A Short History of the Centers for Medicare and Medicaid Services

The Centers for Medicare and Medicaid Services (CMS) has one of the largest influences of any single agency on the medical billing and coding profession. CMS has an enormous affect on determining the rate at which medical services are provided, and as such also has a major influence on private insurance companies. Additionally, in America’s new and changing health care environment, CMS continues to expand into a new role as laid out in the Affordable Care Act. So what exactly is CMS anyway?

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CMS dates back to the signing into law of the Medicare and Medicaid programs by President Lyndon Johnson in 1965, although the idea for such programs was first proposed by President Harry Truman as World War II was winding down in 1945. The Medicare and Medicaid programs started out under separate governmental authority until 1977 when the Department of Health, Education and Welfare (the predecessor of today’s Department of Health and Human Services) established the Health Care Financing Administration (HCFA).

This 1977 consolidation of Medicare and Medicaid under the HCFA (the predecessor of CMS) was carried out under the Secretary of Health, Education and Welfare Joseph Califano to accomplish four objectives:

  1. To improve the administration of both programs.
  2. To improve Medicaid’s staffing
  3. To create an administrative foundation in anticipation of a national health insurance program
  4. To reduce the two tiered system which was felt by many to favor the Medicare program over the Medicaid program

CMS would finally receive its current name on July 1, 2001 when Secretary of Health and Human Services (HHS) Tommy Thompson announced the change as part of an effort to create an increased culture of responsiveness within the agency. As a federal entity, CMS is under the authority of the United States HHS, known colloquially as the Health Department, whose highest ranking member is appointed as part of the President’s cabinet as the US Secretary of Health and Human Services, currently Kathleen Sebelius.

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The CMS directly administers the Medicare program and works with states to implement:

  • Medicaid
  • State Children’s Health Insurance Program (CHIP)
  • Standards designated by the Health Insurance Portability and Accountability Act (HIPAA)
  • Regulations regarding nursing home standards
  • Regulation of lab quality standards

With the passage of the Affordable Care Act (ACA), CMS has also become the administrator for the Healthcare.gov website and has additionally been tasked with setting up Health Insurance Marketplaces and expanding state Medicaid programs in participating states. As such, CMS has become one of the leading agencies for the implementation of the ACA.

CMS has stated four basic goals it is working towards in the new health care environment, namely:

  • To increase the quality of care patients receive at a lower cost
  • To emphasize preventative health measures in the general population
  • To expand health care coverage to more Americans
  • To ensure professionalism and quality in its workforce

Currently CMS employs around 4,100 employees and is headquartered in Baltimore. CMS also maintains offices in Washington DC as well as throughout the country at ten regional field offices in the cities of:

  • Boston
  • New York
  • Philadelphia
  • Atlanta
  • Chicago
  • Dallas
  • Kansas City
  • Denver
  • San Francisco
  • Seattle

According to CMS statistics, each year medical billing and coding professionals process around one billion Medicare claims.