Forum Post: The other Washington could hold the key to Medicare's cost crisis

In order to cut costs and put Medicare on a stronger footing, many health policy experts say the program must stop covering procedures that do little to improve patient health or are not worth the price tag. But the Centers for Medicare and Medicaid Services (CMS), the agency that administers the program, has for the most part failed to implement such cost-cutting measures, because its authority is limited, cuts are controversial and Congress frequently interferes.

Medicare coverage policy most often set far from D.C.

Yet when it comes to setting Medicare coverage policy, relatively few decisions are actually made in Washington, D.C. The Centers for Medicare and Medicaid Services administers the program, but the nuts-and-bolts processes of running the program, including making coverage decisions and paying claims, are performed mostly by private insurance companies that contract with the federal government. Each year, Medicare does institute a dozen or more “national coverage decisions,” often on high-profile or costly procedures. Other procedures are subject to so-called local coverage determinations by the regional insurance contract administrators. The result is a fragmented program in which a procedure Medicare pays for in New York is not necessarily covered in Kansas.

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