Press Releases

EXPANDED ACCOUNTING SYSTEM HELPS MEDICARE ACCOUNTABILITY

Medicare is seeing significant benefits through a more efficient automated accounting system used to pay health care providers for treating Medicare beneficiaries, the Centers for Medicare & Medicaid Services (CMS) announced today.  In seven months of operation, the CMS’ General Ledger Accounting System (HIGLAS) processes resulted in an additional $9 million of interest earned in the trust funds. 

In addition, the new capability to compute claims and payment data with HIGLAS has allowed CMS to generate more accurate payments, reduce overpayments, and retain monies in the Medicare Trust Funds. CMS is now expanding HIGLAS to include Mutual of Omaha, the sixth Medicare contractor to transition to Medicare’s new accounting system.  This is the largest HIGLAS transition to date.

“The savings we’re seeing from the use of the HIGLAS system shows us there is real value in using state-of-the art electronic systems to help pay Medicare claims,” said CMS Administrator Mark B. McClellan, M.D., Ph.D.  “In the next couple of years, as we fully implement HIGLAS, we should be better able to ensure that we are paying Medicare claims more efficiently.”

A dual entry system, common in the private sector, has already begun to improve CMS’ ability to track Medicare Part A and B payments to hospitals, physicians and other health care providers.  The monthly financial reporting required of the Medicare contractors is now completed by HIGLAS within the first four business days of each month compared to the several weeks it takes for users of the existing systems to provide data manually to CMS. 

When HIGLAS is fully implemented, across all Medicare contractors, it will strengthen the management of CMS’ financial operations. The system will identify overpayments, generate demand letters, and allow the agency to collect outstanding debts more timely and effectively.  Over 40 million Medicare claims have been processed by the first five contractors to use HIGLAS in the past eight months, resulting in payments of over $23 billion dollars to health care providers.    CMS anticipates additional savings to result because the collection of outstanding debt and recovery of improper payments may occur faster as CMS continues to standardize and strengthen compliance with federal financial guidelines.

Mutual of Omaha transitioned to HIGLAS beginning today, and is expected to begin paying an average of 128,000 claims each day to approximately 7000 providers of hospital and other institutional services in 49 states.  The first contractor to transition to HIGLAS in May 2005, was Palmetto Government Benefits Administrators Part A, followed by Empire Medicare Services Part B in New Jersey , Empire Medicare Services Part A, First Coast Service Options Part A and TrailBlazer Health Enterprises Part A.

Improvements in financial reporting are necessary to safeguard the Medicare trust funds.  The new system interfaces with the Medicare contractors and the new Recovery Management and Accounting System (ReMAS) which reconciles claims and payments to providers and beneficiaries when Medicare is the secondary payer, further ensuring that claims are paid appropriately.  CMS anticipates that the HIGLAS system will also play a role in the annual retention of millions of benefit dollars to the Medicare Trust Funds. 

The HIGLAS system is built on a commercial-off-the-shelf product, Oracle Federal Financials.  The new system interfaces with two of Medicare’s three shared claims processing computer systems and is replacing the current mainframe-based financial system with a web-based accounting system.  HIGLAS is a component of the Unified Financial Management System (UFMS), a system initiative to streamline budget and accounting activities across the Department of Health and Human Services.  CMS has received clean audit opinions from the HHS Office of the Inspector General since 1999 and the implementation of HIGLAS will help to assure that continues.

In addition, the new Medicare Administrative Contractors will use HIGLAS in their own financial operations and will be integrated into the transition schedule, further improving Medicare’s ability to track claims and payments.