In its 2001 performance and accountability report on the Department of Health and Human Services (HHS), GAO identified key management challenges faced by HHS and its constituent agencies associated with the Medicare program, oversight of nursing homes, medical product safety and efficacy, and ensuring the well-being of children and families. The information GAO presents in this report is intended to sustain congressional attention and a departmental focus on continuing to make progress in addressing these challenges' and others that have arisen since 2001. This report is part of a special series of reports on governmentwide and agency-specific issues.

Medicare program. Medicare remains on GAO's 2003 list of high-risk programs due to the program's size and complexity. The Centers for Medicare & Medicaid Services (CMS) continues to have difficulty refining Medicare's payment methods in ways that reward fiscal discipline while ensuring beneficiary access to care. Since 2001, the agency has made progress in estimating improper payments, collecting overpayments and conducting other financial activities, and identifying information system needs, but further improvements are needed in payment safeguard, financial, and information management activities. Medicaid program. GAO has added Medicaid to its 2003 list of high-risk programs, owing to the program's size, growth, diversity, and fiscal management weaknesses. Limited oversight has afforded states and health care providers the opportunity to increase federal funding inappropriately. Medicare and Medicaid care oversight. CMS has taken steps to improve nursing home oversight, but efforts to ensure quality care at nursing homes, home health agencies, kidney dialysis facilities, and other providers continue to be jeopardized by problems in the performance of state inspections, complaint investigations, and enforcement of federal standards. Public health emergency preparedness. Serious problems in coordination among federal, state, and local public health agencies and in hospital and laboratory capacity could limit emergency responses. HHS is also challenged to balance basic public health needs with critical homeland security priorities. Medical product safety and efficacy. While the Food and Drug Administration has stepped up the rigor of its biologics inspections, it faces several challenges in ensuring the availability, safety, and efficacy of marketed products, including vaccines, and struggles to retain its expert staff. Economic independence and well-being of children and families. Oversight by HHS of the states' implementation of social service program reforms has been encumbered by limitations in states' information systems, program effectiveness measurement, and efforts to foster and disseminate research findings. Financial management systems, processes, and controls. HHS has improved its financial management, but its systems and processes do not routinely generate financial information that is timely or reliable. Further, HHS cannot ensure that it can protect the confidentiality of sensitive information from unauthorized access or its systems from service disruption.

Below are the reports in this series:

High-Risk Series: An Update GAO-03-119 Jan 1, 2003

High-Risk Series: Strategic Human Capital Management GAO-03-120 Jan 1, 2003

High-Risk Series: Protecting Information Systems Supporting the Federal Government and the Nation's Critical Infrastructures GAO-03-121 Jan 1, 2003

High-Risk Series: Federal Real Property GAO-03-122 Jan 1, 2003

Added later:

Pension Benefit Guaranty Corporation Single-Employer Insurance Program: Long-Term Vulnerabilities Warrant 'High Risk' Designation GAO-03-1050SP Jul 23, 2003

Performance and Accountability Series:

Major Management Challenges and Program Risks: A Governmentwide Perspective GAO-03-95 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Agriculture GAO-03-96 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Commerce GAO-03-97 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Defense GAO-03-98 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Education GAO-03-99 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Energy GAO-03-100 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Health and Human Services GAO-03-101 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Homeland Security GAO-03-102 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Housing and Urban Development GAO-03-103 Jan 1, 2003

Major Management Challenges and Program Risks: Department of the Interior GAO-03-104 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Justice GAO-03-105 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Labor GAO-03-106 Jan 1, 2003

Major Management Challenges and Program Risks: Department of State GAO-03-107 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Transportation GAO-03-108 Jan 1, 2003

Major Management Challenges and Program Risks: Department of the Treasury GAO-03-109 Jan 1, 2003

Major Management Challenges and Program Risks: Department of Veterans Affairs GAO-03-110 Jan 1, 2003

Major Management Challenges and Program Risks: U.S. Agency for International Development GAO-03-111 Jan 1, 2003

Major Management Challenges and Program Risks: Environmental Protection Agency GAO-03-112 Jan 1, 2003

Major Management Challenges and Program Risks: Federal Emergency Management Agency GAO-03-113 Jan 1, 2003

Major Management Challenges and Program Risks: National Aeronautics and Space Administration GAO-03-114 Jan 1, 2003

Major Management Challenges and Program Risks: Office of Personnel Management GAO-03-115 Jan 1, 2003

Major Management Challenges and Program Risks: Small Business Administration GAO-03-116 Jan 1, 2003

Major Management Challenges and Program Risks: Social Security Administration GAO-03-117 Jan 1, 2003

Major Management Challenges and Program Risks: U.S. Postal Service GAO-03-118 Jan 1, 2003