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AIS's Health Business Daily
Featured Story, July 30, 2010 Berwick’s Appointment as CMS Administrator Draws Cheers From Medicare Advantage Consultants and Executives Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs. By James Gutman, Managing Editor Medicare Advantage plan consultants and a former plan executive applauded President Obama’s decision July 7 to install CMS administrator nominee Donald Berwick, M.D., as a recess appointment. The decision gives CMS its first “permanent” head since October 2006 at a time when it faces a slew of important reform implementation and regulation issues, many of them directly related to MA and Part D. “Man, he has a lot on his plate,” says Gorman Health Group, LLC CEO John Gorman. He tells MAN that Berwick is likely to be “very, very tough but fair” in his dealings with MA and Part D plans and will usher in a “new era of accountability for care.” Berwick’s career has been “more focused on results than processes,” Gorman notes, and many measures of plan performance, such as the star ratings that will determine MA quality bonuses, now are process-oriented or “proxies” for other measures. “Don is a much more outcomes-oriented kind of dude,” Gorman observes. He adds that Berwick is “very goal oriented” and will use his leverage as a payer “to drive results as far as he can.” Gorman says he was “not at all surprised” that Obama decided to install Berwick, who was nominated April 19, as a recess appointment rather than wait longer for a not-yet-scheduled confirmation hearing in light of Republicans’ interest in making “this into a referendum on the health care reform bill.” The issue now, notes Gorman, is whether the administration can get Berwick confirmed “in a year or so.” Under recess-appointment authority, Berwick can serve until late 2011 without being confirmed. With a permanent administrator in place until at least then, CMS’s positions on issues such as network adequacy and whether products are different enough are likely to harden, Gorman warns. Big priorities for the new administrator, according to Gorman, will be the “time-sensitive items” needed to implement the reform law. That includes Medicare Accountable Care Organizations (ACOs) and fixing the continuing physician fee-schedule problems, he adds. While the MA plan star ratings won’t be a “short-term priority” for Berwick, cautions Gorman, “he may want to put his own fingerprints on it.” If Berwick does, performance-based reimbursement may incorporate many more measures or different measures than it does now, he suggests. Some 2011 Bids May Get Scrutiny From Berwick Since 2011 MA bids now are in and under CMS review, Gorman says Berwick will be “somewhat” involved in decisions on what to accept regarding such aspects as premium and copayment changes. He envisions the more controversial bids landing on Berwick’s desk in August, and says “the easiest thing for him to do is to be Dr. No and reject them and show he’ll be tough.” Berwick might make examples of marginal plans with a history of compliance problems, he says, but he adds that “if you’re transparent and demonstrate value,” Berwick will be an MA plan’s ally. Gorman also anticipates that Berwick will be active on MA and Part D marketing issues. CMS has established “market conduct” as its No. 1 compliance item, he says, and issues on that tend to be “cut and dried.” With this in mind, Gorman forecasts that Berwick will take actions against those plans “with bull’s-eyes on their backs,” such as those that don’t get sales agents certified. A paramount issue to the new administrator, he continues, will be beneficiary access to care and drug therapy. As a physician, Berwick is more likely to take a hard line on issues such as access to chemotherapy, for instance, he says. Berwick also has done a lot of work centered on reducing accidents in hospitals, Gorman points out. “He’s all about what happens in the middle in triggering better outcomes,” Gorman says. That meshes well, he suggests, with a CMS career staff that “has gotten pretty activist and now will have a daily outlet to have their cases go forward.” The “gravitas” of Berwick in terms of his background and reputation will be a “huge plus” for CMS, agrees Tom Hutchinson, now a managing director at law firm Sonnenschein Nath & Rosenthal LLP but until last month director of the Medicare plan payment group at CMS. He’ll be particularly involved, Hutchinson predicts, with the new Center for Innovation created within CMS by the reform law and especially with the aligning of incentives among health care system participants. Berwick has been active on that subject, and “how he’s driving the place” can determine how he puts his ideas into effect, Hutchinson says. Similarly, he adds, the ACO pilot programs are likely to be a priority for the new administrator. The extent of Berwick’s involvement in 2011 MA and Part D bids depends “on how the bids shake out,” he asserts. If there are big proposed premium hikes “across the board,” Berwick will be very involved, Hutchinson forecasts, but otherwise not. Berwick is likely to be very involved in the star ratings, according to Hutchinson. Based on his background, Berwick will want to see “some vigorous standards” for the ratings, he suggests. However, he points out, the new administrator doesn’t have much time to get involved in that since the methodology for the payments, which start for MA plans in 2012, will have to be set by the time of the CMS 2012 “45-day notice” next February. MA risk adjustment data validation audits and the extrapolation of their results to the entire MA organization may be “on his mind quite a bit,” says Hutchinson. RADV audits are a “pretty complicated process,” but someone like Berwick “will get it pretty quick.” On regulation of MA and Part D marketing, on the other hand, he adds, it is unlikely that Berwick will get too involved, and the new head will focus more on how marketing is “being monitored and overseen.” Emphasis Is Likely to Be on Performance Daniel Lyons, M.D., a former MA plan medical director who’s now chief medical officer of MA service company Health Risk Partners, agrees, saying Berwick is likely to rely on his staff more for marketing regulation than he will in an area such as star ratings, which is “exactly in his wheelhouse.” Berwick “believes in performance, and improving performance,” Lyons asserts, and “he’s a doctor — he likes to diagnose things and treat them.” Calling Berwick a “strong leader” and “very gifted,” Lyons says he’s the “right person for the times.” Having Berwick at CMS, he says, takes care of “uncertainties” at the agency and creates “more sense of a team.” Lyons adds that “by nature he’s an activist,” which suggests to him that the new administrator will take an active role in the 2011 MA and Part D bids. Berwick will benefit from having a “pretty stable team” at CMS but will be a “different kind of administrator” than the agency has had in the past, with even a bigger focus on clinical improvement than was the case with the last permanent administrator, fellow physician Mark McClellan, M.D., Ph.D. That clinical focus will mean a lot of attention on the fee-for-service side, which might affect the degree of attention he can give to the health plan side, Lyons says. The one caveat, he continues, is if there’s a sense at CMS that his nomination may never be confirmed. If that’s the case, says Lyons, Berwick will operate “in somewhat of a cloud” that either will intensify after the November elections or “dissipate.” |
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