HHS to integrate Medicare accounting

The Health and Human Services Department yesterday launched a long-term project, worth up to $328.4 million, to unify Medicare’s multiple accounting systems. The Centers for Medicare and Medicaid Services contracted with PricewaterhouseCoopers Inc. of New York to act as systems integrator for the new Healthcare Integrated General Ledger Accounting System.HIGLAS will replace current mainframe financial systems with a modern Web-based accounting system. It will supplant 53 different systems used by the private insurers that process about 3 million Medicare claims daily. In fiscal 2002, Medicare will pay out an estimated $252 billion for 40 million beneficiaries.HHS said in its announcement that “most Medicare contractors do not use double-entry accounting methods or have general ledger capabilities.” That has required HHS workers to verify the insurers’ reports manually.HIGLAS will save about $1.2 billion through fiscal 2010, HHS estimated, by more accurately tracking and collecting receivables. It will be rolled out in phases through the end of fiscal 2006, starting with one Medicare contractor that deals primarily with hospital claims and another that processes physician and supplier claims. HHS’ announcement said these pilots will re-engineer the insurers’ accounting business processes to fit into HIGLAS.Oracle Corp. will provide the financial accounting software. Electronic Data Systems Corp., the application services host, will earn about $100 million, a source said. Ten other hardware and software companies also are subcontractors.