CMS vision shifts as agency halts funding for state programs

Editor's Note

The Centers for Medicare & Medicaid Services (CMS) will no longer approve federal matching funds for designated state health programs (DSHPs) and designated state investment programs (DSIPs) that are not directly related to Medicaid services. According to the April 10 announcement, the decision aims to preserve the core mission of Medicaid and ensure that federal funds are used appropriately.​

As detailed in the announcement, DSHPs and DSIPs have been used by states to fund various programs, such as housekeeping services for non-Medicaid beneficiaries, high-speed internet for rural healthcare providers, and student loan repayment programs. CMS has expressed concerns that these expenditures divert funds from essential Medicaid services and may serve as mechanisms for states to shift budget responsibilities to the federal government.​ Although CMS began phasing out these expenditures—which have raised oversight concerns from congress and the Government Accountability Office (GA)—in 2017, DSHPs and DSIPs have grown from approximately $886 million in 2019 to nearly $2.7 billion in 2025.

In a separate, same-day announcement, newly appointed CMS Administrator Dr Mehmet Oz unveiled his strategic vision for the agency, emphasizing a shift toward preventive care, enhanced transparency, and rigorous efforts to combat fraud and abuse. One stated goal is “shifting the paradigm for health care from a system that focuses on sick care to one that fosters prevention, wellness, and chronic disease management.”

For healthcare providers, Oz advocates for access to better patient information and accountability for health outcomes, moving away from burdensome paperwork. For patients, goals include empowering individuals with personalized tools to manage their health and navigate the healthcare system, beginning with President Trump’s Executive Order on Transparency, aimed at providing Americans with clear information about healthcare costs.

Dr Oz previously served as a cardiothoracic surgeon and led the heart institute at New York Presbyterian Medical Center. He is also widely known as the host of a popular daytime TV show. As CMS Administrator, Oz will oversee a $1.7 trillion budget for programs including Medicare, Medicaid, the Children's Health Insurance Program, and the Health Insurance Marketplace.