10 Issues New CMS Administrator Will Face

Cheryl Clark, April 5, 2010

The Centers for Medicare and Medicaid Services is the agency many providers love to hate.

CMS, which is an $800 billion bureaucracy with nearly 5,000 employees, is also the biggest payer of healthcare bills in the U.S. and arguably the most influential in health reform.

President Obama is reportedly on the verge of officially naming Don Berwick, MD, a highly regarded idealist in quality and efficiency, to lead the agency. CMS has been without an administrator since 2006 though Kerry Weems was the acting administrator during the final years of the Bush administration.

Berwick, a Harvard pediatrician who 20 years ago founded the Institute for Healthcare Improvement to remodel how doctors and hospitals treat patients, describes himself as "an extremist" in his advocacy of patient-centered care.

That concept of patient-centered care requires remodeling the entire healthcare delivery system, as many reform supporters have proposed.

On the heels of the Institute of Medicine report, "To Err Is Human," for example, he was the architect of a series of campaigns that encouraged hospitals to design systems to reduce medical errors. One encouraged hospitals to institute rapid response teams, which are strike forces that come to assist when hospitalized patients begin to fail when they are outside of an intensive care unit.

Whether Berwick will actually be named, and whether he will accept the challenge, remain unclear.

But whoever agrees to take the CMS administrator's desk will have to be a kind of dragon slayer from the start by confronting a host of issues and obstacles and overcoming long-held customs and practices.

Here are 10 issues the new administrator will have to face:

1. Survive Senate confirmation. Reports suggest that opponents of the new healthcare reform legislation may use the proceedings to whittle and pare the responsibilities and authority of the agency that will, in effect, whittle and pare the provisions of the law itself.

2. Fight to build up the agency's reputation from that of an overworked, struggling behemoth to one that sets goals and appropriately incentivizes providers to improve care, decrease morbidity, lower mortality, and improve quality of life.

This may mean fighting for a bigger budget, and somewhat different workforce.

"It's been seen as a bit of a downtrodden agency—understaffed, and never greatly appreciated," says Blair Childs, vice president of public affairs for Premier Inc., which now collaborates with Medicare on several pay-for-performance demonstration projects.

"CMS behaves like a resource-starved agency, which it is," noted Weems, in an interview with John K. Iglehart last June in Health Affairs. "CMS is a weakened organization. It has the capacity to pay bills and prepare the annual payment notices. But after that, there is little capacity, much less time, left to think through what a system of higher quality would look like."

3. Decide how accountable care organizations and medical homes will work, and how best to incentivize physicians to keep patients out of the hospital, putting them in direct competition with the hospitals that give them staff privileges.

This includes implementing a policy that reduces payments to hospitals with higher than average numbers of avoidable readmissions.

4. Create the new CMS Innovation Center, which will spend $10 billion through 2019 on finding ways to provide better care.

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