HHS FY 2018 Budget in Brief - CMS - Program Management

Centers for Medicare & Medicaid Services (CMS): Program Management

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CMS Program Management Budget Overview

(Dollars in millions)

Discretionary Administration 2016 2017 2018 2018
+/- 2017
Program Operations 2,821 2,817 2,441 -376
Federal Administration 733 733 723 -10
Survey and Certification 397 397 406 +9
Research 20 20 18 -2
Total, Discretionary Budget Authority /1 /2 3,971 3,967 3,588 -379


Mandatory Administration 2016 2017 2018 2018
+/- 2017
Obamacare 0 1 1 -
American Recovery and Reinvestment Act 61 0 0 -
Medicare Improvements for Patients and Providers Act 3 3 3 -
Protecting Access to Medicare Act (2014) 6 6 6 -
Improving Medicare Post-Acute Care Transformation (2014) 20 20 19 -1
Medicare Access and CHIP Reauthorization Act 216 196 163 -33
Total, Mandatory /1 305 225 191 -34



Reimbursable Administration 2016 2017 2018 2018
+/- 2017
Medicare and Medicaid Reimbursable Administration /3 680 427 514 +87
Exchange-Related Reimbursable Administration /5 1,154 1,309 1,188 -122
Risk Corridor Collections 362 103 103 -
Subtotal, Reimbursable Administration 2,196 1,839 1,805 -34


Proposed Law (Discretionary) 2016 2017 2018 2018
+/- 2017
Proposed Law        
Offsetting Collections /6 0 0 26 +26
Subtotal, Proposed Law 0 0 26 +26
Program Level, Proposed Law 6,472 6,031 5,610 -448
Full-Time Equivalents /7 6,238 6,495 6,340 -155

Table Footnotes

1/  Totals may not add due to rounding.
2/  Reflects the annualized level of the Continuing Resolution that ended April 28, 2017, including the across the board reduction, the 21st Century Cures Act, and directed transfers.
3/  Includes the following user fees: Clinical Laboratory Improvement Amendments of 1988, sale of research data, coordination of benefits for the Medicare prescription drug program, MA/prescription drug program education campaign, recovery audit contractors, and provider enrollment fees.
4/  The FY 2016 Zika Response and Preparedness Act (P.L. 114-223) provided $387 million in supplemental resources to the Public Health and Social Services Emergency Fund for Zika response and preparedness activities, of which $75 million was allocated for CMS for FYs 2016 and 2017.
5/  Includes user fees charged to issuers in Federally-facilitated Exchanges, State-based Exchanges using the Federal platform, and risk adjustment.
6/  Include a proposal for one new discretionary offsetting collection.  Please see Survey and Certification section for more information.
7/  Full-Time equivalent (FTE) totals include FTE from other funding sources:  Health Care Fraud and Abuse Control Program (HCFAC), state grants, reimbursables, and mandatory appropriations.  CMS will fund the following FTE from other sources:  FY 2016 = 1,720; FY 2017 = 1,970; and FY 2018 = 1,970.

The FY 2018 discretionary budget request for CMS Program Management is $3.6 billion, a decrease of $379 million below the FY 2017 Annualized Continuing Resolution level. This request will enable CMS to continue to effectively administer Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). The FY 2018 Budget reflects CMS’s key priorities to: reduce costs through contract efficiencies; prioritize customer service; invest in program integrity; stabilize and streamline Exchanges; and strengthen the Federal workforce.

Budget Account Summaries

Program Operations

The Program Operations request is $2.4 billion, a decrease of $375 million below the FY 2017 Annualized Continuing Resolution level. The Program Operations account funds essential contractor, information technology, and outreach activities necessary to administer Medicare, Medicaid, CHIP, and private insurance programs. Top priority activities for FY 2018 include:

  • Ongoing Medicare Contractor Operations: Approximately 36 percent, or $885 million, of the FY 2018 Program Operations request supports ongoing Medicare contractor operations. This workload includes processing 1.3 billion Medicare Part A and B claims, enrolling providers in the Medicare program, handling provider reimbursement services, processing 4.8 million first-level appeals, responding to provider inquiries, educating providers about the program, and administering the participating physicians/supplier program.
  • Medicare Appeals: The Budget includes $87 million to timely process about 970,000 provider and beneficiary claim appeals at the second level of appeals.
  • Information Technology Systems and Support: The Budget includes $329 million for non-Exchange information technology systems and other support, including cybersecurity, allowing the agency to protect the valuable consumer health data of millions of Americans from outside threats. Additionally, CMS continues to transition to the use of shared systems, which allow for greater efficiency and reliability agency wide.
  • Medicaid and CHIP Operations: The Budget requests $45 million to fund administrative activities to improve Medicaid and CHIP program operations, including the modernization of data systems.
  • Exchanges: The Budget includes $471 million in requested budget authority for the Exchanges, $453 million of which supports Program Operations activities such as eligibility, call center operations, and information technology. In addition, CMS anticipates collecting approximately $1.2 billion in user fee revenues to support Exchange activities. The total estimated program level, including sources in other accounts, is $1.7 billion.

Survey and Certification Frequencies.

Federal Administration

For FY 2018, the Budget requests $723 million for CMS Federal administrative costs, $10 million below the FY 2017 Annualized Continuing Resolution level.

Of this total, $651 million will support a direct full-time equivalent level of 4,370, a decrease of 155 full-time equivalents below the current level. With this level of staff, CMS will be able to support operations. The reduction in workforce will occur through natural attrition across CMS.

Survey and Certification

The FY 2018 Survey and Certification request is $406 million, a $9 million increase over the FY 2017 Annualized Continuing Resolution level. The increased funding level is needed to maintain survey frequency levels due to growing numbers of participating facilities and improved quality and safety standards. CMS expects States to complete over 23,800 initial surveys and re-certifications and over 56,200 visits in response to complaints in FY 2018.

Over 87 percent of the request will go to State survey agencies or Federal direct survey costs. Surveys include mandated Federal inspections of long-term care facilities (i.e., nursing homes), home health agencies, hospices, as well as Federal inspections of other key facilities. All facilities participating in the Medicare and Medicaid programs must undergo inspection when entering the program and on a regular basis thereafter.

The Budget also proposes to levy a fee for survey and certification revisits that occur as a result of deficiencies found during initial certification, recertification, or substantiated complaints surveys. The fee would provide CMS with an increased ability to revisit poor performers, while creating an incentive for facilities to correct deficiencies and ensure quality of care. The Budget assumes a five month lag for collecting fees in the initial FY 2018 year of operation. [$26 million in user fee revenue in FY 2018]



Reducing Unnecessary Antipsychotic Drug Use in Nursing Homes

The CMS survey and certification budget aims to improve dementia care in nursing homes by decreasing the percentage of long-stay nursing home residents receiving an antipsychotic medication. Antipsychotic medications have common and dangerous side effects when misused to treat the behavioral and psychological symptoms of dementia. In calendar year 2011, 23.9 percent of long-stay nursing home residents received an antipsychotic medication. In calendar year 2015, CMS exceeded its target of 19.9 percent to finish the year at 17.1 percent. CMS set the calendar year 2018 target rate at 15.7 percent.

For FY 2018, the Budget requests $18 million for Research—$2 million below the FY 2017 Annualized CR level—to maintain the Medicare Current Beneficiary Survey and other research databases which support Medicare rate-setting.

Crosscutting Summaries

National Medicare Education Program

Total FY 2018 program level for the National Medicare Education Program is $366 million, including $255 million in budget authority. In order to ensure that beneficiaries have accurate and up-to-date information on their coverage options and covered benefits, beneficiary education remains a top priority for CMS.

Of the total program level, $279.8 million, or 77 percent, supports the 1-800-MEDICARE call center, which provides beneficiaries with access to customer service representatives who are trained to answer questions regarding the Medicare program. The request will support approximately 27 million calls with an average-speed-to-answer of less than five minutes. Beneficiaries can also use 1-800-MEDICARE to report fraud allegations.

The request also includes $50.5 million for beneficiary materials, the majority of which will fund the Medicare & You handbook.

National Medicare & You Education Program (NMEP) FY 2018 Program Level.


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