CMS Under Pressure

Every series in this publication assumes CMS can execute what it announces. That assumption requires examination. In 2025 and 2026, CMS is simultaneously launching WISeR across six states, extending AHEAD and Geo AHEAD through 2035, standing up ACCESS and BALANCE as new CMMI models, managing a complete risk adjustment overhaul, running the full annual MA and Part D rulemaking cycle, and implementing OBBBA’s Medicaid work requirement infrastructure while administering the Rural Health Transformation Program. It is doing all of this while operating through the largest federal workforce contraction in decades. Whether the agency can deliver on the full scope of what it has committed to is the binding constraint that touches every other policy question in this series.

The Scale of Simultaneous Execution

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The CMMI model portfolio alone constitutes an implementation challenge of unusual breadth. WISeR launched January 1, 2026, in six states across four MAC jurisdictions, requiring new AI-powered prior authorization infrastructure that had no precedent in FFS Medicare. AHEAD is operating in six states with two new entrants, its timeline extended to 2035 under the current administration, with global budget mechanisms, state policy coordination requirements, and quality measurement infrastructure that requires sustained contractor and state agency engagement. ACCESS is a ten-year voluntary digital health model requiring new contracting capabilities for technology-enabled care delivery. BALANCE involves CMS as a direct participant in GLP-1 drug pricing negotiations across Medicaid and Part D in a three-phase rollout. LEAD and ASM are in design or early implementation for ACO and specialty payment reform. GLOBE and GUARD are mandatory drug pricing models requiring pharmaceutical manufacturer engagement and compliance infrastructure that CMS has not previously operated at this scale.

Set alongside these new models, CMS is simultaneously executing the transition away from the V24 HCC risk adjustment model toward V28 over a three-year blended phase-in, managing the chart review exclusion implementation under the existing MA rate authority, and preparing for whatever form encounter-based risk adjustment transition takes when formally proposed. The MA rulemaking cycle, which itself involves a 465-plus-page proposed rule in November, a January comment deadline, and a spring final rule, is not a background activity. It is a major operational commitment that runs concurrently with everything else.

The 2026 implementation calendar also includes OBBBA’s Medicaid work requirement apparatus. HHS was required to issue an interim final rule by June 2026, with state implementation required by January 2027. The timeline leaves CMS a roughly six-month window between issuing federal guidance and state compliance. The administrative systems required to support six-month verification cycles across 41 expansion states represent a data and IT commitment that CMS’s enterprise systems were not designed to accommodate in that timeline.

The span of simultaneous execution here is not historically normal. CMS has managed large reform portfolios before, but the combination of a new mandatory payment model class, a new prior authorization infrastructure, a major risk adjustment reform, a pharmaceutical pricing function, and the largest Medicaid eligibility administration change in a generation, all running concurrently, is a qualitative departure from prior high-activity periods.

The Workforce Reduction

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Federal civilian employment fell by approximately 271,000 workers between January and November 2025, roughly a 9% decline. The pace was the fastest peacetime workforce reduction on record. CMS was comparatively shielded from the deepest cuts. HHS announced an overall headcount reduction of 20,000 positions, representing roughly 25% of the agency, and CMS absorbed approximately 300 announced cuts in the initial April restructuring, a figure that understated the total effect when voluntary departures, deferred resignations, and the broader hiring freeze are counted.

The hiring freeze imposed by Executive Order on January 28, 2025, and the 1-to-4 hiring ratio mandated for new career appointments created structural vacancy accumulation independent of any specific RIF. At CMS, the combination of deferred resignation buyouts accepted by career staff, probationary terminations in early 2026, voluntary separations driven by institutional uncertainty, and the hiring constraint means that the workforce loss is not limited to the announced cut numbers. The more operationally significant loss is in career staff with institutional knowledge of specific programs, rulemaking processes, and contractor relationships.

The nurse surveyor workforce was among the categories documented in early terminations. CMS surveyors conduct on-the-ground inspections of health facilities for Medicare certification and safety standards. Recent hires in that function were terminated with form letters citing inadequate performance, including employees who had received maximum performance review scores weeks earlier. Whatever the administrative rationale, the operational effect is reduced Medicare and Medicaid facility oversight capacity precisely when OBBBA’s Medicaid cuts are increasing the financial stress on nursing homes and safety-net hospitals.

The institutional knowledge problem extends beyond headcount. When career staff with five, ten, or twenty years of program-specific experience leave, their departure removes knowledge that is not documented anywhere and cannot be reconstructed quickly. Rulemaking staff who know the history of a regulatory provision, its legal vulnerabilities, and the comment record from prior rulemakings are not replaceable on a 90-day timeline. CMMI model leads who have built relationships with state Medicaid directors, MAC contractors, and provider organizations carry operational context that shapes whether a model lands or misses. The 1-to-4 replacement ratio guarantees that this knowledge loss compounds rather than stabilizes.

The technology talent gap at CMS is a parallel problem. CMS processes more than a trillion dollars in annual payments through systems running on COBOL, a programming language that most contemporary software engineers do not know. CMS leadership has publicly acknowledged that the agency had approximately 13 engineers managing thousands of contractors at the start of 2025. The current administration’s stated priority is modernization through tech talent infusion, but hiring tech talent into an agency under a 1-to-4 replacement constraint, where a political alignment interview screens out a substantial fraction of the software engineering workforce, is not a straightforward path.

Rulemaking Bandwidth

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The notice-and-comment rulemaking process is a finite resource. Writing a proposed rule requires substantive policy development, legal review by OGC, interagency coordination through OIRA, and a 60-day or 90-day public comment period. Responding to comments requires reading and addressing every significant submission, which for a high-interest rule like the annual MA and Part D rule runs into thousands of pages. Writing the final rule requires resolving the legal and policy questions surfaced in comments, which for contested provisions requires internal deliberation, legal defensibility analysis, and additional OIRA review. The timeline from proposed rule to final rule is rarely less than six months and often longer.

CMS cannot run an unlimited number of significant rules simultaneously. The legal review bottleneck at OGC and the OMB/OIRA coordination requirement are hard constraints. In years when CMS has stretched its rulemaking capacity, the indicators are well documented: final rules that fail to address significant comments, rules that are finalized with provisions the agency subsequently admits require correction, and enforcement moratoria where CMS announces it will not enforce provisions it cannot operationalize. Each of these is a downstream consequence of bandwidth overextension.

The current rulemaking load is high by any historical comparison. The annual cycle rules, the OBBBA implementation rules, and the CMMI model-specific guidance documents all run concurrently. The encounter-based risk adjustment transition, if it proceeds through formal rulemaking rather than sub-regulatory guidance, adds a major additional rule. The CMS-4212-P finalization, the forthcoming FY 2027 IPPS cycle, and whatever vehicle CMS uses for the Medicaid work requirement interim final rule together constitute a 2026 rulemaking calendar that will test the agency’s capacity even under normal staffing.

Contractor and MAC Infrastructure

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CMS does not implement most of what it announces directly. It implements through Medicare Administrative Contractors who process claims, conduct medical review, and manage beneficiary and provider communications, through state Medicaid agencies and their own contractors, and through CMMI model participants who are the operational interface for innovation model implementation.

WISeR’s AI-powered prior authorization requires MAC infrastructure at a scale and technical sophistication that did not exist in the FFS system before January 2026. CMS announced model participants on November 6, 2025, with a January 5 operational start for accepting PA requests. The compressed timeline between participant announcement and operational launch left MAC education, provider outreach, and AI system integration to be completed in approximately nine weeks. Whether that timeline produces reliable, consistent PA decision-making across all four MAC jurisdictions in the model’s first year is an implementation risk the model specifications acknowledged but could not resolve in advance.

AHEAD’s global budget infrastructure is a different kind of contractor challenge. The model requires calculation of global budgets at the state level, adjustment for market shifts as providers and beneficiaries move in and out of the model population, quality measurement for large and diverse provider networks, and ongoing state policy coordination. None of these functions has a mature contractor ecosystem behind it. The extension of AHEAD through 2035 defers the pressure somewhat but increases the stakes for getting the contractor infrastructure right.

ACCESS requires digital health contracting capabilities that CMS has not previously exercised. Contracting with technology companies for care delivery functions, managing performance requirements for non-traditional providers, and ensuring that ACCESS model participants meet Medicare coverage and quality standards through digital-only or hybrid care modalities are new operational domains for the agency.

Historical Pattern

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The pattern of what happens when CMS tries to do too much at once is documented in the model evaluation literature. BPCI-A produced quality measurement delays, reconciliation calculation errors, and sustained participant complaints about model administration that persisted into years three and four. The Comprehensive Joint Replacement model showed regional variation in model execution quality that tracked with MAC capacity and state-level provider engagement rather than any feature of the model design. The early years of the Home Health Value-Based Purchasing Expansion produced data quality problems, delayed reporting, and provider confusion about performance attribution that CMS did not fully resolve until the model’s mid-period evaluation.

The pattern in each case was not that CMS abandoned the model before it could fail. The pattern was degraded model quality that appeared before any termination decision could be made. Plans and providers experienced implementation errors, inconsistent contractor guidance, reconciliation delays, and performance feedback that was too late or too inaccurate to be actionable. The models continued running, but they ran less well than their policy designs assumed, and the evaluations reflected that.

CMMI’s current model portfolio is more complex, involves more mandatory participation (TEAM, GLOBE, GUARD), and is being executed with a smaller career workforce than any prior high-activity period. The implementation risk is not theoretical. It is the historically documented consequence of overextension in a rulemaking and contracting ecosystem with finite capacity.

What to Watch

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Implementation risk in the current environment shows up in specific observable signals before it produces visible failures. Rule finalization delays beyond statutory or stated timelines are the first indicator. When CMS misses a stated rulemaking deadline, it is usually because the internal legal or policy work required to finalize the rule is incomplete, and that reflects capacity strain.

Model launch postponements are the next signal. When CMS announces a model start date and then delays it, the announced reason is almost always technical readiness. The operational reality is usually that contractor selection, system development, or provider education fell behind schedule. The WISeR launch proceeded on schedule; whether operational quality matches the launch timeline is a 2026 data question.

Enforcement moratoria are the clearest signal. When CMS announces it will not enforce a provision it has promulgated, it is acknowledging that it cannot operationalize what it wrote. The OBBBA-imposed moratorium on the Medicare Savings Program enrollment rule is one example. Prior CMMI model reconciliation delays are another. Each moratorium is information about the gap between formal policy and the agency’s operational reach.

Congressional oversight hearings on CMS implementation capacity are a lagging but significant indicator. When committees begin asking questions about whether CMS can execute what it has announced, the implementation risk has typically already manifested in ways that providers and plans have documented to their members and which committee staff have surfaced. The oversight hearing is not the early warning. It is the confirmation.

The implementation capacity constraint is the cross-cutting variable that determines whether every other policy described in this series lands as designed or lands at reduced fidelity. It is not a reason to dismiss the policy agenda. It is the reason to watch implementation signals as closely as the policy documents.

Related Reading

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MCR-01_10 The 2025 CMMI Scorecard: Ten Models in One Year MCR-01_03 WISeR: Prior Authorization Comes to Traditional Medicare MCR-09_01 Medicaid Work Requirements: The Dual Eligible Blind Spot