HCFA's Medicare oversight criticized

The Health Care Financing Administration's oversight of Medicare is hindered

by an inadequate and outdated financial management system, according to

representatives from HCFA and the General Accounting Office.

Even though HCFA recently received a "clean" audit of its financial statements

from GAO, "HCFA has not yet established an adequate foundation for control

and accountability over the Medicare program's financial operations," said

Gloria Jarmon, GAO's director for health, education and human services,

testifying Wednesday before the House Government Management, Information

and Technology Subcommittee.

The agency is taking steps to address the financial management issues, including

beginning work on an integrated general ledger accounting system that will

be used internally and by all Medicare contractors, said Mike Hash, HCFA's

deputy administrator.

"The project, which will make it easier to coordinate and reconcile data,

is scheduled for completion by 2004, pending the results of the assessment

phase currently under way," Hash said, adding that President Clinton's fiscal

2001 budget proposal includes a $7 million request for the system.

Hash said dealing with Year 2000 set back the financial management system,

but the agency is looking at commercial off-the-shelf applications to help

meet some of its needs before overall completion in 2004.

HCFA also is taking steps to improve its data-protection efforts, which

have been criticized by GAO and the inspector general of the Department

of Health and Human Services.

Hash said the agency is addressing all audit findings concerning security

vulnerabilities and expects them to be resolved by October. He also said

HCFA is working on its security architecture and infrastructure and "assessing

new technology for securing Internet-based transactions."

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