Where Industry and Security Intersect
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The Centers for Medicare and Medicaid Services (CMS) (formerly known as the Health Care Financing Administration (HCFA)), located within the U.S. Department of Health and Human Services, runs the Medicare and Medicaid programs – two national health care programs that benefit about 75 million Americans. CMS and the Health Resources and Services Administration run the Children’s Health Insurance Program, a program that provides medical coverage for uninsured children in the United States.
CMS also regulates all laboratory testing (except research) performed on humans in the United States. In addition, CMS partners with the Departments of Labor and Treasury to help U.S. citizens and small companies obtain and retain health insurance coverage; these departments work to eliminate discrimination based on health status for people buying health insurance.
CMS spends more than $360 billion a year buying health care services for beneficiaries of Medicare, Medicaid and the Children’s Health Insurance Program. CMS has oversight responsibility for these programs, establishing policies that pay health care providers, and conducting research on the effectiveness of various methods of health care management, treatment, and financing. CMS also assesses the quality of health care facilities and services and takes enforcement actions as appropriate.
CMS has 4,000 employees working in its Baltimore, Maryland headquarters and 10 regional offices nationwide. The headquarters staff is responsible for national program direction. The regional office staffs provide CMS with the local presence necessary for customer service and oversight.
A brief outline of the three major CMS programs follows:
Medicare is the nation’s largest health insurance program, covering more than 38 million Americans at a cost of nearly $200 billion. Medicare provides health insurance to people who are at least 65 years old, people with disabilities, and people with permanent kidney failure. Benefits fall into two major categories: Hospital Insurance (Part A) and Medical Insurance (Part B).
Medicare Part A helps pay for inpatient hospital services, skilled nursing facility services, home health services, and hospice care. Medicare Part B helps pay for doctor services, outpatient hospital services, medical equipment and supplies, and other health services and supplies.
Medicare beneficiaries enrolled in managed care plans such as Health Maintenance Organizations (HMOs) can get both Part A and Part B benefits in most managed care plans and Preferred Provider Organizations. In 1999, the program expanded to provide services for members of HMOs with or without point-of-service options, provider sponsored organizations (closed networks operated by providers) and private fee-for-service plans. Medical savings accounts were also introduced.
Medicaid is a health insurance program for qualifying low-income people and those with disabilities, and is funded and administered through a state-federal partnership. Although there are broad federal requirements for Medicaid, states have a wide degree of flexibility in the design of their programs. States have authority to establish eligibility standards, determine what benefits and services to cover, and set payment rates. About 33 million people are eligible for Medicaid, including certain low-income families with children; aged, blind or disabled people on Supplemental Security Income; certain low-income pregnant women and children; and people who have very high medical bills.
Because states have flexibility in structuring their Medicaid programs, there are variations from state to state. All states, however, must cover these basic services: inpatient and outpatient hospital services; laboratory and X-ray services, skilled nursing and home health services, doctors’ services; family planning; and periodic health checkups, diagnosis and treatment for children.
CMS, along with the Health Resources and Services Administration, runs the Children’s Health Insurance Program. Program benefits became available October 1, 1997, and provided $24 billion in federal matching funds over five years to help states expand health care coverage to nearly five million of the nation’s uninsured children. States set eligibility and coverage, following broad federal guidelines, and have flexibility in the way they provide services. Recipients in all states must have low incomes, be otherwise ineligible for Medicaid, and be uninsured. State programs differ, but all states must cover at least these services: inpatient and outpatient hospital services, doctors’ surgical and medical services, laboratory and X-ray services, and well baby/child care, including immunizations. Some states may provide additional benefits. Benefits are not yet available in all States.