What the Centers for Medicare and Medicaid Services Actually Does

The Centers for Medicare and Medicaid Services runs Medicare, Medicaid, and the Children's Health Insurance Program

The Centers for Medicare and Medicaid Services (CMS) is the federal agency inside the Department of Health and Human Services that operates Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). CMS does not decide who gets coverage or handle individual claims — it sets the rules, pays the providers and insurers who do the work, and makes sure the programs follow federal law. When you call Medicare with a question about your benefits, you are calling a contractor that CMS hired to answer phones. When your doctor gets paid for treating you, CMS arranged that payment through a network of regional insurers.

CMS was created in 1977 by combining two older agencies. It has about 5,000 employees working in Baltimore, Maryland (the main office) and regional offices across the country. The agency's budget is enormous — it pays out hundreds of billions of dollars each year to hospitals, doctors, nursing homes, and other providers — but CMS itself does not deliver medical care. It is a payment and oversight machine.

Key Takeaways

CMS operates three major programs: Medicare (for people 65 and older and some younger people with disabilities), Medicaid (for low-income individuals and families), and CHIP (for children in families that earn too much for Medicaid but not enough to buy private insurance).
CMS sets coverage rules, payment rates, and quality standards, but contracts with private insurers and regional offices to handle the day-to-day work of processing claims and answering beneficiary questions.
The agency publishes official Medicare rules, coverage decisions, and payment information on Medicare.gov, which is the authoritative source for how Medicare works.
If you have a dispute about a Medicare decision — a claim denial, a coverage question, or a billing problem — CMS has an appeals process you can use, though you typically start by contacting your Medicare plan or the contractor handling your claim.

How CMS Divides Its Work Among Contractors

CMS does not have enough staff to process every Medicare claim or answer every beneficiary question, so it hires private companies to do that work under contract. These contractors are regional — your state or region has specific contractors assigned to it. When you call Medicare with a question, you reach one of these contractors, not CMS directly. When your doctor submits a claim, it goes to a contractor, not to CMS.

The contractors CMS uses include insurance companies like Anthem and Humana, as well as specialized claims processors. Each contractor covers a specific geographic area and handles Medicare Part A (hospital insurance) and Part B (medical insurance) claims for that area. Contractors also handle appeals if you disagree with a coverage or payment decision. CMS monitors these contractors to make sure they follow the rules, but the day-to-day interaction you have with Medicare usually involves a contractor, not CMS itself.

This structure can be confusing because you may not know whether you are talking to CMS or to a contractor. The practical answer: if you call 1-800-MEDICARE, you reach a contractor. If you need to contact CMS directly about a policy question or a systemic problem, you would go through Medicare.gov or contact your state's CMS regional office.

What CMS Decides About Coverage and Payment

CMS decides which medical services and supplies Medicare will pay for and how much it will pay. These decisions are called coverage determinations. For example, CMS decides whether Medicare covers a particular drug, whether it covers physical therapy after surgery, or whether it covers a new type of scan. CMS also sets the payment rates — how much a hospital gets paid for a hip replacement, how much a doctor gets paid for an office visit, how much a nursing home gets paid per day.

CMS publishes these decisions in the Medicare Coverage Database, which is searchable on Medicare.gov. If you want to know whether Medicare covers something specific, the Coverage Database is where to look. CMS also publishes a document called the Medicare Claims Processing Manual, which explains the detailed rules contractors must follow when processing claims.

Individual contractors can make local coverage decisions for their region if CMS has not made a national decision. This means coverage for the same service can differ slightly by state or region. If your doctor says Medicare should cover something but your contractor denies it, you can appeal. The appeal process is run by contractors, but CMS sets the rules for how appeals must be handled.

CMS and Quality Standards for Providers

CMS sets quality and safety standards that hospitals, nursing homes, home health agencies, and other providers must meet to receive Medicare payment. These standards are called Conditions of Participation. Providers are inspected to make sure they follow these rules. If a provider fails an inspection, CMS can reduce payment, require a corrective action plan, or stop paying the provider altogether.

CMS also publishes quality data on its website so you can compare providers. For example, you can look up a hospital's infection rates, readmission rates, and patient safety scores. You can look up a nursing home's staffing levels and inspection history. This information comes from CMS data and is meant to help you choose where to receive care.

If you have a complaint about a provider — for example, you believe a nursing home is neglecting residents or a hospital is billing you incorrectly — you can report it to CMS. CMS has a complaint system and will investigate serious concerns. The complaint does not go directly to CMS; you typically report it through your state's health department or through the nursing home ombudsman, but these agencies work with CMS to follow up.

How to Find Official CMS Information

CMS publishes official information on Medicare.gov. This is the authoritative source for how Medicare works, what it covers, and what your rights are. Medicare.gov includes the Medicare Coverage Database, the plan finder tool (where you can compare Medicare Advantage and Part D plans), and detailed explanations of Medicare rules.

CMS also publishes a document called the Medicare & You Handbook, which is sent to everyone on Medicare each fall. This handbook explains your coverage, your rights, and how to appeal decisions. You can also read it on Medicare.gov.

If you need to contact CMS about something other than a claim or coverage question — for example, you want to report a provider or you have a question about CMS policy — you can find contact information for your regional CMS office on Medicare.gov. Most people do not need to contact CMS directly; your Medicare plan, your doctor's office, or the 1-800-MEDICARE line can answer most questions.

CMS and Medicaid and CHIP

CMS oversees Medicaid and CHIP, but these programs work differently from Medicare. Medicaid and CHIP are jointly funded by the federal government and the states, and each state runs its own program within federal rules set by CMS. This means Medicaid coverage, payment rates, and may be able to access rules vary significantly by state. CMS sets the minimum standards, but states have flexibility to go beyond those minimums.

If you have a question about Medicaid or CHIP, you contact your state's Medicaid agency, not CMS. CMS does not process Medicaid claims or answer Medicaid questions directly. However, CMS publishes information about Medicaid on its website, and you can find your state's Medicaid agency contact information there.

Frequently Asked Questions

Can I call CMS directly if I have a problem with my Medicare claim?

You can reach a Medicare contractor by calling 1-800-MEDICARE. The contractor handles claims and appeals. If the contractor cannot resolve your problem, you can file a formal appeal, which is also handled by contractors following CMS rules. You would contact CMS directly only if you believe there is a systemic problem or a policy question that a contractor cannot answer.

Does CMS decide whether I am covered by Medicare?

CMS sets the rules for who is covered by Medicare (age 65 and older, certain younger people with disabilities, people with end-stage renal disease). The Social Security Administration determines whether you meet those rules and enrolls you. CMS does not make individual coverage decisions; it makes the rules that explore to everyone.

How do I know if CMS covers a specific treatment or drug?

Search the Medicare Coverage Database on Medicare.gov. You can search by service, drug name, or condition. The database shows whether Medicare covers it nationally and any rules or limits that explore. If you cannot find an answer, call 1-800-MEDICARE and ask your contractor about local coverage in your area.

What should I do if I disagree with a CMS coverage decision?

You start by appealing to your Medicare plan or the contractor that made the decision. The appeal process has multiple levels. CMS sets the rules for appeals, but contractors handle the first and second levels. If you remain unsatisfied, you can request an independent review or go to an administrative law judge.

Is Medicare.gov run by CMS?

Yes. Medicare.gov is the official CMS website for Medicare information. It is the authoritative source for coverage rules, plan comparisons, provider quality data, and how to appeal decisions. Information on other websites may be outdated or incomplete, so Medicare.gov is the best place to start.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.