McClellan Leaves CMS, Industry Loses a Friend

When Mark McClellan was named to head CMS, industry welcomed the move. As head of FDA, he had been a promoter of medical technology. Once in the administrator's office, he was active and forward-looking. So with his departure, the industry—for the most part—will lose a friend.

“That's not to say that you will not find device companies that would disagree with him on things,” says Ted Mannen, managing director of EBG Advisors Inc. “But, he's the only administrator I've ever known who before coming to the job had written papers on the value of medical technology.”

In the mainstream press, McClellan will most likely be associated with the new Part D benefit that came into effect on his watch. “In a macro sense, he'll be thought of as the guy who supervised the implementation of the new drug benefit,” says Mannen.

But within the device world, he has left his mark in a couple of key areas.

“He will be very strongly associated with this new Coverage with Evidence Development policy, which is a very big deal,” says Mannen. The program aims to allow payment for services that are expansions of existing covered services. In the device industry, “he'll be thought of as the person who brought this new coverage with evidence development to fruition,” notes Mannen.

Most major changes at CMS have been mandated by Congress, explains Mannen. So, the administrator at the time is obliged to implement whatever that change may be. “With Coverage with Evidence Development, there was no statutory impetus. This is an administrator who went into an area where he didn't have to go, but said, ‘we're going to make it a priority to get a technology policy.' He persevered and pulled off a fairly major policy change. So that's one thing that really differentiates him.”

McClellan's other major legacy will be the new rule for the inpatient prospective payment system that was issued on August 1 (see “Industry Speaks, CMS Listens”). “He was very involved in that controversial rule,” says Mannen. “That's one of those cases where you would survey the implant companies, and many of them would not like where he went on that. But he definitely had an effect.”

In a nutshell, Mannen characterizes McClellan's style at CMS as “very much not business as usual.” Compared with most of his predecessors, he was a true activist.

Reimbursement is the perfect example. “We've been talking about coverage of new technology for years. But he was the administrator—whether you like the end result or not—that got in there and put out a guidance document. That document is in effect and is shaping how device companies get coverage now in a very important way,” notes Mannen. “Although not universally applauded, this guidance is one of the most significant changes for technology policy I've ever seen in reimbursement.” Industry found the final rule to be much more acceptable than the proposed rule.

One thing is certain. McClellan committed to fundamental changes, and his leadership was a refreshing change. A number of names have been mentioned as possible successors, but as of this writing, no one has risen to the top. The New York Times reported that Leslie Norwalk, the deputy administrator at CMS, is an obvious candidate to serve as acting administrator. In the meantime, Mannen says, “we will likely go through a stay-the-course period for the foreseeable future.”

Sherrie Conroy for the Editors