HHS to shore up management systems

Department of Health and Human Services Secretary Tommy Thompson is taking steps to fix the department's financial management systems after repeated criticism that HHS cannot keep track of its financial operations.

Thompson has decided to split the department's systems into two — one for the $381 billion Medicare and Medicaid programs and another to handle the finances of the rest of the massive agency.

A General Accounting Office report in January said the agency's financial tracking system was in shambles. It cited one case in Texas where home health agencies that had gone out of business owed millions to Medicare, but officials at the Centers for Medicare and Medicaid Services (CMS) were unable to determine just how much.

Under the plan, CMS, formerly the Health Care Financing Administration, will have its own financial management system, called the HCFA Integrated General Ledger Accounting System.

The rest of HHS will be covered by the expansion of the National Institutes of Health's financial management system, which is part of a project called the NIH Business System. NBS — which also includes financial management, inventory management and other software — is based on Oracle Corp.'s Federal Financials software.

Because CMS' operations are unique and more complex than most of the other HHS organizations, it made sense to have CMS use its own distinct system, according to HHS officials.

But the consolidation of the remaining systems should have a major impact on the agency, Thompson said last week in testimony before the Senate Finance Committee.

"HHS currently is home to nearly 1,200 different computer systems, most of which can't talk to one another," Thompson said. "I am determined that HHS information technology will be managed on an enterprise basis — with a common infrastructure — rather than by many separate agencies."

In a June 14 memo, Thompson said the consolidation would reduce costs, tighten security and provide more accurate information for managing the agency. The system also is expected to track the billions of dollars CMS spends each year and help prevent fraud, waste and abuse, which have plagued the agency.

In the memo, Thompson wrote, "With the unified system, we will have uniform business rules, data standards and accounting policies and procedures across HHS."

The plan helps meet Thompson's goals of centralizing as many of HHS' operations as possible. He said the agency would consolidate accounting services into a single operation for paying bills and tracking vouchers. Thompson promised that HHS would have an enterprise personnel management system as well.

The HHS chief information officer will have authority over IT resources "with the charge to implement a one- department, one-enterprise approach to IT," Thompson said.

An HHS spokesman said the project is expected to take three to seven years. "It's long range," the spokesman said. "It is going to be a process that takes time."