ADP Systems
HCFA's Failure to Follow Guidelines Makes Systems Effectiveness Uncertain Gao ID: IMTEC-90-53 July 26, 1990Pursuant to a congressional request, GAO reviewed the development, progress, performance, and cost of the Common Working File (CWF), which the Health Care Financing Administration (HCFA) implemented to improve Medicare claims processing.
GAO found that: (1) in developing CWF, HCFA believed that it did not have to prepare a required plan, since it employed contractors to process claims, rather than operating its own claims-processing facility; (2) HCFA also did not follow federal guidelines during CWF development; (3) HCFA did not estimate project development costs before initiating CWF, and instead budgeted for CWF as a productivity improvement item within a contractor section of its annual budget; (4) CWF is expected to cost about $103.8 million upon completion; (5) although HCFA justified CWF on the basis of expected savings, resulting primarily from the reduction of payment errors, HCFA could not provide documentation supporting those savings; (6) HCFA did not document actual savings during pilot testing; and (7) HCFA estimated that the annual cost of operating CWF would be about $30 million, negating the $20 million in administrative savings HCFA expected from CWF implementation.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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