Secretary of the Treasury for Economic Policy. Ph.D. in economics from MIT.

3. Thomas Scully, J.D. (2001-2003). Former president and CEO of the Federation of American Hospitals. Health care lawyer and lobbyist.

4. Nancy-Ann DeParle, J.D. (1997-2000). Former commissioner of Tennessee Department of Human Services and associate director of OMB.