HHS Strategic Goals and Objectives - FY 2001 . Objective 3.5 - Enhance the Fiscal Integrity of HCFA Programs and Purchase the Best Value Health Care for Beneficiaries


How We Will Accomplish Our Objective

We will use value-based purchasing for Medicare and Medicaid. ResearchersOur strategy includes:

  • pursuing enactment of private sector purchasing and quality improvement tools for Medicare; for example, care coordination, disease management, and a "competitive defined benefit" program to inject price and quality competition among health plans in Medicare.

  • developing and disseminating guidelines and a checklist for our regional offices to use in reviewing State Medicaid managed care contracts.

  • implementing policies designed to better align payments to market price and levels of care to patient needs and to provide a range of plan choices to beneficiaries.

  • conducting research on developing new payment systems, and evaluating the effectiveness of value-based purchasing techniques, such as competitive bidding.

We will protect Medicare's financing by supporting the dedication of a portion of future budget surpluses to Medicare.

We will carry out an intensive fraud and abuse control effort where we will try to ensure that we pay the right amount to a legitimate provider for an eligible beneficiary. Our strategy will include:

  • educating the provider billing community on payment policy, documentation, and fraudulent practices to increase this community's participation in reducing fraud and billing errors.

3.5 Implementation Strategies
  • Value-Based Purchasing
  • Protecting Medicare Financing
  • Controlling Fraud and Abuse
  • Modernizing Accounting Practices
  • improving the methodology (e.g., rigor, consistency) for evaluating the performance of Medicare fee-for-service contractors.

  • increasing the effectiveness of Medicare claims reviews and look-behind reviews of medical documentation.

  • using the best available computer software and data systems to detect aberrant patterns and trends in Medicare billing.

  • evaluating the Health Care Fraud and Abuse Control Program and using the results to improve performance and better direct resources.

  • developing and demonstrating effective models for reducing errors and preventing health care fraud, waste, and abuse.

  • implementing a Payment Error Prevention Program through the Peer Review Organizations (PROs) to identify specific payment error problems in acute care hospitals and help the hospitals to establish payment compliance programs.

  • working with State Medicaid Agencies to develop national program safeguard models.

  • helping states to identify and resolve crosscutting issues between the Medicare and Medicaid programs that can result in vulnerability to fraud (e.g., crossover claims and duplicate payments by Medicaid and Medicare).

  • developing and implementing a method to inform state agencies about fraudulent activities that are currently occurring around the country.

  • educating beneficiaries to identify and report instances of fraud.

  • implementing the Comprehensive Error Rate Testing program to produce contractor, benefit specific, and national error rates.

We will continue to modernize Medicare's accounting practices to ensure a clean audit opinion. Our strategy will include:

  • analyzing Medicare's accounts receivable and pursuing delinquent debt.

HHS Agencies contributing to this objective:


  • hiring a national contractor to coordinate benefits to ensure that Medicare does not pay claims that private insurance companies should pay.

  • validating the financial management systems of all of Medicare's claims processing contractors.

  • evaluating commercial off-the-shelf software for implementation of an integrated general ledger system to standardize the accounting systems used by all contractors.