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2017 Top Management & Performance Challenges Facing HHS

Issued on  | Posted on  | Report number: OIG-TMC-2017

Report Materials

1. Ensuring Program Integrity in Medicare

In fiscal year (FY) 2016, Medicare spent $679 billion and provided health coverage to 56.8 million beneficiaries. Spending under Medicare is expected to increase significantly over time as a result of growth in the number of beneficiaries and increases in per capita health care costs. The 2017 Annual Report by Medicare's Board of Trustees estimates that the Trust Fund for Medicare Part A (hospital insurance) will be depleted by 2029. It also projects that spending for Medicare Part B (medical insurance) will grow by almost 7 percent over the next 5 years, outpacing the U.S. economy, which is projected to grow by 5 percent during that same time. Key components of the challenge are reducing improper payments, combating fraud, fostering prudent payment policies, and implementing health care reforms and the promise of health information technology (Health IT).

2. Ensuring Program Integrity in Medicaid

With almost 69 million enrolled individuals, Medicaid serves more enrollees than any other Federal health care program and represents one-sixth of the national health care economy. Medicaid is jointly administered and funded by CMS at the Federal level and by States. CMS reported that combined Federal and State Medicaid expenditures were $574 billion for FY 2016. Key components of the challenge are ensuring compliance with fiscal controls, leveraging fraud prevention and, improving national Medicaid data to support program integrity.

3. Curbing the Opioid Epidemic

Opioid abuse and related overdoses are a national epidemic. According to the Centers for Disease Control and Prevention (CDC), more than 33,000 people died in 2015 from overdoses involving opioids, both prescription and illicit, an increase from approximately 28,000 deaths in 2014. Yet despite the increase in the number of people suffering from opioid use disorder, only about one-fifth of individuals receive specialty treatment, and even fewer receive medication-assisted treatment (MAT). Key components of the challenge are addressing inappropriate prescribing of opioids, combating fraud and diversion of prescription opioids and potentiator drugs, addressing inadequate access to treatment, addressing misuse of grant funds, and fighting fraud by treatment providers of opioid use disorder.

4. Improving Care for Vulnerable Populations

HHS programs provide critical health and human services to many vulnerable populations, including individuals who receive nursing home care, group home care, hospice care, or home and community-based services (HCBS), as well as children from low-income families in foster care. HHS must ensure that these individuals have access to and receive high-quality services and are protected from abuse or neglect. Key components of the challenge are addressing substandard nursing home care, reducing problems in hospice care, mitigating risks to individuals receiving home and community-based services, and ensuring access to safe and appropriate services for children.

5. Ensuring Integrity in Managed Care and Other Programs Delivered Through Private Insurers

Millions of enrollees in HHS programs receive health care coverage through private insurance companies and sponsors who contract with CMS or States to deliver benefits and services. In Medicare, approximately 18.6 million Medicare beneficiaries were enrolled in Medicare Advantage (MA) in 2016, more than a threefold increase since 2004, and 39 million beneficiaries received Part D (prescription drug) benefits through plans sponsored by private companies. The majority of Medicaid beneficiaries are enrolled in Medicaid MCOs. In addition, more than 10 million people received health insurance through private plans on health insurance marketplaces (marketplaces) in 2017. Key components of the challenge are combating fraud, waste, and abuse by health care providers billing managed care plans; ensuring integrity and compliance by managed care and Part D sponsors; and overseeing the health insurance marketplaces.

6. Improving Financial and Administrative Management and Reducing Improper Payments

As Americans continue to live longer and with more chronic medical conditions, the Department must ensure that beneficiaries receive high-quality nursing home, hospice, and home- and community-based services (HCBS), including personal care services (PCS). Challenges persist with fraud, waste, and abuse with nursing home and hospice care and HCBS. The Department continues efforts to improve the quality of these services through implementation of new systems such as the Five Star Quality Rating System. OIG believes more should be done to prioritize quality care for this community to improve internal controls and offer better guidance and training for surveyors to ensure that nursing homes with recorded quality and safety issues correct their deficiencies. Key components of the challenge are addressing weaknesses in financial management systems, addressing Medicare trust fund issues/social insurance, reducing improper payments, addressing concerns about contracts management, implementing the Digital Accountability and Transparency (DATA) Act.

7. Protecting the Integrity of Public Health and Human Services Grants

In FY 2016, HHS awarded more grants than any other Federal entity-more than $100 billion in grants, excluding Medicaid. (For information on challenges related to Medicaid, see TMCs #2 and #5.) Recent legislation expands HHS's reach and increases expenditures through new grant programs. In passing the 21st Century Cures Act, Congress authorized (and subsequently appropriated) billions of dollars in new Federal spending to address national public health needs. This included $1.8 billion for cancer prevention, diagnosis, and treatment; $1.5 billion for neurological research; $1.4 billion for the Precision Medicine Initiative; and $1 billion in grants to States for opioid prevention and treatment. The Act also authorized funds for smaller grants to address other public health needs. For example, it authorized $200 million over 4 years for grants for mental and behavioral health education training. Key components of the challenge are ensuring effective grants management within the Department and ensuring program integrity and financial capability at the grantee level.

8. Ensuring the Safety of Food, Drugs, and Medical Devices

The FDA has a broad statutory mandate, and its responsibilities continue to grow. FDA protects the public health by ensuring the safety, efficacy, quality, and security of human and veterinary drugs, biological products, and medical devices, and by ensuring the safety of our Nation's food supply, cosmetics, and electronic products that emit radiation. FDA also regulates the manufacture, marketing, and distribution of tobacco products to protect the public health and to reduce tobacco use by minors. FDA regulates products accounting for approximately 20 percent of all U.S. consumer spending. FDA has the continuing challenge of ensuring the safety and security of our Nation's foods and medical products (including drugs, biological products, and medical devices), which directly affect the health of every American. The expansion of FDA's authorities through legislation, including the 21st Century Cures Act in 2016, the Drug Quality and Security Act in 2013, and the Food Safety Modernization Act in 2010, add to the agency's mandate to protect the public health. Key components of the challenge are ensuring food safety; ensuring the safety, efficacy, and quality of medical products; overseeing the complex drug and medical device supply chain.

9. Ensuring Program Integrity and Quality in Programs Serving American Indian and Alaska Native Populations

In FY 2016, HHS administered 45 percent of all Federal funds that serve American Indian and Alaska Native (AI/AN) communities-a total of $7 billion. A number of HHS agencies administer programs for AI/ANs throughout the United States. With an annual budget of approximately $6 billion, the Indian Health Service (IHS) is the largest of these programs and, in partnership with Tribes, provides or funds health care to approximately 2.2 million AI/ANs who are members of the 567 federally recognized Tribes located in 36 States served by 662 health care facilities. Other HHS agencies provide grants to Tribes for human services programs, ranging from Head Start to the Low Income Home Energy Assistance Program (LIHEAP). HHS faces significant challenges to ensuring effective delivery of crucial services to AI/ANs and protecting funds from fraud, waste, and abuse. Key components of the challenge are improving IHS quality of care, management, and infrastructure; combating fraud and misuse of funds, and ensuring adequate internal controls and staff training for HHS grant programs in Indian Country.

10. Protecting HHS Data, Systems, and Beneficiaries From Cybersecurity Threats

Data management, use, and security are essential to the effective and efficient operation of HHS and its programs. As HHS works to leverage the power of data, the Department will maintain and use expanding amounts of sensitive data. So, too, will individuals and entities-such as States, contractors, providers, grant recipients, and beneficiaries-involved in delivering or receiving benefits from the many HHS programs. Cybersecurity incidents and breaches pose a significant risk to the confidentiality, integrity, and availability of sensitive data. This could cause a myriad of problems including impeding HHS's ability to offer essential programs and services, threatening major elements of our country's critical infrastructure, and placing the health and safety of patients at risk. The Department must ensure that it takes appropriate actions to protect all HHS data and systems from cybersecurity threats. Similarly, HHS must protect its beneficiaries by fostering a culture of cybersecurity among its partners and stakeholders. Key components of the challenge are protecting HHS's data and systems and fostering a culture of cybersecurity beyond HHS.

Top Management Challenge
Office of the Secretary