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Centers for Medicare & Medicaid Services


On July 1, 2001, the Health Care Financing Administration was reorganized and changed its name to the Centers for Medicare & Medicaid Services (CMS). CMS is an operating division of the health and human services department. It was established in 1977 to combine under one administration the oversight of the medicare Program and the federal portion of the medicaid Program (Reorg. Order of Mar. 9, 1977, 42 Fed. Reg. 13262).

As part of the 2001 reorganization, three new business centers were developed: the Center for Beneficiary Choices, the Center for Medicare Management, and the Center for Medicaid and State Operations. The Center for Beneficiary Choices provides beneficiaries with information about Medicare, Medicare Select, Medicare+Choice, and Medigap options. It also manages the Medicare+Choice plans, consumer research and demonstrations, and grievances and appeals. The Center for Medicare Management oversees the traditional fee-for-service Medicare program. This entails developing payment policies and managing Medicare fee-for-service contractors. The Center for Medicaid and State Operations oversees programs administered by the states, including Medicaid, the State Children's Health Insurance Program (SCHIP), insurance regulation functions, survey and certification, and the Clinical Laboratory Improvements Act (CLIA).

Medicare provides health insurance coverage for U.S. citizens age 65 or older, for younger people receiving social security benefits, and for persons needing dialysis or kidney transplants for the treatment of end-stage renal disease (42 U.S.C.A. § 1395 et seq.). Medicare beneficiaries may receive medical care through physicians of their own choosing or through health maintenance organizations and other medical plans that have contracts with Medicare.

Medicaid is a medical assistance program jointly financed by state and federal governments for low-income individuals (42 U.S.C.A. § 1396 et seq.). Medicaid covers health care expenses for recipients of Temporary Assistance for Needy Families (formerly Aid to Families with Dependent Children), as well as for low-income pregnant women and other individuals whose medical bills qualify them as medically needy. Most states also cover medical expenses for older U.S. citizens who are needy, as well as for individuals who are blind and disabled who receive assistance under the Supplemental Security Income Program. Coverage is further extended to some infants and low-income pregnant women and, depending on the state, to other low-income individuals with medical bills that qualify them as medically needy.

The mission of the CMS is to promote the timely delivery of quality health care to Medicare and Medicaid beneficiaries and to ensure that the Medicare and Medicaid Programs are administered in an efficient manner. The agency must also ensure that program beneficiaries are aware of the services for which they are eligible, that those services are accessible and of high quality, and that agency policies and actions promote efficiency and quality within the total health care delivery system. A quality assurance program administered by the CMS is responsible for developing health and safety standards for providers of health care services authorized by Medicare and Medicaid legislation. This program helps to ensure that Medicare and Medicaid beneficiaries receive quality health care services at a reasonable cost.

further readings

Centers for Medicare & Medicaid Services. Available online at <> (accessed July 23, 2003).

Medicare Resource Center. Available online at <> (accessed July 23, 2003).

U.S. Government Manual Website. Available online at <> (accessed November 10, 2003).

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