The Medicare Hierarchy

History of Medicare and Medicaid

On July 30, 1965 President Lyndon Johnson signed Medicare and Medicaid into law. Today, US healthcare is a complicated mega system consisting of multi layered government organizations. Most people have a hard time mentally mapping the roles of each entity and their affiliation with each other. At TT Medical, we feel it’s crucial to master the details of your day to day tasks as well as to understand the big picture to make proper decisions regarding your business. Understanding the Medicare hierarchy helps home health and hospice agencies know where to turn to when facing specific issues.


Medicare provides national medical insurance for Americans ages 65 and older while Medicaid covers low income and disabled individuals of any age. Both programs are managed by the Centers for Medicare and Medicaid, under the Department of Health and Human Services. From there, 3 private insurance companies, called fiscal intermediaries, are contracted by CMS to administer the Medicare Home Health and Hospice program throughout the nation. More fiscal intermediaries exist however they don’t relate to the home health sector. The 3 fiscal intermediaries, National Government Services, Palmetto and CGS outsource the survey process to either state health department or to 3 private accreditation and certification entities. These private accreditation and certification entities are the Joint Commission (JCAHO), Community Health Accreditation Partner (CHAP) and the Accreditation Commission for Health Care (ACHC). Prior to accreditation and certification, however, many states, like California, Texas and Florida require that home health and hospice agencies get a state license, achieved by successfully completing the state’s survey requirements. Some states, like Michigan, don’t require a state license to open a home health or hospice care company. The Office of Inspector General is responsible for investigating and enforcing issues of fraud for all healthcare providers, including individual practitioners, clinicians and any other individuals employed in the healthcare sector.