HHS FY2016 Budget in Brief

Topics on this page: CMS Program Management Budget Overview | CMS Program Management Activities | Crosscutting Summaries | 2016 Legislative Proposals

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

The Centers for Medicare & Medicaid Services ensures availability of effective, up-to-date health care coverage and promotes quality care for beneficiaries.

CMS Program Management Budget Overview

(Dollars in millions)

Discretionary Administration	2014	2015	2016	2016 +/‑ 2015
Program Operations	2,943	2,825	3,024	+199
Federal Administration	733	733	784	+51
Survey and Certification	375	397	437	+40
Research	20	20	—	-20
State High‑Risk Pools	20	—	—	—
Total, Discretionary Budget Authority/1 /2	4,092	3,975	4,245	+270

 

Mandatory Administration	2014	2015	2016	2016 +/‑ 2015
Affordable Care Act	126	52	1	-51
American Recovery and Investment Act	130	130	65	-65
Medicare Improvements for Patients and Providers Act	3	3	3	—
Protecting Access to Medicare Act (2014)	49	25	6	-17
Improving Access to Medicare Post-Acute Care Transformation (2014)	—	107	21	-86
Total, Mandatory Administration	307	317	96	-220

 

Reimbursable Administration	2014	2015	2016	2016 +/‑ 2015
Medicare and Medicaid Reimbursable Administration /3	1,108	621	955	+334
Marketplace-Related Reimbursable Administration /4	252	869	1,535	+666
Subtotal, Current Law	5,759	5,781	6,831	+1,050

 

Proposed Law (Mandatory)	2014	2015	2016	2016 +/‑ 2015
Program Management (mandatory)	—	—	400	+400
Sustainable Growth Rate Reform (mandatory)	—	—	600	+600
Offsetting Collections /5	—	—	30	+30
Extend Funding for CMS Quality Measurement Development	—	—	30	+30
Subtotal, Proposed Law	—	—	1,060	+1,060
Program Level, Proposed Law	5,759	5,781	7,891	+2,110

 

Risk Corridors	2014	2015	2016	2016 +/‑ 2015
Risk Corridors	—	5,450	6,390	+940
Program Management Program Level with Risk Corridors	5,759	11,231	14,281	+3,050

Full-time Equivalents /6

2014 : 5,820

2015 : 6,080

2016 : 6,327

2016 +/- 2015 : +247

Footnotes

1/ Includes $119 million from the Secretary’s one percent transfer authority in FY 2014. Totals may not add due to rounding.

2/ State High Risk Pools are classified as a mandatory activity in FY 2014, but are included above.  

3/ Includes user fees and reimbursables supporting CMS program management.

4/ Includes the following user fees: Marketplaces and risk adjustment (FY 2015 and FY 2016).

5/ Includes proposals for six new offsetting collections: Please see Legislative Proposals section for more information.

6/ FTE totals include FTE from other funding sources: HCFAC, State Grants, reimbursables, and mandatory appropriations. CMS will fund the following FTE from other sources: FY 2014 = 1,325; FY 2015 =1,610; and FY 2016=1,656.

CMS Program Management Activities

The FY 2016 CMS Program Management request is $4.2 billion, an increase of $270 million above FY 2015. This request will enable CMS to enhance and continue to effectively administer Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP), as well as new health insurance reforms contained in the Affordable Care Act.

Program Operations: The Program Operations request is $3 billion, an increase of $199 million above the FY 2015 level. The FY 2015 level includes $305 million for Medicare operations, and the Budget requests this funding as part of the Program Operations request. The Program Operations account funds essential contractor, information technology (IT), and outreach activities necessary to administer Medicare, Medicaid, CHIP, and private health insurance reforms and other programs instituted by the Affordable Care Act. Top priority activities for FY 2016 include:

Ongoing Medicare Contractor Operations : Approximately 30 percent, or $899 million, of the FY 2016 Program Operations request supports ongoing contractor operations such as Medicare claims processing.

Medicare Appeals : The Budget includes $159 million to enhance the processing of provider and beneficiary claim appeals. This amount includes $36 million in new initiatives to improve the efficiency of the Medicare appeals process at the first two levels and limit appeals that escalate to the Office of Medicare Hearings and Appeals.

Marketplaces : The Budget includes $544 million in requested budget authority to support the continued enhancement and operations of Marketplace activities such as eligibility, plan management, and quality improvement. In addition, CMS anticipates collecting approximately $1.6 billion in user fee revenues to support Marketplace activities. See the Crosscutting Accounts section below for additional information.

IT Systems and Support : The Budget includes $340 million for non-Marketplace IT systems and other support, including enterprise-wide software and hardware development and support, and CMS’s data center and telecommunications infrastructure. These investments enable secured data to be accessible to CMS staff and stakeholders. This amount includes a $52 million investment in CMS’s IT shared services initiative, which achieves efficiencies by leveraging key IT resources to serve multiple CMS programs.

Medicaid and CHIP Operations : The Budget requests $41.5 million to fund administrative activities to improve Medicaid and CHIP program operations and implement new responsibilities under the Affordable Care Act. Some of these activities include initiatives to improve enrollment of eligible individuals into Medicaid and CHIP and modernize data systems.

Federal Administration: For FY 2016, the Budget requests $784 million for CMS federal administrative costs, $51 million above the FY 2015 enacted level.

Of this total, $686 million will support a full‑time equivalent (FTE) level of 4,671, an increase of 201 FTEs over FY 2015. This staffing increase will enable CMS to address the needs of a growing Medicare population, as well as oversee expanded responsibilities resulting from the Affordable Care Act and other legislation passed in recent years.

Survey and Certification: The FY 2016 Survey and Certification request is $437 million, a $40 million increase over FY 2015. The increased funding level supports survey frequency levels in response to increasing numbers of participating facilities and improved quality and safety standards. This increase also provides targeted funding for the most serious quality of care concerns by increasing nursing home special focus facility work and enhancing quality monitoring and oversight in the states, territories, islands, and IHS facilities within tribal nations. CMS expects states to complete over 25,000 initial surveys and re‑certifications and over 52,000 visits in response to complaints in FY 2016.

The Improving Medicare Post-Acute Care Transformation Act of 2014 increases hospice survey frequencies to no less than once every three years.

Approximately 87 percent of the request will go to state survey agencies. Surveys include mandated federal inspections of long‑term care facilities (i.e., nursing homes) and home health agencies, 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. In addition, CMS is currently engaged in an effectiveness and efficiency strategy aimed at quality improvement while identifying risk‑based approaches to surveying.

The Budget proposes a discretionary survey and certification revisit user fee which provides 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 that no revenue will be realized in FY 2016, the year of establishment.

Research: Beginning in FY 2016, ongoing research activities will be funded from Program Operations.

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Crosscutting Summaries

Health Insurance Marketplaces (Marketplaces): The discretionary budget includes $629 million for CMS activities and administrative expenses to support Marketplace operations in FY 2016, including $85 million in Federal Administration.

In addition to the Budget request, CMS will collect an estimated $1.6 billion in user fees from issuers in the Federally-facilitated Marketplace, as well as reinsurance and risk adjustment administrative collections, for a total estimated program level of $2.2 billion.

Health Insurance Marketplaces FY 2016 Program Level Request (dollars in millions)
Activity	2016
Marketplace Operations	639
Eligibility and Enrollment	417
Consumer Information and Outreach	808
Marketplace Information Technology	657
Federal Administration	85
Total, Marketplace Program Level /1	$2,189

1/ Marketplace Program Level includes $1.56 billion in user fees, including $25 million in reinsurance administrative contributions, and $629 million in requested budget authority.  Numbers may not add due to rounding.

Marketplaces provide affordable, quality health insurance options to individuals and small businesses, and CMS operates some or all Marketplace functions in over 30 states through the Federally-facilitated Marketplaces. Specifically, CMS performs eligibility and appeals work, certification and oversight of qualified health plans, payment and financial management functions, and operates the Small Business Health Options Program (SHOP). Some states in the Federally-facilitated Marketplaces assist with plan management functions or operate their own SHOP. Additionally, CMS oversees operations of State‑based Marketplaces and provides technical assistance as needed.

CMS provides Marketplace consumer assistance through a call center and website, as well as in-person support through Navigator grants. Additionally, CMS conducts an outreach campaign during the open enrollment season to inform consumers of their insurance options.

Finally, CMS operates a number of IT systems to support the Marketplaces, such as the system that operates core Marketplace functions including eligibility, plan management, and payment functions. The data services hub provides eligibility verification services to all Marketplaces through interfaces with trusted data sources in other federal departments. Other IT costs include hosting services and data management systems.

National Medicare Education Program: Total FY 2016 budget authority for the National Medicare Education Program is $355.1 million. The program level includes an additional $81.6 million in funding from Program Management, and Medicare Advantage/Prescription Drug Program user fees allocated to the call center and beneficiary materials. 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 budget authority, $248.9 million, or 70 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 26 million calls with an average‑speed‑to‑answer of 5 minutes. Beneficiaries can also use 1‑800‑MEDICARE to report fraud allegations. CMS is using information from beneficiary fraud allegations in new ways to compile provider‑specific complaints, flag providers who have been the subject of multiple fraud complaints, and map shifts and trends in fraud allegations over time.

The request also includes $65.2 million for beneficiary materials, the majority of which will fund the Medicare & You handbook. It will also provide funding for CMS to mail notices of minimum essential coverage to all Medicare enrollees, as required by the Affordable Care Act.

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2016 Legislative Proposals

Provide Mandatory Administrative Resources for Implementation:  The Budget includes $400 million in no-year mandatory Program Management funds to implement the mandatory health care proposals accompanying this submission. These health care proposals will allow CMS to realize additional cost efficiencies, and further root out waste and abuse in Medicare and Medicaid, and save as much as $423 billion over the next ten years. The Budget also includes $600 million to reform Medicare physician payments and accelerate physician participation in high-quality and efficient healthcare delivery systems. [$1.0 billion in costs over 10 years]

Invest in CMS Quality Measurement: The Budget proposes to extend funding for a consensus-based entity focused on performance measurement through 2018. The duties for a consensus-based entity are divided between those originally authorized by the Medicare Improvements for Patients and Providers Act of 2008 and those that were added by the Affordable Care Act. Under current law, no additional funding will be provided after 2015. The Budget includes $30 million yearly through 2018, available until expended. This funding is essential as CMS continues to implement valued-based purchasing initiatives and other models which focus on performance-based payments. [$90 million in costs over 10 years]

Allow CMS to Reinvest Civil Monetary Penalties Recovered from Home Health Agencies: This proposal allows CMS to retain and invest civil monetary penalties assessed on home health agencies for activities to improve the quality of care of patients receiving home health services. The Affordable Care Act provided this authority for skilled nursing facilities. [$10 million in costs over ten years] 

Allow CMS to Assess a Fee on Medicare Providers for Payments Subject to the Federal Levy Program: This activity electronically matches Medicare provider payments between delinquent tax and non-tax debts and federal payments disbursed by the government. It allows the Treasury Department to levy up to 15 percent of a provider’s Medicare reimbursement against an outstanding debt. This proposal will allow CMS to recoup its transaction administrative costs from the provider, estimated to be $2 million each year. [No budget impact]

Other User Fee Proposals: The Budget also includes several mandatory proposals that establish new user fees for: Medicare appeals, registering clearinghouses and billing agents that act on behalf of Medicare providers and suppliers, and submitting provider applications for individual provider applications to participate in Medicare.

Next:

• Overview
• Medicare
• Program Integrity
• Medicaid
• Children’s Health Insurance Program
• State Grants and Demonstrations
• Private Health Insurance Protections and Programs
• Center for Medicare & Medicaid Innovation

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