Here are four questions senators should ask Obama’s Medicare nominee

April 8, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition — and read all previous columns here.


Acting Medicare administrator Marilyn Tavenner.

Tuesday is a very important day in the health policy world: For the first time in nearly a decade, Congress will hold confirmation hearings for a Medicare administrator.

The top spot at the federal government's largest agency—one with a nearly $1 trillion budget—has typically proved a tough spot for the Senate to fill. The agency oversees the two programs widely considered to pose the greatest long-term threat to the federal budget and often ends up at the center in Congressional debates as a result.

Enter Marilyn Tavenner, who has served as acting Medicare administrator for about 18 months now. She comes from a background in the private sector, having served as the chief executive of a Virginia hospital before running the state's health and human services department. She's a bit of a unique Medicare nominee in that she's been running the agency for over a year now, and has deep knowledge of the work its done over that time period.

Tavenner will appear before the Senate Finance Committee with bipartisan support. House Majority Leader Eric Cantor (R-Va.) will introduce her at the Tuesday hearing; the two have known each other since Tavenner ran a hospital in Cantor's district, and he has advocated for her nomination. Still, there's not much bipartisan love for Tavenner's biggest task: Implementing the Affordable Care Act.

Much to our chagrin, Congressional procedure does not give Wonkblog space to ask questions at the confirmation hearing. But that doesn't mean we don't have lots of subjects we want to hear Tavenner address—ones that we can ask right here instead of at the Senate hearing.

Why did Health and Human Services delay part of the Affordable Care Act's small business exchange program?

Beginning in 2014, the health care law was supposed to let employers give workers a set amount of money to buy insurance coverage in an online marketplace. That would allow employers to choose any plan they wanted; they would just take their money to the marketplace and shop.

But that provision will not roll out as planned. Health and Human Services decided in March to delay the provision allowing workers to shop plans. Instead, due to what the government described as "logistical concerns," employers will have to pick the plan that their employees enroll on.

The big question here is what that means for the rest of the health care law. Slowing down part of the small business exchange could mean that the Obama administration is smartly managing the details of the health law, realizing it can't do everything and focusing on the most essential programs. Or, it could be the first of many delays for the Affordable Care Act. Any details that help differentiate between the those two scenarios would give a better sense of how prepared the administration feels for 2014.

Why did Medicare change its payment rates for Medicare Advantage plans?

Tavenner's agency had initially proposed a 2.2 percent pay cut for the private insurance plans that cover Medicare patients, known as Medicare Advantage. This, Tavenner explained to me at the time, reflected "the slowdown in costs" of the program.

In final rules though, insurers ended up getting a 3.2 percent pay bump, largely due to Medicare rejiggering the formula for determining how these plans get paid.

Whether legislators will ask about this is unclear; many had lobbied Tavenner to reverse the cuts, and are likely pleased with the outcomes. Any additional information on why the formula changed could give a better sense of how the Obama administration feels about these private Medicare plans, which are slated for some large reimbursement cuts under the Affordable Care Act.

What should the future of hospital care look like?

Before Tavenner ran Medicare and Medicaid, she ran a hospital in Virginia, where she had previously worked as an intensive care unit nurse. That gives her an especially unique perspective on how the health care law will impact the cost of hospital care going forward. The law encourages hospitals and doctors to band together as Accountable Care Organizations that could, the thinking goes, provide patients with better coordinated care.

At the same time, bigger hospital systems can generally demand higher reimbursement rates from insurance companies. That creates a worry these larger hospital systems will inadvertently drive up the cost of health care. How Tavenner sees that balance, between coordination and consolidation, could give a sense of where the ACO program will head in the future.

How much flexibility do states have on the Medicaid expansion?

Republican governors have angled for more flexibility in Medicaid as they weigh whether to expand the program under the Affordable Care Act. The big question is how much Tavenner's agency is willing to bend.

The Centers for Medicare and Medicaid Services has accepted a plan from Florida to largely privatize its Medicaid program and is negotiating a deal with Arkansas to move its Medicaid expansion population into the exchange. At the same time, it has clashed with other states. Tennessee ran into roadblocks on its Medicaid plan, reportedly over how much beneficiaries would be asked to pay.

Medicaid has already outlined a bit of this, most recently in a two-page Q&A document. It is still one of the biggest questions that governor's have right now, and one they would certainly like to see Tavenner answer.

KLIFF NOTES: Top health policy reads from around the Web.

Obamacare supporters are getting worried about enrollment. "But six months before the process begins, questions are mounting about the scope and adequacy of efforts to reach out to consumers – especially in the 33 states that defaulted to the federal government to run their marketplaces, also called exchanges. The Obama administration has said little about outreach plans for those states, and neither the money nor the strategy is apparent." Jenny Gold in USA Today.

Family doctors aren't thrilled with Walgreen's expansion into medical care. "Some physicians are upset by the expansion, saying it will further splinter an already fragmented health care system and therefore harm quality and patient safety. 'It is more difficult to comprehensively manage a patient’s care if they are treated in multiple settings,” said  Jeffrey Cain, president of the American Academy of Family Physicians." Bruce Jaspen in Forbes.

Two D.C. hospitals are fighting over who gets to establish a costly cancer care center. "Two of the region’s largest hospital systems are competing to offer a controversial cancer treatment — joining what critics say is a nationwide medical arms race as hospitals scramble for dominance by investing millions of dollars in technology that has not been proven to be better than cheaper alternatives for some cancers." Lena H. Sun in the Washington Post. 

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Sarah Kliff · April 8, 2013