In its annual summary released Tuesday of HHS top management and performance challenges, the OIG raised concerns over continuing and new vulnerabilities that the department will wrestle with. Last year, implementation of the Affordable Care Act in general led the list, which is included with the agency’s annual financial report.

 

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This year, the auditor has broken out two of the ACA’s most complex and difficult reforms to execute and manage to highlight. The others are holdovers from last year but tweaked to reflect progress in the department’s oversight and accountability.

 

Among the 10 management and performance challenges are:

 

1. Overseeing the health insurance marketplaces. Despite recent progress in the operations of HealthCare.gov, more upgrades and improvements are needed in front-facing consumer functions and backend administrative and financial management functions so that issuers and consumers receive accurate enrollment and subsidy information and that systems for paying insurers operate safely and with internal controls. Short-term and permanent solutions are needed to accelerate and smooth enrollment. Eligibility systems, payment accuracy, contractor oversight, data security and consumer protection are concerns related to the exchanges.

 

2. Transitioning to value-based payments for healthcare. Medicare and Medicaid intend to reward high-quality care, penalize low-quality care or enhance care coordination. The Centers for Medicare & Medicaid Services, which has ongoing test models for accountable care organizations, shared savings and bundled payment for care improvement, needs to prioritize mechanisms for the transition and develop and refine quality, outcomes and performance metrics. The models and the systems they rely on need to be continuously monitored for timeliness, accuracy, program integrity and risk of waste, fraud and abuse.

 

3. Ensuring appropriate use of prescription drugs in Medicare and Medicaid. CMS has strengthened its oversight of prescription drug utilization in Medicare Part D to combat overuse, abuse, fraud and drug diversion by requiring a valid provider identifier. The OIG recommends that prescription claims include an authorized prescriber, better analysis of billing data to detect pharmacies and providers with extreme patterns and assure that Part D plans do not pay for prohibited refills of Schedule II drugs.

 

4. Protecting the integrity of an expanding Medicaid program. Increasing the Medicaid population to qualifying adults earning up to 133 percent of the federal poverty level in those states that have taken the option will intensify the urgency of tackling program integrity issues that the program already faces, including improper payments, managed care program fraud, waste and abuse, such as in contract procurement, and working with states on payments to public providers.

 

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5. Fighting fraud and waste in Medicare Parts A and B. Even as Medicare fraud strike force teams have reduced claims and payments susceptible to fraud, schemes migrate among providers, suppliers and geography, so the agency needs to improve its use of data and tools to combat that. It also should build on its progress with contractor performance and oversight, including more evaluation measures, especially for high-risk providers, such as home health agencies and community mental health centers in fraud-prone areas.

 

6. Preventing improper payments and fraud in Medicare Advantage. CMS needs to continue to monitor that MA organizations submit accurate diagnoses for setting risk-adjustment payments and recoup overpayments. Doing that, the MA error rate fell to 9.5 percent in fiscal 2013 from 11.4 percent the previous year. Strategies used to manage risk included audits of risk-adjustment data to verify diagnoses accuracy, training for MA organizations and educating physicians to improve their medical record documentation to support patient diagnoses. The OIG also recommended a recovery audit contractor program for Medicare Advantage. 

 

Other management challenges were ensuring the quality of care in nursing facilities and home- and community-based settings; effectively using data and technology to protect program integrity; protecting HHS grants and contract funds from fraud, waste and abuse; and ensuring the safety of food, drugs and medical devices.