Will CMS Be Everyone's Friend? - Centers for Medicare and Medicaid Services

Nursing Homes, Oct, 2001 by Michael J. Stoil

In June, Secretary of Health and Human Services Tommy Thompson announced that the Health Care Financing Administration (HCFA) would be known as the Centers for Medicare & Medicaid Services. The renamed organization adopted the acronym CMS rather than CMMS, much as the federal Centers for Disease Control & Prevention is officially abbreviated as CDC. A press spokesperson for the newly rechristened agency suggested that "people try to make four-letter acronyms into words, like NASA (NAS-uh), but they sound out the letters of shorter acronyms like the IRS and the FBI." 'Whether the Centers for Medicare & Medicaid Services is CMS or "sims" depends, of course. on the ear of the beholder.

The official HHS announcement proclaimed the name change as part of an effort "to change the agency and drive it to be the responsive and effective agency that it should be." The name Centers for Medicare & Medicaid Services "reflects the scope of the agency's mission-to serve Medicare and Medicaid beneficiaries. It will help consumers identify the agency that administers their health insurance and will help to develop a more consumer-friendly association."

The agency has not been perceived as perhaps the most friendly and helpful component of the healthcare system. During 24 years as administering agency for Medicare and Medicaid, HCFA developed an agency culture that appeared to focus primarily on zealously protecting federal funds from perpetrators of fraud and abuse. HCFA officials appearing before congressional committees routinely described state governments, healthcare providers and individual citizens as poised to raid the federal treasury. Even independent investigators trying to use the enormous Medicaid/Medicare database on medical claims are required to work through hand-picked HCFA contractors, allegedly to ensure that the data are not "misconstrued" or "misused for purposes that are not in the agency's interest."

This defensive obsession with accountability did not, apparently, extend to the agency's internal operations. The General Accounting Office (GAO)-Congress's own audit agency-recently concluded that HCFA is the worst among all federal agencies in the use of performance measures. Most HCFA managers responded to a GAO survey that they were not held accountable for results to any great extent, and indeed that they did not believe their top leadership was strongly committed to achieving results. On customer service measures, HCFA ranked below every federal agency except the highly secretive Nuclear Regulatory Commission.

The Balanced Budget Act of 1997 that slashed reimbursement rates for Medicare- and Medicaid-financed providers ironically began the transformation from the HCFA watchdog to the consumer focused CMS. Creation of the HMO program Medicare Choice was a major change to Medicare incorporated in the legislation. Congress conceived of enrollment in Medicare HMOs as a means of ensuring more efficient use of Medicare funds and therefore required HCFA to annually provide every Medicare recipient with "comparative" information on traditional Medicare and HMO plans. Officially, the agency's National Medicare Education Program is designed to educate Medicare recipients and help them make "more informed" decisions. Unofficially, it is a marketing campaign for Medicare Choice featuring distribution of more than 35 million copies of an annual Medicare & You handbook in 26 regional editions.

The annual marketing effort of the National Medicare Education Program is accompanied by vast market research activity. Cognitive interviews, focus group testing, surveys and audience evaluations are employed vigorously to fine-tune each year's new edition of the Medicare publications. CMS announced it will issue a contract for two-year case studies of the effectiveness of the National Medicare Education Program in six communities: Tucson, Arizona; Sarasota, Florida; Dayton, Ohio; Eugene, Oregon; Olympia, Washington; and Springfield, Massachusetts. Not coincidentally, all six sites are areas currently served by Medicare HMOs, allowing the researchers to determine whether the agency's outreach materials convince the elderly to switch to Medicare Choice.

Changes to the Specific Low-Income Medicare Beneficiary (SLMB) benefit in the Balanced Budget Act of 1997 also contributed to HCFA's drive to become a consumer-focused organization. The act expanded the number of low-income elderly who could receive the SLMB benefit that pays part of their Medicare premiums with Medicaid. For nursing homes, this has the advantage of establishing residents' financial eligibility for Medicaid before they apply for admission. However, the elderly are required to apply for the benefit rather than receive it automatically as an entitlement.

In addition, the 1997 act schedules the benefit to be terminated in 2002. For this reason, HCFA mounted a massive outreach effort to inform older Americans of the availability of the SLMB benefit and to encourage those eligible to enroll.