CMS Re-alignment Brings New Direction, Possible Medicare Advantage Issues

Janice Simmons, for HealthLeaders Media , February 19, 2010

A move by acting Centers for Medicare and Medicaid Services Administrator and Chief Operating Officer Charlene M. Frizzera on Wednesday reflects efforts by the agency to take some new directions—as it waits for an administrator and healthcare reform.

"The good news is that the reorganization appears to emphasize innovation and demonstration projects, which are desperately needed given the stalemate on health reform on the Hill,” says John Gorman, CEO of Gorman Health Group, in Washington, DC. "There's much that CMS can do through its demonstration authority that doesn't require 60 votes to move forward.

"The bad news is how beneficiary choices—particularly health plans—have been deemphasized by folding that authority into a general Medicare center," Gorman says on the news that one of the centers, the Center for Medicare, will combine Medicare fee for service, managed care, and Medicare Advantage. "Medicare Advantage represents about 25% of beneficiaries, but embedded within a function managing all of Medicare, runs the danger of 'ugly stepchild syndrome' or benign neglect for health plans."

Reorganizations at CMS happen during virtually every administration, Gorman says, and only a handful in the last 20 years have made any significant impact.

CMS has not had a Senate-confirmed administrator since June 2006 when Mark McClennen left and the Obama administration has not forwarded a name for confirmation yet.

"It may be a while before we know if this reorg will stick," he adds.

Paul Keckley, executive director of the Deloitte Center for Health Solutions in Washington, says CMS’ moves were expected.

"I think the Secretary [of the Department of Health and Human Services] is now organizing efforts around some pretty predictable themes. One is connecting health services with human services—the emphasis on community health centers, community mental health centers, federally qualified health centers," he says.

Another theme is looking at the alignment of physicians and hospitals in local communities.

"I think it's appropriate. I think it's a fresh look of what CMS can be doing other than just administering Medicare, he adds.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at

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