LOS ANGELES—The Centers for Medicare & Medicaid Services (CMS) is prioritizing the acceleration of technology under President Donald Trump, according to the agency’s new deputy administrator and chief of staff Stephanie Carlton.

Carlton, a Trump appointee, spoke at the Association of Health Care Journalists’ annual conference last week in Los Angeles. She was previously acting administrator of the CMS.

One of the agency’s goals is to become the leading payer in the U.S., setting an example for other payers. “How do we foster a culture that’s really innovative?” Carlton said. The CMS is trying to do so by leveraging technology. The agency today has fewer than 15 engineers, Carlton said. “We need to build that part of our talent set,” she said. 

The benefit of tech is multifold. The CMS is hoping to crush waste and abuse across its programs, per Carlton. The agency has launched a “fraud war room,” where lawyers and data analysts are working to “catch fraud before it even happens.” 

The CMS also hopes to empower beneficiaries with technology. Generative AI has the potential to transform how people interact with healthcare, she noted. It would be powerful to tap into a HIPAA-compliant longitudinal data set of one’s medical history for personalized, evidence-based medical advice. While interoperability is an important step in knitting those types of data together, more can be done, Carlton said: “It’s quite clunky right now, if you look at the technology.” 

The CMS is also interested in helping providers see data in real time, with the goal of making smarter clinical decisions. Despite a workforce shortage, she said, the point of tech is to supplement and not replace what clinicians do: “The human touch will still be around for a long time.” 

The agency is interested in the role private enterprise can play in supporting innovation in the sector. As capitalists and Republicans, Carlton said, “we think there’s a huge role for entrepreneurs and innovators in healthcare.” She cited as one example the most favored nation (MFN) drug pricing model, which the Trump administration is looking to revive after a failed attempt to implement it in Trump's first term. A new MFN rule, some experts say, would likely be the target of legal challenges. 

Drug pricing has been a priority for Trump since 2016, Carlton said, who sees it as an issue of “fairness” that U.S. citizens overpay for drugs compared to other nations. To combat this, Trump has asked the CMS to consider trade deals, the 340B program and pricing to get a better deal for taxpayers. While the Inflation Reduction Act prohibits considering international pricing, other levers can do that, such as models via the Center for Medicare and Medicaid Innovation, Carlton said. 

In response to audience questions, Carlton expressed frustration that a lot of Medicaid spending has gone toward resources not core to the mission of the CMS. This thinking is in line with a recently announced CMS push to cut what it sees as redundant or unnecessary spending. 

“This is CMS. It’s not the Department of Education. Why are we doing student loan repayments through Medicaid?” Carlton said. She believes the CMS should instead work with other agencies better structured to handle that type of support.

Carlton suggested that framing the latest proposed changes to Medicaid as “cuts” was inaccurate. In the years to come, the CMS will still spend more on Medicaid than it does today, she claimed. Instead, the reconciliation bill seeks to manage the rate of the program’s growth. 

“It is quite literally not a cut,” Carlton said. Medicaid was intended as a safety net, she explained, and its reimbursement rates were not intended to reach commercial levels. “The trajectory has gotten out of control when it comes to [Medicaid] spending.” 

Rachel Nuzum, senior vice president of policy at the Commonwealth Fund, countered Carlton's remarks, asserting that proposed Medicaid changes were, in fact, reductions as she was speaking on a panel with other policy experts later that day.

Trump's massive tax and immigration package, which is moving to the Senate for consideration, proposes reductions in federal Medicaid spend worth an estimated $723 billion. Though in theory, states could choose to up their contributions, it is hard to see any state being in a position to fully fill the gap, Nuzum said during a discussion about the impact of the sweeping changes across the Department of Health and Human Services under Trump. 

In response to Carlton’s remarks,. “It’s more realistic to talk about it as a reduction in federal resources and a shift to states to really make that determination,” Nuzum said.