CMS's new leader.

In September, the head of the Centers for Medicare & Medicaid Services (CMS) joined the growing exodus of senior health policy officials from the Bush administration. Mark A. McClellan, physician and award-winning healthcare economist, had been serving as CMS Administrator since March 25, 2004. Before coming to CMS, McClellan served as Commissioner of the Food and Drug Administration and as a member of the President's Council of Economic Advisers. McClellan had also held the position of Deputy Assistant Secretary of the Treasury for Economic Policy in the Clinton administration.

McClellan's resignation appears to follow one of the two patterns that characterize the unusual number of departures from federal healthcare positions in the past 15 months. A few, like the pistol-packing HHS Inspector General Janet Rehnquist and brief-tenured FDA Commissioner Lester Crawford, have been partisan appointees whose heavy-handed behavior created political problems for their agencies. Crawford established a dubious record for tenure when he announced that "it is time, at the age of 67, to step aside"--less than 90 days after being confirmed by the U.S. Senate. Most of those resigning, however, have been well-liked, highly qualified, and experienced experts who left the impression that federal service was no longer worth the personal and professional sacrifices involved.

These include David Brailer, MD, PhD, the first National Coordinator for Health Information Technology, and Susan F. Wood, Assistant FDA Commissioner for Women's Health. Wood's resignation stated, "I have spent the last 15 years working to ensure that science informs good health policy decisions. I can no longer serve as staff when scientific and clinical evidence, fully evaluated and recommended for approval by the professional staff here, has been overruled."

McClellan clearly belongs in this second category. He had developed a long and respected resume of academic and private-sector experience in the arcane world of health economics before arriving in Washington. Although he may best be remembered by the public as the CMS Administrator associated with the passage of the controversial Medicare Part D, McClellan personally had relatively little to do with the legislation. Instead, according to CMS, implementation of the Medicare Modernization Act has been the responsibility of Leslie V. Norwalk, Esq., Deputy Commissioner and Chief Operating Officer of CMS since 2001.

Norwalk has now replaced McClellan as Acting CMS Commissioner and is widely expected to remain as head of the agency. Her background contrasts sharply with that of her predecessor and may have significant implications for CMS policies during the last two years of the Bush administration.

Norwalk arrived in the Washington area as a twentysomething law student at George Mason University and quickly found work in the White House Presidential Personnel Office under the first President Bush. When Bill Clinton won the '92 election, Norwalk left the government to join the Washington office of Epstein Becker & Green (EBG), whose Health Care and Life Sciences Practice is believed to be the largest in the nation. According to EBG, its Washington office "provides complete legal support for health care organizations related to third party payors," including representation before Medicare, Medicaid, and the U.S. Public Health Service, as well as appeals of payment denials and overpayment determinations for providers and suppliers under all government health programs. Norwalk's specific responsibilities at EBG are protected under attorney-client privilege, but a hint of her work may be found in her description by a colleague as an expert on the "federal healthcare fraud litigation boom."

Bush Administration II found Norwalk back in government service as the appointed Counselor for CMS. Over the past five years, under CMS Administrators Tom Scully and McClellan, she added the positions of Deputy Administrator and Chief Operating Officer to her portfolio. She has, in short, been a consistent political presence in the agency since the beginning of the Bush administration.

The partisan nature of that presence became apparent during congressional hearings in 2004 on whether the Bush administration had deliberately withheld information from Congress on the actual cost of Medicare Part D. Richard Foster, Chief Actuary of CMS, testified to Congress that he had been warned by administration officials to keep even Republican members of Congress in the dark about his office's estimates of the costs of the proposed benefit. Foster said he believed that his job description, as written by Congress, required the CMS Actuary to independently advise Congress about the likely financial effect of any CMS legislation--and he specifically mentioned Norwalk as the Bush administration appointee who argued that he should not provide that advice.

Norwalk later testified about her version of the incident:

    During our June 13th [2003] meeting, Mr. Foster described the
  history of his office in providing actuarial support to Congress,
  including the history surrounding the Balanced Budget Act of 1997
  legislation and accompanying Conference Report language and his
  professional responsibilities. Under these authorities, he believed
  that he had an obligation to report his actuarial analysis to
  Congress, without informing the Administrator of the specifics of the
  Congressional request or his analysis in response to the request. He
  believed that providing this information to the Administrator
  compromised his ability to function as he believed the Chief Actuary
  should.
    During the meeting, I reviewed the statutory language, which states,
  "The Chief Actuary shall be appointed by, and in direct line of
  authority to, the Administrator...." The accompanying Conference
  Report language highlights the importance of actuarial analysis in
  drafting legislation. However, neither the statutory text nor
  Conference Report language on its face requires the Office of the
  Actuary to report to or provide internal Executive Branch information
  to Congress. While Mr. Foster noted the emphasis in the Conference
  Report of sharing information with Congress, I explained to him that
  the Conference Report language does not require sharing information.
  In any event, the Conference Report language does not have the force
  of law.

Norwalk continued to testify that she did not know that Foster had been asked by Congress to provide accurate data on the cost of Medicare Part D. In her version of the events, Foster came to talk to her about a "difficult situation" and never mentioned that the subject was his office's estimates of the cost of Medicare Part D, despite the fact that implementation of the benefit was Norwalk's responsibility. Nevertheless, she testified, she would have provided the same answer because independent advice from the Chief Actuary to Congress would have been a serious breach of the separation of legislative and administrative powers.

Norwalk's 2004 testimony, her lack of actual experience "outside the Beltway," and her apparent role as a Bush loyalist combine to present a picture of a very different type of leadership at CMS under her tenure. Most Americans assume that the federal bureaucracy is (among other things) a source of expert knowledge that inspires and informs policy. That description clearly applied to the credentials of CMS administrators Scully and McClellan, and to other senior officials who have resigned from this administration, who were able to bring some degree of disinterestedness to their jobs. However, top government offices do bear with them inevitable political responsibilities and related sacrifices, and officials can sometimes find these to be onerous. The new acting CMS Administrator gives evidence of being a different sort of top official, one who will function strictly as a presidential loyalist. The public responsibilities of the job may modify this stance. Only time (up to two years, anyway) will tell.

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