At CMS, the Mission Is Broader Than Medicare and Medicaid

This was published as a Wall Street Journal Think Tank column on August 10, 2015.

Is it time for the Centers for Medicare and Medicaid Services to change its name again?

The Department of Health and Human Services agency known as CMS oversees Medicare and Medicaid, among other programs. It is responsible for a trillion dollars in annual spending, more than a hundred million beneficiaries, 39% of total health spending, and 43% of hospital revenues. Daily decisions at CMS can affect millions of lives and billions of dollars.

But when CMS was formed in the Carter administration–as part of the Department of Health, Education, and Welfare–it was called the Health Care Financing Administration. I worked there then. HCFA was created under Secretary Joe Califano shortly before the Department of Health, Education, and Welfare became HHS as part of an effort to bring together previously separate agencies. The challenge proved tough, and Secretary Califano fired its first administrator. Secretary Califano sent in Leonard Schaeffer, a brilliant administrator who pulled the agency together and got it on track. A basic, though not formal, goal at the agency then was to use the power of the two public health insurance programs to control costs and drive positive change throughout the health-care system.

During the Reagan years, HCFA’s vision began to shrink with the administration’s view of smaller government. In 1996, House Speaker Newt Gingrich famously directed conservative ire at the Health Care Financing Administration, saying that it and its pro-regulatory, anti-market policies should “wither on the vine.” But wither it did not, as the agency did its share to implement spending reductions called for in the Balanced Budget Act of 1997. In 2001, HCFA’s name was changed under Health and Human Services Secretary Tommy Thompson to the Centers for Medicare and Medicaid Services–or CMS–to signal a less regulatory, more cooperative role. Over the years CMS implemented several important programs, including the Medicare drug benefit in 2006; its administrators have included some of the most gifted leaders in health care.

Today, CMS is the lead agency in HHS for implementation of the Affordable Care Act. It oversees many critical aspects of health-care reform, including the new insurance marketplaces and To carry out its responsibilities under the ACA, it has a new component–the Center for Consumer Information and Insurance Oversight–and another new office, the Center for Medicare and Medicaid Innovation. The latter is a health financing research and development operation that provides billions of dollars in funding for projects that demonstrate how Medicare payment reform would work. With the goals announced in January–shifting 50% of Medicare payment to quality by 2015 and 90% to quality or value by 2018–CMS has a much more proactive posture in Medicare.

CMS is far from everyone’s favorite agency, and not everything it is doing works perfectly. But CMS’s responsibilities for the ACA and its proactive approach to payment reform mark a return to a broader mission. The marketplace is taking signals from policy and payment changes made at CMS.

In the short term, changing the agency’s name may not be worth the cost of new stationery, business cards and the other practical ripple effects. And it certainly is not worth having a big debate about its name as other agency business goes before Congress. But the name of an agency signals what it does for both employees and the external world. The name also helps keep it on mission. And whether or not its name changes, CMS has changed.

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