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Tavenner confirmation in limbo
Roadblock over funds may augur more fights ahead

By Rich Daly
Posted: April 27, 2013 - 12:01 am ET

It was supposed to be smooth sailing now for Marilyn Tavenner to be confirmed as CMS administrator. She enjoyed a generally warm reception during a hearing before the Senate Finance Committee. The committee voted without dissent to move her along to the full Senate, which was expected to approve her without controversy.

Suddenly that changed when Sen. Tom Harkin (D-Iowa), who supports Tavenner, placed an unexpected hold on her nomination. The move could presage both more funding fights and snags to her confirmation, according to some health policy experts.

The reversal of fortune for the person responsible for implementing the Patient Protection and Affordable Care Act is tied to the White House's treatment of a $19 billion 10-year pool of money that the law established for prevention and public health. Harkin, who authored that provision, said his hold on Tavenner was a response to the Obama administration's fiscal 2014 budget proposal to divert $453.8 million from the fund to help the CMS get people enrolled in coverage offered in the new health insurance exchanges.

The Prevention and Public Health Fund was intended to provide a reliable stream of cash over 10 years for efforts that have seen wild fluctuations in annual appropriations, according to prevention advocates.

“Robbing prevention when we know these efforts can improve people's health and lower healthcare costs goes against the very mission of healthcare reform,” Harkin told HHS Secretary Kathleen Sebelius at an April 24 hearing.

Such pre-appropriated federal money is unusual, according to policy experts, and the prevention fund has drawn proposals to redirect the money nearly since its creation. Those efforts included a $6.25 billion cut to the 10-year pool of money that Congress passed in February 2012 to offset a delay of a scheduled reduction in Medicare physician payments. House Republicans last week stopped short of voting to divert $4 billion from the overall fund toward a program offering subsidized coverage to Americans with pre-existing conditions.

A Harkin spokeswoman said Friday that his discussions with the administration are “ongoing.” The administration may have tried to pre-empt Harkin's objections by requesting approval to transfer $123 million from other sources to leave a net $616.5 million in total federal prevention funding, including the ACA prevention fund, for the fiscal year.

Possible outcomes include a promise from administration officials that they won't take any further money from the fund, leaving it with $1 billion to $2 billion available each year through fiscal 2022. But a promise may hold little sway on Harkin, who is retiring at the end of 2014 and has complained that the administration previously promised to leave the plan alone.

Provider groups are nervously watching the fight but keeping their distance.

“It's critically important and will make a significant difference for Medicare, Medicaid and ACA policymaking and oversight to have a full-time, fully approved, confirmed CMS administrator,” said Chip Kahn, president and CEO of the Federation of American Hospitals. “It has weakened all of the programs that we haven't had a confirmed administrator since 2006.”

However, this kind of intra-party fight “generally is not something that outsiders can affect,” Kahn said.

Ultimately, observers expect Harkin to back down because the administration doesn't have any other options to pay for the law's implementation.

Tom Scully, a former CMS administrator, said the CMS was put in charge of the healthcare overhaul in part because it has wide latitude “to move money around.” That fiscal flexibility has been a critical advantage because the Republican-led House has blocked attempts to provide more money for implementation.

“But there is a limit on that, and they have to hire a ton of new people to carry out this bill and they didn't have any appropriated funds,” Scully said. “So their only way to get around it and find the money without asking Congress for more money was to find another source; so the prevention fund was all they have.”

Harkin has insisted that the administration could find money from other sources to implement the law but has not publically specified them. Tavenner recently told senators that she already used her administrative authority to tap several other one-time funding sources for implementing the Affordable Care Act in the current fiscal year. It also remains possible the CMS will need to tap the fund again for the reform law.

Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, said he expects much of the funding after this year to be covered by fees that the exchanges will require from insurers. That cash is expected to start flowing into the CMS next year as marketplaces go live in every state.

In addition to the prevention fund transfer, the budget requested $1.5 billion in new funding for exchange implementation, an increase from the $1 billion unsuccessfully sought in the previous fiscal year.

The tussle over Harkin's hold could presage other problems for Tavenner's nomination. “The real issue here is if there is going to be another hold in two weeks from some other senator,” Scully said. “There's a hundred senators and every one of them on any particular day could have a hospital or someone who is mad at Medicare or Medicaid for something, and if they all want to make a point of it she could be dragged out forever.”

Follow Jessica Zigmond on Twitter: @MHjzigmond

Tavenner was warmly received during her confirmation hearing, where she was introduced by her home-state senator, Mark Warner (D-Va.)
Photo credit: GETTY IMAGES

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