The healthcare overhaul moving through Congress elevates the job of running the government's $700-billion Medicare agency to new heights and all but guarantees a political battle over filling the post. The Centers for Medicare and Medicaid Services (CMS), which oversees the government's health insurance programs for the elderly, disabled and poor, would emerge with more power over the insurance sector and could oversee a new public health insurance plan.
But the Obama administration has yet to nominate a leader for the Centers for Medicare and Medicaid Services (CMS) and shows no sign of offering an appointee while tensions are high over the final shape of the legislation. President Barack Obama has already tapped leaders to head other major federal health agencies - the Centers for Disease Control and Prevention, the Food and Drug Administration and the National Institutes of Health.
But his choice for CMS is certain to face tough questioning from Republicans who have criticised reform legislation and are unlikely to back the final plan. If Democrats successfully pass legislation to overhaul the nation's health care system, CMS could see its role swell as overseer of a potential public insurance option. CMS could also see its workload increase with various Medicare payment changes and an expansion of eligible Medicaid patients. "CMS is really the only operating division at the department that knows anything about insurance," said Leslie Norwalk, who served as an acting administrator for CMS during the last Bush administration. The agency "naturally would be the place to implement any expansion of access."
One name that has circulated in Washington as a potential head of CMS is Liz Fowler, a senior aide to Senate Finance Committee Chairman Max Baucus. Fowler returned to Capitol Hill in February to help draft the healthcare reform legislation. A lawyer who competes in triathlons, Fowler also has industry experience from serving as a vice president at WellPoint Inc. Other names surfaced earlier in the year but have since faded amid the fight over health reform. Fowler had no comment on whether she was in the running for the job. The White House also had no comment.
While the top job remains vacant, CMS is being run by Acting Administrator Charlene Frizzera, former chief operating administrator of the agency. Whoever takes over from her will face some of the biggest changes the agency has seen in years. The last time CMS saw such an expansion was in late 2003 when Congress passed Part D, Medicare's prescription drug program that allows private companies to offer cover medication costs with CMS oversight.
Under current reform proposals, the agency would likely handle more than just oversight of private companies, taking on an entire new responsibility of regulating the multibillion dollar US health insurance industry. Insurers now are governed by state rules that vary widely. Healthcare reform bills would impose national regulations over everything from eliminating discrimination to out-of-pocket costs. A government-run insurance plan, which would compete against private companies, could also fall under CMS's watch.
"Part D was just a drug benefit folded into an already existing program. This healthcare reform bill... is going to require the creation of a whole new infrastructure," said Kim Monk, an analyst with Capital Alpha Partners. Additionally, the nominee will face pressure from an aging US population and looming financial woes, with Medicare's trust fund expected to dry up by 2017 unless drastic changes are made. While markets crave certainty, investors are not so worried about the CMS vacancy since whoever gets the job will have to carry out the legislation.
"It's not like there's an empty CEO slot at a big health care company," said Tom Carroll, an analyst at Stifel Nicolaus. Obama's pick to lead CMS would first have to pass muster with the Senate Finance Committee. The Democratic-led panel saw a deep party-line division in advancing its version of the reform bill, with just one Republican voting in favour of it.
Republicans have already threatened to block several other lower level health officials in the wake of a CMS dispute with Humana Inc last month. CMS is investigating a letter Humana sent to customers enrolled in its private Medicare Advantage plans, a move Republicans immediately challenged. The letter, tucked inside an envelope touting important plan information, warned that Democratic health bills could reduce benefits.
A spokeswoman for the committee's top Republican, Charles Grassley, who voted against the committee's health bill, said placing a hold on any nominee is always a possibility. Grassley, speaking last week at the Reuters Washington Summit, said he wanted a CMS nominee with medical expertise but had no specific person in mind. Representatives for Baucus did not reply to requests for comment.
Whoever takes the top CMS job will face tough scrutiny from lawmakers, the public and others in carrying out reforms mandated by Congress while keeping an eye on dwindling funds. "The person who gets into that role is going to really be under the microscope," said Stifel Nicolaus' Carroll. "That makes it even that much more difficult and even that much more important to find the right person."