Health Affairs Editor Suggests Reforms for CMS in New England Journal of Medicine Report

In a "health policy report" in the Dec. 27 issue of the New England Journal of Medicine, John Iglehart, the editor of Health Affairs, outlines CMS' "vast responsibilities" and potential reforms for the agency. Democrats and Republicans alike agree that CMS, originally known as HCFA and created in 1977 to oversee Medicare and Medicaid, is "badly in need of repair," Iglehart writes. In congressional testimony, care providers also have expressed "anger" and "frustration" with the agency, particularly for its "endless stream of regulations." Although federal lawmakers and officials in the executive branch agree that reforms are necessary, they have been more inclined to fund the agency's efforts to investigate fraud cases than to "take on the difficult task" of improving CMS' "administrative capacity," Iglehart says. He notes that in the last year, HHS Secretary Tommy Thompson and CMS Administrator Tom Scully outlined plans to "streamline" CMS' procedures, including an "all-electronic procedure" to allow providers to allow to "react more readily to proposed regulatory actions. In addition, Thompson and Scully have proposed assigning a senior staff person as a key contact for every group of providers and launching a campaign to educate the public about Medicare. Lawmakers have "applauded" these "initial steps," but are "moving to place their own imprimatur on regulatory relief," Iglehart says. For instance, the House on Dec. 4 approved a bill (HR 3391) that, in part, would authorize CMS to "competitively contract" with the "best entities available to process, make (provider) payments and answer questions."

Reforming Medicare
Iglehart also addresses the prospect of "broader" Medicare reforms, noting that "[i]nvesting new resources in CMS means, by definition, strengthening" traditional fee-for-service Medicare. Although the Bush administration has for the moment set aside broader Medicare reforms, "some changes are in the works, and others are probably forthcoming," Iglehart says. Still, the "ideological divide between Republicans and Democrats" will prevent broad reforms for the foreseeable future. Democrats and providers favor expanding Medicare's fee-for-service structure, while Republicans are pushing to "modernize" Medicare by expanding contracts with private health plans. Iglehart concludes that "neither Democrats nor Republicans have fully embraced the challenge of upgrading the capacity of CMS to manage its far-flung responsibilities," adding, "More money will be needed to replace outdated computer systems, raise salaries and attract new staff members who have the skills required to manage a modern health insurance program and restore the confidence of physicians and others that the federal government can be a reliable business partner" (Iglehart, New England Journal of Medicine, 12/27).