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McClellan Resigns As Head Of CMS, Claiming Drug Benefit Is On A Stable Track

Reprinted from the September 6, 2006 issue of "The Pink Sheet" DAILY

Mark McClellan has announced he will step down as CMS administrator by early October, citing a desire to spend more time with his family. Until then, he will work on having a smooth transition of leadership at the agency.

In a Sept. 5 press briefing, McClellan noted that during his two-and-half-year tenure at CMS, the agency overcame administrative difficulties implementing the Medicare Modernization Act of 2003, including the new Part D drug benefit.

He maintained that Part D is now running smoothly, citing evidence such as: startup problems have been identified and addressed; Part D is costing 25% less than expected; more than 90% of Medicare beneficiaries are enrolled; beneficiary satisfaction rates are over 80%; and the agency just finished collecting its second year of plan bids.

"I will [move on] with full confidence that the agency will continue to do what it takes to improve the health and health care of all the Americans who count on us," McClellan stated in an e-mailed resignation announcement to CMS staff.

The agency is expected to appoint an acting administrator this month. Officials in a position to be named interim head include: Deputy Administrator Norwalk; Herb Kuhn, director for Medicare Management; Abby Block, director of the Office for Beneficiary Choices; and Dennis , director for Medicaid and State Operations. was named acting administrator in December 2003 after the resignation of former CMS Administrator Tom Scully. He acted in that capacity until April 2004, when McClellan was confirmed by the Senate.

McClellan's plans for the immediate future include unofficial involvement in the political campaign of his mother, Carole Keeton Strayhorn, who is running as an independent for Texas governor.

He also said he will consider joining a Washington, D.C.-based think tank and could resume his professorship at Stanford University, where he taught prior to joining the government.

Before being confirmed for the CMS post in April 2004, McClellan served as FDA commissioner, where he started in November 2002. Prior to FDA, he was involved in crafting the administration's Medicare policy as a member of the White House Council of Economic Advisors.

-Todd Leeuwenburgh (t.leeuwenburgh@...)