DCEKG Podcast w/ Joe Grogan | Ep 135 How FDA and CMS Should Work Together with Dr. Mark McClellan

DC EKG with Joe Grogan: A Healthcare Policy Podcast DCEKG Podcast w/ Joe Grogan | Ep 135 How FDA and CMS Should Work Together with Dr. Mark McClellan In Episode 135 of DC EKG, Joe Grogan hosts Dr. Mark McClellan, the only person to have served as both FDA Commissioner and CMS Administrator. Dr. McClellan walks Joe through the creation of Medicare Part D, how accurate data and effective public-private partnerships are the foundation for successful healthcare policy, and why the FDA and CMS need to collaborate more seamlessly. The first half covers the historic Medicare Modernization Act of 2003 and the creation of Part D. Dr. McClellan explains the unprecedented challenges: coordinating 50,000-plus pharmacies, managing enrollment across multiple plans, and creating real-time eligibility systems that instantly tell pharmacists if a patient was covered and what their copay would be. He discusses bipartisan support, including Senator Ted Kennedy's critical vote for cloture, and how the Bush administration backed detailed regulations even in an election year. The result was SureScripts, a functioning national system for drug coverage eligibility. The second half addresses what went wrong. Dr. McClellan identifies the core problem: electronic health records were optimized for billing and reimbursement rather than clinical decision-making. Diagnosis coding shifted from procedure billing to risk adjustment, creating incentives to add diagnoses for higher payments rather than for clinical accuracy. What the system needs instead is auditable, verifiable clinical data such as lab results, BMI measurements, and disease severity measures, not manual diagnosis codes that are subject to manipulation. Dr. McClellan discusses why the FDA and CMS must collaborate more seamlessly, rather than CMS second-guessing the FDA's scientific judgment. He gives examples of successful collaborations, such as TAVR (transaortic valve replacement) and new digital forward-provider payment models in Medicare Part B. He emphasizes the coming challenge posed by one-time curative treatments like gene-editing and CRISPR therapies, which require entirely new payment models. His message: accurate, meaningful data shared among providers, payers, and patients drives all value in healthcare and leads to better outcomes. Key Timestamps 0:00 What drives everything in healthcare is accurate underlying data 1:30 Mark McClellan introduces himself and his career background 4:05 Why Mark went to the FDA before CMS and the Bush administration transition 8:20 Janet Woodcock and implementing Bayesian statistical methods 9:26 Hiring Scott Gottlieb as a special advisor 11:35 The creation of Part D and Ted Kennedy's critical role 14:00 Creating a new standalone drug coverage market 15:30 Connecting 50,000 pharmacies with real-time eligibility 16:42 How SureScripts solved the data exchange problem for Part D 22:06 Looking back 10 years: regrets and what could have been done differently 24:30 How electronic health records became optimized for billing 26:14 Risk adjustment and the shift from CPT codes to diagnosis codes 29:00 What we need instead: auditable lab results and real clinical data 30:35 FDA CMS collaboration and why CMS should not second-guess FDA science 33:08 TAVR as a successful coverage with evidence development example 35:45 Digital forward providers and outcome-based Medicare Part B payment 37:55 The challenge of one-time curative treatments like gene editing 39:39 If Mark were HHS Secretary tomorrow, what would be his priority 42:47 The Duke Margolis conference and future healthcare challenges 46:56 The hepatitis C treatment payment problem and preparing for cures 50:15 Joe's personal story about his mother waiting for TAVR 52:10 How to fix evidence development and make clinical development faster 54:30 GLP one negotiation and pricing models for low-cost high-volume products Medicare Part D, Medicare Advantage, FDA CMS collaboration, drug benefit, prescription drug coverage, health policy, electronic health records, risk adjustment, data quality, diagnosis coding, gene therapy, CRISPR, one-time cures, coverage with evidence development, TAVR, digital forward providers, Dr. Mark McClellan, healthcare innovation, public-private partnerships About the Guest Dr. Mark McClellan is a physician, economist, and health policy expert who served as FDA Commissioner from 2002 to 2004 and CMS Administrator from 2004 to 2006 in the Bush administration. He is Director of the Margolis Institute for Health Policy at Duke University, where he leads research on Medicare reform, healthcare innovation, and AI in medicine. He sits on the boards of Cigna and Johnson and Johnson. Podcast: DC EKG with Joe Grogan Episode: 135 Guest: Dr. Mark McClellan Sponsor: Survivors for Solutions – https://survivorsforsolutions.org Executive Producer: John "CZ" Czwartacki, DC EKG Podcast Producer: Stay on Course Studios – https://www.stayoncourse.studio