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CCIIO Director Steve Larsen Leaving For UnitedHealth Unit Optum in Mid-July

Wednesday, June 27, 2012
Federal Insurance Regulator Leaving CMS

Key Development: CCIIO Director Steve Larsen stepping down in mid-July to become executive vice president of UnitedHealth Group's Optum unit.

Next Step: CCIIO Office of Health Reform Director Mike Hash will be interim director until permanent successor is found.

By Sara Hansard

Steve Larsen, director of the federal office in charge of regulating health insurance under the reform law, will step down from his position in mid-July, Centers for Medicare & Medicaid Services acting Administrator Marilyn Tavenner told agency employees in a June 15 email.

Mike Hash, director of the Office of Health Reform in the Department of Health and Human Services, will be interim director of the Center for Consumer Information and Insurance Oversight (CCIIO) while a permanent successor is found for Larsen, who is director of CCIIO and deputy administrator of CMS.

Tavenner told agency employees, “Steve and I have worked closely over the past year in our efforts to incorporate the work of CCIIO into CMS. Together we have leveraged CMS' strengths as we took on these new responsibilities and I am proud of our efforts to hold insurance companies accountable to consumers and our work with states and others to build a new insurance marketplace.” Larsen's efforts “helped to lay the foundation for our continued success and have put us on a path to make sure that these new marketplaces are available to consumers in every state in 2014,” she said.

Leaving to Join Optum.
Larsen will be executive vice president at Optum, a health services and information technology company that is part of UnitedHealth Group Inc., of Minnetonka, Minn., the company confirmed. UnitedHealth Group is the parent company of UnitedHealthcare, the largest health insurer in the United States in terms of policyholders and revenues.

“We are excited to welcome Steve Larsen to Optum,” company spokesman Matthew Stearns told BNA in an email. “Steve's extensive, broad-based experience in health care will further enhance the support Optum provides to the health system and consumers in a rapidly evolving environment.”

Larsen became director of CCIIO in 2011 when the unit was reorganized and moved into CMS, as HHS implemented the health insurance regulation provisions of the Patient Protection and Affordable Care Act. He had previously been director of the Division of Insurance Oversight in the HHS office that was the predecessor to CCIIO.

Tenure Included Controversial Regulation.
Larsen has led CCIIO during the early phase of implementing PPACA, which was signed into law in 2010. During his tenure, CCIIO has issued numerous regulations, including the controversial decision to require entities affiliated with religious organizations, such as religious hospitals and schools, to cover contraceptive services without requiring cost sharing.

The Catholic Health Association June 15 sent a letter to Tavenner objecting to the contraceptive coverage regulation, specifically a March advance notice of proposed rulemaking on preventive services (CMS-9968-ANPRM) under the health reform law (see previous article). CHA asked that CMS “at the very least” expand the definition of a religious employer to make clear that Catholic hospitals and health care organizations are exempt from the contraceptive mandate (see related article).

The Supreme Court is expected to issue its ruling on the constitutionality of PPACA by the end of June.

Larsen's Experience, Reactions.
Prior to joining the Obama administration to implement PPACA, Larsen served in a number of capacities at Amerigroup Corp., a public managed care company serving Medicaid and Medicare beneficiaries, according to his biography on the CCIIO website. Larsen also was Maryland insurance commissioner for six years, chairman of the Maryland Public Service Commission for Gov. Martin O'Malley (D), and a partner with law firm Saul Ewing LLP.

“Steve did a remarkable job implementing massive changes in our health insurance system and took a lot of abuse as the point person for implementation,” Washington and Lee University Law Professor Timothy Jost told BNA in an email. “I will miss him.”

Opponents of PPACA linked Larsen's departure with difficulties in implementing the law. “ObamaCare--the president's signature domestic achievement--utterly depends on each state having a health insurance 'exchange' up and running by 2014,” Michael Cannon, director of health policy studies at the Cato Institute, told BNA in an email. “Larsen's office is supposed to create 15 or 30 or more of these new government bureaucracies with exactly no money. I would resign too,” he said.

By Sara Hansard


The letter from the Catholic Health Association is at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/CatholicHealth(1).pdf.

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