established Medicare, and Title XIX initiating Medicaid. Medicare, Medicaid, and related programs are currently managed by CMS within the Department of Health and Human Services.

In general, work that CMS currently performs helps to fulfill either its mission as a health care insurance provider or reflects its mandate to help improve health care quality. CMS’s core tasks include “processing billions of claims, addressing millions of inquiries and appeals, and conducting thousands of health care facility inspections and complaint investigations. CMS manages and supports its prescription drug plans, Medicare Advantage plans, employer-sponsored retiree health care coverage, and various administrative grants. The agency works with various states, regions, and providers to facilitate enrollment of millions of eligible recipients and to develop policies for cost-effective and quality health care.”2

In addition, CMS is responsible for several other key programs such as managing quality standards and training at clinical laboratories, advancing the national e-health agenda, and engaging in research and demonstration projects to improve claims reimbursement and quality of care.

The agency directly employs approximately 4,000 people, two-thirds of whom are based at its Maryland headquarters. CMS also has 10 regional offices throughout the United States,3 and CMS headquarters has 11 main functional divisions.4 In addition to its own staff, CMS currently relies on approximately 80,0005 contractors involved in claims processing and employed as front-and middle-office staff in the Medicare Administrative Contractor offices, as well as in building, managing, and maintaining its numerous IT systems.

As a result, CMS has a diverse and complex cast of stakeholders invested in its mission, and by extension in the performance of its sys


2 CMS, 2006, “Achieving a Transformed and Modernized Health Care System for the 21st Century: CMS Action Plan 2006–2009,” document, formerly available at

3 CMS, 2011, “CMS Programs & Information,” website, available at, last accessed July 31, 2011.

4The divisions are the Center for Medicare; Operations (which includes the Office of Financial Management, the Office of Information Services, and the Office of E-Health Standards and Services); Center for Medicaid, CHIP, and Survey & Certification; Center for Medicare and Medicaid Innovation; Center for Consumer Information and Insurance Oversight; Office of Clinical Standards and Quality; Center for Strategic Planning; Office of Executive Operations and Regulatory Affairs; Center for Program Integrity; Office of Legislation; and Office of the Actuary. For more information regarding CMS organizational structure, see the CMS organizational chart, last updated August 1, 2011: CMS, 2011, “Department of Health and Human Services: Centers for Medicare and Medicaid Services,” chart, available at, last accessed August 1, 2011.

5Laurie Maatta, 2011, “CMS Systems Scope and Scale,” presentation to the committee, January 13, site visit.

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