Lack of CMS chief prompts speculation about strategy

Washington -- The Centers for Medicare & Medicaid Services is going on three years without a permanent, Senate-confirmed administrator. The White House has given little indication of when President Obama might appoint someone officially to head up the agency, despite the fact that CMS might be expected to play a major role in implementing any health system reforms that lawmakers might pass.

CMS has not had a permanent administrator since Mark B. McClellan, MD, PhD, stepped down in October 2006.

Since January, Charlene Frizzera has served as acting administrator for the agency, which is the largest buyer of health care services in the United States and controls an annual budget of about $700 billion. Lawmakers are considering a reform measure that, if approved, would mean some big changes for the programs under its jurisdiction -- including substantial revisions to the Medicare physician payment system.

The lack of a nominee for the full position is puzzling to some observers. But there is also agreement among some health policy experts that CMS has been doing a good job this year, despite the lack of an official administrator, due in part to a strong supporting team. It includes Nancy-Ann DeParle, director of the newly created White House Office of Health Reform, and Jonathan Blum, director of the Center for Medicare Management and acting director of the Center for Health Plan Choices. DeParle is a former administrator of the Health Care Financing Administration, the predecessor to CMS, and was also a member of the Medicare Payment Advisory Commission. Blum is a former Senate health aide and has also worked for the White House budget office.

"There are a number of people in senior positions in the administration who are very much involved in CMS issues, so it's not like people are ignoring the agency," said Dr. McClellan, now director of the Engelberg Center for Health Care Reform and a senior fellow at the Brookings Institution in Washington, D.C. "Because of the promise of health reform and Medicare and Medicaid in achieving that goal, this is a really important position for the administration, and I think they want to get it right."

While the agency will need a permanent chief to implement reforms, it does not need one to get Congress to pass them, Dr. McClellan said.

Thomas A. Scully, who preceded Dr. McClellan at the agency, believes the administration may be waiting until a health system reform bill is passed before nominating an administrator.

"If you had a Senate confirmation right now, it would create a forum for chaos," said Scully, who helped shepherd Medicare prescription drug legislation through Congress, and who is now senior counsel at Alston & Bird. "If they had nominated someone earlier in the year, I think it would have been fine. But at this point, I think they're doing the wise thing and holding off until they pass reform."

Without a permanent director in place, other CMS officials have stepped up to lead the agency, said Joe Baker, president of the Medicare Rights Center, a patient advocacy organization in Washington, D.C.

"They're listening and responding, even without an administrator," Baker said. "I think they're filling from the bottom up rather than the top down, so work is getting done."

Still, some lawmakers would like to have someone officially at the helm of CMS with whom they can communicate. Rep. Bill Cassidy, MD (R, La.), for instance, said he has some questions about program fraud he would like to see addressed by a permanent administrator, particularly in areas of the country where it is rampant.

"Wouldn't it be nice if Congress and the American people had the ability to ask somebody how the new director would address that," Dr. Cassidy said. "By the very fact that someone is not appointed, we are not given the opportunity to ask these types of questions."

The administration is "working hard to find the best fit to steer CMS during this critical period," said Reid H. Cherlin, a White House spokesman. "In the meantime, the agency is running at 100% capacity and continuing to provide vital services for millions of Americans. We look forward to nominating an administrator soon."

But experts said somebody must officially be directing the show if and when a health system reform bill is passed. "If Congress creates a whole new structure for the commercial market and they have CMS involved, then yes, I think it would be a good idea to have another Mark McClellan or somebody like that in place," Scully said.