INSIGHT BY KPMG

Federal healthcare agencies provide a new perspective on the challenges of achieving program integrity

This content is provided by KPMG

Programs suffering from waste, fraud, abuse and increasing improper payments are low-hanging fruit when it comes to cutting federal spending, since they require little-to-no political will to address; government efficiency is a nonpartisan issue. What is required to better address these problems, however, is a broader perspective to achieve program integrity through improved leadership, proper staffing and good collaboration.

Federal health agencies are trying to improve program integrity as the transition from fee-for-service to value-based care, largely due to the Affordable Care Act and other healthcare-focused legislation, changes the way healthcare is administered in this country and the number of citizens who interface with the government on healthcare-related matters increases.

“HHS takes seriously its commitment to safeguarding taxpayer dollars and ensuring program integrity in the programs it administers,” the Health and Human Services Department said in a November 2017 statement. “HHS has incorporated program integrity designs in the development of new programs focusing on quality payment and alternative payment methods and is working on a variety of risk assessments and risk profiles to develop program-specific risk mitigation strategies and overall risk reduction.”

Emblematic of this push, the Centers for Medicare and Medicaid Services recently announced a new Enhanced Medicaid Program Integrity Strategy based on three pillars of “flexibility, accountability and integrity.” It will include improved or new audits at the state level, more data sharing and collaboration on the use of data analytics, and public reporting of state performance on the Medicaid Scorecard. But how successful have HHS and other federal healthcare agencies been in implementing these strategies thus far?

KPMG and the Government Business Council surveyed 238 employees of federal health agencies, including the Veterans Benefits and Veterans Health Administrations, the Centers for Disease Control and Prevention, and the Centers for Medicare and Medicaid Services, among others. Of those, 52 percent identified themselves as holding leadership positions, with ranks of GS/GM-13 or higher.

The survey found respondents perceived a number of challenges to effective program integrity within their agencies. Notably, of those respondents, 71 percent said the main objective of program integrity is to determine the best strategy to achieve program goals.  “This indicates a belief that program integrity involves taking strategic and preventative measures that help program managers achieve their mission, not only reduce improper payments,” said Tim Comello, Federal Risk Consulting Partner at KPMG.  The same number said it is the responsibility of senior leadership to maintain program integrity.

“In our experience, we’ve seen program integrity success stories where a strategic and structured approach is used to implement many of the leading practices identified in the study,” Comello said. Only 64 percent of respondents are aware of a program integrity framework at their agency, and only 36 percent say it’s effective. Breaking this down further, 9 percent of respondents reported having no program integrity framework, 28 percent don’t know if they do or not, and 28 percent believe that theirs is ineffective, meaning successful frameworks are outnumbered nearly two-to-one.

And frameworks also improve how employees view their agencies’ efforts at improving program integrity. Respondents who said their agencies have a framework were about 25 percent more confident in their agencies’ ability to mitigate improper payments, and significantly more confident in their agencies’ ability to improve the program through the use of best practices.

But some agencies, and their leadership, have made clear that implementing these frameworks is a trial-and-error process that will take time.

“We will be transparent and collaborative as we experiment here,” Alex Azar, HHS secretary, said during a March 2018 speech to the Federation of American Hospitals. “We’re mindful that aggressive models have not always worked out, so appropriate guardrails will always be essential. But make no mistake: we will use these tools to drive real change in our system.”

The survey’s respondents had some ideas on just how to best go about driving that change.

More than half the survey respondents said staffing was the top barrier to program integrity. However, “Digging into the survey results, it’s apparent that ‘improved staffing’ isn’t necessarily a plea for more people, but rather additional skills,” Comello said. Those additional skills could be derived from development of existing people or tools.  According to the survey, 69% of those who use data & analytics say it is effective for monitoring or improving program operations.  “This is consistent with leading practice in the market where enabling intelligent automation, data and analytics, and other advanced technologies, has been used as a means to eliminate repetitive tasks, allowing employees to focus on strategic initiatives,” Comello said.

But the senior leaders, GS/GM-13 and above, see a different barrier. Of those respondents, 44 percent said a fragmented program governance structure is the main issue. They feel they don’t have the ability to oversee and guide all relevant components in programs. This could contribute to the feeling of a lack of collaboration among other respondents.  “Critical to program integrity is a culture that supports the collaborative management of risk and avoids organizational silos,” Comello said.

For federal healthcare agencies struggling to implement and improve program integrity solutions as they adapt to the changing landscape of American healthcare, attaining a deeper understanding of the results of this survey and what it means for their programs is as easy as contacting KPMG.

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