Top 10 Challenges

The Department of Health & Human Services looks at the long road ahead

The Department of Health & Human Services is responsible for a $1.1 trillion portfolio. That’s a lot of money. And a lot that can go wrong. The Office of Inspector General synthesized its work in oversight, risk analysis, data analytics and cybersecurity to arrive at what it considers to be the top 10 management and performance challenges facing the Department of Health and Human Services.

Challenge No. 1: Ensuring program integrity in Medicare.
In FY 2016, the Centers for Medicare & Medicaid Services (CMS) reported an improper payment rate of 11 percent, corresponding to $41 billion, for Medicare fee-for-service, i.e., Medicare Parts A and B. Some types of providers and suppliers pose heightened risk to the financial integrity of the program. For instance, OIG and CMS have identified high rates of improper payments for home healthcare, hospice care, and certain hospital services. Additionally, OIG estimates that Medicare improperly paid hundreds of millions of dollars for chiropractor services that did not meet Medicare requirements.

Challenge No. 2: Ensuring program integrity in Medicaid
Reducing improper payments to providers is a critical element in protecting the financial integrity of the Medicaid program. In FY 2016, HHS reported an improper payment rate in the Medicaid program of 10.5 percent. OIG audits have identified substantial improper payments to providers across a variety of Medicaid services, including school-based services, non-emergency medical transportation, targeted case management services, and personal care services. OIG has also uncovered improper payments made on behalf of individuals ineligible for Medicaid, deceased beneficiaries, and beneficiaries with multiple Medicaid identification numbers.

Challenge No. 3: Curbing the opioid epidemic
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, reports CDC. Yet, only about one-fifth of individuals receive specialty treatment, and even fewer receive medication-assisted treatment.

Challenge No. 4: Improving care for vulnerable populations
HHS programs provide 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, as well as children from low-income families in foster care. The OIG says that HHS must ensure that these individuals have access to and receive high-quality services and are protected from abuse or neglect.

Challenge No. 5: Ensuring integrity in managed care and private insurance
Improper billing and fraud by healthcare providers is not limited to Medicare and Medicaid fee-for-service programs. Medicare Advantage (managed care) organizations, Medicare Part D sponsors and Medicaid MCOs also face these risks.

Challenge No. 6: Improving financial management
HHS is the largest civilian agency within the federal government. 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.

Challenge No. 7: Protecting the integrity of grants
In FY 2016, HHS awarded more grants than any other federal entity – more than $100 billion in grants, excluding Medicaid. Recent legislation expands the department’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 four years for grants for mental and behavioral health education training.

Challenge No. 8: Ensuring the safety of food, drugs and devices
FDA’s responsibility to ensure safe, effective, and quality medical products begins long before a product is brought to market, and continues after FDA approval. FDA oversees more than 13,000 drug facilities and 25,000 medical device facilities. The agency is also responsible for authorizing the use of investigational medical products as well as ensuring the safety and efficacy of all prescription medical products before marketing in the United States. In 2016, FDA approved 22 novel drugs, 73 first-time generic drugs, and 91 novel medical devices.

Challenge No. 9: Ensuring program integrity for 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 is the largest of these programs and, in partnership with tribes, provides or funds healthcare 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.

Challenge No. 10: Meeting cybersecurity threats
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 HHS programs. Cybersecurity incidents and breaches pose a significant risk to the confidentiality, integrity, and availability of sensitive data.

Source: Top Management and Performance Challenges Facing HHS, 2017, U.S. Department of Health & Human Services, Office of the Inspector General, https://oig.hhs.gov/reports-and-publications/top-challenges/2017/2017-tmc.pdf

Did you know?

The Department of Health & Human Services is the largest civilian agency within the federal government. In FY 2016, HHS reported total budgetary resources of approximately $1.1 trillion.

With almost 69 million enrolled individuals, Medicaid serves more enrollees than any other federal healthcare program, and represents one-sixth of the national healthcare economy. The Centers for Medicare & Medicaid Services reports that combined federal and state Medicaid expenditures were $574 billion for FY 2016. Medicaid is jointly administered and funded by CMS at the federal level, and by states.

In FY 2016, Medicare spent $679 billion and provided health coverage to 56.8 million beneficiaries. The 2017 Annual Report by Medicare’s Board of Trustees projects that spending for Medicare Part B (medical insurance) will grow by almost 7 percent over the next five years, outpacing the U.S. economy, which is projected to grow by 5 percent during that same time. It also estimates that the Trust Fund for Medicare Part A (hospital insurance) will be depleted by 2029.

In 2016, the Food and Drug Administration approved 22 novel drugs, 73 first-time generic drugs, and 91 novel medical devices.

The FDA oversees more than 13,000 drug facilities and 25,000 medical device facilities.

The Indian Health Service – in partnership with tribes – provides or funds healthcare to approximately 2.2 million people in American Indian and Alaska Native communities, who are members of the 567 federally recognized tribes.