HEALTHCARE INTEGRATED GENERAL LEDGER ACCOUNTING SYSTEM (HIGLAS) Association of Government Accountants – DC Chapter Conference May 9, 2007

George E. Jenkins, CPA, MBA Deputy Director, Financial Management Systems Group Office of Financial Management Centers for Medicare and Medicaid Services Department of Health and Human Services “Modernizing the Agency and Transforming Healthcare”

CMS Vital Statistics “CMS - Modernizing One of The Largest Healthcare Purchasers In The World!” Over 1.2 billion Medicare claims are processed each year. Medicare enrollment includes approximately 44 million beneficiaries and is growing. CMS is one of the largest purchasers of health care in the world and represents 33 cents of every dollar spent on health care in the United States.

What is HIGLAS? Healthcare Integrated General Ledger Accounting System (HIGLAS) HIGLAS provides CMS a uniform financial management system to account for over $600 billion spent in outlays for healthcare each year. Oracle Federal Financials was selected by CMS as the base COTS application to improve the Agency’s ability to manage the benefits and administrative accounting functions.

HIGLAS Program Vital Statistics To date, HIGLAS produced the following: $138.2 billion in Medicare Benefit Payments (As of April 24, 2007) 284.6 million Claims Processed (As of April 24, 2007) $5.2 billion of AR/AP netted funds (Through March 2007) $36.3 million Interest earned in the trust funds (Through FY06)

Benefits Realization Implemented COTS-Based Dual-Entry Accounting System (Meets Federal Standards) Recoups Medicare Overpayments through Netting Improves Collection of Debts Savings as of January 2007: Preserved $4.58 Billion in Medicare Trust Funds Earned additional interest ($36.3M) in the Medicare Trust Funds (through FY06) Other Savings and Benefits : Fewer Improper Payments - Decreases the need for Recovery Actions (Less “Pay and Chase”) Reduced Costs due to Decommissioned Cuff Record Systems HIGLAS provides FFMIA Compliance & supports DHHS Compliance Improvements in Automated Debt Collection/Referral Activities Creates Audit Trails for every Transaction/Payment/Claim in HIGLAS Improves Financial Audit Ability

Functionality Analysis for Integration -as an example… Current Environment HIGLAS Environment Shared System - FISS Shared System - FISS Claims Adjudication Claims Adjudication 837 Adjudicated Claims 835 Remittance Info FISS Financial Module Accounts Payables Accounts Receivables HIGLAS Generate Payment Accounts Payable Netting Cuff Systems CFO Reports 750/751 Accounts Receivable Integrated Financial Reports General Ledger No Transactional Accounting Double Entry Accrual Accounting No General Ledger Integrated Financial Reporting Multiple Cuff Systems Single Transactional System No Financial Integrity Detail Accounting Audit Trail

General Ledger Business Processes – as an example… Accounts Payable Set of Books Accounts Receivable General Ledger Journals Manual Journals Posting Process Automated/Manual Journals Process Recurring Journals Automatic/Manual Journal Reversals Manually Post Journals Schedule Journal Posting Daily Reconciliation Process Maintain Accounting Calendar Process GL Month End Close Process GL Year End Close Generate Period End Reports and Queries Calendar Every transaction carries the ACS Daily transfer of entries from AP & AR to GL For financial integrity you would be performing a month-end close based on the Accounting Calendar Major Application Features provided Set of Books Defined Segment Values Defined Accounting Calendar Defined to Sep-06 Cross Validation Rules Aliases Defined Rollup Groups Defined Recurring Journals Defined Security Rules Transaction Codes Defined GL Reports Account Analysis Report Chart of Accounts Reports FSG Definition Reports General Ledger Reports Journal Reports Trial Balance Reports Reporting

Multiple Users within HIGLAS Medicare Contractor A Medicare Contractor B Medicaid, Other Admin. Programs FISS / MCS Pricer & Claims Adjudication Pricer & Claims Adjudication Allotment, Pay & Monitor HIGLAS Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable Accounts Payable Accounts Receivable Other Accounts Workload A Workload B CMS Integrated General Ledger Financial Reporting CMS Financial Reporting

HIGLAS Release 1 – Oracle Solution Modules Oracle Federal Financials - Release 11i Application Foundation Application Modules Third-party Integration In/Outbound Staging Trading Community Architecture (TCA) Enterprise Application Integration 271/274 Provider/ Beneficiary 837 Adjudicated Claims 835 Remittance Advice Extended Functionality Multi-Org Scheduler Application Security Content Manager Loans Accounts Receivable Accounts Payable Audit Trail File Transfer Concurrent Processing Cash Management Federal Administrator Online Screens & Reporting General Ledger Archive & Restore

HIGLAS Release 1 - Financials & HTB Integration HIGLAS Oracle eBusiness Suite - Release 11i Application Foundation Application Modules Staging Trading Community Architecture (TCA) 271/274 Provider/ Bene. 837 Adjudicated Claims 835 Remittance Advice Multi-Org Application Security Accounts Receivable Accounts Payable Healthcare Transaction Base (HTB) Audit Trail ETL Concurrent Processing Document Summary General Ledger Online Screens & Reporting Cash Management Extended Functionality

HIGLAS Technical Operations AUDITS External Audits CFO EDP Circular A-123, Job Mapping Security Testing and Evaluation Internal Audits NESSUS Vulnerability Assessment Roles and Responsibilities System Integrator System Users POA&M

HIGLAS Access Job Roles, Responsibilities, and Job Role Constraints

Basic Design for Access Functionality and Access is assigned based on the various HIGLAS Modules or Job Role Categories Accounts Payable Accounts Receivable General Ledger Cash Management , Bank Information Loans Management Audit AR Collections Third Party Payments (TPP) Federal Administration Healthcare Transaction Base (HTB) User access to HIGLAS is defined and implemented through the Job Roles and Responsibilities matrix. The users may be granted update or inquiry/view access to any of the Oracle applications employed by HIGLAS. Most users need access to only a segment of each Oracle application to perform their assigned job duties. Furthermore, to comply with security and segregation of duty requirements, the Standard Oracle applications listed on this slide and the previous slide are broken down into more detailed lower level segments called Job Roles and Responsibilities. Access is granted by assigning the users one or more HIGLAS standard job roles.

Functionality Within the modules you either have Update or Inquiry Capability The capability is determined by what Job Role is assigned to you Each job role has associated responsibilities and each responsibility provides specific functionality. It is a tiered approach. A standard Job Role is a level of authority in the Oracle application that will allow HIGLAS users to access one of the listed applications within a “data partition” (i.e. workload or Org ID). There are currently 33 Job Roles in the Job Roles and Responsibilities Matrix. Although there is not a one to one relationship between the Job Roles and Responsibility, each Job Role has at least one Responsibility. Each of those responsibilities provides access to view and/or update various types of data, and in many cases run selected standard and/or custom reports. These job roles provide the flexibility necessary for each Medicare Contractor to segregate and limit user access while protecting sensitive data. Examples follow on the next few slides.

Functionality Outline Tiered Approach – AP Module Update AP Payments Add Update Inquire AP Payments Add and Update AP Payments Inquire AP Payments, payment batches form, payments form, payment overview form and withheld amounts form View Accounting Lines AP Setup Inquiry Control Payables Periods Inquiry Open Interfaces Invoices Inquiry Run and View Selected AP Reports Every Job Role has specific functionality and access determined by the responsibilities associated with that Job Role. The first tier (Update AP Payments) represents the Job Role. The second tier (Add Update Inquire AP Payments) represents the Responsibility. The third tier represents the functionality and access associated with that Responsibility. The purpose of this design and it’s application for the Medicare Contractors is to: Define the appropriate access to HIGLAS for all users so that each individual may perform their assigned duties. (Not more access than they need) Map all HIGLAS users consistently by the Standard Job Roles and Responsibilities Validate that access granted to users in each job role does not violate security or segregation of duties requirements Work with the HIGLAS Security Team to plan and validate system configuration and load users into the designated HIGLAS instance for testing, production, or maintenance.

We will take a look at some examples of the Job Role Functionality Outline from the AP Module. The format is the same across all Oracle modules. AP Module

Update AP Payments Add Update Inquire AP Payments Provides access to view, update, and add claim payment data in the AP module and drill down capability to the invoice information. Provides access to run selected standard and custom AP reports. Add Update Inquire AP Invoices Provides access to view, add, and update invoice claim information in the AP module. Provides access to run selected standard and custom AP reports. Update AP Payments is the Job Role. Add Update Inquire AP Payments is the associated responsibility. Specific Functionality for this responsibility is: add/update AP payments, inquire AP payments, payment batches form (form is an Oracle term for screen), payments form, payment overview form and withheld amounts form, view accounting lines, control payables periods inquiry, run and view selected AP reports. Add Update Inquire AP Invoices is the Job Role Add Update Inquire AP Invoices is the Responsibility Functions associated with this responsibility are: add and update AP invoices, invoice batches form and invoices form; inquire AP invoices, invoices batches form, invoices form, invoice overview form and withheld amounts form; view accounting lines; AP setup inquiry; control payable periods inquiry; view profile settings and change personal profiles; run and view selected AP reports; and enter settlement transactions (Part A only).

Update AP AR Customer /Supplier Add Add Update Inquire AP Suppliers Provides access to view, add and update Provider / Beneficiary / Employee / Insurers data in the AP module. Provides access to run selected standard and custom AP reports. Add Update Inquire AR Customers Provides view, update and add capability to Provider / Beneficiary / Employee / Insurers data in the AR module. (Quick Standard and Summary Customer Forms, and Customer Profile Classes). Provides access to run selected standard and custom AR reports. Update AP AR Customer / Supplier Add is the Job Role Add Update Inquire AP Suppliers is the Responsibility Specific functionality for that Responsibility is view accounting lines; add and update suppliers; supplier inquiry; update supplier holds; supplier holds inquiry; AP setup inquiry; control payables periods inquiry; view profile settings and change personal profiles; run and view selected AP reports Update AR AR Customer / Supplier Add is the Job Role Add Update Inquire AR Customers is the Responsibility Note that this Job Role has two associated responsibilities. – Add Update Inquire AP Suppliers (previous screen) and Add Update Inquire AR Customers. (see the Job Role Functionality Outline) Specific functionality for this Responsibility is – add and update customers standard form, summary form, profile classes and quick entry form; AR setup inquiry; run and view selected AR reports; HIGLAS invoice status setup inquiry; multiple fund setup inquiry; PSA lookups inquiry; auto invoice interface lines inquiry; auto invoice interface exceptions inquiry.

Job Role Constraints Part of our Job Role Functionality Outline is the Job Role Constraints Section. A work group reviewed the Job Roles and Responsibilities and developed a listing which indicates how to provide access without compromising segregation of duty requirements. One of our biggest challenges is to make sure that the HIGLAS users have the access they need to do their jobs without providing access that will cause them to violate segregation of duty requirements. For example, if a user is able to update AP payment information, they should not be able to update the provider or beneficiary data in the AP module, or update their address or banking information. Examples follow on the next screens.

Job Role Constraints Access To Update AP Payments Update AP Invoices Add and update claim payment data in the AP module or Update AP Invoices Add and update invoice claim information Update AR Apply Receipts /AR Transactions Add update receivable transaction data Apply /reverse receipts (e.g. apply cash receipt to a receivable) Should Deny Access To Update AP AR Customer Add or Update AP Supplier Address or Update AP Supplier EFT or Update Banks Update AR Receipts Add update cash receipts in AR module, but can’t apply/reverse the receipt to an AR. Example: With Update AP Payments Job Role you can add and update claim payment data in the AP module and have drill down capability to the invoice information. With Update AP Invoices Job Role you can add and update invoice claim information in the AP module. You can also enter settlement transactions ( Part A only). Based on the fact that you can impact payments, you should not have access to the Job Roles on the right side of the screen. They allow you to: Add or update Provider /Beneficiary / Employee/ Insurer data in the AP module; Add or Update Provider/Beneficiary/Employer/ Insurer data in the AR module; Update Provider/Beneficiary address information; Update Provider/Beneficiary EFT information; and Update Provider, Customer bank account information. If you have access to Update AR Apply Receipts / AR Transactions Job Role, you can (see the two bullets). You should not have access to Update AR Receipts Job Role. Having both would allow you to complete the circle of adding or updating a receivable transaction, adding or updating a cash receipt in the AR module and applying that cash receipt to a receivable or reversing that receipt.

Job Roles, Responsibilities, and Job Role Constraints The Job Role and Responsibility Matrix was used to create the Job Role Functionality Outline. This document outlines the Job Roles, Responsibilities, and associated functionality. It also defines Job Constraints in a format that is easy to read and understand. The contractors determine access needs based on the functionality as defined by the job roles. HIGLAS access is defined based on the Job Roles and Responsibilities in each of the modules. The Oracle application administers it via the HIGLAS Menu Matrix which sets access to screens, inquiry or update capability, and access to view and run reports. This is done for each HIGLAS User within their contractor workload.

The next several slides represent the job role constraints that were identified by the Job Mapping Workgroup. The Job Roles are identified followed by the job role constraints. Job Role Constraints

Job Role Constraints Update AP Payments Non-Manager Job Role Constraints: Should not have Update AP AR Customer/Supplier Add or Update AP Supplier Address or Update AP Supplier EFT or Update Banks Update AP Invoices Update AP AR Customer/Supplier Add Non-Manager Job Role Constraints: Should not have Update AP Invoices or Update AP AR Collections / Refunds or Update AP Payments or Update AP CM Recon or Update AP Supplier EFT or Update Banks or Update Interface AP Invoices or Update CM Each contractor is provided with the Job Role Functionality Outline during their Transition Kick Off meeting. This way they can review what access is provided, and be fully aware of the Job Role constraints and guidelines that have been identified.

Job Role Constraints Update AP AR Collections / Refunds Non-Manager Job Role Constraints: Should not have Update AP AR Customer/Supplier Add or Update AP Supplier Address or Update AP Supplier EFT or Update Banks or Update AR Receipts Update AR Apply Receipts / AR Transactions Non-Manager Job Role Constraints: Should not have Update AR Receipts Update AP CM Recon Non-Manager Job Role Constraints: Should not have Update AP AR Customer/Supplier Add or Update AP Supplier Address or Update AP Supplier EFT or Update Interface AP Invoices or Update Banks or Update GL It is the responsibility of the Contractor’s CMS Authorized Approver (CAA) to request HIGLAS access sufficient for job performance, while avoiding situations that would create Segregation of Duty violations. This document serves as a great resource when making decisions concerning employee access.

Job Role Constraints Update AR Receipts Non-Manager Job Role Constraints: Should not have Update AP AR Collections / Refunds or Update AR Apply Receipts / AR Transactions Update GL Non-Manager Job Role Constraints: Should not have Update CM or Update AP CM Recon Update Banks Non-Manager Job Role Constraints: Should not have Update AP Payments or Update AP Invoices or Update AP AR Customer/Supplier Add or Update AP AR Collections / Refunds or Update AP CM Recon or Update AP Supplier Address or Update CM or Update AP Supplier EFT or Update Interface AP Invoices

Job Role Constraints Update AP Supplier Address Non-Manager Job Role Constraints: Should not have Update AP Invoices or Update AP AR Collections / Refunds or Update AP Payments or Update AP CM Recon or Update AP Supplier EFT or Update Banks or Update Interface AP Invoices or Update CM Update CM Non-Manager Job Role Constraints: Should not have Update AP AR Customer/Supplier Add or Update AP Supplier Address or Update AP Supplier EFT or Update Interface AP Invoices or Update Banks or Update GL

Job Role Constraints Update AP Supplier EFT Non-Manager Job Role Constraints: Should not have Update AP Invoices or Update AP AR Collections / Refunds or Update AP Payments or Update AP CM Recon or Update AP AR Customer/Supplier Add or Update Banks or Update Interface AP Invoices or Update AP Supplier Address or Update CM Update Interface AP Invoices Non-Manager Job Role Constraints: Should not have Update AP AR Customer/Supplier Add or Update AP CM Recon or Update AP Supplier EFT or Update Banks or Update AP Supplier Address or Update CM Loans Agent Non-Manager Job Role Constraints: Should not have Loans Manager