BUDGET SUMMARY

When fully implemented, HIGLAS will:

♦ standardize the collection, recording, and reporting of financial information by Medicare contractors;

♦ provide an integrated, enterprise-wide system supporting administrative and program financial management needs; and

ensure compliance with statutory financial management requirements, address concerns of the General Accounting Office and the Office of Inspector General (OIG), and enable CMS to retain a clean audit opinion.

The budget also supports efforts to reduce erroneous Medicare fee-for-service payments that do not comply with Medicare laws and regulations. CMS has reduced the payment error rate as calculated by the OIG from 14 percent in FY 1996 to 6.8 percent in FY 2000. Beginning in FY 2003, CMS will replace the OIG audit with the results of its comprehensive error rate testing (CERT) program.

Annual Performance Plan and Annual Performance Report

The CMS's annual performance plan (APP) complements and supports the agency's FY 2003 budget, and is integral to it. Our total number of FY 2003 goals is 37. The agency is confident that performance measurement under GPRA will substantially improve CMS's programmatic and administrative performance.

CONCLUSION

Compared to the FY 2002 appropriation, the CMS FY 2003 Program Management appropriation request represents a 3.2 percent increase. This budget will meet our basic operational needs while supporting the goals of the Administration and improving beneficiary education and providing health care choices for our beneficiaries. We believe that we can begin to make meaningful changes to the programs we administer within these funding levels. The justifications in the following pages reinforce this commitment to our stakeholders and highlight our program administration plans for FY 2003.

PROGRAM MANAGEMENT

Appropriation Language

For carrying out, except as otherwise provided, titles XI, XVIII, XIX, and XXI of the Social Security Act, titles XIII and XXVII of the Public Health Service Act, and the Clinical Laboratory Improvement Amendments of 1988, not to exceed

[$2,440,798,000,] $2,538,330,000, to be transferred from the Federal Hospital

Insurance and the Federal Supplementary Medical Insurance Trust Funds, as authorized by section 201(g) of the Social Security Act; together with all funds collected in accordance with section 353 of the Public Health Service Act and section 1857(e)(2) of the Social Security Act, and such sums as may be collected from authorized user fees and the sale of data, which shall remain available until expended, and together with administrative fees collected relative to Medicare overpayment recovery activities, which shall remain available until expended: Provided, That all funds derived in accordance with 31 U.S.C. 9701 from organizations established under title XIII of the Public Health Service Act shall be credited to and available for carrying out the purposes of this appropriation: Provided further, That [$18,200,000,] from amounts appropriated under this heading, $3,000,000 for the managed care system redesign shall remain available until expended[: Provided further, That $100,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Regional Nursing Centers Consortium in Philadelphia to initiate a demonstration project to evaluate 15 nurse-managed health centers in urban and rural areas across Pennsylvania: Provided further, That $200,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Madonna Rehabilitation

PROGRAM MANAGEMENT

Center in Lincoln, Nebraska to create a new standard of rehabilitation practice and program design for children and adults with disabilities: Provided further, That $250,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Cook County, Illinois Bureau of Health for the Asthma Champion Initiative to reduce morbidity and mortality from asthma in high prevalence areas: Provided further, That $250,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Illinois Primary Health Care Association to implement the Shared Integrated Management Information System providing centralized case management, reimbursement and administrative support services: Provided further, That $500,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to Project Access in Muskegon, Michigan to offer affordable insurance to uninsured workers, primarily in small business, and low-income individuals: Provided further, That $590,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to Santa Clara County, California, for the outreach and application assistance aspects of its Children's Health Initiative, to demonstrate means of expanding enrollment of eligible children in Medicaid, SCHIP and other available health care programs: Provided further, That $800,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Fishing Partnership Health Plan, based in Boston, Massachusetts, for a demonstration project on the efficacy of using a community-based health benefit program to provide health care coverage for lowerincome independently employed workers and their families: Provided further, That $800,000 of the amount available for research, demonstration, and evaluation activities

PROGRAM MANAGEMENT

shall be awarded to the Mind-Body Institute of Boston, Massachusetts to continue and expand a demonstration project: Provided further, That $900,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the Children's Hospice International demonstration program to provide a continuum of care for children with life-threatening conditions and their families: Provided further, That $1,500,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the lowa Department of Public Health for the continuation of a prescription drug cooperative demonstration: Provided further, That $2,000,000 of the amount available for research, demonstration, and evaluation activities shall be awarded to the AIDS Healthcare Foundation in Los Angeles for a demonstration of residential and outpatient treatment facilities]: Provided further, That $51,000,000, to remain available until September 30, 2004, is for contract costs for the Healthcare Integrated General Ledger Accounting System: Provided further, That the Secretary of Health and Human Services is directed to collect fees in fiscal year [2002] 2003 from Medicare+Choice organizations pursuant to section 1857(e)(2) of the Social Security Act and from eligible organizations with risk-sharing contracts under section 1876 of that Act pursuant to section 1876(k)(4)(D) of that Act. (Departments of Health and Human Services Appropriations Act, 2002; additional authorizing legislation required.)