Medicare’s McClellan Resigns

BALTIMORE–CMS Administrator Mark McClellan, who has overseen
Medicare’s biggest expansion since the program’s inception 40 years
ago, announced Tuesday that he will resign his post early next
month.

Taking the helm in 2004 after former Administrator Tom Scully
left the position, the 43-year-old physician and economist has
supervised the agency during rollout of Medicare’s Part D
prescription drug benefit–and as planning moves toward DME
competitive bidding in 2007. He also has guided CMS during calls
for Medicaid reform and, more recently, in implementing
controversial provisions in the Deficit Reduction Act, including
its 36-month cap on home oxygen rental.

McClellan told reporters his decision to resign from CMS was not
related to a possible takeover by Democrats in the House or Senate
after the November elections, which could result in oversight
hearings on the new drug benefit. The drug program got off to a
rough start, with beneficiaries complaining about problems
obtaining their medications. However, McClellan said most
beneficiaries are now satisfied with the program and that their
costs are lower than originally projected.

In a statement, Senate Finance Committee Chairman Sen. Charles
Grassley, R-Iowa, said he hoped McClellan’s departure “doesn’t
cause delays in getting Part D snags fixed for beneficiaries and
that he’ll correct all known problems before he leaves.” However,
Grassley, whose committee oversees Medicare, added that McClellan
“should get credit for a lot of behind-the-scenes work to make sure
millions of Medicare beneficiaries get their prescriptions filled
smoothly.”

Other legislators were not so generous.

“I hope the next administrator places a renewed focus on
oversight, shies away from partisan politics and works to protect
and preserve Medicare for future generations,” Rep. Pete Stark,
D-Calif., said in a statement.

Before his appointment to CMS, McClellan served as commissioner
of the Food and Drug Administration. He has also served as a senior
health policy aide to President Bush and as a member of the White
House Council of Economic Advisors. Previously, he worked at
Stanford University as an associate professor and director of the
Program on Health Outcomes Research, and was an attending physician
for internal medicine at Stanford Health Services.

McClellan’s successor has not yet been named, though insiders
say there are several front-runners for the job, including Deputy
CMS Administrator Leslie Norwalk; Herb Kuhn, director of the Center
for Medicare Management at CMS; and Dennis Smith, director of the
Center for Medicaid and State Operations at CMS. Because the
current legislative session is winding down, an acting CMS director
could be named to serve until the Senate holds a confirmation
hearing on the new nominee.

The job includes administering a budget estimated at almost $600
billion a year on health care for approximately 90 million
Americans through Medicare, Medicaid and the State Children’s
Health Insurance Program. McClellan’s replacement will likely have
to face questions about how to sustain Medicare as the nation’s 78
million baby boomers move into eligibility and approach old age.
There could also be continuing questions about the Part D drug
benefit snafus, Medicaid reform plans and additional program cuts
that many expect in the Bush administration’s next fiscal year
budget proposal.

McClellan, whose brother Scott McClellan is the former White
House press secretary, said he is interested in taking a job with a
think tank.