GAO: HCFA faces numerous challenges in 21st century
Report says complexities will increase
The year 2000 (Y2K) bug, the Balanced Budget Act (BBA), the Health Insurance Portability Act, and the daily challenges of running the nation’s largest health insurance program has the Baltimore-based Health Care Financing Administration (HCFA) limping into the 21st century. In addition, HCFA has had few resources to devote to other pressing issues such as streamlining its work force and updating antiquated computer systems.
A recent General Accounting Office (GAO) assessment of HCFA painted a troubled picture for the agency as it heads into the new millennium.
"As HCFA moves into the 21st century, its challenges will continue to become more numerous and complex," said William J. Scanlon, director of health financing and public health issues for the health education and human services division of the GAO, during congressional subcommittee testimony Feb. 11.
"Once it has finished preparing for Y2K, HCFA must face tasks it has had to put aside or not fully addressed. Several immediate challenges lie ahead. HCFA must finish and then refine program changes to fully realize the benefits expected from the Balanced Budget Act. It also needs to renovate antiquated and streamline redundant computer systems. Furthermore, it needs to strengthen its financial management and efforts to preserve program integrity."
The GAO is concerned that while HCFA has made progress in addressing its highest priorities, many problems still remain. For example, The GAO pointed out that while HCFA is spending considerable resources to bring its billing systems into Y2K compliance, much of the computer systems used for that billing system would be obsolete shortly after 2000. In essence, HCFA is expected to spend millions in renovating its systems only to have to replace them a few short years later.
Scanlon was also critical of HCFA implementation of BBA and Health Insurance Portability and Accountability Act (HIPAA). "HCFA has completed many major tasks this past year and implemented significant portions of the HIPAA and the BBA, but progress remains slow," Scanlon told legislators.
Like their nursing home and home health colleagues, hospices of all types face prospective payment mandated by the BBA. But the complexity of the Y2K problem stalled implementation of the prospective payment system for home health agencies.
Scanlon credits HCFA with trying to address its shortcomings, but says it failed areas such as financial management and routine oversight to ensure provider compliance. The GAO also criticizes HCFA’s lack of planning, blamed largely on the crisis atmosphere created by Y2K, BBA, and HIPAA. "In our interviews and focus groups, a pervasive theme was the need to work in crisis mode, made worse by a lack of planning," Scanlon told subcommittee members.
"HCFA’s continuing challenges are taxing — strong leadership and management will be required to meet them," Scanlon said. "More effective planning, new staff with needed skills, and better accountability could help HCFA address these challenges and better ensure quality health care for the elderly, poor, and disabled."
(Editor’s note: A complete copy of HCFA Management: Agency Faces Multiple Challenges in Managing its Transition to the 21st Century can be found at the GAO Web site, www.gao.gov.)
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