Congress slams MTS as costs soar

Members of Congress and the General Accounting Office last week sharply criticized the Health Care Financing Administration (HCFA) for its management of the Medicare Transaction System (MTS) a system that will now cost close to $1 billion to complete way above the $151 million price tag originally anticipated.

MTS will replace with a single unified system nine systems used to process Medicare claims. An $19 million contract was awarded to GTE Corp. in 1994 to develop the system software but the program has been delayed due to mismanagement and lack of a clear initial system design.

GAO found that critical managerial and technical weaknesses continue to delay development of the system. "I don't think the project can go ahead without substantial change " said Joel Willemssen the director of information resources management in the Accounting and Information Management Division at GAO.

Willemssen made the comments at a joint hearing of the Government Management and Information Technology Subcommittee and the Human Resources Subcommittee.

Rep. Stephen Horn (R-Calif.) said at the hearing that the fears Congress has had for the past several years that "HCFA was ill-equipped to manage such a massive and complex project" have been realized. "We feared the costs would outweigh the benefits. Unfortunately our fears have materialized." Other members agree.

"Under the hood Medicare's engine the computerized claims-payment system is a sputtering inefficient tangle of jury-rigged repairs and incompatible parts that no one mechanic understands or can fix " said Rep. Christopher Shays (R-Conn.). "Today the Medicare Transaction System is a costly shambles."

An unrealistic schedule and an "unwillingness or inability to communicate critical information make it very difficult to be confident MTS will ever be the fix Medicare needs to serve beneficiaries and stem losses [from] fraud and abuse " Shays said.

HCFA already has spent more than $40 million on MTS according to the agency. GAO and HCFA estimate that MTS will now cost about $1 billion over 10 years to complete. According to HCFA when it estimated the cost for the system at $151 million in 1992 it did not yet have a systems strategy. It also did not take into consideration the cost of obtaining data processing capacity.

An Enormous Undertaking

Bruce Vladeck administrator of HCFA said the agency is still committed to MTS and has taken steps to get the project back on track. "When the work on this system began we did not fully understand the enormity of what we were undertaking " he said.

On April 4 the agency issued a 90-day stop-work order to GTE and told the vendor to focus on only the managed-care module of MTS the first of six planned releases. HCFA said it will examine alternative methods to reaching the MTS goal including using commercial off-the-shelf software which it is now testing.

Vladeck said HCFA has decided to build MTS incrementally instead of taking a "big bang" approach and it has performance measures in place. The agency will have a strategy to move ahead with MTS by July he said.

There are other issues HCFA must address as well - namely the Year 2000 problem. "If the Medicare system is unable to process claims accurately in the Year 2000 the impact on Medicare beneficiaries across the country and indeed the entire health care system could be catastrophic " Horn said.

Vladeck said HCFA started work 18 months ago on the problem and has identified the lines of code that need to be rewritten. By Dec. 31 1998 all the Year 2000 corrections will be made with extensive testing scheduled for 1999.Irving Zaks vice president and general manager of GTE Government Systems said that while mistakes were made there have been accomplishments.

Zaks said the overall systems architecture has been developed and is being implemented which includes identifying the specific hardware operating systems and telecommunications networks. The system requirements for the managed-care component will be delivered in June.

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