The Centers for Medicare and Medicaid Services (CMS) is the federal agency that runs Medicare, Medicaid, and the Children's Health Insurance Program (CHIP)

CMS is part of the U.S. Department of Health and Human Services. It is the government office that decides how Medicare works, what it covers, how much it pays doctors and hospitals, and who can join. If you receive a Medicare bill, a coverage denial, or a notice about your benefits, that decision came from CMS or from an insurance company following CMS rules.

CMS does not deliver care itself. It does not employ doctors or run hospitals. Instead, it sets the rules that Medicare insurance companies must follow, pays those companies to administer the program, and oversees the money. When you call Medicare with a question about your coverage, you are calling a contractor that CMS hired to answer phones and process claims — but the policy behind the answer is CMS's.

Understanding what CMS is and what it controls helps you know who to contact when something goes wrong, what rules explore to your coverage, and where to find the official answer to a question about your benefits.

Key Takeaways

  • CMS is the federal agency that creates Medicare rules, decides what is covered, and sets payment rates for doctors and hospitals.
  • CMS hires private insurance companies to handle the day-to-day work of processing claims and answering beneficiary questions, but CMS makes the final policy decisions.
  • If you disagree with a coverage decision or a claim denial, you have the right to appeal, and CMS publishes the rules for how appeals work.
  • CMS maintains the official Medicare website (Medicare.gov) and publishes coverage policies, billing rules, and beneficiary rights in documents called Local Coverage Determinations and National Coverage Determinations.
  • CMS also runs Medicaid and CHIP, which serve lower-income adults, children, and pregnant people, though each state administers its own Medicaid program under CMS guidelines.

How CMS Runs Medicare Day to Day

CMS does not directly bill you, process your claims, or answer your phone calls. Instead, it contracts with private insurance companies called Medicare Administrative Contractors (MACs) to handle those tasks. There are different MACs for different regions of the country, and they process claims for Original Medicare (the traditional fee-for-service plan run by the government). CMS also contracts with insurance companies to offer Medicare Advantage and Medicare Part D prescription drug plans, which are private plans that must follow CMS rules.

When you submit a claim or call with a question, you are usually talking to one of these contractors, not to CMS directly. However, the rules they follow — what they must cover, how much they can charge you, what they can deny — all come from CMS. If a contractor makes a mistake or denies something it should have covered, CMS is the agency that sets the appeals process and can overturn the decision.

CMS also employs people who review claims for fraud, audit hospitals and doctors to make sure they are billing correctly, and investigate complaints from beneficiaries. These oversight functions happen behind the scenes but affect what you pay and whether your claims are processed fairly.

What CMS Decides About Your Coverage

CMS decides which medical services, drugs, and equipment Medicare will pay for. These decisions are published in two types of documents: National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs).

A National Coverage information is a rule that applies to all of Medicare nationwide. For example, CMS has an NCD that says Medicare will cover a colonoscopy for colorectal cancer screening once every 10 years for people age 50 and older. This rule is the same whether you live in California or Maine.

A Local Coverage information is a rule that applies only in a specific region, usually because the evidence for a treatment is mixed or because local medical practice differs. For example, one MAC might cover a certain type of physical therapy for knee pain while another MAC in a different region does not. You can find the LCDs that explore to your area on the CMS website or by calling your local MAC.

If your doctor prescribes something and Medicare denies it, the denial letter will usually cite the NCD or LCD that applies. Understanding which rule was used helps you decide whether to appeal or ask your doctor for an alternative treatment that Medicare does cover.

How CMS Sets Payment Rates and Billing Rules

CMS decides how much it will pay doctors, hospitals, and other providers for each service. These payment rates are published in fee schedules that change every year. A doctor who accepts Medicare must accept the CMS-approved amount as full payment (except for the deductible and coinsurance you owe). A doctor who does not accept Medicare can charge you more, but you can request that CMS reimburse you directly for part of the bill.

CMS also sets the rules for how providers can bill you. For example, CMS rules say that a hospital cannot bill you for a service that Medicare covers unless you signed a form before the service saying you understood Medicare might not pay. These rules protect you from surprise bills and from being charged unfairly.

Every year, CMS publishes updates to payment rates and billing rules. These changes can affect your out-of-pocket costs and what your doctor or hospital can charge. Your Medicare Summary Notice (the bill you receive after a service) is based on the CMS payment rules in effect at the time of service.

Your Rights to Appeal and Dispute Decisions

CMS publishes the rules for appealing a coverage denial or a billing error. If Medicare or your Medicare Advantage plan denies a claim, you have the right to ask for a review. The appeal process has multiple levels: first a reconsideration by the same contractor, then a review by an independent reviewer, then a hearing before an administrative law judge if the amount in dispute is large enough, and finally an appeal to the CMS Appeals Council.

You do not need a lawyer to appeal, though you can hire one if you choose. CMS publishes a free guide called "Your Medicare Appeal Rights and How to Use Them" that explains each step. You can also contact your State Health Insurance information Program (SHIP), which offers free help with appeals and disputes.

The time limits for appealing vary depending on the level of appeal and whether you are in Original Medicare or a Medicare Advantage plan. CMS sets these important date, and missing a important date can mean you lose your right to appeal. If you receive a denial notice, read it carefully for the appeal important date and instructions.

CMS Also Runs Medicaid and CHIP

In addition to Medicare, CMS oversees Medicaid and the Children's Health Insurance Program (CHIP). These programs serve people with lower incomes — Medicaid covers adults and children, and CHIP covers children in families that earn too much for Medicaid but not enough to afford private insurance.

Unlike Medicare, which is the same nationwide, each state runs its own Medicaid and CHIP program under CMS guidelines. This means may be able to access, covered services, and payment rates vary by state. CMS approves each state's plan, monitors spending, and makes sure states follow federal rules. If you are on Medicaid or CHIP, your state administers your benefits, but CMS sets the framework.

CMS publishes information about Medicaid and CHIP on its website, including links to each state's program. If you have questions about Medicaid or CHIP, you will usually contact your state's Medicaid office rather than CMS directly.

Where to Find CMS Information and Contact Them

The official Medicare website, Medicare.gov, is run by CMS. You can use it to find coverage information, look up doctors and hospitals, compare plans, and read official guidance about your benefits. Medicare.gov also has links to the National Coverage Determinations and Local Coverage Determinations mentioned above.

You can contact CMS indirectly by calling Medicare at 1-800-MEDICARE (1-800-633-4227). This number connects you to a contractor, not to CMS staff, but the contractor can answer questions about CMS policies and can escalate issues to CMS if needed. You can also file a complaint about a Medicare contractor or a Medicare Advantage plan with CMS through the Medicare.gov website.

If you need help understanding a CMS decision or appealing a denial, contact your State Health Insurance information Program (SHIP). SHIP counselors are trained in Medicare rules and can explain CMS policies in plain language. You can find your state's SHIP by calling 1-800-MEDICARE or visiting the Eldercare Locator at 1-800-677-1116.

Frequently Asked Questions

Is CMS the same as Medicare?

No. CMS is the federal agency that runs Medicare. Medicare is the health insurance program for people age 65 and older and some younger people with disabilities. CMS makes the rules, but Medicare Advantage plans and other contractors do the day-to-day work of processing claims and paying providers.

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

You can call 1-800-MEDICARE, which connects you to a CMS contractor who can help. For complex issues or complaints about a contractor's handling of your claim, you can file a complaint through Medicare.gov, and CMS will investigate. CMS does not have a direct phone line for beneficiaries, but the Medicare phone line routes you to the right contractor for your issue.

What does it mean when a coverage denial letter mentions an NCD or LCD?

It means CMS (for an NCD) or your local Medicare contractor (for an LCD) has decided that Medicare does not cover the service you received or your doctor prescribed. You can read the full NCD or LCD on the CMS website to understand the reason. If you disagree, you can appeal the decision and ask for a review of whether the rule was applied correctly to your situation.

Does CMS set the price I pay for my Medicare Advantage plan?

No. Insurance companies set the premiums for Medicare Advantage plans, but CMS approves the plans and sets rules about what they must cover and what they can charge. CMS also pays the insurance companies a fixed amount per beneficiary. You can compare plan prices and coverage on Medicare.gov every year during the open enrollment period.

If I move to a different state, does CMS change my coverage?

Your Original Medicare coverage stays the same nationwide because CMS runs it uniformly. If you are in a Medicare Advantage plan, you may need to switch plans because plans are usually available only in certain regions. If you are on Medicaid, your coverage will change because each state runs its own Medicaid program with different rules and benefits.