- The Washington Times - Tuesday, August 10, 2010

As administrator for the $800-billion-a-year Centers for Medicare & Medicaid Services, Dr. Donald Berwick is charged with implementing many of President Obama’s sweeping health care mandates in ways that undoubtedly will affect health plans, hospitals and health care providers across the country.

But a review of some of the funding sources of the nonprofit think tank he co-founded and until recently headed show health care entities that don’t appear on Dr. Berwick’s financial disclosure or on the standard ethics agreement that officials use to root out potential conflicts of interest.

The BlueCross BlueShield Association of America, Cardinal Health Foundation, Aetna Foundation, the RX Foundation and Baxter International are among the nonprofit Institute for Healthcare Improvement’s publicly disclosed donors, and it’s unclear whether they figured into the government’s standard ethics review.

Those entities have provided anywhere from $50,000 to as much as $5 million each to the institute’s “5 Million Lives Campaign,” which aims to improve hospital safety.

White House officials say Dr. Berwick is in full compliance with all ethics rules, and his financial disclosure form instructs nominees to list only former clients of a business or nonprofit in which the nominee was directly involved in providing a service for a fee for more than $5,000.

Dr. Berwick, 63, would have faced standard questioning about the finances of the Massachusetts-based nonprofit group if he had gone through the normal confirmation process, but his recess appointment last month means he can serve until the end of the next session of Congress without a Senate vote or a hearing.

Still, Sen. Charles E. Grassley, Iowa Republican and ranking member of the Senate Finance Committee, wants to know who funds the nonprofit institute and whether any of those organizations were taken into consideration when ethics officials vetted Dr. Berwick for potential conflicts of interest.

“One of the many significant issues related to your nomination that remains unresolved is the potential for conflicts arising from donors to the Institute for Healthcare Improvement, the organization you founded and led as Chief Executive Officer,” Mr. Grassley wrote in a recent letter to Dr. Berwick.

“The public has the right to know whether the numerous and significant policy decisions that you make are vulnerable to these potential conflicts of financial interest.”

A spokesman for the Centers for Medicare & Medicaid Services, where Dr. Berwick is commissioner, declined to comment and referred questions to the White House.

“Dr. Berwick will be responding to Senator Grassley’s letter,” White House spokesman Reid Cherlin said. “But the independent office of government ethics has certified that Dr. Berwick is in full compliance with all of the ethics rules and conflict rules that Congress has set forth.”

Mr. Grassley’s letter seeks Internal Revenue Service filings from the nonprofit for the past three years, including the so-called Schedule B list of revenue sources, which is not included on publicly available forms.

“My request goes to the heart of the issue of whether you are able to execute your significant responsibilities as CMS Administrator in a fair and impartial manner,” Mr. Grassley wrote in his July 29 letter, providing a deadline to turn over the information by Friday.

As part of an agreement to avoid any actual or apparent conflicts of interest, Dr. Berwick said, he would recuse himself from specific matters involving the institute, records show.

But he will seek a limited waiver from the rules to allow him to participate in matters involving Kaiser Permanente, which has had contracts with the institute, and the New York-based Commonwealth Fund, where Dr. Berwick served on an advisory panel.

If granted, the waiver won’t allow his participation on contracts, audits, investigations, disputes or appeals involving either entities, and at least one Department of Health and Human Services employee must be with Dr. Berwick involving any contacts with Kaiser Permanente or the Commonwealth Fund, according to the agreement.

In addition, Dr. Berwick resigned several unpaid positions as part of the agreement, including at BlueCross BlueShield of Massachusetts, the Robert Wood Foundation and the Journal of the American Medical Association.

His ethics agreement does not indicate that he will have to recuse himself from matters involving other entities listed as major donors on the institute’s website.

Last year, Dr. Berwick received nearly $900,000 in salary, bonus and deferred compensation as chief executive of the nonprofit Institute for Healthcare Improvement, which has fewer than 150 employees and describes itself as a “small organization with a very big mission.”

Jonathan Small, a spokesman for the institute, said about 25 percent to 30 percent of the organization’s income comes from well-known foundations publicly disclosed by the organization, but the majority of the income comes from revenue generated from fee-based programs.

Mr. Obama appointed Dr. Berwick as Republicans raised questions about his views on rationing health care, but the president said he wanted to fill the post because Republicans were delaying the nomination for political purposes.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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