Just like that, HCFA last week became the Centers for Medicare and Medicaid Services, as HHS Secretary Tommy Thompson and HCFA Administrator Thomas Scully outlined a series of internal changes aimed at improving agency management and communication with providers and beneficiaries.
The agency would be made up of three centers: a center for "beneficiary choices," focusing on Medicare's HMO operations; a center for Medicare "management" to oversee fee-for-service operations; and a center for Medicaid and state operations.
The name change-expected to cost $50,000-is effective immediately. The agency also will begin to implement the reorganization immediately.
To improve communications with providers, plans, states and beneficiaries-a key push of the new administration's-Scully will name senior staff members to act as primary contacts for each constituency.
"The best thing we can do (to create a friendlier agency) is change the name, start out fresh and try to encompass what it is the agency does," Thompson said at a press conference to unveil the HCFA reorganization.
Provider groups praised the proposal. "It shows a real willingness by (Scully and Thompson) to move very rapidly," said Dan Boston, assistant vice president of legislation and public affairs for the Federation of American Hospitals. "Clarifying lines of authority and having individual lines of contact for providers and enhanced education for beneficiaries, those are all good things."
The Bush administration, meanwhile, is drafting a Medicare restructuring plan under which the government will pay seniors' premiums for enrolling in private-sector health plans, with the traditional Medicare fee-for-service program one of the plans competing for federal dollars. Prescription drug coverage would be extended to seniors through those health plans.
The Bush plan could be out this month or in July. Congressional leaders have said they want to send Bush a Medicare overhaul bill before they go on their summer recess in August.
Some hospital lobbyists, however, fear that the escalating costs of the reform plans and their prescription drug components could prod the administration to finance part of Medicare restructuring with new caps on provider payment growth (See News at Deadline, p. 6).
"Take nothing for granted on this thing," said one hospital lobbyist, who asked not to be identified.
The speed with which the administration released the plan signals aggressive action on Medicare. The changes come just three weeks after the Senate confirmed Scully, the former chief of the Federation of American Hospitals, as HCFA administrator. Both Scully and Thompson promised to transform the agency into one that is more provider-friendly but continues to aggressively pursue fraud and poor-quality providers.
Earlier this year, Thompson took the unprecedented step of spending a week with HCFA employees at the agency's Baltimore campus. The former Wisconsin governor, who often feuded with HCFA over Medicaid waivers, said he came back convinced that agency employees are talented and committed but overworked.
In unveiling the HCFA reorganization, Scully did not elaborate on his comments earlier this month regarding plans to release data on Medicare providers, including doctors, HMOs, nursing homes and eventually hospitals. Speaking at a press conference with Scully, Thompson said the issue was next on the agency's agenda and would be discussed shortly.
Regarding a drive to double the proportion of beneficiaries enrolled in Medicare HMOs by 2005, Scully said a $35 million media campaign would begin this fall to highlight the option. Agency officials said the money for the campaign would come from existing program administration budgets.
Scully said he would pursue legislation to reduce Medicare's number of fiscal intermediaries and carriers from 50 now to fewer than 20 by 2006, with the aim of giving providers more consistent interpretations of Medicare regulations.
The current law allows hospitals and physicians to nominate Medicare carriers and intermediaries in their regions, but Thompson and Scully said that prevents the federal government from hiring the best contractors they can.
The Blue Cross and Blue Shield Association, which represents many Medicare contractors, will wait to see the details of the proposal before commenting, said Suzanne Block, a Blues spokeswoman.