CMS - Regulations and Compliance
The Centers for Medicare and Medicaid Services (“CMS”) is a federal agency that oversees and administers the major health care programs in the United States. CMS is a branch of the Department of Health and Human Services (“HHS”).
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What Does CMS Do?
CMS provides incentive payments to eligible providers (“EP”) who supply treatment and services to Medicaid and Medicare patients and those who adopt electronic health records (“EHR”). The agency also:
- analyzes health care provider data;
- produces research reports from its findings;
- publishes quality and certification standards; and
- works to eliminate fraud within the health care system.
CMS partners with state governments to administer Medicare and Medicaid services. The head of the CMS is appointed by the president and confirmed by the Senate and is considered the Administrator of the Centers for Medicare and Medicaid Services.
What is CMS in Charge of Administering?
CMS is in charge of administering large portions of:
- Medicare;
- Medicaid;
- The Affordable Care Act (ACA) (“Obamacare”);
- The Children’s Health Insurance Program (“CHIP”);
- The Clinical Laboratory Improvement Amendments (“CLIA”);
- The Health Insurance Portability and Accountability Act (“HIPAA”);
- The 2015 Medicare Access and CHIP Reauthorization Act (“MACRA”); and
- CMS is also in charge of overseeing the administration of HealthCare.gov.
Quality and Certification Standards
In addition to administering all of the programs listed above, CMS is also in charge of creating quality and certification standards for many of the programs, including:
- Health insurance portability standards;
- Administrative simplification standards from HIPAA;
- Clinical laboratory quality standards under the CLIA; and
- Quality standards in long-term care facilities through its survey and certification process.
What Are the Primary CMS Statutes and Regulations?
Regulation | Description |
HIPAA, also known as Administrative Simplification, mandates that HHS adopt a national standard for electronic transactions. | |
(Health Insurance Reform) Designated Standard Maintenance Organizations. | Designated Standards Maintenance Organizations (DSMOs) are named. |
Standards and Code Sets for Electronic Transactions and DSMO Process | HHS adopts national drug codes and codes on dental procedures.
The code sets are made up five characters, including letters and numbers.
These codes represent medical supplies, durable medical goods, and non-physician services.
It also sets codes for services like ambulance, durable medical equipment, prosthetics, orthotics, outpatient hospital care, chemotherapy, Medicaid, and more. |
This Act mandates the electronic submission of Medicare claims. | |
These requirements increase the effectiveness of the health care industry by implementing a standard for a “unique employer identifier” in order to enable efficient electronic transmission of certain health information.
It requires that employers be identified when they transmit information to health plans and that the source or receiver of eligibility or benefit be identified as well. | |
This publication modified and finalized the electronic transaction standards and HIPAA-covered entities standards.
CMS also responded to public comments about the standards. | |
ASCA regulations requiring electronic submission of Medicare claims are published by HHS.
This publication creates a statutory requirement that reimbursement claims under Medicare be submitted electronically. | |
HHS adopts regulation that sets a standard for all health care providers to use a unique health identifier, also known as a National Provider Identifier (NPI). | |
HHS creates civil monetary penalties on entities that violate the Administrative Simplification provisions of HIPAA. | |
This publication modified the standard medical data code sets and implemented the transition from ICD-9 to ICD-10 codes (code sets for coding diagnosis and inpatient hospital procedures.) | |
Transaction standards for Medicaid pharmacy subrogation.
“Subrogation” describes a legal right to pursue a third party that caused an insurance loss to the insured in order to recover the amount of the claim paid by the insurance provider. | |
(HITECH) Health Information Technology and Economic and Clinical Health Act | Revised the civil monetary penalties for HIPAA violations. |
Final rule on civil monetary penalties. | |
The ACA expanded HIPAA to mandate operating rules for transactions, standards for ETF transfers and claims attachments, adoption of the unique health plan identifier (HPID), and health plan certification of compliance.
HHS also mandated a program to reach out to advisory bodies for input on Administrative Simplification. | |
Congress requires the adoption of operating rules for the health care industry and directed HHS to adopt a single set of operating rules for each transaction in order to create uniformity of electronic standards. | |
In order to help insurance providers cover the cost of the transition from ICD-9 to ICD-10, HHS revises the medical loss ratio requirements.
This modified the way regulations treat ICD-10 conversion costs, changes the rules on deducting community benefit expenditures, and revises the rules governing the distribution of rebates by issuers in group markets. | |
Standards for Electronic Funds Transfers (ETF) and Electronic Remittance Advice (ERA) | Section 1104 of the Affordable Care Act is implemented and requires the adoption of a standard for electronic funds transfers (ETF). |
Section 1104 of the Affordable Care Act is implemented and requires the adoption of operating rules for electronic funds transfers (ETF). | |
This rule established the standard for a national unique health plan identifier (HPID) and other entity identifiers (OEIDs) and required that these be implemented.
OIEDs are identifiers for entities that are not health plans, health care providers, or individuals, but that are required to be identified in standard transactions. | |
HHS Office for Civil Rights (OCR) publishes Administrative Simplification regulations. | |
This rule proposes requirements that a controlling health plan (CHP) must submit information and documentation in order to demonstrate that they are compliant with certain HHS standards and operating rules.
This rule also created penalty fees for a CHP that fails to comply with the certification of compliance requirements. | |
Congress prohibits HHS from requiring ICD-10 compliance. | |
HHS implements PAMA which prohibited them from requiring ICD-10 compliance. Thereby postponing the ICD-10 compliance date. | |
CMS announces the delay of enforcement of HPID regulation. | |
HHS published withdrawal notice for Certification of Compliance rules that would have implemented a new Medicare payment model. |
What Are Electronic Health Records?
Electronic health records must meet the standards and requirements set forth by the Health Information Technology for Economic and Clinical Health Care Act (“HITECH”).
These standards include:
- Meaningful use adoption;
- Electronic health record security; and
- Data management capabilities between multiple doctors, hospitals, and laboratories.
When Was CMS Formed?
When CMS was formed, in 1977, it was called the Health Care Financing Administration (“HCFA”). At the time, the administration was organized under the Department of Health, Education, and Welfare (“HEW”).
This administration was formed as a way to organize and coordinate Medicare and Medicaid and get the Social Security Administration (“SSA”) (who was in charge of Medicare) and the Social and Rehabilitation Service (“SRS”) (who was in charge of Medicaid) on the same page.
In 1979, HEW was split when the federal government created a separate Department of Education, leaving the “health” and “welfare” portion of the agency to become known as the Department of Health and Human Services (“HHS”).