During the first year of President Donald Trump’s second term, the Centers for Medicare and Medicaid Services (CMS) has emerged as a surprisingly effective agency amidst a backdrop of political turmoil and agency demoralization. With oversight of approximately $1.7 trillion in healthcare expenditures, accounting for 24% of the federal budget, CMS has made strides that set it apart from other health agencies, which have faced significant challenges.
The Food and Drug Administration (FDA), once lauded for its role in drug regulation and food safety, has struggled under the current administration. In contrast, CMS has continued to innovate and uphold its nonpartisan mission, even as other agencies have seen a mass exodus of skilled professionals. In 2025, more than 300,000 federal workers left government service, including over 10,000 with advanced degrees in science, technology, engineering, and mathematics (STEM). The departure of these individuals has had far-reaching implications, diminishing the effectiveness of health services and increasing waiting times for care, particularly within the Veterans Affairs department, which lost 50,000 employees.
One notable area of concern has been the policies enacted by Health Secretary Robert F. Kennedy Jr., whose controversial adjustments to the childhood vaccine schedule have raised alarms regarding public health safety. Yet, CMS has managed to navigate these turbulent waters effectively by focusing on critical reforms within its purview.
Among the key initiatives launched by CMS is an effort to strengthen primary care. The agency has increased payment rates for primary care physicians while reducing payments for specialists, a move welcomed by healthcare experts. Although the pay increase is modest, it signals a commitment to improving the primary care system, which is crucial for patient health outcomes.
Another significant reform is the expansion of site-neutral payments, which aims to equalize reimbursement rates for similar services provided in different settings. For example, a hip replacement performed in a hospital costs nearly $3,500 more than the same procedure at an ambulatory surgical center. This disparity contributes significantly to healthcare spending, and estimates indicate that shifting care from hospitals to lower-cost settings could save up to $100 billion annually without compromising quality. Recently, CMS announced the expansion of site-neutral payments for drug administration, including chemotherapy and immunotherapy, reflecting a shift towards more efficient healthcare funding.
Contrary to expectations, CMS proposed a minimal payment increase of just 0.09% or $700 million for Medicare Advantage plans for 2027, a stark contrast to the previous year’s increase of over 5% or $25 billion. Experts have criticized the Medicare Advantage system for allowing private insurers to overcharge the government, with estimates suggesting that these practices could lead to overpayments exceeding $75 billion annually. The recent modest payment increase has led to a significant decline in market value for major Medicare Advantage plans, demonstrating CMS’s intent to curb excesses in this sector.
In terms of innovation, the CMS Innovation Center has introduced several new models focused on improving care quality and reducing costs. One such model, the Advancing Chronic Care with Effective, Scalable Solutions (ACCESS), aims to integrate artificial intelligence technologies for better management of chronic conditions like hypertension and diabetes, which collectively account for around 1 million deaths annually.
Another initiative, the Wasteful and Inappropriate Service Reduction (WISeR) model, seeks to address fraud in Medicare by testing prior authorization for 17 services that have been subject to abuse. This approach comes in response to alarming trends, such as a dramatic increase in Medicare spending on skin substitutes, which surged from $252 million in 2019 to over $10 billion in 2024.
Despite these advancements, not all CMS policies have been positively received. Recent decisions to rescind Biden-era guidance on abortion-related emergency care have raised concerns about legal uncertainties for healthcare providers. Polling indicates that healthcare costs have become the primary concern for American households, surpassing worries about other essential expenses.
As the U.S. healthcare system approaches a critical juncture, the role of CMS remains pivotal. While significant reforms are needed to address affordability and accessibility, the agency’s recent actions reflect a commitment to improving primary care and managing healthcare costs effectively. The ongoing challenges faced by other federal agencies further emphasize the importance of recognizing CMS’s achievements during this turbulent period in American healthcare policy.
Ezekiel J. Emanuel, vice provost for global initiatives at the Perelman School of Medicine, and Merjan L. Ozisik, a research fellow in the Department of Medical Ethics and Health Policy at the same institution, underscore the need for continuous improvement in the healthcare system, particularly as the nation prepares for the next administration in 2029.
