- The Washington Times - Sunday, August 29, 2010

Before he took over the nation’s Medicare and Medicaid agency this summer, Dr. Donald Berwick retired from the nonprofit health care think tank he co-founded with a nearly $900,000 compensation package and a seven-figure executive retirement plan.

But Dr. Berwick is declining to say exactly who provided funding to the Massachusetts-based Institute for Healthcare Improvement in response to Republicans who question whether the new Medicare chief could have a conflict of interest if medical-device companies or health plans helped make his generous compensation package possible in the first place.

Last week, Dr. Berwick, who is administrator of the Centers for Medicare and Medicaid Services (CMS), declined to release information about donors to the nonprofit group where he served as chief executive, saying he no longer worked there and had no authority to release information that was not public.

In a letter to Sen. Charles E. Grassley, Iowa Republican and ranking member of the Senate Finance Committee, Dr. Berwick said he has complied fully with the ethics rules.

“You can be assured that I will comply with all of the recusal and other obligations contained in my ethics agreement,” Dr. Berwick wrote.

The Washington Times reported earlier this month that a review of some of the funding sources of the Institute for Healthcare Improvement 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, giving $50,000 to $5 million each to the institute’s “5 Million Lives Campaign” hospital-safety initiative.

Yet under the ethics rules, nominees such as Dr. Berwick needs to disclose only donors or former clients that provided more than $5,000 for services that the nominee personally was involved in providing.

The provision means that a group such as BlueCross BlueShield could have given the institute more than $1 million, but if Dr. Berwick wasn’t personally involved in providing any services, he wouldn’t have to disclose the donor information. On the other hand, if he earned just $5,000 giving a speech to a trade association, federal ethics lawyers would insist on vetting the arrangement for a potential conflict of interest.

Mr. Grassley said the donor details remain important because unlike most political nominees, Dr. Berwick didn’t go through the standard confirmation process whereby senators could question him about his background during a confirmation hearing.

President Obama gave Dr. Berwick a recess appointment, meaning he can serve until the end of the next session of Congress without a confirmation hearing.

“The CMS administrator has authority for the health coverage of more than 100 million Americans and manages a budget larger than the Pentagon’s,” Mr. Grassley said Friday. “At least a minimal amount of transparency is necessary for the head of such an influential agency.”

Mr. Grassley said a committee hearing into Dr. Berwick’s nomination would have examined the institute’s funding and identified potential conflicts of interest in his job overseeing Medicare and Medicaid.

“The public doesn’t have enough information to be able to evaluate his capacity to serve without any conflicts,” Mr. Grassley said.

But Dr. Berwick said he has undergone a stringent ethics review. In his letter to Mr. Grassley, he pointed out that he won’t participate in any particular matters that have a direct financial impact on two of his former clients, the Commonwealth Fund and Kaiser Permanente. He also said he has had no financial interest in the Institute for Healthcare Improvement. He said the institute does not and will not provide health coverage for him or his family.

Dr. Berwick also said that upon his resignation, he forfeited all benefits from the institute except his supplemental executive retirement plan, which his government financial-disclosure form estimates to be worth $ 1 million to $2.35 million.

But he said he couldn’t provide Mr. Grassley with requested information about the identity of the institute’s donors.

“I remain committed to doing whatever I can to comply with your request and any other request from the committee for information related to my nomination,” he wrote. “However, because the information you requested includes non-public documents in the possession of my now former employer, it is not within my power to comply with your entire request.”

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

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