Medicare

This testimony focuses on the Health Care Financing Administration's (HCFA) preparedness to run the Medicare program in the 21st century. Because the $200 billion Medicare program is critical to nearly all elderly Americans and to many of the nation's disabled, program management, excessive spending, and depletion of the Medicare Trust Fund have been the subject of much congressional scrutiny in recent years. GAO and others have frequently reported that too much is being spent inappropriately because of the fraudulent and abusive billing practices of health care providers. GAO discusses (1) HCFA's new authorities under recent Medicare legislation, (2) the view of HCFA managers on the agency's ability to carry out various Medicare functions, and (3) the steps HCFA needs to take to accomplish its objectives over the next several years.

GAO noted that: (1) substantial program growth and greater responsibilities appear to be outstripping HCFA's capacity to manage its existing workload; (2) legislative reforms have increased HCFA's authority to manage the Medicare program; (3) simultaneously, however, other factors have increased the challenges HCFA faces, including the need to make year 2000 computer adjustments and develop a new, comprehensive information management strategy; manage transitions in its network of claims processing contractors; and implement a major agency reorganization; (4) in addition, officials report that the expertise to carry out HCFA's new functions is not yet in place and that HCFA has experienced a loss of institutional knowledge through attrition; (5) in this environment, agency managers are concerned that some of their responsibilities might be compromised or neglected altogether because of higher-priority work; (6) HCFA's approach for dealing with its considerable workload is incomplete; (7) heretofore, the agency lacked an approach--consistent with the requirement of the Government Performance and Results Act of 1993 to develop a strategic plan--that specified the full range of program objectives to be accomplished; (8) HCFA has developed a schedule for responding to recent legislative reforms but is still in the process of detailing the staffing and skill levels required to meet reform implementation deadlines; and (9) while addressing new mandates, the agency also needs to specify how it will continue to carry out its ongoing critical functions.