Marilyn Tavenner, CMS Director Nominee, Vows To Run Medicare Agency As A 'Business'

* Bipartisan backing from House Majority Leader Cantor

* Nominee rates operational skills over vision for agency

By Toni Clarke

WASHINGTON, April 9 (Reuters) - President Barack Obama's nominee to lead the huge agency that runs Medicare and Medicaid got rare bipartisan praise on Tuesday, but faced tough questions about healthcare reform and a recent controversial decision on Medicare Advantage payment rates.

Testifying before the Senate Finance Committee, which will decide whether to advance her nomination, Marilyn Tavenner said her role would be to run the Centers for Medicare and Medicaid Services as a business, and as a partner with many healthcare entities for the benefit of all.

Tavenner, a former nurse and hospital company executive from Virginia, has been acting administrator of the agency since late 2011.

"We have an $820 billion dollar business to run that a large amount of this country has a stake in, from beneficiaries to providers to hospitals to insurance companies to Congress to the administration to our CMS employees and contractors," Tavenner said. "We need to operate CMS as a business and act like business partners."

In a sign of her bipartisan appeal, she was introduced by one of the nation's most prominent conservative lawmakers and a longtime foe of Obama's Affordable Care Act, fellow Virginian and House Majority Leader Eric Cantor, who worked with Tavenner when she ran the state's Medicaid program.

"If there is anyone that I trust to try and navigate the challenges, it is Marilyn Tavenner. And I feel that strongly about her," said Cantor.

Committee Chairman Max Baucus of Montana lauded Tavenner's confidence, courage and compassion, while Virginia Senator Tim Kaine, a former governor, called her "a proven problem solver."

In prepared testimony, Tavenner said "strong operational skills" were most important for CMS, and she highlighted the agency's efforts to crack down on Medicare fraud and payment errors and to improve data access. CMS is part of the Department of Health and Human Services.

Tavenner was grilled by Republican senators about various aspects of the Affordable Care Act, which the agency will implement in addition to its provision of health coverage for some 100 million people -- mostly the elderly, poor and disabled.

Ranking Republican Senator Orrin Hatch of Utah said that CMS has "not been able to provide satisfactory answers" on various aspects of the state health insurance exchanges that are a centerpiece of the healthcare act. Signup for the exchanges, which are to provide subsidized private health coverage on Jan. 1, starts in October.

"We still know very little about how the exchanges will operate, what the key operational and implementation deadlines are, and how CMS is monitoring them to determine if things are on track or not," Hatch said.

"There is still much that you will need to do in order to assure members of this committee that CMS is heading in the right direction and that your leadership will help steer the agency through the very turbulent times that lie ahead."

Iowa Republican Charles Grassley pressed Tavenner on the possible leak of the April 1 decision on Medicare Advantage payment rates to a consulting firm. His queries were based on an April 3 Wall Street Journal report that stock market gains on April 1 were due to a report by Height Securities, saying the announcement would favor insurers.

Medicare Advantage provides care for seniors who elect to receive their Medicare benefits through private insurance plans.

"When information leaks from the administration that has the ability to cause significant market movement, it is wrong and quite possibly illegal," Grassley said.

Tavenner said she had asked the Office of the Inspector General to be brought in, to complement an internal review. "I do not consider this a small issue. I consider this a huge issue," she said.

Republicans opposed to the Affordable Care Act, which is designed to expand coverage to an estimated 27 million previously uninsured Americans, have blocked earlier attempts by Obama to name a new administrator.

CMS has been without a Senate-confirmed leader since 2006, when Dr. Mark McClellan, a Republican nominee who oversaw the implementation of the Medicare prescription drug benefit, resigned after just two years.

In July 2010 Obama appointed Donald Berwick, chief executive of the not-for-profit Institute for Healthcare Improvement, to the position while Congress was in recess.

More than 40 Republican senators vowed to block Berwick's confirmation, accusing him of wanting to ration healthcare. Berwick resigned shortly before the expiration of his recess appointment in December 2011.

Tavenner was Berwick's principal deputy and became acting administrator of CMS upon his departure.

Before joining CMS, Tavenner worked for four years as the secretary of health and human resources for Virginia. She spent 25 years working for the Hospital Corporation of America, beginning as a nurse, eventually becoming an executive, and ending in 2005 as head of its outpatient services unit. (Additional reporting by David Morgan; editing by Ros Krasny and Leslie Adler)