The US federal government monitors and manages the practice of medicine in a number of ways, including:
Regulation
The FDA regulates the marketing and use of medical products, such as prescription drugs, medical devices, and supplements. The FDA monitors products after they are approved to ensure they are still safe and to track any adverse events.
Reimbursement
The Centers for Medicare and Medicaid Services (CMS) regulates reimbursement for healthcare products and services for Medicare and Medicaid. CMS also operates the federal insurance marketplaces created by the ACA.
Funding
The federal government funds research that leads to new treatments and options for patients and providers. The Health Resources and Services Administration (HRSA) funds health programs for underserved Americans and workforce education programs.
Public health surveillance
The federal government tracks infectious disease outbreaks in the US and worldwide.
Contracts
The federal government finances contracts to encourage public health initiatives, develop state and local provider contracts, and support ongoing activities.
Cost control
The federal government controls costs by setting provider rates, capping annual out-of-pocket fees, and negotiating drug prices.
While State and local governments play a key role in the US healthcare system, including licensing health care professionals, regulating health insurance plans, and operating safety-net facilities, the Federal government has the authority through the Supremacy Clause to over-rule State Medical practices.
Additional commentary:
The FDA regulates the marketing and use of medical products, such as prescription drugs, medical devices, and supplements. The FDA monitors products after they are approved to ensure they are still safe and to track any adverse events.
The FDA doesn't regulate supplements as medicines at all, the extent of supplement regulation by the FDA is based on them being treated as food items, not medicines. FDA monitors drugs for safety after they've been approved, but monitoring for medical devices is quite limited - mainly implantable devices like pacemakers and insulin pumps, and even that's sketchy sometimes.
The Centers for Medicare and Medicaid Services (CMS) regulates reimbursement for healthcare products and services for Medicare and Medicaid. CMS also operates the federal insurance marketplaces created by the ACA.
CMS regulates reimbursement for services only for Medicare, and then only for bog-standard original medicare. They don't regulate provider reimbursement for services performed by contracted providers under a Medicare Advantage product - most insurers peg their reimbursement policies to medicare levels, but they frequently pay at a higher % than Medicare.
CMS doesn't regulate reimbursement for services by Medicaid - Medicaid reimbursement levels are developed by the states, but similar to MA, if the state uses a managed medicaid approach, most medicaid managers (they're not technically insurance companies) negotiate their own contracts with providers, and often pay at a different rate than the state-developed reimbursements. The state pays the insurer at the state-level, but insurers frequently pay out at a higher rate, and make up the difference through care management, steerage, and quality control practices.
The federal government finances contracts to encourage public health initiatives, develop state and local provider contracts, and support ongoing activities.
Can you elaborate on this?
The federal government controls costs by setting provider rates, capping annual out-of-pocket fees, and negotiating drug prices.
Nah, not really. The fed only sets provider rates for Medicare, not for anything else. And even then, they set the defined rate for what the fed pays for bog-standard original fee-for-service Medicare, not for Medicare Advantage plans. They don't set provider rates for Medicaid, nor for any employer or individual plans. It would probably be beneficial for all of us if the *did*... but they don't.
Similarly, the fed only negotiates drug prices for Medicare, and that's a very new practice, within just the last couple of years I think. Medicare isn't my focus field, so I'm not sure when it finally actually went into effect.
The fed only caps annual out of pocket fees for ACA regulated plans for Individuals and Metal Small Group. They don't cap larger employer coverage, they don't apply caps to pre-aca Grandfathered plans, they don't even cap Medicare.
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An even larger miss, however, is that the fed doesn't manage medicine pretty much at all. The fed doesn't set Standards of Practice, pretty much doesn't get involved at all. They don't even define the distinction between elective and non-elective medicine, nor between cosmetic and reconstructive services. They don't have requirements around how medicine should or should not be delivered, or when it should be withheld.
The only thing that even comes close are related to prescription tracking for controlled substances, like opioids and amphetamines and such.