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Chapter 7

Policy Implementation

Learning Objectives

Describe the responsibilities of the executive, legislative, and judicial branches of government in policy implementation

Explain why the Centers for Medicare & Medicaid Services (CMS) is an important policy-implementing organization

Discuss the management challenges CMS faces in carrying out its policy implementation responsibilities

Describe the four key activities of policy implementation

Outline the federal rulemaking process

Discuss the role of interest groups in rulemaking

List and discuss three key variables in policy operation

Introduction to Policy Implementation

Enactment of laws and amendments marks the transition from policy formulation to policy implementation

Exhibit 7.1

Implementation is primarily a management undertaking, which activates the intent of legislative enactments by managing human, financial, and other resources for the purpose of designing, rulemaking, operating, and evaluating

People in implementing organizations can:

Implement policies

Make other policies

Exhibit 7.1 Policymaking Process: Implementation Phase and Activities

Designing

Efforts to establish the agenda of an implementing organization, plan how to address the agenda, and organize to carry out the plans

Agenda is normally rather static

Periodically, substantial change may occur

Example: Additional implementing responsibilities given to CMS by the ACA

Continuous Redesign Causes

Change occurs in an implementing organization’s external environment

An organization adopts new technologies

An organization experiences a change in management personnel

Large-scale design changes that involve reorganization/restructuring occur

Changes in implementation responsibilities trigger changes in organizational structure

Rulemaking

Enacted laws may not be explicit enough to guide implementation

Rulemaking: process through which federal agencies develop, amend, or repeal rules

Early and vital step in implementation

Exhibit 7.5

Formally established rules have legal effect

Exhibit 7.5 The Federal Rulemaking Process

Note: OIRA, Office of Information and Regulatory Affairs (of Office of Management and Budget). Source: Adapted from Carey (2019).

Rules of Rulemaking

There are rules to making rules

Federal Register Act of 1935

Administrative Procedure Act of 1946

Implementing agencies must publish proposed rules (i.e., a draft)

Those with interests can participate in the rulemaking prior to adoption of the final rule

Both are published in the Federal Register

Rulemaking for the ACA

Example: 2013 HHS Notice of Proposed Rulemaking related to implementing the ACA

Oversight of premium-stabilization programs

Program integrity of state marketplaces

Flexibility for states

Consumer protections for enrollment assistance

Etc.

Rulemaking presents active points of involvement in policymaking

Interest Groups in Rulemaking

Every policy affects one or more interest groups

Interest groups seek to influence rulemaking

Result is intense lobbying

Most politically powerful groups exert the greatest influence

Example: Rulemaking that stemmed from the enactment of Medicare

Exhibit 7.6

Exhibit 7.6: Typical Policy Preferences of Selected Health-Related Individuals and Organizations

Other Interactions Between Rulemakers and Those Affected by the Rules

When rule development is anticipated to be difficult, special provisions may be made

Example: Health Maintenance Organization Act (1973)

Another strategy is the creation of advisory commissions

Example: Amendments to the Social Security Act (1983)

Operating

Beware: Some individuals with implementing responsibilities may seek to stall, alter, or even subvert the laws in their implementation phase

Operating activities

Example: CMS’s operation of Medicare Parts A and B

CMS’s Operation of Medicare

Includes:

Processing claims

Enrolling providers in the Medicare program

Handling provider reimbursement services

Processing appeals

Responding to provider inquiries

Educating providers about the program

Administering the participating physician/supplier program

Key Variables in Operating Policies

Operational success depends on:

How the policy is designed or constructed

Characteristics of the organization(s) charged with implementation

Capabilities of the implementing organization’s manager

Capabilities of Managers

Managers are responsible for:

Molding internal and external agreement on the organization’s purposes and priorities

Building support for the organization’s purposes and priorities among internal and external stakeholders

Striking a workable balance among members’ economic, professional, and public interests

Negotiating and maintaining effective relationships

Capabilities of Managers

Additional important qualities include:

Basic management skills

Possession of specific competencies

Collaboration skills

Ability to develop shared cultures

Coordination

Evaluating

Brings implementation full circle and can lead to new rounds of policymaking

Policy evaluation: systematically collecting, analyzing, and using information to answer basic questions about a policy, and ensuring that those answers are supported by evidence

Types of Evaluations

Process: assesses ongoing operations

Outcome: results in specific outcomes, impact

Formative: collects data for needed changes

Summative: assesses results

Cost-benefit: compares the relative costs to the benefits

Cost-effectiveness: compares the relative costs to having met its objectives

Timing of Evaluations

Ex-ante policy evaluation: mainly influences agenda setting

Policy monitoring evaluation: helps ensure that policies are implemented as designed and intended

Ex-post policy evaluation: determines the real value of a policy

Support for Policy Evaluations

Two executive branch organizations and three legislative branch agencies

Agency for Healthcare Research and Quality

Produces evidence to make healthcare safer; higher quality; and more accessible, equitable, affordable

CMS Innovation Center

Tests new payment and service delivery models to reduce program expenditures for Medicare, Medicaid, or CHIP beneficiaries

Support for Policy Evaluations

Government Accountability Office

Congressional watchdog that provides timely, objective, and fair information

Congressional Budget Office

Provides Congress with the nonpartisan analyses needed for economic and budget decisions

Congressional Research Service

Provides Congress with information/analyses that would allow it to make more informed decisions

Executive Branch Organizations

Implementing organizations: HHS, DOJ, EPA, FDA, CMS

Exhibit 7.4

CMS is heavily involved in implementing important health policies

Examples: Medicare, Medicaid, ACA

Must coordinate with states to establish health insurance marketplaces, expand Medicaid, and regulate private insurance plans

Exhibit 7.4 Organization Chart of CMS, 2020

Legislative Branch Oversight

Four goals of legislative oversight

Ensure that implementing organizations adhere to congressional intent

Improve the efficiency, effectiveness, and economy of government’s operations

Assess the ability of implementing organizations and individuals to manage implementation

Ensure that implementation of policies reflects the public interest

Legislative Branch Oversight

Oversight is accomplished through:

Funding appropriations

Direct contact between members of Congress and implementers

Each standing committee of the House and Senate:

Has certain oversight responsibilities

Must adopt its oversight plan in each Congress’s first session (Rule X)

CMS as an Exemplar Implementing Agency

CMS is the largest purchaser of healthcare in the United States

Budget: Approximately $1 trillion for 2020

Provides health benefits to about 145 million beneficiaries

Medicare

Medicaid

Children’s Health Insurance Program (CHIP)

ACA adds millions more

Structure and Functions of CMS

Exhibit 7.4

Organized into centers serving key functions

Center for Medicare

Center for Medicaid and CHIP Services

Center for Consumer Information and Insurance Oversight

CMS Innovation Center

Center for Clinical Standards and Quality

Center for Program Integrity

Structure and Functions of CMS

Center for Medicare

Focal point for national Medicare program policies

Center for Medicaid and CHIP Services

Focal point for policies and operations relating to Medicaid and CHIP

Center for Consumer Information and Insurance Oversight

Sets and enforces standards for health insurance

Ensures availability of affordable healthcare

Structure and Functions of CMS

CMS Innovation Center

Identifies, validates, and disseminates information about new care models and payment approaches

Center for Clinical Standards and Quality

Focal point for quality, clinical, and medical science issues

Center for Program Integrity

Focal point for Medicare/Medicaid/CHIP integrity fraud and abuse issues

Managing Policy Implementation

Authoritative decisions are also made during implementation

Two important management aspects

Implementing organizations must manage the implementation of policies

Managers of these organizations must also oversee their own organizations

Managing Policy Implementation

In managing CMS, its leaders must:

Analyze variables in CMS’s external environment

Determine CMS’s mission and objectives

Assemble the resources necessary to achieve the mission and objectives

Determine the processes necessary to accomplish the mission and objectives

Lead others in contributing to the accomplishment of the mission and objectives

Managing Policy Implementation

Challenges

Overseeing the health insurance marketplaces

Transitioning to value-based payments for healthcare

Ensuring appropriate use of prescription drugs

Protecting the integrity of expanding programs

Fighting fraud and waste

Managing Policy Implementation

Challenges

Preventing improper payments and fraud

Ensuring quality of care in caregiving settings

Using data/technology to protect program integrity

Protecting grants and contract funds from fraud/waste

Ensuring the safety of food, drugs, and medical devices

Summary

Designing

Rulemaking

Operating

Evaluating

Responsibility for policy implementation

CMS as an exemplar implementing agency

Policy implementation as policymaking but with a management aspect

Review Questions

Describe in general terms the implementation phase of public policymaking, including the responsibility of each branch of government.

Describe the designing activity in policy implementation.

Discuss the federal rulemaking process, including the role of interest groups.

Describe the operating activity in policy implementation.

Describe the evaluating activity in policy implementation.

List and briefly describe five organizations that support policy evaluation.

Review Questions

Discuss legislative oversight of policy implementation.

What are some of the important activities in CMS?

Describe CMS’s key functions with regard to Medicare and Medicaid.

Discuss the challenges CMS faces in managing the health insurance marketplaces.

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