Healthcare Integrated General Ledger Accounting System (HIGLAS)

The Centers for Medicare & Medicaid Services (CMS) is the federal agency within the U.S. Department of Health and Human Services (DHHS) that administers the Nation's federal Medicare program and provides federal oversight of State Medicaid programs for every State in the Nation. CMS is one of the largest purchasers of health care in the world. The programs that CMS administers provide health care for one in four Americans, or approximately 95 million citizens. This equates to more than $635 billion in taxpayer dollars each year. The Medicare program alone processes more than one billion fee-for-service claims each year and is the Nation's largest purchaser of managed care, accounting for approximately 14 percent of the Federal Budget. By directly contracting with private sector businesses known as “Medicare Contractors,” as well as State government entities, CMS uses automated systems to support both the claims processing and accounting functions required to administer and support these critical health insurance programs.

The Healthcare Integrated General Ledger Accounting System (HIGLAS)

CMS is currently in the process of standardizing and centralizing federal financial accounting by developing and implementing a single, integrated dual-entry accounting system. This accounting system, the Healthcare Integrated General Ledger Accounting System (HIGLAS), will replace the existing separate accounting/payment systems for Medicare and Medicaid. The main objective of this effort is to leverage the use of commercial off the shelf (COTS) software in the federal government to increase automation, increase efficiency, and maximize economies of effort to centralize management and save millions of taxpayer dollars that fund Medicare and Medicaid each year, while at the same time eliminating redundant and inefficient / ineffective manual processes. HIGLAS is a component of the DHHS Unified Financial Management System (UFMS). CMS is coordinating with DHHS development effort to ensure HIGLAS core financial data can be integrated with UFMS. The unification of the systems is aimed at improving data consolidation and financial reporting capabilities for all of DHHS.

HIGLAS represents one of the largest Oracle client implementations in the world for the Oracle 11i Federal Financials Suite. HIGLAS will provide CMS a uniform financial management system and represents the consolidation of two major CMS projects within the office of the CMS Chief Financial Officer (CFO). The first, the Integrated General Ledger and Accounting System project, was initiated to improve the accounting and financial management processes used by CMS's Medicare contractors to administer Medicare Parts A and B. The contractors' accounts receivable, accounts payable, general ledger, and several reporting processes were deemed in particular need of improvement. The second project was an effort to improve CMS's Administrative Program Accounting (APA), which entailed the replacement of CMS's legacy accounting system and the systems that currently support State and grant payment/management, procurement, travel management, and asset management.

Since HIGLAS deployment efforts began over 4 years ago (May 2005), CMS has made remarkable progress. The HIGLAS transition schedule is very aggressive. CMS transitioned the first Medicare Contractor to HIGLAS in May, 2005. To date, 14 Medicare Contractors have transitioned to HIGLAS. In October 2007, HIGLAS implemented administrative program accounting for federal Medicaid and Children's Health Insurance Program (CHIP) State grant payments. So far, we have implemented HIGLAS on schedule and within budget and continue towards complete nationwide implementation of HIGLAS in FY 2012.

Federal Compliancy and Standards

HIGLAS has a direct impact on the ability of DHHS to leverage financial management information to ensure desired outcomes and affect performance. Specifically, HIGLAS directly supports DHHS efforts to meet compliance goals of the Federal Financial Management Improvement Act (FFMIA) by having all CMS Payment dollars (Medicare, Medicaid, and administrative program accounting) on HIGLAS by FY 2012. The FFMIA requires each agency to implement and maintain financial management systems that comply with federal requirements and accounting standards. HIGLAS is critical success factor towards ensuring DHHS meets it FFMIA compliance requirements. At present, the total amount of CMS dollars (Medicare and Medicaid) accounted for in HIGLAS is at 62.2 percent. HIGLAS also helps retain the CMS “clean opinion” on the federally mandated audit of CMS financial statements, as set forth under the Chief Financial Officer Act. Moreover, HIGLAS allows CMS to address the material weaknesses as identified by the 1998 DHHS-Office of the Inspector General financial statement audit of CMS.

Strategic and Operational Benefits

The HIGLAS effort has improved significantly the ability of CMS/DHHS to perform Medicare accounting transactions. These improvements and benefits attributable to HIGLAS include reduced costs due to elimination of redundant individual Medicare financial record systems, improvements in automated Medicare debt collection/referral activities, creation of audit trails for every Medicare transaction/payment/claim in HIGLAS, improved Medicare financial audit ability, and improved capability for CMS to more systematically and efficiently recover identified Medicare fee-for-service (FFS) overpayments. Moreover, HIGLAS implementation has resulted in better internal financial controls across Medicare contractor operations, such as implementing and enforcing segregation of duties within the Medicare contractor community, etc.

Additional Interest Earned

Implementation of HIGLAS has a significant and positive impact on the amount of additional interest earned (saved) in the Medicare Trust Funds. Internal CMS analysis has shown that Medicare contractors transitioned to HIGLAS are collecting monies quicker than would normally have occurred in a pre-HIGLAS environment, as a direct result of efficiencies gained in the process of offsetting or “netting” receivables that are owed by Medicare providers to the government. These efficiencies result in more monies being retained in the Medicare Trust Funds, thereby resulting in additional interest earned in the Medicare Trust Funds. It should be noted that the current Medicare contractor financial systems would have eventually collected this money. The HIGLAS solution, due to automation and improved processes, is collecting this money more quickly for CMS.