The Centers for Medicare & Medicaid Services (CMS) is a federal agency within the U. S. Department of Health and Human Services (HHS). CMS plays a crucial role in the nation’s healthcare system, administering Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace. The agency’s primary mission is to ensure that millions of Americans have access to high-quality, affordable healthcare.
Overview of CMS
Established in 1965, CMS was part of the Social Security Act when Medicare and Medicaid were created. Since then, CMS has expanded its role to oversee various healthcare programs and initiatives.
CMS’s responsibilities include:
- Administering Medicare—CMS manages Medicare, which provides health insurance to people aged 65 and older, certain younger individuals with disabilities, and people with End-Stage Renal Disease (ESRD).
- Administering Medicaid—CMS oversees Medicaid, a joint federal and state program that helps with medical costs for some people with limited income and resources.
- Regulating health insurance—CMS enforces regulations to ensure health insurance coverage is fair and equitable. This includes overseeing the Health Insurance Marketplace, where individuals can purchase health insurance plans.
- Improving healthcare quality—CMS implements quality improvement programs and initiatives to enhance healthcare delivery and patient outcomes across the nation.
- Innovating in healthcare—Through the Center for Medicare & Medicaid Innovation (CMMI), CMS tests new payment and service delivery models to reduce costs and improve care.
Latest CMS Rulings
CMS regularly issues rulings and guidelines that impact healthcare providers, insurers, and beneficiaries. Here are some of the latest rulings:
- System changes to prevent unauthorized Marketplace activity—Effective July 19, 2024, CMS has introduced system changes to prevent unauthorized agents and brokers from altering consumers’ Federally-Facilitated Marketplace (FFM) enrollments. Unauthorized agents must now conduct a three-way call with the consumer and the Marketplace Call Center or direct the consumer to make changes themselves through healthcare.gov. This move aims to protect consumers from fraudulent activities.
- Transparency in coverage and no surprises act regulations—CMS has issued regulations to enhance transparency in coverage and address surprise billing including requirements related to air ambulance services and agent and broker disclosures. These measures aim to protect consumers from unexpected medical bills and ensure that they’re well-informed.
- Regulatory process and public participation—CMS follows a structured rule-making process that includes proposing new regulations, soliciting public comments, and publishing final regulations. This process ensures that CMS regulations are well-reasoned and aligned with legal requirements.
Medicare Payment Rates for 2024
In its annual update, CMS released the final rule for Medicare payment rates for 2024. This includes adjustments to payment rates for hospitals, physicians, and other healthcare providers. Key changes include:
- Increased hospital payments—An overall increase of 2.5% in payments to hospitals that meet quality reporting requirements.
- Physician fee schedule—Adjustments to the Medicare Physician Fee Schedule including updates to payment rates for telehealth services to support continued access to remote care.
- Value-based purchasing—Enhancements to the Hospital Value-Based Purchasing Program to further incentivize high-quality care.
Medicare Advantage and Part D Rule
CMS finalized a rule to strengthen the Medicare Advantage and Part D prescription drug programs. Notable provisions include:
- Improved access to medications—Requirements for Medicare Advantage plans to streamline the process for patients to obtain necessary medications.
- Enhanced beneficiary protections—New policies to protect beneficiaries from high out-of-pocket costs and improve the transparency of plan offerings.
- Support for telehealth—Expansion of telehealth services coverage within Medicare Advantage plans to ensure continued access to virtual care.
Price Transparency Rule
To promote greater transparency in healthcare costs, CMS has implemented a rule requiring hospitals to provide clear, accessible pricing information online. This rule mandates:
- Public disclosure—Hospitals must post standard charges including payer-specific negotiated rates for all services in a machine-readable format.
- Shoppable services—Hospitals must provide a consumer-friendly display of prices for at least 300 shoppable services, enabling patients to compare costs and make informed decisions.
Accountable Care Organizations (ACOs) Rule
CMS has updated regulations for Accountable Care Organizations (ACOs) to foster better care coordination and cost management. Key elements include:
- Enhanced incentives—Increased shared savings opportunities for ACOs that demonstrate improved care quality and cost efficiency.
- Flexibility in participation—More flexible participation options for smaller or rural ACOs to encourage broader participation in the program.
Medicaid and CHIP Reforms
CMS has also introduced reforms to strengthen Medicaid and CHIP programs. These include:
- Extended postpartum coverage—States are encouraged to extend postpartum Medicaid coverage from 60 days to 12 months to support maternal health.
- Enhanced benefits for children—Initiatives to improve access to comprehensive care for children enrolled in CHIP including mental health services and preventive care.
Proposed Changes for 2025
CMS is proposing the following changes in rules for next year:
- Medicare Physician Fee Schedule (MPFS)—CMS proposes a 2.8% reduction in the conversion factor for the 2025 Medicare Physician Fee Schedule, lowering it to $32.3562 from $33.2875 in 2024. This reduction reflects ongoing challenges in the fee schedule structure and the need for legislative action to provide relief.
- Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System—CMS proposes a 2.6% update to OPPS and ASC payment rates for 2025, reflecting a 3.0% projected hospital market basket percentage increase, reduced by 0.4% for productivity adjustment. This is slightly lower than the 3.1% increase implemented in 2024.
- Health equity and social drivers of health—CMS proposes new quality measures focused on health equity and social drivers of health along with input on further addressing patient safety. In addition, CMS proposes expanding coverage for colorectal cancer screening tests and implementing mandatory continuous eligibility for children in Medicaid and CHIP.
- Telehealth services—CMS proposes to add several services to the Medicare Telehealth Services List on a provisional basis including caregiver training services and demonstration prior to initiation of home International Normalized Ratio (INR) monitoring. The agency also plans to continue the suspension of frequency limitations for certain telehealth visits.
- Behavioral health services—CMS proposes new coding and payment for safety planning interventions for patients in crisis and digital mental health treatment devices. These measures aim to enhance access to behavioral health services and integrate behavioral health specialty treatment into primary care.
- Accountable Care Organizations (ACOs)—CMS proposes changes to the Medicare Shared Savings Program to further advance value-based care. These include mitigating the impact of SAHS billing activity and establishing a methodology to account for improper payments in recalculating expenditures and payment amounts.
Sources:
- CMS: FY 2025 IPPS Proposed Rule Home Page
- CMS: CMS Rulemaking
- CMS: CMS Rulings
- CMS: CMS Rulings: Ruling No. CMS-2020-1-R2
- DLA Piper: CMS Introduces Proposals to CY 2025 Medicare Physician Fee Schedule
- Forbes: CMS’s 2025 Proposed Rule Is Out: More Cuts? Why Not?
- Holland & Knight: CMS Releases CY 2025 OPPS and ASC Proposed Rule
Further Thoughts
CMS continues to play a pivotal role in shaping the healthcare landscape in the United States. Its recent rulings aim to enhance healthcare quality, improve access to care, and ensure transparency in healthcare costs.
As CMS adapts to the evolving needs of patients and providers, its policies and regulations will continue to influence the delivery of healthcare across the nation. For healthcare providers, insurers, and beneficiaries, staying informed about CMS’s latest rulings is essential to navigating the complexities of the healthcare system.
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