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Pursuant to a congressional request, GAO analyzed the Health Care Financing Administration's (HCFA): (1) fiscal year (FY) 1990 budget request for its information technology systems and data processing needs; and (2) efforts to reduce Medicare contractors' automatic data processing (ADP) costs.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services 1. The Secretary of Health and Human Services should direct the Administrator, HCFA, to report all ADP costs, including Medicare contractor and Medicaid state operations, in the information technology system's budget.
Closed - Implemented
The Department agreed that Medicare ADP costs should be identified in the information technology budget. The Department disagreed with the recommendation to include state agency ADP costs for Medicaid because it believed that state agencies should not be considered contractors under the Brooks Act.
Department of Health and Human Services 2. The Secretary of Health and Human Services should direct the Administrator, HCFA, to consider pursuing a more direct approach to cut Medicare contractor ADP system costs through shared processing and shared maintenance. This should include preparing a well-supported analysis of the benefits of sharing and an analysis of available approaches to implementing systems standardization and consolidation, including a determination of whether specific legislative authority is necessary.
Closed - Implemented
The Department concurred with the recommendation and maintained that it was actively promoting the shared systems policy. However, GAO later determined that HCFA implemented its shared system policy without the well-supported analysis GAO recommended. GAO therefore again recommended that HCFA perform the necessary analyses to support the shared systems policy, in GAO/IMTEC-92-41, March 18, 1992.

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