Gilfillan leaves as innovations just beginning

The next chief of the CMS' idea lab will enter the scene just as early results emerge from the young agency's first efforts. Those returns will be closely scrutinized for clues to solving the nation's toughest health policy challenges, as well as picked apart for political gain.

But the results are not yet in, which carries its own political risks. Indeed, the CMS Innovation Center continues to struggle with the arduous and tense work of how to run programs considered among some of the most ambitious and least understood initiatives set in motion by the Patient Protection and Affordable Care Act.

“I don't envy your job,” Sen. Orrin Hatch (R-Utah) told Dr. Richard Gilfillan, the center's director, at a March hearing of the Senate Finance Committee. Gilfillan plans to walk away from it this month.

The opportunities and headaches will soon fall to CMS Chief Medical Officer Dr. Patrick Conway, at least temporarily.

Hatch assessed “confusion and clear lack of focus” at the Innovation Center and questioned the number of initiatives and “high-salary” employees carrying them out. But the agency is generally viewed in the industry as a bastion of smart people doing important work.

The Affordable Care Act gives the center $10 billion over 10 years. Its experiments so far include accountable care, bundled payments, primary-care case management and grants for people and organizations with promising ideas ($895 million awarded and up to $1 billion offered in a second round).

Gilfillan's departure, announced last week by release of an internal CMS memo, was met with surprise from industry executives working closely with the Innovation Center on its widely watched test of accountable care, the Pioneer ACO model. Some said his exit would risk delays to the program, which has had a bumpy start. Any replacement will need time to learn the complex program and establish the faith Gilfillan earned, which has so far been needed to weather disagreements, they said.

“I believe he understood” the concerns and challenges of hospitals and doctors working to develop and test new payment models, said Dr. William Chin, executive medical director of HealthCare Partners, a division of DaVita that operates Pioneer ACOs in California, Nevada and Florida. Chin said the incoming chief will face numerous unsettled issues “we're in the deep throes of trying to understand.” That includes a dispute over quality measures that went public this year.

In February, Pioneers publicly rejected proposed quality measures that they have to meet in order to receive bonuses. The ACO leaders asked for another year before bonuses are tied to the targets. Federal officials said no but agreed to develop new performance targets. Those have not yet been released. Last week, federal officials extended a deadline to July 15 from May 31 for Pioneers to withdraw from the program.

Gilfillan spoke to hospital and insurance executives with more practical knowledge and understanding than many within policy circles thanks to his career with Geisinger Health System, said Dr. Timothy Ferris, vice president of population health management for Partners HealthCare in Boston.

He frequently acknowledged the challenges providers faced and did not overlook the industry's effort or good will. “Rick never made that mistake,” Ferris said. That allowed him to build a working relationship, ask for compromise and respond with flexibility, all of which has proved valuable during the trial and error of the Pioneer ACO venture. “You have to be able to trust the person on the other side of the table,” he said.

Gilfillan's departure did not come as a complete surprise to everyone.

“Am I disappointed? Yes. Am I surprised? No,” said Deirdre Baggot, a registered nurse and vice president of the healthcare consulting firm the Camden Group. Baggot serves as an expert reviewer in application reviews for the bundled payment initiative. “The pace of change at CMS is not what we're all used to who work on the hospital and health plan side,” she added. “And that can be challenging.”

Thomas Scully, a senior counsel at Alston & Bird who served as CMS administrator during President George W. Bush's first term, said from his experience, leaders in these positions can burn out. Scully also said he doesn't think Gilfillan's leaving will be too disruptive for the Innovation Center.

“I think he's a big ideas guy, and a lot of what they're doing now is implementation,” Scully said. “I think it would be worse if he left a year ago.”

Baggot said she views Gilfillan's exit as “an enormous loss” because he has an understanding of bundled payments—which he worked with during his tenure at Geisinger—that few in the healthcare industry possess. “I believe strategically they are the best options to achieve the aims of healthcare reform, and I think him leaving leaves a real gap in knowledge in the area of bundled payment.”

Baggot recalled relaying concerns from bundled-payment awardees regarding data they were expecting from the Innovation Center. “I got an immediate response on a Friday, and on a Monday we had a call. On that call, he gave an update.”

With 450 sites ready to implement bundled payments as of Oct. 1, it will be critical for the next director to be equally responsive and accessible, Baggot said.

They'll get both in Conway—who was named acting director—said Marilyn Yager, a senior policy adviser at Alston & Bird. “He is a bright, confident person who is willing to show in a meeting when he's learning something,” said Yager, a healthcare aide to then-Sen. John Kerry (D-Mass.) in the 1980s and a healthcare liaison in the Clinton administration.

Neither Gilfillan nor Conway was available for an interview last week.

Conway, a pediatrician, was named CMS CMO and director of the Center for Clinical Standards and Quality in May 2011. “He responds in a way that helps the group or individual feel like their time is well spent,” Yager said. “I think that's how government is supposed to run.”

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