Medicare:

Shared Systems Policy Inadequately Planned and Implemented

IMTEC-92-41: Published: Mar 18, 1992. Publicly Released: Mar 18, 1992.

Additional Materials:

Contact:

Frank Reilly
(202) 512-6252
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed a 1989 Health Care Financing Administration (HCFA) policy change that encouraged HCFA Medicare claims processing contractors to share automatic data processing (ADP) systems, focusing on: (1) HCFA implementation of the policy change; and (2) the policy's impact on Medicare claims processing.

GAO found that: (1) in 1992, Medicare claims processing contractors reduced the number of ADP systems processing claims from 58 to 22; (2) HCFA was not adequately prepared to implement the policy change and provided limited oversight during implementation; (3) HCFA did not establish minimum automation requirements to ensure that contractors would process claims efficiently and accurately until 2 years after implementing the policy; (4) since HCFA did not evaluate individual contractor systems to identify the most appropriate systems for sharing, contractors stopped using their own systems and began using other systems that may have been less effective; (5) many contractors experienced claims processing disruptions and reduced productivity during conversion to shared ADP systems, and only 20 of the 55 contractors in a shared maintenance or processing arrangement indicated that they were very satisfied with their shared systems and that operational efficiency had improved; (6) HCFA is considering requiring additional shared system policy changes, even though it has not performed a comprehensive cost-benefit analysis on the impact of its current shared system policy; (7) although HCFA believes that maintaining fewer systems and processing centers can reduce costs and promote uniformity, it has not considered the effect that conversion may have on contractors' ability to ensure accurate Medicare payments; and (8) although HCFA will spend $39.6 million through fiscal year 1992 in implementing the shared system initiative, it has not documented or communicated any long-term system plans.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Department of Health and Human Services (HHS) disagreed with the recommendation. The Department stated that it was pleased with the success of the shared systems initiative and had no desire to reverse course. This recommendation was included in the last annual report on open recommendations and is, therefore, now being closed.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to suspend further implementation of its system sharing policy until HCFA completes its evaluation of existing contractor ADP systems to ensure that the systems are in compliance with HCFA basic system requirements.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Not Implemented

    Comments: HHS disagreed with the recommendation. The Department stated that it was pleased with the success of the shared systems initiative and had no desire to reverse course. This recommendation was included in the last annual report on open recommendations and is, therefore, now being closed.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to suspend further implementation of its system sharing policy until HCFA uses this evaluation, along with contractor program performance data, to determine which contractors would benefit from a conversion to shared processing and which systems would be the best candidates to convert to.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Not Implemented

    Comments: HHS disagreed with the recommendation. The Department stated that it was pleased with the success of the shared systems initiative and had no desire to reverse course. This recommendation was included in the last annual report on open recommendations and is, therefore, now being closed.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to suspend further implementation of its system sharing policy until HCFA provides continual oversight and direction of conversion activities to minimize disruption and ensure that Medicare processing goals are met.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Not Implemented

    Comments: HHS disagreed with the recommendation. The Department stated that it was pleased with the success of the shared systems initiative and had no desire to reverse course. This recommendation was included in the last annual report on open recommendations and is, therefore, now being closed.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to suspend further implementation of its system sharing policy until HCFA develops a long-term strategic plan outlining the HCFA vision for Medicare claims processing and the interim steps needed to achieve this vision. Such a plan must address the use of technology in safeguarding Medicare funds and processing claims efficiently.

    Agency Affected: Department of Health and Human Services

 

Explore the full database of GAO's Open Recommendations »

Sep 29, 2016

Sep 28, 2016

Sep 15, 2016

Sep 14, 2016

Sep 12, 2016

Sep 9, 2016

Sep 6, 2016

Looking for more? Browse all our products here