Medicare: Information Systems Modernization Needs Stronger Management and Support

A letter report issued by the General Accounting Office with an abstract that begins "Congress has questioned whether the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration, adequately implemented new payment methods, effectively safeguarded program payments, and adequately oversaw the quality of care provided to beneficiaries. CMS depends on hundreds of information technology (IT) systems to help manage the Medicare program. With year 2000 systems renovations successfully completed, CMS has focused on modernizing its IT systems. The agency's information systems are crucial to carrying out Medicare's core missions of claims processing and payment, program oversight, and administration of participating health plans. Medicare's major systems are aged, however, and many are incompatible with one another. To address these problems, CMS intends to modify, replace, or redesign systems on which key Medicare missions depend. CMS plans to make incremental system improvements while maintaining current functions and accommodating changes mandated by legislation. The agency's IT planning and management processes--intended to increase the likelihood that new systems will be successful and cost-effective--have shortcomings. The agency's blueprint documenting its existing and planned IT environments, also known as its enterprise architecture, is missing essential detail in critical parts, including well-documented business functions, information flows, and data models. CMS is trying to strengthen its planning and has developed guidance for an improved management process, but will need to make considerable effort to ensure that modernization stays on track. These weaknesses in IT planning and management are part of larger agency management challenges. Resource gaps, both in funding and staff expertise, threaten the success of planned IT improvements. At the same time, CMS has made little use of performance measures to ensure accountability and increase the likelihood of achieving results.