June 22, 2001
Secretary Thompson Renames HCFA; Proposes First Round of Agency Reforms
On June 14, HHS Secretary Tommy Thompson announced an initial wave of HCFA reforms, including renaming and restructuring the agency, which is now called the Centers for Medicare and Medicaid Services (CMS). According to Thompson, the new name better represents the agency's primary mission: to serve Medicare and Medicaid beneficiaries. It also demonstrates a renewed commitment to enhancing the agency's responsiveness and efficiency. Secretary Thompson and CMS Administrator Thomas Scully further elaborated on the name change and other early reforms at a June 19 Senate Finance Committee hearing.
Along with the name change, HCFA will be reorganized into three centers with names that clearly reflect their core responsibilities. The Center for Beneficiary Choices will focus on beneficiary education/information, the management of Medicare managed care plans, and grievance/appeals functions. The Center for Medicare Management will be responsible for the fee-for-service program, while the Center for Medicaid and State Operations will encompass programs administered by the states.
At the hearing, Secretary Thompson proclaimed his intent to make HHS the most responsive office in government, with the very first step being the improvement of CMS communications with beneficiaries, providers, States, and other customers. Mr. Scully explained that those improvements will include a Medicaid/SCHIP contact person for each state, a 24-hour toll-free Medicare information call center for beneficiaries with questions, and a regular, quarterly schedule for releasing provider-related announcements. Secretary Thompson also announced that CMS will invest $36 million over 3 years to install standardized bookkeeping software, and it has begun plans to replace the agency's over 200 operating systems with a single, agency-wide system.
Secretary Thompson also urged the Finance Committee to reconsider the way contractors are currently selected and compensated. He suggested that customer service problems (e.g., payment delays) could be resolved by reducing/standardizing the pool of contractors, selecting contractors through competitive bids, and establishing performance-based compensation packages. Secretary Thompson's remarks were supported by a member from the hearing's second panel, Dr. Nick Wolter, president and CEO of Deaconess Billings Clinic (Montana). Citing the inconsistency of payment denials from region to region, he called for a standardization of contractors and contracting processes. As a rural provider, he also suggested that CMS make sure its contractors account for regional variations in the delivery of healthcare services.
The remaining panel members discussed several other challenges CMS faces as it attempts to reform the agency. Dr. Judith Hibbard from the Department of Planning, Public Policy, and Management at the University of Oregon warned that the inability and reluctance of Medicare beneficiaries to make well-informed coverage decisions requires a new range of resource-intensive education services for seniors, including one-on-one counseling. Dr. Hibbard advised against program lock-ins until an effective beneficiary education program was in place, and suggested the creation of local Medicare customer service centers similar to those operated by the Social Security Administration.
William Scanlon of the General Accounting Office warned Congress that their expectations of CMS far outweighed the agency's capacities. If Congress continues to assign new responsibilities to the agency, they must first provide modern technology, create a budget for retaining skilled and experienced staff, and assure CMS's ability to shape and carry-out long-term planning. Michael Gluck, Ph.D., from the Institute for Health Care Research Policy at Georgetown University, agreed, particularly in terms of building a skilled and experienced staff. The agency needs (and currently lacks) a staff that is knowledgeable in medicine, information technology, and modern health insurance issues. The only way to build that staff, Dr. Gluck believed, was to create competitive and attractive salaries and benefit packages.
Information: Christiane Mitchell, AAMC Office of Governmental Relations, 202-828-0526.
