In response, CMS has begun several modernization initiatives and has planned others that are intended to help the agency demonstrably boost the performance of its core functions. In recent years, when major Medicare legislation added new benefits and created new payment methods to improve the program’s fiscal health, many system changes had to be implemented. These orders are instructions sent by CMS for contractors to modify their claims processing systems. Systems Hinder Providing Timely, Relevant Data for Program Management

Program monitoring and oversight is another critical agency function that is fundamental to ensuring that Medicare beneficiaries have access to quality health care services and that the program is paying claims properly. CMS also collects and analyzes information to ensure that payments to managed care organizations are appropriate. CMS’ current plans for implementing modernization improvements include making incremental changes to some systems while replacing others with more advanced technology. At the same time, however, CMS has made limited use of performance measures to achieve accountability and results. This includes further developing the enterprise architecture documentation, particularly the agency’s information flows and data elements. With the certainty of longer term project funding tied to an increased expectation for performance and accountability, the likelihood of achieving success in modernizing Medicare’s information systems could be greatly improved. Because the absence of an effective enterprise architecture and IT investment management process hinders CMS’ ability to manage its IT environment, the Congress may wish to consider making the authority to obligate funds contingent upon the agency using the funds initially to support only   ongoing program operations, maintenance of existing systems, and IT projects currently under way;   efforts to develop an effective enterprise architecture and IT investment management process, as well as to obtain the human capital needed to modernize IT practices and operations; and   statutorily required activities. Another contact and GAO staff acknowledgments are listed in appendix V.

Appendix I: Scope and Methodology

Our review of CMS’ IT modernization efforts described aspects of CMS’ current IT environment and projects CMS has under way to improve its systems, examined the agency’s IT planning efforts and IT management process, and discussed the challenges that need to be addressed to meet the agency’s IT goals. 9, 2000).
What GAO Found

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.