New health-care rules multiply man-hours for policymakers, bureaucrats

By N.C. Aizenman
Thursday, June 3, 2010; A15

At the Department of Health and Human Services, the team charged with writing new health insurance rules has ditched the fridge and microwave in their break room so they can have more work space.

At the Labor Department, a clue to the hours staff members are keeping is offered by the motion-activated lights in the hallways. They are on by 6 a.m. and don't flicker off until long after dark.

The health-care overhaul may have slipped from the headlines since President Obama signed the bill into law in March. But the gargantuan chore of putting the statute's more than 2,000 pages of provisions into practice is keeping Washington's policymakers and bureaucrats busier than ever.

"As soon as the bill passed, I sent an e-mail to congratulate a friend of mine at HHS who was heavily involved working with Congress," recalled Assistant Secretary of Labor Phyllis C. Borzi. "She sent me an e-mail right back that said, 'Roll up your sleeves, my friend. Now the hard work begins.' "

The White House largely remains in the driver's seat.

Most Mondays and Thursdays, Nancy-Ann DeParle, director of the White House Office of Health Reform, meets with several dozen top officials to weigh in on the myriad sensitive decisions required to translate the law's mandates into fine print covering one-sixth of the economy.

According to administration sources, key participants include Jeanne Lambrew, director of the Office of Health Reform at HHS, and Mark Childress, the agency's acting general counsel. Also present are officials from Treasury and Labor, where Borzi oversees implementation as head of the Employee Benefits Security Administration.

White House regulars include veterans of the effort to craft the law, such as health policy expert Ezekiel Emanuel of the Office of Management and Budget, as well as newcomers to the team, such as Democratic communications specialist Stephanie Cutter, brought on to launch a major public outreach campaign.

DeParle recently briefed Senate Democrats on a slew of provisions set to begin this year that will offer relief to vulnerable groups until the law takes full effect in the years ahead, and provide Congress members with achievements to point to before November's midterm elections.

The measures include sending $250 checks to seniors to offset the coverage gap in Medicare's drug benefit, giving tax breaks to small businesses that cover employees, prohibiting many insurers from denying coverage to children with preexisting conditions and requiring insurers to let parents keep adult children on their policies.

"They're rolling this stuff out very smartly, every week or 10 days coming out with another positive thing about the bill that makes it appealing to a particular constituency," said Senate Finance Committee spokesman Scott Mulhauser.

The extent of White House involvement is a measure of the law's potential impact on Obama's presidency. But it also reflects the degree to which the law leaves fundamental decisions to the administration's discretion.

For instance, insurers will ultimately be required to spend most of the premiums they collect to pay medical bills or otherwise improve members' health. But what sort of activities should be counted? Other looming doozies: What constitutes an "unreasonable" premium increase? Which procedures can insurers set annual limits on covering?

"How these regulations get written can have a real impact on how much health-care reform we actually end up getting -- and a lot of them need to get written within weeks," said Mark B. McClellan, a former administrator of the Centers for Medicare and Medicaid Services now with the Brookings Institution.

Insurers may have cause to be nervous about the hires for the HHS branch most responsible for regulating them. Jay Angoff, director of the Office of Consumer Information and Insurance Oversight (OCIIO), took on Blue Cross of Missouri when he was that state's insurance commissioner. Steve Larsen, deputy director for oversight, clashed with CareFirst when he was Maryland's insurance commissioner. Karen Pollitz, head of the consumer support division, was a critic of insurance practices as a Georgetown University professor.

But Dean Rosen, who was a health-care adviser to then-Senate Majority Leader Bill Frist (R-Tenn.), cautioned against assuming that Angoff's team would be hostile to insurers. "If you look at this administration, it would certainly be hard to find people who favor the insurance industry. . . . But these are people who want this law to work, and there's a serious discussion underway about how much regulation the market can take."

Apart from the difficulty of navigating such controversies, there is the sheer logistical challenge of setting up all the new programs the law calls for. First up: a temporary "high-risk pool" insurance program for people whose medical conditions have prevented them from getting insurance. HHS must have the national version ready to go by July 1.

New agencies within the federal government also need to be created. So far, the only one up and running is OCIIO -- whose 40 or so staffers are still debating the best shorthand name for the office. ("Oh-sigh-oh" and "O-C-I-I-O" are the leading contenders.)

Next up is the Center for Medicare and Medicaid Innovation within HHS -- charged with nothing less than "bending the curve" of spiraling health-care costs by fostering new payment and health-care delivery systems.

At least the agency within HHS with the greatest role to play -- the Centers for Medicare and Medicaid Services -- is well-established. But the Senate has yet to set a date for confirmation hearings to vet Obama's choice to lead the agency, Donald Berwick. Early rumblings by Republicans suggest the process will not be smooth. And experts estimate that HHS will ultimately need to employ hundreds more staffers.

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