What is 'Centers for Medicare and Medicaid Services (CMS) '

The Centers for Medicare and Medicaid Services (CMS) is the agency within the U.S. Department of Health and Human Services (HHS) that administers the nation’s major health care programs. Health care programs include Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the state and federal health insurance marketplaces. CMS collects and analyzes data, produces research reports, and works to eliminate instances of fraud and abuse within the health care system. 

BREAKING DOWN 'Centers for Medicare and Medicaid Services (CMS) '

Centers for Medicare and Medicaid Services manages many crucial national health care programs that affect the lives of millions of Americans. The agency’s goal is to provide “a high-quality health care system that ensures better care, access to coverage, and improved health.” CMS has offices at its headquarters in Maryland and in several cities throughout the United States, including Boston, Kansas City, San Francisco and Atlanta, strategically positioned to serve each region.

CMS manages the Administrative Simplification Standards of the Health Insurance Portability and Accountability Act (HIPPA). The use of Administrative Simplification Standards strives to implement the adoption of national electronic health care records, guarantee patient privacy and security, and enforce HIPPA rules. CMS oversees quality in clinical laboratories, long-term care facilities, as well as providing oversight of the health insurance exchanges.  

Medicare Program

President Lyndon B. Johnson created Medicare and Medicaid in 1965. Initially, other agencies managed these programs. Medicare is a taxpayer-funded program for seniors of age 65 and older. Eligibility requires the senior to have worked and paid into the system through the payroll tax. Medicare also provides health coverage for people with recognized disabilities as confirmed by the Social Security Administration (SSA) and those with specific end-stage diseases. 

Medicare consists of four parts, titled A, B, C, and D. Part A covers inpatient hospital, skilled nursing, hospice, and home services. Medical coverage is provided under part B and includes physician, laboratory, outpatient, preventive care, and other services. Medicare Part C or Medicare Advantage is a combination of parts A and B. Part D (signed in 2003 by President George W. Bush), provides coverage for drugs and prescription medications.

Medicare enrollees share costs with taxpayers through premiums and out-of-pocket expenditures. Read about How Much Medicare and Medicaid Costs Americans.

Medicaid and CHIP Programs

Medicaid is a federal and state funded program intended to help with medical expenses for low-income patients. Coverage is limited to patients who must be a U.S. citizen or legal resident. For seniors with limited financial resources, it is possible to be eligible for both Medicare and Medicaid. Medicaid also extends coverage to services not covered by Medicare, such as nursing home care and personal care services.  Medicaid is a means-tested program managed by the state governing bodies. States are not required to participate in Medicaid. 
 
CHIP, formerly known as the State Children's Health Insurance Program (SCHIP), formed in response to the failed health care reform bill proposed by President Bill Clinton. CHIP provides health coverage for children of families with limited financial resources, but whose income is too high to qualify for Medicaid. HHS matches state funds to provide for CHIP coverage.

Through its Center for Consumer Information & Insurance Oversight, CMS plays a role in the federal and state health insurance marketplaces by helping to implement the Affordable Care Act’s laws about private health insurance and providing educational materials to the public.

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