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2018 Top Management & Performance Challenges Facing HHS

Issued on  | Posted on  | Report number: OIG-TMC-2018

Report Materials

1.Preventing and Treating Opioid Misuse

In 2017, the President declared the opioid crisis a nationwide public health emergency. Some analysts estimate that up to 6 million Americans could have opioid use disorder. In 2017, it is estimated that more than 49,000 opioid-related overdose deaths occurred in the United States (U.S.), an average of 134 deaths per day. Key components of the challenge include:

  • Reducing inappropriate prescribing and misuse of opioids
  • Combating fraud and diversion of prescription opioids and potentiator drugs
  • Ensuring access to appropriate treatment for opioid use disorder
  • Ensuring that funding for prevention and treatment is used appropriately

2.Ensuring Program Integrity in Medicare Fee-for-Service and Effective Administration of Medicare

In FY 2017, Medicare spent $698.7 billion and provided health coverage to 58.4 million beneficiaries. Medicare spending represents more than 15 percent of all Federal spending. Future spending is expected to increase significantly because of growth in the number of beneficiaries and increases in per capita healthcare costs. The 2018 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplemental Medicare Insurance Trust Funds estimates that the Trust Fund for Medicare Part A (Hospital Insurance) will be depleted by 2026. It also projects that spending for Medicare Part B (Medical Insurance) will grow by almost 8.2 percent over the next 5 years, outpacing the U.S. economy, which is projected to grow by 4.7 percent during that time. Key components of the challenge include:

  • Reducing improper payments
  • Combating fraud
  • Fostering prudent payment policies
  • Maximizing the promise of health information technology

3.Ensuring Program Integrity and Effective Administration of Medicaid

Medicaid is the largest Federal healthcare program, with 67 million individuals enrolled, and represents one-sixth of the national health economy. Medicaid is administered by States, according to Federal requirements. The program is funded jointly by the Federal Government and States. For FY 2017, CMS estimated Federal and State Medicaid expenditures of $592 billion. Expenditures are projected to increase at an average annual rate of 5.7 percent and reach over $1 trillion by 2026. Effectively administering the Medicaid program takes on heightened urgency as it continues to grow in spending and the number of beneficiaries served. The Department provides States with flexibility to administer their Medicaid programs, so they can design innovative waivers based on the unique needs of their Medicaid enrollees. Key components of the challenge include:

  • Improving the reliability of national Medicaid data
  • Reducing improper payments
  • Combating fraud
  • Ensuring appropriate Medicaid eligibility determinations

4. Ensuring Value and Integrity in Managed Care and Other Innovative Healthcare Payment and Service Delivery Models

The HHS Secretary has made the transition to value-based care a top priority for the Department. HHS continues to enact reforms in Medicare and Medicaid that are designed to promote quality and value of care. Understanding what constitutes value and whether it is delivered is a challenge in complex healthcare programs and services. As managed care continues to play an increasingly important role in the Medicare and Medicaid programs, ensuring that beneficiaries get the services they need is essential. Finally, developing and implementing managed care and other innovative models in ways that promote innovation and effectiveness, while also protecting against fraud, waste, and abuse, is a significant challenge. Key components of the challenge include:

  • Ensuring effectiveness and integrity in new models
  • Combatting provider fraud and abuse
  • Fostering compliance by managed care organizations

5. Protecting the Health and Safety of Vulnerable Populations

HHS programs provide critical health and human services to many vulnerable populations in many different settings. Therefore, HHS must ensure that the individuals in HHS programs have access to and receive high-quality care and services and are protected from abuse or neglect. Key components of the challenge include:

  • Ensuring the safety and security of unaccompanied children in HHS care
  • Addressing substandard nursing home care
  • Reducing problems in hospice care
  • Mitigating risks to individuals receiving home- and community-based services
  • Ensuring access to safe and appropriate services for children
  • Addressing serious mental illness

6.Improving Financial and Administrative Management and Reducing Improper Payments

HHS is the largest civilian agency in the Federal Government. In FY 2017, HHS reported total budgetary resources of approximately $1.1 trillion. Responsible stewardship of HHS programs is vital, and operating a financial management and administrative infrastructure that employs appropriate safeguards to minimize risk and provide oversight for the protection of resources remains a challenge for HHS. Due to their size, HHS programs account for some of the largest estimated improper payment amounts. HHS must also ensure the completeness, accuracy, and timeliness of any financial and program information provided to other entities, both internal and external to the Federal Government. Key components of the challenge include:

  • Addressing weaknesses in financial management systems
  • Addressing Medicare trust fund issues/social insurance
  • Reducing improper payments
  • Improving contract management
  • Implementing the DATA Act

7. Protecting the Integrity of HHS Grants

In FY 2017, HHS awarded $101 billion in grants (excluding CMS). HHS has increasingly used grant programs to address a variety of public health needs and crises, including the opioid epidemic, emergency preparedness, and natural disaster relief efforts. This expansion comes with an increased need to effectively manage grant funding. The growth of Federal funding to State and local governments also requires additional verification of existing controls and reporting requirements. Key components of the challenge include:

  • Ensuring appropriate and effective use of grant funds
  • Ensuring effective grant management at the department level
  • Ensuring program integrity and financial capability at the grantee level
  • Combating fraud, waste, and abuse

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

FDA has the continuing challenge of ensuring the safety and security of the Nation's food and medical products (including drugs, biological products, and medical devices), which directly affect the health of every American. With an annual budget of more than $5 billion, FDA oversees products that represent about 20 percent of all U.S. consumer spending. FDA has a broad statutory mandate that has continued to expand through recent legislation. The Cures Act, for instance, provided new authorities to help spur medical innovation and modernize medical product regulation throughout a product's lifecycle. Key components of the challenge include:

  • Ensuring food safety
  • Ensuring the safety, effectiveness, and quality of drugs and medical devices
  • Ensuring the security of drug supply chains

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

Many HHS programs provide health and human services to AI/ANs throughout the U.S., with IHS directing the largest amount of targeted funding to AI/AN communities. With a budget of $5.5 billion in FY 2018, IHS is responsible for providing primary and preventive health services to 2.3 million AI/ANs in partnership with the 573 federally recognized Tribes. Other HHS agencies provide grants to Tribes for human services programs, including Head Start and the Low-Income Home Energy Assistance Program (LIHEAP). Key components of the challenge include:

  • Addressing deficiencies in IHS management, infrastructure, and quality of care
  • Preventing fraud and misuse of HHS funds serving AI/AN populations

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

Data management, use, and security are essential to the effective and efficient operation across HHS's agencies and programs. Each agency has its own mission, budget, leadership, and IT systems. HHS spends more than $5 billion every year on IT (not including grants-related IT expenditures). The environment in which HHS must protect its systems is complex, with ever-increasing volumes of data residing in many places and with many entities and individuals, and with continued expansion of the Internet of Things, including networked medical devices. Those possessing health and human services data-including public stakeholders-have cybersecurity responsibilities, which include ensuring effective people, processes, and technologies are in place to protect HHS data. The Department's challenges are, thus, multifaceted and include protecting data on internal systems, overseeing the cybersecurity of data in cloud environments, and ensuring that providers, grantees, and contractors are adhering to sound cybersecurity principles. Key components of the challenge include:

  • Securing HHS's data and systems
  • Advancing cybersecurity within the healthcare ecosystem

11.Ensuring that HHS Prescription Drug Programs Work as Intended

HHS programs accounted for almost 40 percent ($130 billion) of the total U.S. prescription drug expenditures in 2016. HHS oversees coverage of prescription drugs under various programs operated by the Department, such as Medicare, Medicaid, and IHS. In addition to providing drug coverage benefits through CMS and IHS, the Department also impacts prescription drug availability and pricing through agencies such as FDA and HRSA's 340B Drug Pricing Program. Key components of the challenge include:

  • Protecting the integrity of prescription drug programs
  • Fostering prudent payments for prescription drugs
  • Ensuring appropriate access to prescription drugs

12.Ensuring Effective Preparation and Response to Public Health Emergencies

Public health emergencies, such as emerging infectious diseases and natural disasters, can severely strain public health and medical infrastructure and lead to serious illness and loss of life. As the lead agency for the Federal response to public health emergencies, HHS is responsible for ensuring both it and its State and local partners are prepared to respond to, and recover from, public health emergencies efficiently and effectively. Key components of the challenge include:

  • Ensuring access to health and human services during and after emergencies
  • Ensuring effective use and oversight of funding
  • Ensuring effective and timely responses to infectious disease threats

Top Management Challenge
Office of the Secretary