Medicare: New Claims Processing System Benefits and Acquisition Risks
HEHS/AIMD-94-79
Published: Jan 25, 1994. Publicly Released: Feb 25, 1994.
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Highlights
Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) process for procuring the Medicare Transaction System (MTS), a single automated system intended to replace claims processing functions performed by multiple automated systems, focusing on: (1) anticipated MTS benefits; (2) whether procurement safeguards ensure adequate system development; and (3) MTS role under a reformed health care system.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that the agency's intended actions to address the planning and acquisition issues identified in this report are implemented immediately. Among other things, the Secretary should ensure that HCFA top management is continuously involved in the MTS project. |
GAO is closing this recommendation because, in AIMD-97-78, it provided much more detailed recommendations on actions the HCFA Administrator should take. That is, GAO identifies specific actions which the HHS Secretary should require the HCFA Administrator to take to reduce the risks associated with MTS by ensuring that MTS is managed as an investment and by ensuring that critical systems-development practices are followed. GAO will monitor HCFA's actions to ensure top management involvement by examining its progress on these more detailed recommendations.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that the agency's intended actions to address the planning and acquisition issues identified in this report are implemented immediately. Among other things, the Secretary should ensure that Department of Health and Human Services information resources management officials participate in the MTS project and that experts from other department components are available to assist HCFA. | In his May 16, 1997 testimony, HCFA's Administrator noted that for major information technology efforts such as MTS, recent legislation (the Clinger-Cohen Act of 1996) gives specific oversight responsibility to HHS' Chief Information Officer (CIO). The Administrator said that in reassessing MTS development strategy, HCFA will obtain appropriate assistance and oversight from the CIO and other oversight bodies. The HHS CIO told GAO, at an October 1996 GAO briefing to HCFA on MTS problems, that he will be more closely involved in overseeing MTS. In addition, HCFA has appointed an acting CIO who is responsible for planning and overseeing MTS and other technology efforts. Further, the HCFA...
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that the agency's intended actions to address the planning and acquisition issues identified in this report are implemented immediately. Among other things, the Secretary should ensure that HCFA provide progress updates each January to congressional appropriations and oversight committees describing the status of MTS, including progress, problems, milestones, and costs in designing, developing, and deploying the system. | HCFA's actions are only partly responsive in that it has provided a limited amount of information to Congress, including: (1) providing general information in June 1995 to appropriations and other committees on MTS progress; (2) notifying the Senate Appropriations Committee in February 1997 that its MTS system development contract would require an additional $52 million in funding for new work included in the renegotiated MTS contract; and (3) testifying before House Government Reform and Oversight subcommittees in May 1997 that the MTS contractor's work was increasingly behind schedule, that HCFA had ordered the contractor to stop work on all but one of the functional areas on which it...
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Administrative costsClaims processingConcurrencyHealth insurance cost controlInformation systemsMedicareRequirements definitionRisk managementStrategic information systems planningFraud, Waste and Abuse