Dr. Oz describes changes he would bring to Medicare, Medicaid as CMS administrator

April 3 update: The Senate formally confirmed Oz as CMS administrator via a 53-45 party-line vote. He is expected to be sworn in and begin work within days.

March 25 update: The Senate Finance Committee voted 14-13 along party lines to send Oz’s nomination to the full Senate for a formal confirmation vote. Democrats voting against Oz cited his lack of a stated commitment to protecting Medicaid from budget cuts as a key issue.

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Dr. Mehmet Oz would look to disrupt the healthcare power structure if he’s installed as CMS administrator, he said during his Senate confirmation hearing.

“There are probably 150 people who control healthcare in America, and they don’t really want anything to change,” Oz told the Senate Finance Committee.

Similarly, “We’ve got to challenge the incumbents in the system to have new ideas bubble to the top so we can pick winners based on competition.”

He did not disavow private-equity investment in healthcare, amid recent controversy, because “the only way to go after the big guys is to have smaller people who are willing to put money into initiatives that could go after [traditional] business models. Private equity is one of the ways you can do that. I absolutely agree with the point that it’s been abused, but this is an opportunity, too.”

In general, the March 14 hearing was free of the heated exchanges and apparent flubs that marked the two January confirmation hearings of Robert F. Kennedy Jr. for the post of HHS secretary. Oz also wasn’t pressed on his possible underpayment of Social Security and Medicare taxes in recent years.

As described during the hearing, here is Oz’s perspective on pivotal healthcare industry issues.

Big-picture changes

Oz said he wants to empower Medicare and Medicaid beneficiaries to take better care of their own health by giving them better tools and more transparency and increasing health-related interactions that occur outside formal appointments.

“One tactic that I believe will work quite effectively is that if we can get real-time information from physicians and other providers taking care of patients and, using that real-time information, give feedback to people who are worried about their well-being — that’s when they’re more likely to use that advice,” Oz said.

“That tool would allow them to call an expert if they needed that resource. We’d reimburse some of the healthy lifestyles that would be generated by these interactions, and we’d make them an active participant in their well-being.”

Similarly, he will look to help providers by applying AI and other technology to generate real-time information during patient encounters and within workflows.

Such ideas could support the Make America Healthy Again movement championed by Kennedy — as long as payment models change to reflect those goals, Oz said.

“Giving patients advice on lifestyle takes a lot longer than telling them to take a pill,” he said. “Doing surgery on people pays so much more than giving them advice about how to avoid operations that it’s difficult to imagine anyone not doing the wrong thing in that model.”

Medicare Advantage

Oz was not asked about his past endorsement of a Medicare Advantage (MA) for All model, in which MA would expand to cover all Americans except those on Medicaid.

He did sound willing to go after MA insurers that allegedly overcharge the government through methods such as upcoding.

“It’s something that is addressable,” Oz said. “I pledge if [I’m] confirmed, now we’ll go after it.”

He also said, “It’s upside down, and I think there are ways for us to look at the upcoding that’s going on — that’s happening systematically in many systems, in many programs — to make sure that people are being appropriately paid for taking care of sick patients, but not patients who aren’t ill. We have numerous tools, but part of this is just recognizing there’s a new sheriff in town.”

Oz would consider ways to negate the influence of MA plan brokers and agents, potentially by expanding plan enrollment to cover multiple years.

“That would save some of the money that brokers are taking out of the middle,” he said.

Sen. Bill Cassidy (R-La.) said Oz should look at the increasing tendency of MA plans to override local Medicare coverage determinations that establish coverage of items and services. Oz said he had not been aware that was happening.

Prior authorization

Technology can make prior authorization more efficient in MA, Oz said.

“I believe we have the power right now with technology that didn’t exist even three or four years ago to automate a lot of these [administrative] processes,” Oz said.

He said among the roughly 5,000 procedures that are subject to prior authorization as listed by insurers, only about 1,000 legitimately should go through the process.

“We should be able to create an experience for physicians and patients so that we know almost immediately if what they’re going through is requiring a preauthorization, and if it does, what do they actually do to qualify for it? That could be instantaneous,” Oz said.

He said there’s a need to “revisit some of the assumptions we’ve taken for granted for decades … and use technology today that could help us, because we have AI support tools, navigation systems that could pretty quickly adjudicate whether you should have to wait even a day to get the medication.”

AI also can be used in nefarious ways, including in prior authorization decisions, he acknowledged.

“If we see that there’s something being done, for example inappropriate use of AI or inappropriate denial of services with AI, we should be using AI within the agency to identify that early enough so that we can prevent it,” Oz said. “We should do it in real time, not six months down the road.”

Medicaid

Several Democrats pressed Oz about what he would do to ensure the viability of Medicaid in the wake of what could be substantial cuts stemming from the ongoing FY25 budget reconciliation process.

Oz said streamlining the program may benefit the core populations traditionally served by Medicaid.

“When you expand the number of people on Medicaid without improving the resources required for those doctors to take care of those patients, you stretch resources very thinly for the people for whom Medicaid was originally designed,” Oz said. “They cannot be compromised, so we have to make some important decisions to improve the quality of care.”

He said he’s in favor of work requirements, but “I don’t think you need to use paperwork to [fulfill the] work requirement, and I don’t think that should be used as an obstacle, a disingenuous effort to block people from getting on Medicaid.”

He also said, “The rapid expansion of required moneys for Medicaid is far beyond what was ever envisioned when the ACA [Affordable Care Act] was originally passed. It’s one of the areas we can do better.”

Responding to a question, Oz said he sees logic in having bridge programs to help people transition from Medicaid to ACA marketplace plans as needed. Such programs may become more important if Congress allows the enhanced subsidies for marketplace plan premiums to expire at the end of 2025.

Rural healthcare

Oz said telehealth can better support rural healthcare if CMS forges cohesive partnerships between smaller facilities and large health systems.

“It’s not just that they pick up the phone when you call,” he said. “It’s someone from an institution that knows your protocols, maybe they’ve shared theirs. You have a simpatico relationship that goes beyond just what’s on the streamed-in signal.”

He later said, “They’re not just there digitally, they’ve been [to the facility]. They know the institution, they know the people. They develop a camaraderie that allows them to thrive.”

Some changes may have to entail right-sizing institutions, Oz suggested, although he did not describe how Medicare policy could be used to influence such scenarios.

“There are some great institutions, 300-bed hospitals built in 1970 that really shouldn’t be a 300-bed hospital anymore, even though it is the only place to get care in that area,” he said. “We have to provide a better solution for the people in those areas, a financially viable one for the community and one that actually protects the state coffers.”