The newly confirmed administrator of the Centers for Medicare & Medicaid Services (CMS) on Thursday announced his agenda and vision for the agency. CMS also shared a letter to states about plans to refocus its Medicaid program resources.
In his first official statement as CMS administrator, Dr. Mehmet Oz said that he aims to fulfill the vision of President Donald Trump and Human and Health Secretary Robert F. Kennedy Jr. to “make America healthy again.”
“Great societies protect their most vulnerable,” said Dr. Oz. “As stewards of the health of so many Americans–especially disadvantaged youth, those with disabilities, and our seniors, the CMS team is dedicated to delivering superior health outcomes across each program we administer. America is too great for small dreams, and I’m ready to get work on the President’s agenda.”
Dr. Oz, a cardiothoracic surgeon and former television host, said the agency will work to modernize Medicare, the marketplaces, and Medicaid, so Americans get the care that they want, need, and deserve.”
To achieve these goals, Dr. Oz said that CMS will focus on:
- Providing consumers with personalized solutions to better manage their health and navigate the complex health care system. As a first step, CMS will provide Americans with information they need about costs.
- Giving health care providers better information about their patients and holding them accountable for health outcomes, rather than unnecessary paperwork that distracts them from their mission. For example, he said, CMS will work to streamline access to life saving treatments.
- Identifying and eliminating fraud, waste, and abuse
- Shifting the current health care system that focuses on sick care to one that fosters prevention, wellness, and chronic disease management. For example, Dr. Oz said CMS operates many programs that can focus on improving holistic health outcomes.
CMS changes regarding designated state health programs, designated state investment programs
In addition to sharing Dr. Oz’s vision for the agency, CMS on Thursday announced plans to “preserve the state-federal Medicaid partnership.”
As Congress debates how much or whether to cut Medicaid funding as part of its goal to slash $880 billion from the federal budget, CMS said it intends to stop spending on duplicated resources available through other federal and state programs or isn’t directly tied to health care services. “Mounting expenditures, such as covering housekeeping for individuals who are not eligible for Medicaid or high-speed internet for rural health care providers, distracts from the core mission of Medicaid, and in some instances, serves as an overly creative financing mechanism to skirt state budget responsibilities,” the agency said in a statement.
The agency intends to “safeguard the financial health of the Medicaid program” by focusing on improving health outcomes of the most vulnerable dependent on Medicaid.”
In a letter to state Medicaid directors, Deputy Administrator and Director Drew Snyder said the agency would no longer approve new or extend existing requests for federal matching funds for state expenditures on designated state health programs (DSHP) and designated state investment programs (DSIP). DSHPs and DSIPs are state-funded health programs that, without “creative interpretations” of section 1115 demonstration authority, would not have qualified for federal Medicaid funding, Snyder said.
Federal funding for DSHP has raised concerns in Congress and the Government Accountability Office about whether the programs were linked to eligible populations and aligned with the federal-state financial partnership established under the Medicaid statute. CMS said that In 2017, it acted to phase-out these expenditures, noting “demonstrations have not made a compelling case that federal DSHP funding is necessary to support the continuation of important programs previously operated by the state, and federal DSHP funding is inconsistent with the overall federal-state financial relationship under the Medicaid statute.”
According to CMS, the DSHP and DSIP programs have grown from approximately $886 million in 2019 to nearly $2.7 billion in eligible expenditures in 2025, representing increasing costs to the federal government without a sustainable state contribution. The programs, CMS said, do not tie directly to services provided to Medicaid beneficiaries.
CMS cited the following examples:
- $11M in grants to a labor union in New York to reduce costs of health insurance for certain childcare providers
- $241M for a program in New York for non-medical in-home services, such as housekeeping
- $17M for a California student loan repayment program
- $20M in grants to high-speed internet for rural health care providers in North Carolina
- $3.8M for a diversity in medicine initiative in New York
Synder said in the letter that CMS is open to consulting with states if they believe services currently supported in DSHPs and DSIPs qualify for federal matching funds under their state plans.