Republicans critical as US Medicare chief appears

* CMS administrator makes first appearance before Congress

* Says health reform law will help CMS control costs

* Senate Republicans criticize costs, recess appointment

WASHINGTON, Nov 17 (Reuters) - Senate Republicans decried the cost of Medicare and Medicaid and accused the Obama administration of blocking their oversight of the federally supported insurance programs for the elderly and the poor, at a hearing on Wednesday.

It was Centers for Medicare & Medicaid Services Administrator Donald Berwick’s first appearance before lawmakers since his July recess appointment by President Barack Obama, a maneuver that bypassed Senate confirmation hearings.

Berwick said major health legislation passed earlier this year gives the two programs new tools to control costs so they do not run out of money.

“What’s true in every other modern industry is true in healthcare too ... doing things right costs less,” Berwick told the Senate Finance Committee. “When we raise the quality of care for Medicare beneficiaries, we raise the quality of care for everybody.”

Berwick and committee Democrats said provisions in the health law that strengthen funding for preventive services and allow CMS to experiment with ways to provide more efficient and coordinated care will help reduce costs.

About 45 million elderly and disabled Americans are enrolled in Medicare plans, which have come under fire from critics who say the government pays too much to the companies running them and that they are subject to fraud.

Medicare drew attention last week when the co-chairs of a panel looking at ways to reduce the federal deficit called for sweeping changes to cut the program’s costs.

CMS announced on Tuesday the formal creation of a new innovation center, called for by the health law, that will serve as a testing ground for new practices.

The agency said it will look at “bundling” payments for multiple procedures and “health home” models in which patients with at least two chronic conditions can designate a provider to coordinate treatments.

Medicare reform is a main plank in the health legislation that was championed by President Barack Obama.

Republicans, who made big gains in recent congressional elections, have pledged to repeal the law, saying it will fail to achieve promised savings and is an overreach by government with provisions requiring all Americans to buy coverage starting in 2014 or face fines.

Republicans on the finance committee focused during the hearing on what they perceive as a lack of transparency surrounding Medicare and Medicaid.

Members criticized the Obama administration for appointing Berwick during a congressional recess, Berwick for accepting the appointment before being vetted by the Senate, and their Democrat colleagues for failing to call Berwick in front of the committee sooner.

“For this $800 million agency, the President just recess appointed you,” Utah Republican Orrin Hatch said, adding that Berwick could be “the most important man in America” on health care. (Reporting by Emily Stephenson; Editing by Tim Dobbyn)