Development and Organization of the Health Care Financing ...

1 DOCUMENT RESUME02852 -[A20932071 Development and Organization of the Health care FinancingAdministration. Jujy 21, 1977. 29 before the. Senate Committee on Finance: HealthSubcommittee; by Gregory J. Ahart, Director, Human Area: Personnel Management and Compensation (300); HealthPrograms (1200).Contact: Human Resources Function: Health : General Health Financing Assistance(555); General Government: Central Personnel Management(805). Organization Concerned: Health care Financing Relevance: Senate Committee on Finance: : Social Security Act, sec.]

2 1817. ocial Security Act,sec. reoLjanization cf the Health care Firanc'ngAdministration (HCFA) within the Departtent of Health ,Education, and Welfare (HEW), which hs resulted in theplacement of edicaid, Medicare, and quality and standardsprimrily under the direction cf one agency head, should resultin imprcved management of the programs through bettercoordination c efforts and exchange of infoiwation. Theorganizational structure, including the authorization ofsnopcific supergrade positions, is stil3 dev2loping.

3 HCFA requests nor supergrade ard xecutive level staff have been cutin haif since the initial proposal, ad some reductions haveoccurred sine the Subcommittee on Health questioned the continued split between the Public Health Service and HCFAcan b expected to esult ii problems with respect to theadministration and management of the Health Financing programsauthorized by the Social Security Act. TLsre is evidence ofduplication and overlapping of staff activities in functionalstatements issued by HCFA and other elements of HEW.

4 However,most of these duplications were in the area of planning orcarrying out evaluations, studies, and research where theidentification of precise duplication based on broad functionalstatements is difficult. The primary areas where realconsolidation has occurred are in program integrity and theadministration of standards and provider certifications. Littlehas occurred in other consolidation of edicaid and Hedicarefunctions presumably because of the major differences in thelegislation for the two programs. (SC)United States aneral Accounting Officef) Washington, 20548 Nra FOR RELEASE ON DELIVERY400 Expected at 9:00 EDTT hursday, July 21, 1977 Statement ofGregory J.

5 Hart, DirectorHuman Resources Divisionbefore theSubcommittee on HealthCommittee on FinanceUnited States SenateonDevelopment and Organization of theHealth care Financing AdministrationMr. Chairman and Members of the Subcommittee:We are pleased to appear here today to discuss the results of ourreview of the Development and Organization of the Health care FinancingAdministration (HCFA) in the Department of ealth, Education, and Welfare(HEW).The Subcommittee asked us to determine if the Organization of HCFAhad resulted in--proliferation of supergrades,--fragmentation of authority and responsibility, and--proliferation and possible overlapping of staff discussed the objectives and effects of the reorganization withhigh-ranking HEW headquarters officials, some regional office personnel,and with representatives of the Office of Management and Budget and theCivil Service Commission.

6 We reviewed available documentation of staffingpatterns--numbers, grade-levels, and position descriptions--before andIafter the creation of HCFA. We also discussed the effects of staffingpatterns with Civil Service Commission problem we had in conducting our review was that not all of thedecisions relating to HCFA's rganization had been made at the time HCFAwas considered as operational on June 20, 1977, Thus, its organizationis in a constant state of flux with changes in the organizational elements'responsibilities occurring almost daily,OBJECTIVE; OF HEW'S REORGANIZATIONOn March 8, 1977, HEW Secretary Joseph A.

7 Califano, Jr. announced aseries of reorganization initiatives designed tn (1) strealine HEW opera-tions, (2) improve delivery of services, and (3) reduce opportunities forfraud and accomplish these goals, the t'EW consolidated the educational loanprograms within the Office of Education and disestablished the Social andRehabilitation Service (SRS) transferring SRS's income security ptogrcn(aid to families with dependent children) and related activities to theSocial Security administration (SSA), SRS's social services program to theOffice of Human Development OHD), and SRS's medical assistance program(Medicaid) to the newly established HCFA.

8 In addition to Medicaid, HCFAwas given responsibility for administering the Medicare program which wastransferred from SSA, and the standards, certification, and professionalstandards review Organization (PSRO) programs which were transferred fromthe Public Health Service (PHS).Basically, HCFA received the program responsibilities and most of thepersonnel of fine organizational components, (1) SSA's Bureau of Health2 Insurance, (2) the Division of Health Insurance Studies in SSA's Office ofResearch and Statistics, (3) PHS's Bureau of Quality Assurance, (4) PHS'sOffice of Long-Term care , and (5)

9 SRS's Medical Services also received about half of SRSts support and staff personnel to per-form similar functions for a result of these transfers of functions, HCFA is now responsiblefor administering both Medicare and Medicaid and most of the activitieswhich support these two programs. Medicare and Medicaid are similar inmany respects, but also differ significantly. For example, both programsusually use the same Health fciliry standards and certification programs,Medicaid paymerts are limited to Medicare's reimbursement rates, and bothproyrams contract extensively with private companies for claims processingfunctions.

10 However, Medicare is a Federal program with uniform eligibilityand reimbursement criteria nationwide while Medicaid is basically a Statepr;ai in which the Federal Government sets broad policy and participatesin program costs with State governments setting all or some of the eligibi-lity and reimbursement standards. Thus, there is one Medicare program but53 Medicaid Secretary said an immediate benefit of consolidating Medicareand Medicaid would be an energetic program of reviews to determine majorabuses in Health care Financing programs.