Federal Oversight of State Medicaid Management Information Systems Could Be Further Improved

HRD-82-99: Published: Jul 30, 1982. Publicly Released: Jul 30, 1982.

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GAO reviewed the Medicaid Management Information System (MMIS) to follow up on actions taken by the Department of Health and Human Services (HHS) to implement prior GAO recommendations. On the federal level, MMIS is administered by the Health Care Financing Administration (HCFA).

The newly designed Systems Performance Review, which contains the performance standards developed in response to revised statutory requirements that approved systems must meet, has been successful in identifying some program weaknesses. While the performance standards include measures of system effectiveness and efficiency, economy of operations, a major purpose of MMIS, is not measured. Thus, HHS does not know whether states' systems are meeting standards at a reasonable cost. HCFA recognizes the need to evaluate operational economy, but it has deferred action on this, anticipating that HHS will require states to implement a functional cost reporting system to ensure accurate and comparable cost data. Current performance standards do not include any measures of the states' effectiveness in identifying and correcting program misutilization by Medicaid providers and recipients or the contributions of the surveillance and utilization review subsystem (SURS) to that activity. GAO found that states were having problems with the SURS methodology which affected the subsystem accuracy in identifying potential misusers. Also, states: (1) were underreporting systems operating costs; and (2) had proceeded with automatic data processing (ADP) equipment or services purchases without obtaining prior HHS approval. HHS regulations require states to obtain prior HHS approval before purchasing ADP equipment and services exceeding certain dollar limits, but HCFA requires states to follow this procedure only when they desire 90-percent federal funding.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: MMIS standards were established to require that group practice physicians be separately identified for SURS profiling and identified through individual provider numbers. HCFA concluded that state cost reporting systems were so varied, it could not make valid comparisons. HHS decided not to implement additional SURS requirements because of the administrative burden placed on the states.

    Recommendation: The Secretary, HHS, should direct the Administrator, HCFA, to include in future systems performance review standards and methodology a requirement to measure: (1) operational economy; (2) the states' effectiveness in identifying and correcting program misutilization; (3) contributions of SURS to overall surveillance and utilization review accomplishments; and (4) exception process methodology to better ensure accuracy of SURS data.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HCFA has issued Financial Management Review Guides for MMIS and for skilled professional medical personnel. Additionally, HCFA has conducted related followup discussions with appropriate state staff.

    Recommendation: The Secretary, HHS, should direct the Administrator, HCFA, to clarify instructions to states for reporting Medicaid administrative costs to ensure that costs of personnel who may qualify as skilled professional medical personnel but are engaged in MMIS functions be reported as MMIS operations and costs.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: State Medicaid Manual changes were approved by the Secretary on May 6, 1985, to make them consistent with HHS regulations on ADP prior approval and advance notice.

    Recommendation: The Secretary, HHS, should direct the Administrator, HCFA, to revise the state Medicaid Manual so that it is consistent with the HHS regulation which requires prior approval or advance notice of ADP equipment and services purchases.

    Agency Affected: Department of Health and Human Services

 

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