Skip to main content
  • Click to open or close the program search boxShow Me Programs
    • Show me the programs that are
      performing Go
    • Show me the programs that are
High Risk Issue


View Detailed Plan

Medicare Program

Problem: Medicare is the second largest social insurance program in the U.S. with 44.1 million beneficiaries and total gross expenditures of $432 billion in 2007. Medicare faces increasing financial pressure and for the past seven years, this Administration has worked to increase the effectiveness and efficiency of Medicare. With Congress, we've made great strides in modernizing and improving health care benefits. CMS builds on these efforts by updating and strengthening our payment systems, improving vulnerabilities and information control weaknesses in IT management and security, ensuring Medicare/Medicaid dual eligible population enrollment into and coverage by Medicare prescription drug plans, and improving quality of care and efficiency while restraining costs. One of the most effective tools to restrain spending growth is through refinements that more closely align provider payments to the costs of providing efficient, high quality health care services, rather than the number of services.

Goal: --Refine Medicare payments to ensure they are appropriate. Improve program integrity and reduce improper payments. -- Improve Medicare program management. -- Strengthen oversight to improve patient safety and quality care.


  • Refine Medicare payments to ensure they are appropriate. Improve program integrity and reduce improper payments:

    • Refine Medicare payments CMS implemented important refinements to several payment systems that are believed to result in savings to the Medicare Trust Fund and improve the alignment of payments to the resources needed to provide health care services. CMS implemented important refinements to the Home Health Prospective Payment System and to the Inpatient Prospective Payment System (IPPS). CMS implemented a new competitive bidding program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) in 10 metropolitan areas on July 1, 2008; however, the recent Medicare Improvements for Patients and Providers Act (MIPPA) delayed implementation of the program until 2009. CMS updated the practice expense methodology for the Physician Fee Schedule (PFS). CMS increased the packaging of services in the Outpatient Prospective Payment System (OPPS). CMS implemented a budget neutral revised ambulatory surgical center (ASC) payment system.
    • Enhance program integrity and reduce improper payments Continue to implement Medicare error rate measurement programs that comply with the Improper Payments Information Act of 2002 (IPIA). Annually report on Medicare (fee-for-service, Medicare Advantage, Part D), error rates and corrective actions, as appropriate. Strengthen Medicare program integrity efforts to reduce improper payments and reduce fraud and abuse. Continue program integrity initiatives to address Medicare vulnerabilities and fraudulent business practices in high risk geographic areas. Complete the transition to a national Recovery Audit Contractor (RAC) program by 2010. Implement the DMEPOS supplier provider requirement that all obtain accreditation by September 30, 2009.
  • Improve program management: Ensure that CMS information technology security and Information Technology Investment Management (ITIM) policies, procedures, and standards were implemented effectively; ensure effective coverage for the Medicare/Medicaid dual eligible population into prescription drug plans; and improve management of the Medicare program.

    • Eliminate vulnerabilities and information control weaknesses in IT management and security 1. Updated and reissued the CMS Policy for the Information Security Program and Acceptable Risk Safeguards in accordance with OMB and NIST guidance. 2. Updated the ITIM policy and guidance, utilizing an updated Strategic Plan to align investments with business needs.
    • Ensure enrollment and coverage for the Medicare/Medicaid dual-eligible population into prescription drug plans 1. Implemented a policy to facilitate seamless prescription drug coverage for those new dual-eligible beneficiaries whose Part D eligibility is predictable -- Medicare beneficiaries who subsequently qualify for Medicaid. 2. Ensure beneficiaries are reimbursed for services received during retroactively covered months and assign them to a Part D plan sooner.
    • Improve management of the Medicare program 1. The implementation of Medicare contracting reform will contribute to improved management of the Medicare program by providing performance incentives to contractors, increasing payment accuracy, utilizing standardized administration services, and enhancing the information technology platform of the program. 2. In accordance with the 2003 legislation, CMS plans to transfer 100 percent of the Medicare FFS claims workload to the new Medicare Administrative Contractors (MACs) by 2010.
  • Strengthen Oversight to Improve Patient Safety and Quality of Care:

    • Strengthen the consistency and effectiveness of standards application and increase the quality of laboratory services. In order to improve the safety and quality of laboratory testing, CMS continues to: 1. Develop new protocols or refinements to surveyor guidance and work with the laboratory industry and stakeholders to ensure a consistent approach to evaluating laboratory compliance. 2. Provide comprehensive educational materials for laboratory providers on the CMS Web site. 3. Implement cytology proficiency testing for individuals who examine Pap smears and take action on those who fail. 4. Improve our ability to respond to complaints concerning laboratory testing by establishing an automated complaint tracking system. 5. Establish Clinical Laboratory Improvement Amendments (CLIA) staffing levels consistent with workload and available CLIA revenues. 6. Establish new protocols for improving oversight of our approved laboratory accreditation organizations.
    • Improve oversight weaknesses in nursing home survey and certification programs. 1. In order to improve oversight of the quality of care in nursing homes, CMS continues to: 2. Survey all nursing homes at least once every 15 months. 3. Develop new protocols or refinements to surveyor guidance and work with the nursing home industry and stakeholders to ensure a consistent approach to evaluating nursing home compliance. 4. Publish regulations to ensure that better fire-safety policies and procedures are in place. 5. Publish the names of the most poorly performing nursing homes on the CMS Web site. 6. Provide information for each nursing home, including quality data measurements and deficiencies identified during certification surveys to consumers, families and others on the CMS Web site to help consumers make the best choice for their loved ones. 7. Provide technical assistance through the Quality Improvement Organizations (QIOs) to help nursing homes improve their care.
The content on is developed by the U.S. Office of Management and Budget and Federal agencies.