New HHS Secretary Burwell faces tough tasks ahead

(Story updated at 4:30 p.m. ET.)

Incoming HHS Secretary Sylvia Mathews Burwell, confirmed by the Senate on Thursday, now faces critical issues related to implementation of the federal healthcare law and a narrow window to prepare for the 2015 open-enrollment period.

She should quickly decide on her top priorities for the agency, said Michael Leavitt, a former governor of Utah who served as HHS Secretary under President George W. Bush. She then must focus on accomplishing those tasks and avoid distractions, given the limited amount of time she'll be at the helm prior to the inauguration of a new president in early 2017, he said.

“A thousand days in a town like Washington, D.C., with a lot of political distractions and turmoil; you have to choose the things that are most critical,” Leavitt said.

Burwell won confirmation on a bi-partisan 78-17 vote. Key Republicans backing her nomination included Sens. Orrin Hatch (R-Utah), the ranking minority member of the Finance Committee, and Lamar Alexander (R-Tenn.), the senior Republican on the Health, Education, Labor and Pensions Committee.

Senate Democrats lauded Burwell as the right person for the job. “We've got to be about reforms and improvements,” said Sen. Tim Kaine (D-Va.). “Sylvia Mathews Burwell is a person who walks into work every day wanting things to be better than they were yesterday.”

But Sen. Jeff Sessions (R-Ala.) questioned whether Burwell had the managerial experience for the post. “She just simply is not the person that we need today to bring order out of the disarray that we have in the healthcare system of this country,” Sessions said during the floor debate.

Burwell will oversee a $1 trillion agency with nearly 80,000 employees. Its purview includes authority over drug regulation, disease monitoring and medical research. During the debate over her nomination, Hatch referred to HHS as “almost an uncontrollable, un-administrable agency.” But Burwell's stewardship of the ongoing implementation of the Patient Protection and Affordable Care Act will undoubtedly draw the most scrutiny.

Burwell comes to the high-profile post after serving as director of the Office of Management and Budget for roughly a year. Her resume also includes stints as president of the Wal-mart Foundation, chief operating officer of the Bill and Melinda Gates Foundation and deputy chief of staff to President Bill Clinton.

She takes over for Kathleen Sebelius, who became a political piñata for Republicans as the administration's point person on the contentious healthcare law. The former Kansas governor rode out the disastrous rollout of the state and federal exchanges—and numerous calls for her resignation—to oversee an initial open-enrollment period that exceeded projections, with 8 million individuals signing up for private health plans.

Sebelius is not the only key HHS official to step down in recent weeks. Jonathan Blum, CMS principal deputy administrator, departed in May. And Michael Hash, director of HHS' Office of Health Reform, announced his retirement last month.

Leavitt thinks more departures are likely as the Obama administration nears its completion. “She needs to embrace the career employees,” Leavitt said. “There's always an instinct on the part of political (appointees) to not fully appreciate the powerful impact that career employees can have.”

The success of the open-enrollment period has been shadowed by ongoing technology problems, including reports that more than 2 million individuals who signed up for coverage face data discrepancies on key details such as income or immigration status. That could lead to enrollees owing money after utilizing subsidies to which they were not entitled, or even to some enrollees losing coverage.

There are also ongoing problems with back-end exchange operations that were shunted to the side to focus on the initial open-enrollment period. Those problems will need to eventually be resolved so that insurers receive accurate payments and individuals can re-enroll in coverage without undue difficulties.

In addition, some state-based exchanges continue to have severe technical issues. The problems in Oregon and Nevada have been so severe that state officials have decided to rely on the federal HealthCare.gov website for 2015 enrollments. That migration to the federal exchange could cause additional technological headaches.

“Certainly that kind of process was not something that was fully anticipated and prepared for,” said Elizabeth Carpenter, a director with the consulting and research firm Avalere Health.

The rocky rollout of the exchanges puts additional pressure on the administration to have a smooth 2015 open-enrollment period, which begins Nov. 15.

Joel Ario, managing director at Manatt Health Solutions and former director of HHS' office overseeing the health insurance exchanges, says a key task for Burwell will be managing the agency's relationships with state governments and insurers.

In particular, he cities ongoing concerns about adequate provider networks for health plans sold on the exchanges, and what role HHS will play in regulating that structure, as critical issues going forward. Ario believes that the federal government would be wise to largely defer to state regulators in establishing rules for provider networks.

“Those are particularly important issues for this secretary, because while she comes with stellar credentials, they don't include working with states or insurers,” Ario said. “Those two constituencies are very important for her to reach out to.”

Carpenter points to another potentially politically thorny issue that Burwell will need to navigate in the coming months: updating rules for essential health benefits prior to the 2016 open-enrollment period. Carpenter points out that HHS could begin issuing guidance on the issue as soon as this fall.

“Certainly the midterms complicate that, as we know essential health benefits have been highly controversial in the past,” said Carpenter, noting that the Obama administration has so far given states wide regulatory leeway to establish coverage rules. “The question is if HHS will maintain that approach, or take another path.”

Burwell won't have much time to learn the bureaucratic ropes. Already, insurers are submitting proposed insurance products for sale on the exchanges in 2015, and state regulators are scrutinizing the details. Products that insurers want to sell through the federal exchange need be submitted to the CMS (PDF) by June 27 for review.

“We're really approaching 2015 open enrollment with rapid speed,” Carpenter said.

Follow Paul Demko on Twitter: @MHpdemko