Aging Issues: Related GAO Reports and Activities in Fiscal Year 1995
(Letter Report, 03/06/96, GAO/HEHS-96-82).
Pursuant to a congressional request, GAO provided a listing of its
fiscal year (FY) 1995 products and ongoing work regarding older
Americans.
GAO work during FY 1995 covered: (1) such issues as federal government
employment activities, health care, housing, income security, and
veterans' affairs; and (2) reports directed primarily at older Americans
or affecting older Americans as one of several target groups and
congressional testimonies on issues related to older Americans.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: HEHS-96-82
TITLE: Aging Issues: Related GAO Reports and Activities in Fiscal
Year 1995
DATE: 03/06/96
SUBJECT: Elderly persons
Long-term care
Health care programs
Managed health care
Retirement pensions
Veterans benefits
Housing for the elderly
Social security benefits
Health insurance cost control
Aid for the elderly
IDENTIFIER: Bibliographies
Adult Education Basic Grant
Medicaid Program
Medicare Program
Food Stamp Program
California Medi-Cal Program
TennCare
Medicare Secondary Payer Program
Medigap
Civil Service Retirement System
District of Columbia Pension Liability Funding Reform Act
of 1994
Social Security Disability Insurance Program
Supplemental Security Income Program
VA Dependency and Indemnity Compensation Program
Federal Employees Retirement System
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Cover
================================================================ COVER
Report to the Special Committee on Aging, U.S. Senate
March 1996
AGING ISSUES - RELATED GAO REPORTS
AND ACTIVITIES IN FISCAL YEAR 1995
GAO/HEHS-96-82
Aging Issues in Fiscal Year 1995
(105689)
Abbreviations
=============================================================== ABBREV
AEA - Adult Education Act
AFDC - Aid for Families With Dependent Children Program
CDC - Centers for Disease Control and Prevention
COLA - cost of living adjustment
DIC - Dependent and Indemnity Compensation Program
DOD - Department of Defense
DUR - drug utilization review
ERISA - Employee Retirement Income Security Act of 1974
FHA - Federal Housing Administration
HCFA - Health Care Financing Administration
HHA - home health agency
HHS - Department of Health and Human Services
HMO - health maintenance organization
HUD - Department of Housing and Urban Development
IHS - Indian Health Service
MIG - Medicare insured group
PBGC - Pension Benefit Guaranty Corporation
PPO - preferred provider organization
RMA - referral and monitoring agency
SCORE - Service Corps of Retired Executives Program
SSA - Social Security Administration
SSI - Supplemental Security Income
UMWA - United Mine Workers of America
USDA - Department of Agriculture
VA - Department of Veterans Affairs
Letter
=============================================================== LETTER
B-270776
March 6, 1996
The Honorable William S. Cohen
Chairman
The Honorable David H. Pryor
Ranking Minority Member
Special Committee on Aging
United States Senate
This report responds to the Committee's request for a compilation of
our fiscal year 1995 products and ongoing work regarding programs and
issues affecting older Americans and their families.
GAO's work in aging issues reflects the continuing importance of
federal programs supporting older Americans. About 34 million
Americans are age 65 and older, and by the year 2020 that number will
exceed 52 million. Because the elderly represent one of the fastest
growing segments of the country's population, the Congress faces many
issues involving income security and health care policy in which the
federal government will play an important role. These issues range
from demographic changes affecting the traditional structure and role
of the family to the financing and provision of health care, social
security, and pensions.
Our work during fiscal year 1995 covered many issues, including
federal government activities concerning employment, health care,
housing, income security, and veterans issues. Some federal programs
such as Social Security and Medicare are directed primarily at older
Americans. Other federal programs target older Americans as one of
several groups served, such as Medicaid or federal housing programs.
In the appendixes, we describe three types of GAO products and
activities that relate to older Americans:
reports and correspondence (see app. I),
congressional testimonies (see app. II), and
ongoing assignments (see app. III).
The issues addressed by these products and ongoing work are presented
in table 1. The table shows that health, income security, and
veterans issues were the areas most frequently addressed among our
products focused on older Americans.
Table 1
GAO Activities Relating to the Elderly
in Fiscal Year 1995
Reports and
corresponden Testimonie Ongoing
Elderly issues ce s work
---------------------- ------------ ---------- --------
Education and 2 1 1
Employment
Health 33 20 29
Housing 2 0 0
Income Security 17 12 13
Veterans/Department of 15 2 9
Defense
Related issues 3 0 0
==========================================================
Total 72 35 52
----------------------------------------------------------
---------------------------------------------------------- Letter :0.1
As arranged with your office, we are sending copies of this report to
interested congressional committees. Copies also will be made
available to others upon request. This report was prepared under the
direction of Benjamin C. Ross, Evaluator-in-Charge, who may be
reached at (202) 512-7260.
Jane L. Ross
Director, Income Security Issues
FISCAL YEAR 1995 REPORTS AND
CORRESPONDENCE ON ISSUES AFFECTING
OLDER AMERICANS
=========================================================== Appendix I
During fiscal year 1995, GAO issued 72 reports on issues affecting
older Americans. Of these, 2 were on education, 33 on health, 2 on
housing, 17 on income security, 15 on veterans/DOD, and 3 on other
related issues.
EDUCATION ISSUES
--------------------------------------------------------- Appendix I:1
ADULT EDUCATION: MEASURING
PROGRAM RESULTS HAS BEEN
CHALLENGING
(GAO/HEHS-95-153, SEPT. 8,
1995)
------------------------------------------------------- Appendix I:1.1
According to a recent national survey, nearly 90 million adults in
the United States have difficulty writing a letter explaining an
error on a credit card bill, using a bus schedule, or calculating the
difference between the regular and sale price of an item. To address
these deficient literary skills, Congress passed the Adult Education
Act, which funds state programs to help adults acquire the basic
skills needed for literate functioning, benefit from job training,
and continue their education at least through high school. The most
common types of instruction funded under the act's largest
program--the State Grant Program--are basic education (for adults
functioning below the eighth grade level), secondary education, and
English as a second language. Because many clients of federal
employment training programs need instruction provided by the State
Grant Program, coordination among these programs is essential.
Although the State Grant Program funds programs that address the
educational needs of millions of adults, it has had difficulty
ensuring accountability for results because of a lack of clearly
defined program objectives, questionable validity of adult student
assessments, and poor student data.
ADULT EDUCATION ACT
(GAO/HEHS-95-65R, FEB. 16,
1995)
------------------------------------------------------- Appendix I:1.2
GAO provided information on the Adult Education Act (AEA) that
focused on the (1) funding history of AEA; (2) changes that have
taken place in the amount of services that the State-Administered
Basic Grant Program provides; and (3) goals, targeted populations,
and service recipients of the State-Administered Basic Grant Program.
GAO noted that: (1) AEA funding increased from $100 million in
fiscal year 1994, (2) enrollment in the State-Administered Basic
Grant Program rose from approximately 377,000 participants in 1966 to
almost 4 million participants in 1994, and (3) the purpose of AEA is
to provide educational opportunities for adults who lack the
necessary literacy skills to become a citizen and to be productive in
their employment.
HEALTH ISSUES
--------------------------------------------------------- Appendix I:2
COMMUNITY HEALTH CENTERS:
CHALLENGES IN TRANSITIONING
TO PREPAID MANAGED CARE
(GAO/HEHS-95-138, MAY 4,
1995)
------------------------------------------------------- Appendix I:2.1
As states move to prepaid managed care to control costs and improve
access for their Medicaid clients, the number of participating
community health centers continues to grow. Medicaid prepaid managed
care is not incompatible with health centers' mission of delivering
health care to medically underserved populations. However, health
centers face substantial risks and challenges as they move into these
arrangements. Such challenges require new knowledge, skills, and
information systems. Centers lacking expertise and systems face an
uncertain future, and those in a vulnerable financial position are at
even greater risk. Today's debate over possible changes in federal
and state health programs heightens the concern over the financial
vulnerability of centers participating in prepaid managed care. If
this funding source continues to grow as a percentage of total health
center revenues, centers must face building larger cash reserves
while not compromising services to vulnerable populations. GAO
summarized this report in testimony before Congress; see Community
Health Centers: Challenges in Transitioning to Prepaid Managed Care,
(GAO/T-HEHS-95-143, May 4, 1995), by Mark V. Nadel, Associate
Director for Health Financing and Policy Issues, before the Senate
Committee on Labor and Human Resources.
DURABLE MEDICAL EQUIPMENT:
REGIONAL CARRIERS' COVERAGE
CRITERIA ARE CONSISTENT WITH
MEDICARE LAW
(GAO/HEHS-95-185, SEPT. 19,
1995)
------------------------------------------------------- Appendix I:2.2
In November 1993, the Health Care Financing Administration (HCFA)
began consolidating the work of processing and paying claims for
durable medical equipment, prostheses, orthoses, and supplies at four
regional carriers. Claims for such items had previously been
processed and paid by local Medicare carriers. As part of the
transition to regional processing, the four regional carriers
developed coverage criteria for the items. GAO found that the final
criteria adopted by the regional carriers are consistent with
Medicare's national coverage policies and the law. GAO does not
believe that the criteria have impeded disabled beneficiaries' access
to needed durable medical equipment and other items. Also, in 1994
the regional carriers approved a similar percentage of service for
durable medical equipment and other items for the disabled and aged
Medicare beneficiaries, so there was no significant difference in
access to durable medical equipment and other items between the two
groups of beneficiaries.
EMPLOYER-BASED HEALTH PLANS:
ISSUES, TRENDS, AND
CHALLENGES POSED BY ERISA
(GAO/HEHS-95-167, JULY 25,
1995)
------------------------------------------------------- Appendix I:2.3
As the movement for comprehensive federal health care reform has lost
steam, the focus of reform has shifted to the states and the private
market. States remain concerned about the growing number of people
lacking health coverage and about financing health plans for poor
people. Employers have become increasingly aggressive in managing
their health plans and have adopted various managed care plans and
innovative funding arrangements. However, the Employee Retirement
Income Security Act of 1974 (ERISA) effectively blocks states from
directly regulating most employer-based health plans, although it
allows states to regulate health insurers. GAO found that nearly 40
percent of enrollees in employer-based health plans- -44 million
people--are in self-funded plans. The divided federal and state
framework for regulating health plans produces a complex set of
trade-offs for regulating health plans. Self-funded plans, which are
exempt from state regulation under ERISA, provide employers greater
flexibility to design a health benefits package that may have been
less feasible to provide under state regulation. At the same time,
however, states are unable to extend regulations, such as solvency
standards, preexisting condition clause limits, and guaranteed issue
and renewal requirements, even indirectly, to enrollees in these
self- funded plans. GAO summarized this report in testimony before
Congress; see Employer-Based Health Plans: Issues, Trends, and
Challenges Posed by ERISA (GAO/T-HEHS-95-223, July 25, 1995), by Mark
V. Nadel, Associate Director for National and Public Health Issues,
before the Senate Committee on Labor and Human Resources.
FOOD ASSISTANCE PROGRAMS
(GAO/RCED-95-115R, FEB. 28,
1995)
------------------------------------------------------- Appendix I:2.4
GAO reviewed the Department of Agriculture's (USDA) domestic food and
nutrition assistance programs, focusing on those programs that target
benefits to women, children, infants, the elderly, and the needy.
GAO noted that (1) USDA food assistance programs constitute about 60
percent of the USDA budget and the Food Stamp Program accounts for
more than one-half of those benefits; (2) 6 of the 14 USDA food
programs target the groups reviewed; (3) participants'
characteristics and the nature and level of benefits vary widely
across the programs; (4) most of the programs have income eligibility
criteria and some programs have additional criteria that individuals
must meet to receive benefits; (5) benefit overlap is built into most
of the programs, but it is not known how many persons participate in
more than one program; (6) state and local governments and nonprofit
organizations play a large role in distributing program benefits; (7)
some USDA programs are similar to other agencies' assistance
programs; (8) ineffective targeting of low-income people, burdensome
administration, subsidizing providers rather than families, rising
costs, duplication of services, inequitable funding allocations, and
unfunded mandates affect the distribution of food benefits; and (9)
alternatives to reduce costs and streamline program operations
include improving low-income targeting, consolidating multiple
programs, reducing some programs' funding levels, and eliminating
some ineffective programs.
HCFA'S APPROACH TO
EVALUATING MEDICARE
TECHNOLOGY
(GAO/AIMD-95-234R, SEPT.
29, 1995)
------------------------------------------------------- Appendix I:2.5
GAO reviewed HCFA's approach to analyzing the benefits of commercial
technology in the Medicare program. GAO noted that HCFA (1) is
limiting its analysis of the benefits of commercial technology to
determining whether Medicare contractors complied with existing
payment controls and is using a flawed sampling methodology to select
claims for review; (2) is attempting to verify the savings achievable
through commercial systems without understanding how the systems
operate; (3) believes that it cannot examine commercial systems
without actually procuring a system; and (4) is failing to identify
real monetary benefits of commercial detection systems in its
analysis.
HEALTH CARE REFORM:
CONSIDERATIONS FOR RISK
ADJUSTMENT UNDER COMMUNITY
RATING (GAO/HEHS-94-173,
SEPT. 22, 1994)
------------------------------------------------------- Appendix I:2.6
As part of the debate over health care reform, some have proposed
prohibiting insurers from denying coverage or charging different
premiums to persons on the basis of their health status. Under such
a "community rating" system, an insurer would have to charge each
potential beneficiary the same premium for a given insurance plan.
However, community rating could create financial incentives for
insurers to attract only healthy clients because these people would,
on average, pay more in premiums than they generate in claims.
Insurers' profits would depend more on the plan's ability to attract
healthy beneficiaries and would be less responsive to efforts to
deliver high-quality service at the lowest price. Risk adjustment
can mitigate the undesirable effects of community rating on insurers'
incentives. This report describes how the federal government's
previous experience with risk adjustment is relevant to implementing
risk adjustment under health care reform and identifies features of
health care reform that could affect the ability to adequately adjust
risk.
HEALTH CARE SHORTAGE AREAS:
DESIGNATIONS NOT A USEFUL
TOOL FOR DIRECTING RESOURCES
TO THE UNDERSERVED
(GAO/HEHS-95-200, SEPT. 8,
1995)
------------------------------------------------------- Appendix I:2.7
Many Americans live in places where barriers exist to obtaining basic
health care. These areas range from isolated rural locations to
inner-city neighborhoods. In fiscal year 1994, the federal
government spent about $1 billion on programs to overcome access
problems in such locations. To be effective, these programs need a
sound method of identifying the type of access problems that exist
and focusing services on the people who need them. The Department of
Health and Human Services (HHS) uses two main systems to identify
such locales. One designates Health Professional Shortage Areas, the
other Medically Underserved Areas. More than half of all U.S.
counties fall into these two categories. GAO reviewed the two
systems to determine (1) how well they identify areas with primary
care shortages, (2) how well they help target federal funding to
benefit those who are underserved, and (3) whether they are likely to
be improved under proposals to combine them.
HEALTH INSURANCE
PORTABILITY: REFORM COULD
ENSURE CONTINUED COVERAGE
FOR UP TO 25 MILLION
AMERICANS (GAO/HEHS-95-257,
SEPT. 19, 1995)
------------------------------------------------------- Appendix I:2.8
Although federal and state laws have improved the portability of
health insurance, an individual's health care coverage could still be
reduced when changing jobs. Between 1990 and 1994, 40 states enacted
small group insurance regulations that include portability standards,
but ERISA prevents states from applying these standards to the health
plans of employers who self-fund. As a result, some in Congress have
proposed broader national portability standards. GAO estimates that
as many as 21 million Americans each year would benefit from federal
legislation to ensure that workers who change jobs would not be
subject to new health insurance plans that impose waiting periods or
preexisting condition exclusions. In addition, as many as 4 million
Americans who at some point have been unwilling to leave their jobs
because they feared losing their health care coverage would benefit
from national portability standards. Such a change, however, could
possibly boost premiums, according to insurers.
HMO ENROLLMENT DATA
(GAO/HEHS-95-159R, MAY 25,
1995)
------------------------------------------------------- Appendix I:2.9
GAO provided information on health maintenance organization (HMO)
enrollment, focusing on the number of Medicare beneficiaries enrolled
in risk-based HMOs. GAO noted that (1) between December 1993 and
1994, the percentage of Medicare beneficiaries enrolled in risk-based
HMOs increased from 5.1 to 6.3 percent for a total of about 2.3
million beneficiaries; (2) although older beneficiaries had lower
enrollment rates than the general Medicare population, they also
increasingly joined risk-based HMOs; (3) between 1993 and 1994, the
percentage of Medicare beneficiaries aged 75 and older enrolled in
risk-based HMOs increased from 4.8 to 6.1 percent; and (4) the
percentage of beneficiaries aged 85 and older enrolled in risk-based
HMOs increased from 3.9 to 4.7 percent between 1993 and 1994.
HOSPITAL-BASED HOME HEALTH
AGENCIES (GAO/HEHS-95-209R,
JULY 19, 1995)
------------------------------------------------------ Appendix I:2.10
GAO reviewed whether increased hospital ownership of home health
agencies (HHA) has contributed to the growth in Medicare home health
costs. GAO found that hospital-based HHA (1) generally care for
beneficiaries with less chronic conditions and provide fewer visits
to patients than all other types of HHA, except those run by the
government and (2) apparently are not driving up Medicare costs any
more than other types of HHA.
INDIAN HEALTH SERVICE:
IMPROVEMENTS NEEDED IN
CREDENTIALING TEMPORARY
PHYSICIANS (GAO/HEHS-95-46,
APR. 21, 1995)
------------------------------------------------------ Appendix I:2.11
Indian Health Service (IHS) facilities, which provide medical care to
more than 1 million American Indians and Alaskan Natives, supplement
their staffs with temporary physicians. But weak policies have led
IHS to unknowingly hire doctors who have been disciplined for such
offenses as gross and repeated malpractice and unprofessional
conduct. IHS does not explicitly require verifying all active and
inactive state medical licenses that a temporary physician may have.
Further, most IHS facilities that have contracts with companies that
supply temporary physicians do not require the companies to inform
IHS of the status of all medical licenses a physician may hold. In
addition, IHS facilities do not have a formal system for sharing
information on temporary physicians who have worked within the IHS
medical system. This report also discusses what happens when
requested medical services are delayed.
LONG-TERM CARE: CURRENT
ISSUES AND FUTURE DIRECTIONS
(GAO/HEHS-95-109, APR. 13,
1995)
------------------------------------------------------ Appendix I:2.12
Today, an increasing number of Americans need long-term care.
Unprecedented growth in the elderly population is projected for the
twenty-first century, and the population age 85 and older--those most
in need of long-term care--is expected to outpace the rate of growth
for the entire elderly population. In addition to the dramatic rise
in the elderly population, a large portion of the long-term care
population consists of younger people with disabilities. The
importance of long-term care was underscored by the 1994
congressional debate over health care reform and, more recently, by
the "Contract with America," which proposed assistance such as tax
deductions for long-term care insurance and tax credits for family
caregiving. This report (1) defines what is meant by long-term care
and discusses the conditions that give rise to long-term care need,
how such need is measured, and which groups--young and old--require
long-term care; (2) examines the long-term care costs that are borne
by federal and state governments as well as by families; (3)
addresses strategies that states and foreign countries are pursuing
to contain public long-term care costs; and (4) discusses predictions
by experts on the future demand for long-term care.
LONG-TERM CARE: DIVERSE,
GROWING POPULATION INCLUDES
MILLIONS OF AMERICANS OF ALL
AGES (GAO/HEHS-95-26, NOV.
7, 1994)
------------------------------------------------------ Appendix I:2.13
Contrary to popular perception, not all Americans needing long-term
care are elderly or institutionalized. Of the 12 million Americans
requiring such care, 5 million are working-age adults and about half
a million are children; the vast majority--10 million--live at home
or in community residential facilities. The long-term care needs of
this population vary considerably, from around-the-clock nursing care
to occasional assistance with household chores, such as cooking and
house cleaning. The aging of the baby boom generation means that
long-term care needs will increase well into the next century, as
much as doubling among the elderly population in the next 25 years.
Meaningful projections of the nation's future long-term care needs,
however, are clouded by uncertainty about whether baby boomers will
live longer, healthier lives than preceding generations and by a lack
of good estimates on the future size of the nonelderly disabled
population. Further, researchers believe that the number of younger
disabled has grown in recent decades and will continue to do so, in
part as a result of changing medical technology and other factors
that may allow more low-birth-weight infants to reach childhood, for
example, or more young adults to survive disabling accidents. The
diverse ages, needs, and conditions of the long-term care population
mean that greater flexibility is needed in the design and
administration of programs to match the range of individual needs.
MEDICAID MANAGED CARE: MORE
COMPETITION AND OVERSIGHT
WOULD IMPROVE CALIFORNIA'S
EXPANSION PLAN
(GAO/HEHS-95-87, APR. 28,
1995)
------------------------------------------------------ Appendix I:2.14
The Medicaid program was established to make health care more
accessible to the poor. In many communities, however, beneficiaries'
access to quality care is far from guaranteed. Too few doctors and
other health care providers choose to participate in Medicaid because
of low payment rates and administrative burdens. To address the
access problem, as well as rising costs and enrollment in its $15
billion Medi-Cal program (which serves about 5.4 million
beneficiaries), California intends to increase its reliance on
managed care delivery systems. This report (1) describes
California's current Medicaid managed care program, (2) reviews the
state's oversight of managed care contractors with a focus on
financial incentive arrangements and the provision of preventive care
for children, (3) describes the state's plans for expansion, and (4)
identifies key issues the state will face as it implements the
expanded program.
MEDICAID: RESTRUCTURING
APPROACHES LEAVE MANY
QUESTIONS (GAO/HEHS-95-103,
APR. 4, 1995)
------------------------------------------------------ Appendix I:2.15
Over the years, various proposals have been made to restructure the
Medicaid program. One approach calls for providing federal block
grants to the states and giving them increased responsibility for
running the program. Under another proposal, Medicaid would be
entirely funded and administered by the federal government. Yet
another would split Medicaid into two programs, one encompassing
acute and primary care and the other long-term care. This report
compares the different restructuring approaches and discusses their
implications for federal-state financing and administration of the
program. GAO also provides information on the need to establish a
federal "rainy day" fund if restrictions, such as block grants, are
placed on federal revenues paid to states. GAO also provides the
most recent data on the amount of federal Medicaid funds provided to
each state.
MEDICAID: SPENDING
PRESSURES DRIVE STATES
TOWARD PROGRAM REINVENTION
(GAO/HEHS-95-122, APR. 4,
1995)
------------------------------------------------------ Appendix I:2.16
The $131 billion Medicaid program is at a crossroads. Between 1985
and 1993, Medicaid costs tripled and the number of beneficiaries rose
by more than 50 percent. Medicaid costs are projected to rise to
$260 billion, according to the Congressional Budget Office. Despite
federal and state budgetary constraints, several states are
pressuring to expand the program and enroll hundreds of thousands of
new beneficiaries. The cost of expanded coverage, they believe, will
be offset by the reallocation of Medicaid funds and the wholesale
movement of beneficiaries into some type of managed care arrangement.
This report examines (1) federal and state Medicaid spending, (2)
some states' efforts to contain Medicaid costs and expand coverage
through waiver of federal requirements, and (3) the potential impact
of these waivers on federal spending and on Medicaid's program
structure overall. The Comptroller General summarized this report in
testimony before Congress; see Medicaid: Spending Pressures Drive
States Toward Program Reinvention (GAO/T-HEHS-95-129, Apr. 4, 1995),
by Charles A. Bowsher, Comptroller General of the United States,
before the House Committee on the Budget.
MEDICAID: TENNESSEE'S
PROGRAM BROADENS COVERAGE
BUT FACES UNCERTAIN FUTURE
(GAO/HEHS-95-186, SEPT. 1,
1995)
------------------------------------------------------ Appendix I:2.17
In early 1993, Tennessee predicted that increases in state Medicaid
expenditures and the loss of tax revenues used to finance Medicaid
would produce a financial crisis. To avert a financial crisis,
control its Medicaid expenditures, and extend health insurance
coverage to most state residents, Tennessee converted its Medicaid
program into a managed care health program--TennCare--to serve both
Medicaid recipients and uninsured persons. GAO found that although
TennCare met its objectives of providing health coverage to many
uninsured persons while controlling costs, concerns remain with
respect to access to quality care and managed care performance.
Specifically, questions have been raised about TennCare's rapid
approval and implementation, lack of provider buy-in to the program,
and delays in monitoring TennCare's access and quality of care. In
addition, the soundness of the methodology for determining and the
resulting adequacy of the program's capitation rates have been
questioned. This report discusses (1) TennCare's basic design and
objectives, (2) the degree to which the program is meeting these
objectives, and (3) the experiences of TennCare's insurers and
medical providers and their implications for TennCare's future.
MEDICARE: ALLEGATIONS
AGAINST ABC HOME HEALTH CARE
(GAO/OSI-95-17, JULY 19,
1995)
------------------------------------------------------ Appendix I:2.18
In response to a congressional request, GAO investigated allegations
against ABC Home Health Care, a home health agency, and its
participation in Medicare's home health care program. In the
Medicare program, providers may receive reimbursement for only those
expenses that are reasonable in amount and related to patient care
for eligible patients. Current and former employees told GAO that
local ABC office managers directed them to alter records to make it
appear that patients continued to need home health visits.
Additionally, managers directed employees to continue visiting
patients who, in the employees' opinions, did not qualify for home
health care because they no longer met Medicare rules defining
homebound status. ABC also reportedly charged Medicare for the cost
of acquiring other HHAs by paying owners a small sum up front and the
balance in the form of salary under employment agreements, a practice
that is inconsistent with Medicare regulations for reimbursement.
Finally, according to former employees, some managers directed
employees to market ABC and its services with the intent of charging
Medicare for costs that were not reimbursable. GAO has shared
information concerning possible illegal activities with appropriate
law enforcement authorities. GAO summarized this report in testimony
before Congress; see Medicare: Allegations Against ABC Home Health
Care (GAO/T-OSI-95-18, July 19, 1995), by Richard C. Stiener,
Director, Office of Special Investigations, before the Subcommittee
on Health and Environment and the Subcommittee on Oversight and
Investigations, House Commerce Committee.
MEDICARE: ANTIFRAUD
TECHNOLOGY OFFERS
SIGNIFICANT OPPORTUNITY TO
REDUCE HEALTH CARE FRAUD
(GAO/AIMD-95-77, AUG. 11,
1995)
------------------------------------------------------ Appendix I:2.19
Medicare continues to suffer large losses each year due to fraud.
Existing risks are sharply increased by the continual growth in
Medicare claims--both in number and percentage processed
electronically. Existing Medicare payment safeguards can be bypassed
and apparently do not deter fraudulent activities. HCFA should be
able to benefit by taking full advantage of emerging antifraud
technology to better identify and prevent Medicare fraud. The number
and types of Medicare fraud schemes perpetrated in South Florida may
make that area the best place to test antifraud systems before
nationwide use.
MEDICARE CLAIMS: COMMERCIAL
TECHNOLOGY COULD SAVE
BILLIONS LOST TO BILLING
ABUSE (GAO/AIMD-95-135, MAY
5, 1995)
------------------------------------------------------ Appendix I:2.20
With an investment of only $20 million in off-the-shelf commercial
software, Medicare could save nearly $4 billion over 5 years by
detecting fraudulent claims by physicians--primarily manipulation of
billing codes. On the basis of a test in which four commercial firms
reprocessed samples of more than 20,000 paid Medicare claims, GAO
estimates that the software could have saved $603 million in 1993 and
$640 million in 1994. GAO estimates that because beneficiaries are
responsible for about 22 percent of the payment amounts--mainly in
the form of deductibles and copayments--Medicare could have saved
them $134 million in 1993 and $142 million in 1994. The test results
indicate that only a small portion of providers are responsible for
most of the abuses: fewer than 10 percent of providers in the sample
had miscoded claims. GAO summarized this report in testimony before
Congress; see Medicare Claims Billing Abuse: Commercial Software
Could Save Hundreds of Millions Annually (GAO/T-AIMD-95-133, May 5,
1995), by Frank W. Reilly, Director of Information Resources
Management in the Health, Education, and Human Service Area, before
the Subcommittee on Labor, Health and Human Services, Education, and
Related Agencies, Senate Committee on Appropriations.
MEDICARE: EXCESSIVE
PAYMENTS FOR MEDICAL
SUPPLIES CONTINUE DESPITE
IMPROVEMENTS
(GAO/HEHS-95-171, AUG. 8,
1995)
------------------------------------------------------ Appendix I:2.21
In fiscal year 1994 alone, Medicare was billed more than $6.8 billion
for medical supplies. Congressional hearings and government studies
have shown that Medicare has been extremely vulnerable to fraud and
abuse in its payments for medial supplies, especially surgical
dressings. In one case discussed in congressional testimony in 1994,
Medicare paid more than $15,000 in claims for a month's supply of
surgical dressings for a single patient, apparently without reviewing
the reasonableness of the claims before payments. Until recently,
medical suppliers had considerable freedom in choosing the Medicare
contractors that would process and pay their claims. Some exploited
this freedom by "shopping" for contractors with the weakest controls
and highest payment rates. This report discusses the (1)
circumstances allowing payment for unusually high surgical dressing
claims and (2) adequacy of Medicare's internal controls to prevent
paying such claims.
MEDICARE HOSPITAL PAYMENTS
(GAO/HEHS-95-158R, MAY 25,
1995)
------------------------------------------------------ Appendix I:2.22
GAO provided information on the growth in Medicare hospital payments,
focusing on the annual payment growth rates for various types of
hospitals. GAO noted that (1) while general inflation grew about 3.5
percent annually from 1984 through 1992, hospital payments per
discharge grew at an annual rate of 5.4 percent; (2) major teaching
hospitals averaged a 5.7 percent annual payment growth rate and
nonteaching hospitals averaged a 5.3 percent annual payment growth
rate; (3) hospitals receiving disproportionate share payments had a
higher per discharge payment growth rate than hospitals not receiving
such payments; (4) larger hospitals in both urban and rural settings
had higher payment growth rates; (5) government-owned hospitals had
higher payment growth rates than voluntary or proprietary hospitals;
(6) increased payments did not necessarily translate to increased
profits, since expenses were not accounted for; and (7) case
complexity grew more rapidly among large urban and rural hospitals,
which partially explains their higher payment growth rate.
MEDICARE: INCREASED HMO
OVERSIGHT COULD IMPROVE
QUALITY AND ACCESS TO CARE
(GAO/HEHS-95-155, AUG. 3,
1995)
------------------------------------------------------ Appendix I:2.23
This report discusses problems that HCFA has had monitoring HMOs it
contracts with to provide services to Medicare beneficiaries and
ensuring that they comply with Medicare's performance standards. GAO
found weaknesses in HCFA's quality assurance monitoring, enforcement
measures, and appeal processes. Although HCFA routinely reviews HMO
operations for quality, these reviews are generally perfunctory and
do not consider the financial risks that HMOs transfer to providers.
Moreover, HCFA collects virtually no data on services received
through HMOs to enable it to identify providers who may be
underserving beneficiaries. In addition, HCFA's HMO oversight has
two other major limitations: enforcement actions are weak and the
beneficiary appeal process is slow. HCFA's current regulatory
approach of ensuring good HMO performance appears to lag behind the
private sector. GAO summarized this report in testimony before
Congress; see Medicare: Increased Federal Oversight of HMOs Could
Improve Quality of and Access to Care (GAO/T-HEHS-95-229, Aug. 3,
1995), by Sarah F. Jaggar, Director of Health Financing and Public
Health Issues, before the Senate Special Committee on Aging.
MEDICARE PROVIDERS' LEGAL
EXPENSES (GAO/HEHS-95-214R,
JULY 18, 1995)
------------------------------------------------------ Appendix I:2.24
GAO provided information on Medicare reimbursement of providers'
legal expenses, focusing on (1) the conditions that Medicare imposes
on provider legal expense reimbursements and whether these conditions
differ from those applied in other government contexts, (2) the
amount Medicare spends on providers' legal expenses, and (3) whether
Medicare providers have abused current provisions covering legal
expense reimbursement. GAO noted that (1) HCFA has not specified the
conditions under which legal fees are reimbursable; (2) Medicare
decides whether providers' legal fees are reimbursable on a
case-by-case basis; (3) the provisions for reimbursing Medicare
providers' legal fees are more generous than those in other
government contexts in that providers can be reimbursed by Medicare
regardless of outcome and providers' legal expenses are not capped;
(4) in 1994, 46 HHAs had a combined total of $6.5 million in legal
expenses; and (5) HHAs are more likely to submit claims for Medicare
reimbursement and to appeal denied cost adjustments, despite limited
chances of success.
MEDICARE: REFERRALS TO
PHYSICIAN-OWNED IMAGING
FACILITIES WARRANT HCFA'S
SCRUTINY (GAO/HEHS-95-2,
OCT. 20, 1994)
------------------------------------------------------ Appendix I:2.25
Because Florida had the only statewide information then available on
doctors with a financial stake in imaging center joint ventures, GAO
analyzed 1990 Medicare claims for imaging services ordered by
physicians in that state. GAO found that Florida doctors with a
financial interest in such centers ordered about $10 million more in
Medicare-paid imaging services than other doctors in 1990. Florida
physicians with imaging facilities in their offices, group practices,
or other practice settings also had higher imaging rates compared
with those of other physicians. HHS has not yet finalized the
regulations and procedures needed to implement and enforce federal
self-referral restrictions that would apply to doctors with a
financial interest in joint ventures. Moreover, HCFA has no system
to check physician-referral patterns to identify abusive
overutilization of self-referrals.
MEDICARE SECONDARY PAYER
PROGRAM (GAO/HEHS-95-101R,
MAR. 6, 1995)
------------------------------------------------------ Appendix I:2.26
GAO provided information on and suggested language for proposed
legislation regarding the recovery of health care costs from private
insurers where Medicare is the secondary payer. GAO noted that the
(1) proposed legislation would give a clearer statutory basis for
existing Medicare regulations on cost recovery from private insurers,
which were recently invalidated by a court ruling; (2) HHS is also
preparing a legislative proposal to address this and other Medicare
issues; (3) government may have to refund millions of dollars in past
recoveries and forego future recoveries because of the court ruling;
and (4) court ruling barred recoveries from third-party
administrators and claims filed past the insurers' filing deadlines
and before 1989.
MEDICARE SPENDING: MODERN
MANAGEMENT STRATEGIES NEEDED
TO CURB BILLIONS IN
UNNECESSARY PAYMENTS
(GAO/HEHS-95-210, SEPT. 19,
1995)
------------------------------------------------------ Appendix I:2.27
Medicare's vulnerability to billions in unnecessary payments stems
from a combination of factors. First, Medicare pays higher than
market rates for some services and supplies. For example, Medicare
pays more than the lowest suggested retail price for more than 40
types of surgical dressings. Second, Medicare's anti-fraud-and-abuse
controls do not prevent the unquestioned payment of claims for
improbably high charges or manipulated billing codes. Third,
Medicare's checks on the legitimacy of providers are too superficial
to detect the potential for scams. Various health care management
strategies help private payers avoid these problems, but Medicare
generally does not use these strategies. The program's pricing
methods and controls over utilization, consistent with health care
financing and delivery 30 years ago, have not kept pace with major
financing and delivery changes. GAO believes that a viable strategy
for remedying the program's weaknesses would involve adapting the
health care management approach of private payers to Medicare's
public payer role. This strategy would include (1) more
competitively developed payment rates, (2) enhanced fraud and abuse
detection efforts through modernized information systems, and (3)
more rigorous criteria for granting authorization to bill the
program.
MEDICARE: TIGHTER RULES
NEEDED TO CURTAIL
OVERCHARGES FOR THERAPY IN
NURSING HOMES
(GAO/HEHS-95-23, MAR. 30,
1995)
------------------------------------------------------ Appendix I:2.28
Nursing homes and rehabilitation centers are taking advantage of
ambiguous payment rules and the lack of guidelines to bill Medicare
at inflated rates for therapy services. State averages for physical,
occupational, and speech therapists' salaries range from about $12 to
$25 per hour, but Medicare has been charged upwards of $600 per hour.
The extent of overcharging and its precise impact on Medicaid outlays
are unclear; however, billing schemes uncovered in recent years
suggest that the problem is nationwide and growing in magnitude.
Extraordinary markups on therapy can result from providers exploiting
regulatory ambiguity and weaknesses in Medicare's payment rules.
Payment rules and procedures developed when the therapy industry was
much smaller and less sophisticated have proved no match for
increasingly complex business practices designed to generate
increased Medicare revenue and skirt program controls. Although the
overbilling problem has been known since 1990, no action has been
taken to close loopholes that allow payment for these overcharges.
MEDIGAP INSURANCE:
INSURERS' COMPLIANCE WITH
FEDERAL MINIMUM LOSS RATIO
STANDARDS, 1988-93
(GAO/HEHS-95-151, AUG. 23,
1995)
------------------------------------------------------ Appendix I:2.29
The Medigap market grew steadily from 1988 to 1993, from $7.3 billion
to $12.1 billion. Medigap insurers' aggregate loss ratios were
relatively stable during the first 4 years of that period. During
the next 2 years, however, these ratios fell about 10 percent, to an
aggregate 75 percent for individual policies and 85 percent for group
policies. In 1991, 19 percent of Medigap policies failed to meet
loss ratio standards; this rose to 38 percent by 1993. The premium
dollars spent on such policies increased from $320 million in 1991 to
$1.2 billion in 1993. If insurers had been required to give refunds
or credits on substandard policies, as they will in the future,
policyholders would have been due about $124 million during 1992 and
1993.
MICHIGAN FINANCING
ARRANGEMENTS
(GAO/HEHS-95-146R, MAY 5,
1995)
------------------------------------------------------ Appendix I:2.30
GAO provided information on Michigan's 1995 Medicaid funding
arrangements. GAO noted that (1) Michigan has been among the most
successful states in obtaining additional federal Medicaid funds; (2)
since fiscal year 1991, Michigan has reduced its Medicaid costs by
$1.8 billion due to a variety of financing partnerships with medical
providers; (3) most federal matching funds paid to providers have
been returned to the state, thus reducing state appropriations; (4)
although federal legislation has curtailed certain financing
practices, Michigan has found new ways to obtain federal matching
funds, such as using provider donations to maximize federal funds and
reduce state costs; (5) Michigan's use of intergovernmental transfers
could reduce Medicaid costs by an additional $428 million in fiscal
year 1995; (6) Michigan expects to obtain over $414 million in
federal matching funds in fiscal year 1996; (7) Michigan should
realize a net benefit of $196.5 million in fiscal year 1995 by
adjusting nursing home and mental health Medicaid services payments;
and (8) Michigan determined that it could make additional hospital
outpatient payments of $40 million without exceeding what Medicare
would pay for such services.
PATIENT SELF-DETERMINATION
ACT: PROVIDERS OFFER
INFORMATION ON ADVANCE
DIRECTIVES BUT EFFECTIVENESS
UNCERTAIN (GAO/HEHS-95-135,
AUG. 28, 1995)
------------------------------------------------------ Appendix I:2.31
Congress passed the Patient Self-Determination Act in 1990 to
reinforce individuals' constitutional right to decide their final
health care. The act requires health care providers to increase
public awareness about the use of "advance directives"--a living will
or health care power of attorney. An advance directive spells out
how life-support decisions should be carried out should the patient
become terminally ill and unable to communicate his or her wishes.
This report provides information on the act's implementation and on
the effectiveness of advance directives in ensuring patient
self-determination. GAO looks at the extent to which (1)
institutional health care providers and the federal government are
complying with the act's provision, (2) the public uses advance
directives to express their end-of-life treatment wishes, and (3) an
advance directive affects a patient's desired care.
PRESCRIPTION DRUGS AND THE
ELDERLY: MANY STILL RECEIVE
POTENTIALLY HARMFUL DRUGS
DESPITE RECENT IMPROVEMENTS
(GAO/HEHS-95-152, JULY 24,
1995)
------------------------------------------------------ Appendix I:2.32
The inappropriate use of prescription drugs is particularly hazardous
for the elderly. Not only do they use more prescription drugs than
any other age group, the elderly are more likely to take several
drugs at once, increasing the likelihood of harmful drug reactions.
Furthermore, the elderly do not eliminate drugs from their systems as
efficiently as younger patients because of decreased liver and kidney
function. GAO found that 17.5 percent of nearly 30 million
noninstitutionalized Medicare recipients age 65 or older used at
least one drug identified as generally unsuitable for elderly
patients since safer alternative drugs exist. Inappropriate
prescription drug use can result from doctors using outdated
prescribing practices, pharmacists not doing drug utilization
reviews, and patients not telling their doctors and pharmacists about
all the drugs they are taking. Recent initiatives are seeking to
address this problem. Federal and state efforts have encouraged the
development and dissemination of detailed information on the effect
of prescription drugs on the elderly, and the medical community is
urging doctors to increase their knowledge of geriatrics and elderly
clinical pharmacology. At the same time, drug utilization review
systems now allow prescriptions to be screened before they are filled
to identify potential problems, such as adverse drug interactions or
inappropriate dosage levels. Changes in the health care delivery
system may also help reduce inappropriate use of prescription drugs.
For example, managed care plans, through the use of controls such as
a "gatekeeper," could potentially improve the coordination of drug
therapies for newly enrolled elderly patients.
PREVENTING ABUSIVE MEDICARE
BILLING (GAO/HEHS-95-260R,
SEPT. 5, 1995)
------------------------------------------------------ Appendix I:2.33
GAO discussed its recommendations for preventing abusive Medicare
billing and whether the recommendations can be implemented
legislatively. GAO noted that (1) Medicare law could be amended to
require HHS to establish the requirements recommended as well as a
higher limit on the amount that Medicare will recognize as reasonable
for therapy services; (2) expense claim limits could be set at the
amount established under Medicare's part B fee schedules for therapy
services; (3) establishing an upper limit would partially define
billable units of service, since the procedure codes for occupational
and speech therapy do not define the amount of time the codes cover;
and (5) proposals have been made to require nursing homes to bill for
the services provided to their residents, whether payment is sought
from part A or part B fee schedules.
HOUSING ISSUES
--------------------------------------------------------- Appendix I:3
HUD-ASSISTED RENTERS
(GAO/RCED-95-167R, MAY 18,
1995)
------------------------------------------------------- Appendix I:3.1
GAO provided information on the Department of Housing and Urban
Development's (HUD) rental assistance programs, focusing on the
potential for assisted households to move toward or achieve economic
self-sufficiency. GAO noted that based on samples of 1989 data (1)
HUD-assisted renters' median age was 50 years, with 29 percent 34
years or younger, 36 percent between the ages of 35 and 64, and 35
percent 65 years or older; (2) the elderly and the disabled, who
constituted about 49 percent of HUD-assisted households, had limited
potential for achieving self-sufficiency; (3) 45 percent of assisted
households had children, with 12 percent having three or more
children; (4) about 55 percent of the households were headed by
single parents; (5) single parents needed child care and other
services to participate in training or employment programs; (6) about
36 percent of the heads of assisted households had graduated from
high school, another 18 percent had 1 or more years of college, and
21 percent had fewer than 8 years of schooling; (7) at least 45
percent of HUD-assisted renters needed additional education or
training to become self-sufficient; (8) the renters' median income
was $7,320; (9) about 7 percent of the renters had incomes of $20,000
or more; (10) only 40 percent of the households reported income from
wages or salaries; and (11) a 3-member family renting a 2-bedroom
apartment would need an annual income ranging from $18,396 to $36,264
to become economically independent of the housing program.
HUD MANAGEMENT: GREATER
OVERSIGHT NEEDED OF FHA'S
NURSING HOME INSURANCE
PROGRAM (GAO/RCED-95-214,
AUG. 25, 1995)
------------------------------------------------------- Appendix I:3.2
HUD has insured private lenders against financial losses arising from
defaults on mortgages for nursing homes and retirement service
centers. Although HUD officials believe that the program has enabled
the agency to assist populations or areas that are not well served by
the private sector, GAO found that the nursing home program has not
been targeted to specific populations or communities and that HUD
does not collect or analyze information on whom the program is
servicing. The Federal Housing Administration (FHA) has not
completely assessed the financial performance of the nursing home and
retirement service center programs. Available data indicate that the
nursing home program has incurred losses of $187 million, adjusted
for inflation, during its 35-year history. Additionally, FHA's
fiscal year 1994 loan loss reserves anticipate future losses
equivalent to about 19 percent of the $3.7 billion balance of nursing
home loans in the portfolio as of September 1994. HUD data show that
about 46 percent of the retirement service center's total portfolio
of about $1.4 billion had defaulted and resulted in FHA insurance
claims as of September 1994. GAO doubts whether HUD will be able to
effectively manage the nursing home and retirement service center
programs in the near future.
INCOME SECURITY ISSUES
--------------------------------------------------------- Appendix I:4
COMBINED FUND UPDATE
(GAO/HEHS-95-166R, MAY 25,
1995)
------------------------------------------------------- Appendix I:4.1
GAO reviewed the United Mine Workers of America (UMWA) Combined
Benefit Fund, focusing on the fund's (1) beneficiaries, expenses, and
revenues; and (2) Medicare reimbursement arrangements. GAO noted
that (1) as of October 1, 1994, the fund had 96,700 beneficiaries,
about three-quarters of whom were coal industry operators; (2) 29
firms terminated their contributions to the fund between October 1994
and March 1995, which necessitated the reassignment of 3,114
beneficiaries; (3) the fund had billed all operators about $162
million for fiscal year 1995 premiums; (4) the fund's Medicare per
capita reimbursement rate was renegotiated and reduced for the year
beginning July 1994, which makes it unlikely that future annual
surpluses will occur; and (5) overall annual operating deficits are
expected to begin in 1995, which would eliminate the current surplus
by 2003.
COMBINED FUND ANALYSIS
(GAO/HEHS-95-230R, AUG. 4,
1995)
------------------------------------------------------- Appendix I:4.2
GAO reviewed two studies of the UMWA Combined Benefit Fund. GAO
noted that (1) the consultants' models projected widely differing
financial results for the UMWA Combined Benefit Fund; (2) the models'
expense estimates for 1995 differed by about $16 million; (3) one of
the models underestimated the UMWA fund's 1995 net expenses by
approximately $3 million; (4) one consultant based its medical cost
inflation assumptions on the Fund's past and current efforts to
contain cost growth in prescription drugs; (6) the other consultant
relied on the Medicare trust fund's projections of medical inflation
and adjusted these estimates to reflect the Fund's past experiences;
and (7) the later assumptions may be more reasonable and may be more
accurate in predicting the Fund's status beyond 1995.
CSRS FUNDING
(GAO/GGD-95-200R, APR. 3,
1995)
------------------------------------------------------- Appendix I:4.3
GAO reviewed information on the funding status of the Civil Service
Retirement System. GAO noted that (1) the system's unfunded
liability is not a problem that needs to be fixed to avoid a steep
increase in outlays from the Treasury or increases in the deficit and
(2) there should be sufficient assets in the retirement fund to cover
benefit payments to all current and future retirees.
D.C. DISABILITY RETIREMENT
RATE (GAO/GGD-95-133, MAR.
31, 1995)
------------------------------------------------------- Appendix I:4.4
The federal government makes annual payments to the District of
Columbia retirement fund for police officers and firefighters. To
encourage the District government to control disability retirement
costs, these payments must be reduced when the disability retirement
rates exceeds a certain limit. GAO concludes that no reduction is
required in the fiscal year 1996 payment to the fund.
DISTRICT PENSIONS: FEDERAL
OPTIONS FOR SHARING BURDEN
TO FINANCE UNFUNDED
LIABILITY (GAO/HEHS-95-40,
DEC. 28, 1994)
------------------------------------------------------- Appendix I:4.5
With a total unfunded liability of about $5 billion in 1993, the
three District of Columbia pension plans continued to be not as
well-funded as 24 comparable state and local governmental pension
plans. Under the funding method proposed by the District of Columbia
Pension Liability Funding Reform Act of 1994 (H.R. 3728) and a
companion District bill, about $1 billion in value today of
contributions that the District would make under the existing law
would be shifted to the federal government. However, because the
approach would entail federal payments escalating at 5 percent per
year through 2035, more of the burden of eliminating the unfunded
liability would shift to future federal budgets and generations of
federal taxpayers. In contrast, a constant annual federal payment of
$102.1 million would shift less of the burden to future federal
budgets and taxpayers, cost the federal government a little less
overall, and have the same effect as H.R. 3728 in stabilizing the
District's contributions at about 45 percent of payroll while
eliminating the liability. Other options with lower constant annual
federal payments would also eliminate the liability, but the
District's contributions would be higher. Also, under the District's
act, its contributions for the first 3 years would be at the required
minimum of $295.5 million. GAO notes that these payments would be
about $58 million higher than the actuarially determined amounts.
FEDERAL RETIREMENT:
BENEFITS FOR MEMBERS OF
CONGRESS, CONGRESSIONAL
STAFF, AND OTHER EMPLOYEES
(GAO/GGD-95-78, MAY 15,
1995)
------------------------------------------------------- Appendix I:4.6
The retirement benefits provided by the Civil Service Retirement
System for Members of Congress are generally more generous than those
provided for other federal employees. The major differences are
found in the eligibility requirements for retirement and the formulas
used to calculate benefits. The Member benefit formula applies to
congressional staff, but they are covered by the general employee
retirement eligibility requirements. Law enforcement officers and
firefighters may retire earlier than general employees and are
covered by a more generous benefit formula than are general
employees. Under the Civil Service Retirement System, the provisions
for air traffic controllers fall between those for law enforcement
officers and firefighters and those for general employees. Many of
the advantages afforded to Members of Congress and congressional
staff under the Civil Service Retirement System were continued under
the Federal Employees Retirement System, which covers workers hired
in 1984 and thereafter. But under the Federal Employee Retirement
System, provisions for law enforcement officers, firefighters, and
air traffic controllers are very similar to provisions for Members.
GAO summarized this report in testimony before Congress; see
Congressional Retirement Issues, (GAO/T-GGD-95-165, May 15, 1995), by
Johnny C. Finch, Assistant Comptroller General for General
Government Programs, before the Subcommittee on Post Office and Civil
Service, Senate Committee on Governmental Affairs.
MEANS-TESTED PROGRAMS
(GAO/HEHS-95-94R, FEB. 24,
1995)
------------------------------------------------------- Appendix I:4.7
GAO provided information on welfare reform proposals to simplify
means-tested public assistance programs. GAO noted that (1) welfare
services should be easily accessible by all who seek assistance; (2)
there is no integrated strategy to unify these programs to address
the interrelated needs of individuals and families; (3) despite
efforts to better coordinate federal programs, conflicting
requirements make it difficult for program staff to coordinate
activities and share resources; and (4) program integration could be
facilitated by reducing or eliminating federal program barriers and
reengineering the welfare delivery process.
PBGC (GAO/AIMD-95-225R, AUG.
24, 1995)
------------------------------------------------------- Appendix I:4.8
GAO reviewed the Pension Benefit Guaranty Corporation's (PBGC)
accounting procedures and internal controls that warranted
management's attention as of September 30, 1994. GAO noted that PBGC
(1) used evidence about significant transactions that occurred after
year-end in assessing its year-end contingent liabilities; (2)
misclassified several pension plans based on their prior year
classifications; (3) placed greater emphasis on bond ratings and
debt-equity ratios in classifying pension plans; (4) had financial
statements that did not disclose factors that represented high
contingent liability risks; (5) did not adequately disclose the
monetary effects that actuarial assumptions had on the amounts
disclosed; (6) did not provide all available information about its
efforts to recover amounts from sponsors of terminated plans in its
financial statements; (7) incorrectly recorded its estimated losses;
(8) did not provide adequate documentation in its Single Employer
Program's Statement of Cash Flows; (9) inconsistently reviewed its
financial assistance to multiemployer plans; (10) had yet to evaluate
the effectiveness of its ratio screens in identifying troubled plans;
(11) incorrectly listed 16 multiemployer plans as inactive in its
Premium Processing System; (12) incorrectly allocated some of its
losses to the Multiemployer Program; and (13) had not fully
implemented its new computerized premium accounting system, disaster
recovery plan, and software changes.
PENSION COLAS
(GAO/HEHS-95-219R, AUG. 11,
1995)
------------------------------------------------------- Appendix I:4.9
GAO provided information on the frequency and characteristics of
cost-of-living adjustments (COLA) that retirees receive from public
and private pension plans. GAO noted that (1) Social Security and
federal pension plans incorporate automatic, annual COLA; (2) over
half the states reporting to the Bureau of Labor Statistics provide
automatic COLA annually, generally capped between 3 and 5 percent;
(3) the remaining states mainly provide ad hoc COLA, although the
number of states granting ad hoc COLA has gradually decreased since
1987, due to lower inflation; (4) ad hoc COLA in private pension
plans occur less frequently than automatic COLA in the public sector
and the plans often specify a maximum increase; (5) a number of
factors, such as union negotiations, affect employers' decisions to
provide COLA increases; (6) COLA provisions vary widely among
industries, ranging from 3 percent of pension plans in the retail
sector to over 60 percent in the transportation industry; and (7) ad
hoc adjustments to private sector pension benefits have declined in
recent years from over 50 percent to under 10 percent of plans.
PRIVATE PENSIONS: FUNDING
RULE CHANGE NEEDED TO REDUCE
PBGC'S MULTIBILLION DOLLAR
EXPOSURE (GAO/HEHS-95-5,
OCT. 5, 1994)
------------------------------------------------------ Appendix I:4.10
In 1990, GAO flagged 17 federal program areas as high risk, including
the Pension Benefit Guaranty Corporation (PBGC), which is plagued by
a large and growing deficit and a large exposure to potential claims
from underfunded plans. PBGC recently reported that underfunding in
the single-employer defined-benefit plans it insures grew from $38
billion in 1991 to $53 billion in 1992--this despite more stringent
funding requirements that the Pension Protection Act mandated for
underfunded plans in 1987. GAO concludes that the current funding
rules for underfunded plans are not working well. Despite the act's
intent that funding in underfunded plans be improved, most sponsors
of underfunded plans made no additional contributions to reduce
underfunding in 1990. This is partly due to an unanticipated design
flaw that yields offsets that are too large for many plans. In
addition to describing the act's weaknesses in reducing underfunding,
this report describes the potential impact of the proposed Pension
Funding Improvement Act of 1993 and the administration's proposed
Retirement Protection Act of 1993 on improving plan funding.
SERVICE CORPS OF RETIRED
EXECUTIVES
(GAO/RCED-95-127R, MAR. 10,
1995)
------------------------------------------------------ Appendix I:4.11
GAO provided information on the Small Business Administration's
Service Corps of Retired Executives Program (SCORE), focusing on how
SCORE (1) determines budget allocations for regional locations; (2)
officials view the fairness of the allocations; and (3) meets the
needs of rural communities. GAO noted that (1) SCORE regional budget
allocations are based primarily on historical trends in actual
expenditures; (2) SCORE officials stated that their areas receive a
fair share of SCORE funds, given the small size of the total budget;
and (3) to meet the needs of rural communities, SCORE uses approaches
such as waiving the guidelines for the number of volunteers needed to
start a chapter and using persons or funds from larger chapters to
subsidize rural chapters.
SOCIAL SECURITY
ADMINISTRATION: LEADERSHIP
CHALLENGES ACCOMPANY
TRANSITION TO AN INDEPENDENT
AGENCY (GAO/HEHS-95-59, FEB.
15, 1995)
------------------------------------------------------ Appendix I:4.12
In 1994, Congress passed legislation making the Social Security
Administration (SSA) an independent agency. As part of the
transition, GAO was required to evaluate the interagency agreement
for transferring personnel and resources from HHS to SSA. GAO
concludes that the two agencies have developed an acceptable
methodology for identifying the functions; personnel; and other
resources, such as furniture and computer equipment, to be
transferred to an independent SSA. They have also made good progress
toward completing the initiatives necessary for SSA to be a fully
functional independent agency by March 31, 1995. However, SSA will
continue to face serious policy and management challenges, including
the long-range shortfall in funds to pay future Social Security
benefits. Also, questions have been raised by GAO and others about
the future growth of the Disability Insurance program and recent
increases in Supplemental Security Income (SSI) benefits.
SSI DISABILITY ISSUES
(GAO/HEHS-95-154R, MAY 11,
1995)
------------------------------------------------------ Appendix I:4.13
GAO provided information on several SSI issues related to (1) SSI
outreach activities; (2) the status of continuing disability reviews
involving interpreter fraud; (3) the function of referral and
monitoring agencies (RMA) in overseeing the drug addict and alcoholic
populations; and (4) the number of drug and alcohol addicts in
treatment. GAO noted that (1) very few SSI outreach activities are
targeted to drug addicts and alcoholics; (2) SSA has not requested
funding for SSI outreach for fiscal years 1993 through 1996; (3) in
two states, SSA continuing disability reviews are yielding a high
rate of initial benefit terminations, of which about 60 percent have
been appealed; (4) SSA is developing an interpreter database to
understand the extent of the fraud problem; (5) RMAs assess
beneficiaries' treatment needs, make treatment referrals, monitor
beneficiaries' compliance with treatment, and report their compliance
status to SSA; (6) RMAs do not conduct SSI outreach activities; (7)
only 1 in 6 addicted beneficiaries are in required treatment, mainly
due to the lack of RMA funding to monitor beneficiaries' treatment;
and (8) in fiscal year 1996, the administration is requesting $195
million for RMA monitoring activities, which is a significant
increase over 1990 through 1993 levels.
SUPPLEMENTAL SECURITY
INCOME: GROWTH AND CHANGES
IN RECIPIENT POPULATION CALL
FOR REEXAMINING PROGRAM
(GAO/HEHS-95-137, JULY 7,
1995)
------------------------------------------------------ Appendix I:4.14
The SSI program is the largest cash assistance program for the poor
and one of the fastest growing entitlement programs; program costs
have risen 20 percent annually during the last 4 years. SSI provides
means-tested income support payments to aged, blind, or disabled
persons. Last year, more than 6 million people received about $25
billion in federal and state benefits. In response to SSI's rapid
growth, Congress passed legislation limiting drug addicts' benefits,
and this year it is considering further restrictions for these
recipients as well as for children and noncitizens. This report
provides an overview of the SSI program and its recent history.
Specifically, it examines factors contributing to caseload growth and
changes in the characteristics of SSI recipients.
WELFARE BENEFITS: POTENTIAL
TO RECOVER HUNDREDS OF
MILLIONS MORE IN
OVERPAYMENTS
(GAO/HEHS-95-111, JUNE 20,
1995)
------------------------------------------------------ Appendix I:4.15
Under welfare reform legislation being considered by Congress,
resources for helping poor families may become increasingly
limited--making it critical that only those who are eligible for
benefits receive them. In 1992, benefit overpayments in three
welfare programs--Aid to Families With Dependent Children (AFDC),
Food Stamps, and Medicaid--totaled $4.7 billion, or about 4 percent
of the total benefit paid. Moreover, nationwide recovery of these
benefits was relatively low. This report discusses (1) what states
are doing to recover benefit overpayments, what the more effective
practices are, and what states could do better and (2) what the
federal government could do to help states recover more overpayments.
WELFARE PROGRAMS:
OPPORTUNITIES TO CONSOLIDATE
AND INCREASE PROGRAM
EFFICIENCIES
(GAO/HEHS-95-139, MAY 31,
1995)
------------------------------------------------------ Appendix I:4.16
The federal government provides billions of dollars in public
assistance each year through an inefficient welfare system that is
increasingly cumbersome for program administrators to manage and
difficult for eligible clients to access. Program consolidation may
be one strategy to reduce the inefficiency of the current system of
overlapping and fragmented programs. This report (1) describes
low-income families' participation in multiple welfare programs; (2)
examines program inefficiencies, such as program overlap and
fragmentation; and (3) identifies issues to consider in deciding
whether and to what extent to consolidate welfare issues. Regardless
of how the welfare system is restructured, ensuring that federal
funds are used efficiently and that programs focus on outcomes
remains important. Without a focus on outcomes, concerns and the
effectiveness of welfare programs will not be adequately addressed.
WELFARE REFORM:
IMPLICATIONS OF PROPOSALS ON
LEGAL IMMIGRANTS' BENEFITS
(GAO/HEHS-95-58, FEB. 2,
1995)
------------------------------------------------------ Appendix I:4.17
GAO found that the percentage of immigrants receiving public
assistance--specifically SSI or AFDC--is higher than the percentage
of citizens receiving these benefits. Six percent of all immigrants
receive benefits compared with 3.4 percent of all citizens. Most
immigrant recipients live in four states: California, New York,
Florida, and Texas; more than one-half of all immigrant recipients
live in California. Between 1983 and 1993, the number of immigrants
receiving SSI more than quadrupled, increasing from 151,000 to
683,000. During this period, immigrants grew from about 4 percent of
all SSI recipients to more than 11 percent. As a percentage of all
adult AFDC recipients, immigrants grew from about 5 percent to 8
percent. In all, immigrants received an estimated $3.3 billion in
SSI benefits and $1.2 billion in AFDC benefits in 1993. Most
immigrant recipients are lawful permanent residents or refugees, but
other characteristics of immigrants receiving SSI and AFDC vary. For
example, the number of immigrants receiving SSI aged
benefits--available to those 65 years and older--has increased
dramatically. According to the Congressional Budget Office, a
welfare reform proposal now before Congress (H.R. 4) would save $9.2
billion from the SSI program and $1 billion from the AFDC program
over 4 years. GAO estimates that 522,000 SSI recipients and 492,000
AFDC recipients would become ineligible for benefits under H.R. 4.
VETERANS/DOD ISSUES
--------------------------------------------------------- Appendix I:5
DEFENSE HEALTH CARE: ISSUES
AND CHALLENGES CONFRONTING
MILITARY MEDICINE
(GAO/HEHS-95-104, MAR. 22,
1995)
------------------------------------------------------- Appendix I:5.1
DOD's military health care system provides medical services and
support both in peacetime and in war to members of the armed forces
and their families, as well as to retirees and survivors. Post-Cold
War planning scenarios, efforts to reduce the overall size of the
military, federal budget cuts, and base closures and realignments
have focused attention on the size of DOD's health care system, its
makeup, how it operates, whom it serves, and whether its missions can
be carried out in a more cost-effective way. This report describes
the Military Health Services System, past problems faced by DOD as it
ran the system and efforts to solve those problems, and the
management challenges now confronting DOD. GAO summarized this
report in testimony before Congress; see Defense Health Care: DOD's
Managed Care Program Continues to Face Challenges (GAO/T-HEHS-95-117,
Mar. 28, 1995), by David P. Baine, Director of Federal Health Care
Delivery Issues, before the Subcommittee on Military Personnel, House
Committee on National Security.
DEFENSE HEALTH CARE:
PROBLEMS WITH MEDICAL CARE
OVERSEAS ARE BEING ADDRESSED
(GAO/HEHS-95-156, JULY 12,
1995)
------------------------------------------------------- Appendix I:5.2
The American military presence in Europe has declined dramatically
since 1989. The active duty population has been cut by 57 percent-
-from 332,000 to 138,000. At the same time, the military health
services systems has also been substantially reduced. Many
beneficiaries have expressed concern about their reduced access to
health care from military medical facilities overseas and are
dissatisfied with the care they receive from host nation providers.
This report discusses (1) the availability of health care in military
facilities, (2) any obstacles to providing that care, (3) the
experiences of beneficiaries who have used host nation providers as
an alternative to military health care, and (4) whether DOD is
addressing service delivery problems and beneficiary concerns. To
develop this information, GAO visited 15 military communities in
Germany and northern Italy, where many of the beneficiary complaints
about medical and dental care originated.
PROPOSED VA HOSPITAL AT
TRAVIS AIR BASE
(GAO/HEHS-95-268R, SEPT.
19, 1995)
------------------------------------------------------- Appendix I:5.3
GAO provided information on the proposed construction of a Department
of Veterans Affairs (VA) hospital at Travis Air Force Base in
Fairfield, California, focusing on (1) reasons that the project cost
estimate was higher than VA originally proposed to Congress and (2)
where veterans living in the Travis facility target area currently
receive medical care. GAO noted that (1) the project cost estimate
increased because VA believed it needed to construct and renovate
more space than originally anticipated; (2) many veterans in the
Travis target area currently receive hospital care at VA medical
centers in the northern California and Nevada areas; and (3) although
veterans' use of VA medical centers decreased in fiscal years 1992
and 1993, the reason for the decrease was unclear.
VA CLINIC FUNDING
(GAO/HEHS-95-273R, SEPT.
19, 1995)
------------------------------------------------------- Appendix I:5.4
GAO provided information on how two VA medical centers financed their
new free-standing primary care clinics to improve veterans' access to
health care services. GAO noted that (1) the two centers have
financed their four new clinics from savings derived from local
management initiatives to improve operating efficiency; (2) the
centers plan to open 10 more clinics over the next several years that
will also be financed from other cost-saving initiatives; (3) the
centers have contracted with predominantly rural clinics to provide
primary care to veterans; (4) the yearly contract costs for the
current and future clinics are expected to be less than $2 million;
(5) cost savings have been derived from inpatient ward
consolidations, patient utilization reviews, health education
classes, service contract modifications, and staff reductions; and
(6) the new clinics are expected to reduce veterans' use of
fee-for-service private care and reimbursements for travel expenses
to VA medical facilities.
VA HEALTH CARE: NEED FOR
BREVARD HOSPITAL NOT
JUSTIFIED (GAO/HEHS-95-192,
AUG. 29, 1995)
------------------------------------------------------- Appendix I:5.5
VA assumed control of the former Naval Hospital in Orlando, Florida,
in June 1995. VA plans to convert the hospital into a nursing home
while continuing to operate an existing outpatient clinic. VA also
plans to build a new hospital and nursing home in Brevard County, 50
miles from Orlando. GAO concludes that VA's conversion of the former
Orlando Naval Hospital into a nursing home and construction of a new
hospital and nursing home in Brevard County is not the most prudent
and economical use of its resources. These construction projects are
based on questionable planning assumptions that may result in the
unneeded expenditure of federal dollars. Specifically, VA did not
adequately consider the availability of hundreds of community nursing
home beds and unused VA hospital beds as well as potential decreases
in future demand for VA hospital beds. VA could achieve its goals in
Central Florida by using existing capacity.
VA HEALTH CARE: PHYSICIAN
PEER REVIEW IDENTIFIES
QUALITY OF CARE PROBLEMS BUT
ACTIONS TO ADDRESS THEM ARE
LIMITED (GAO/HEHS-95-121,
JULY 7, 1995)
------------------------------------------------------- Appendix I:5.6
Physicians peer review--physicians reviewing the work of other
physicians--is crucial to ensuring that quality care is provided to
patients. An essential element of peer review is management support
for actions recommended by the peer review process. Without such
support, peer review is meaningless because no action is taken on the
peer reviewers' recommendations. This report examines the
relationship between problem identification and problems resolution
in VA physician peer review. GAO discusses (1) how the results of VA
peer review are being used in reprivileging and disciplining doctors
with performance problems; (2) what the impediments to effective peer
review are; and (3) whether VA was taking steps to identify, follow
up on, and report to state medical boards and the National
Practitioner Data Bank on the actions of those physicians who are not
performing in accordance with professional standards.
VA HEALTH CARE: RETARGETING
NEEDED TO BETTER MEET
VETERANS' CHANGING NEEDS
(GAO/HEHS-95-39, APR. 21,
1995)
------------------------------------------------------- Appendix I:5.7
Many veterans have health care needs that are not adequately met
through current health care programs, including VA's health care
system. About one-third of the nation's homeless are veterans,
nearly one-half of whom have serious mental problems, suffer from
substance abuse, or both. The homeless have limited access to health
care services and may not seek medical treatment. About 38 percent
of male and 25 percent of female Vietnam veterans with Post Traumatic
Stress Disorder have not sought treatment. About 91,000 low-income,
uninsured veterans with no apparent health care options indicated in
a 1987 VA survey that they had never used VA health facilities
because they were unaware that they were eligible or they had
concerns about the quality or accessibility of VA health care. VA
cannot adequately address many of these health care needs because (1)
it relies primarily on direct delivery of health care services in VA
facilities, (2) its complex eligibility and entitlement provisions
limit the services that veterans can obtain from VA facilities, and
(3) space and resource limitations prevent eligible veterans from
obtaining covered services. This report presents several options for
restructuring VA's health care system to enable it to better meet the
health care needs of veterans.
VA SAVINGS OPTIONS
(GAO/HEHS-95-165R, MAY 18,
1995)
------------------------------------------------------- Appendix I:5.8
GAO reviewed several options to achieve budgetary savings in VA's
health care system without adversely affecting the current level of
services provided to low-income or disabled veterans. GAO noted that
VA could achieve health care cost savings by (1) shifting care from
VA hospitals to alternative settings, such as ambulatory care; (2)
adopting state veterans' home charging policies; (3) authorizing
estate recovery programs; (4) increasing copayments for health
services; (5) reducing or eliminating care for veterans with high
incomes; (6) delaying VA hospital construction projects; (7)
increasing the use of community nursing homes as an alternative to
new VA nursing homes; (8) strengthening veterans' income verification
requirements; (9) changing VA dispensing practices for prescription
drugs; (10) eliminating the dispensing of over-the-counter drugs;
(11) recovering the full costs of services provided to nonveterans;
(12) consolidating its mail service pharmacies; (13) consolidating
underutilized services in nearby VA medical centers; (14) suspending
locality-based pay adjustments; and (15) restructuring its ambulatory
care system.
VA'S FLORIDA NETWORK
PLANNING (GAO/HEHS-95-160R,
MAY 16, 1995)
------------------------------------------------------- Appendix I:5.9
GAO addressed a series of questions related to VA's acquisition and
intended use of the Naval Hospital in Orlando, Florida. GAO noted
that (1) the VA Integrated Planning Model is based upon veterans'
ages, average lengths of hospital stays, and number of patients
treated in selected medical services; (2) VA used its model to
project veterans' inpatient, outpatient, and nursing home needs for
the year 2005; (3) VA did not consider the number of VA hospitals per
square mile per capita in making its construction planning decisions
for Central Florida and significantly overestimated the number of
hospital beds it would need in 1995; (4) it is unclear why Florida's
hospital utilization rates are far below the national rates; (5) the
veteran population is expected to decline in Florida and the nation
over the next 15 years, while the total population in these areas is
expected to increase; (6) there are waiting periods for certain
elective medical treatments in Central Florida VA hospitals due to
staffing reductions; and (7) the VA Integrated Planning Model
adequately accounts for the aging nature of the veteran population.
VETERANS' BENEFITS: BASING
SURVIVORS' COMPENSATION ON
VETERANS' DISABILITY IS A
VIABLE OPTION
(GAO/HEHS-95-30, MAR. 6,
1995)
------------------------------------------------------ Appendix I:5.10
In 1993, VA's Dependency and Indemnity Compensation (DIC) program
paid benefits totaling $2.7 billion to about 276,000 surviving
spouses of service members who had died on active duty and surviving
spouses of some disabled veterans. These benefits were paid under
the Veterans' Benefits Act of 1992, which changed the basis for DIC
benefits from the military rank of the deceased service member or
veteran to a flat rate for all surviving spouses. This report (1)
estimates DIC recipients' total income and determines the kinds and
the amounts of benefits received from other programs, (2) determines
the financial impact on surviving spouses of the deaths of totally
disabled veterans and of veterans who were receiving supplemental
payments because they had multiple severe disabilities and could not
care for themselves, and (3) assesses alternative ways to set DIC
benefits.
VETERANS' BENEFITS: BETTER
ASSESSMENTS NEEDED TO GUIDE
CLAIMS PROCESSING
IMPROVEMENTS
(GAO/HEHS-95-25, JAN. 13,
1995)
------------------------------------------------------ Appendix I:5.11
Slow claims processing and poor customer service have long been
recognized as serious problems for VA. As early as 1990, VA began
encouraging its regional offices to improve their claims processing
system, but processing times and backlogs have increased rather than
decreased. At the end of fiscal year 1994, nearly 500,000 claims
awaited a VA decision. About 65,000 of these were initial disability
compensation claims. On average during fiscal year 1994, veterans
waited more than 7 months for their initial disability claims to be
decided and, if approved, payments to begin; some waited much longer.
This report discusses VA's current plans to change regional office
claims processing and assesses VA's plans to determine the
effectiveness of those changes.
VETERANS' BENEFITS:
EFFECTIVE INTERACTION NEEDED
WITHIN VA TO ADDRESS APPEALS
BACKLOG (GAO/HEHS-95-190,
SEPT. 27, 1995)
------------------------------------------------------ Appendix I:5.12
Veterans often wait months for VA to decide their compensation and
pension claims. In addition, the 40,000 veterans who appeal VA's
decisions each year wait much longer--more than 2 years for a final
decision, according to agency officials. GAO found that VA's appeals
process is increasingly bogged down, and the outlook for the future
is not bright. Legislation and court ruling expanded veterans'
rights but also expanded VA's adjudication responsibilities. VA is
having difficulty integrating these responsibilities into its already
complex and unwieldy adjudication process. Since 1991, the number of
appeals awaiting Board action has risen by 175 percent and the
average processing time has increased by more than 50 percent.
Studies by GAO, VA, and others have recommended the need for
autonomous organizations in VA to work together to identify and
resolve problems. Yet GAO found that problems continue to go
unidentified and unresolved. Unless VA clearly defines its
adjudication responsibilities, it will be unable to determine whether
it has the resources to meet those responsibilities and whether new
solutions may be needed, including laws amending VA's
responsibilities or reconfiguring the department.
VETERANS' BENEFITS: VA CAN
PREVENT MILLIONS IN
COMPENSATION AND PENSION
OVERPAYMENTS
(GAO/HEHS-95-88, APR. 28,
1995)
------------------------------------------------------ Appendix I:5.13
Despite its responsibility to ensure accurate benefit payments, VA
continues to overpay veterans and their survivors hundreds of
millions of dollars in compensation and pension benefits each year.
VA has the ability to prevent millions of dollars in overpayments but
has not done so because it has not focused on prevention. For
example, VA does not use available information, such as when
beneficiaries will become eligible for Social Security benefits, to
prevent the overpayments from occurring. Furthermore, VA does not
systematically collect, analyze, and use information on the specific
causes of overpayments that will help it target preventive efforts.
VETERANS COMPENSATION:
OFFSET OF DOD SEPARATION PAY
AND VA DISABILITY
COMPENSATION
(GAO/NSIAD-95-123, APR. 3,
1995)
------------------------------------------------------ Appendix I:5.14
DOD uses separation pay to induce people to serve in the military
despite the risk of involuntary separation. Congress authorized
special separation pay to minimize the use of involuntary separations
in the ongoing force drawdown. Pay offsets prevent service members
from receiving dual compensation for a single period of service.
Repealing offsets for separation and disability pay would cost the
federal government an estimated $435 million for those service
members who separated during fiscal years 1995-99. A repeal would
cost about $799 million if it was made retroactive to fiscal year
1992, when the special separation pay program began. Separation and
disability pay offsets have not significantly undermined the
voluntary separation incentive. According to DOD, the bulk of the
drawdown since fiscal year 1992 has been accomplished through
voluntary separations. DOD requires the services to inform
separating service members about the offset.
VETERANS' HEALTH CARE: USE
OF VA SERVICES BY
MEDICARE-ELIGIBLE VETERANS
(GAO/HEHS-95-13, OCT. 24,
1994)
------------------------------------------------------ Appendix I:5.15
Medicare-eligible veterans make substantial use of VA services not
extensively covered under Medicare. GAO found that many of these
veterans turn to VA specifically to obtain such services,
particularly prescription drugs, inpatient psychiatric care, and
long-term nursing care. Also, many Medicare-eligible veterans who
use VA health care facilities have lower incomes and less private
insurance than those who rely solely on Medicare, suggesting that
out-of-pocket costs may have influenced veterans to turn to VA for
health care. Changes to Medicare or veterans health benefits made as
a result of health care reform could significantly affect future
demand for VA health care services. Medicare changes that would add
benefits, such as outpatient prescription drugs, or reduce
beneficiary cost sharing could lower demand for VA health care
services. On the other hand, VA benefit changes, such as the
elimination of restrictions on access to outpatient services,
improved access to care, and expanded entitlement to free care, could
boost demand for VA health care. Finally, the historic reluctance of
Medicare beneficiaries to enroll in HMOs could reduce their
willingness to enroll in VA health plans as long as traditional
fee-for-service care remains available under Medicare.
OTHER RELATED ISSUES
--------------------------------------------------------- Appendix I:6
AGING ISSUES: RELATED GAO
REPORTS AND ACTIVITIES IN
FISCAL YEAR 1994
(GAO/HEHS-95-44, DEC. 29,
1994)
------------------------------------------------------- Appendix I:6.1
This report compiles GAO's fiscal year 1994 products and ongoing work
on older Americans and their families. Because the elderly are one
of the fastest growing segments of today's society, Congress faces a
host of issues--ranging from demographic changes in the structure and
role of the family to financing and provision of health care, Social
Security, and pensions--in which the federal government will play an
important role. This booklet summarizes 30 issued reports on
policies and programs directed mainly at older Americans. Included
in this section are reviews of health, income security, social
services, and other topics. GAO also summarizes 59 reports in which
older Americans were one of several groups targeted by federal
policies. For example, Medicaid finances, nursing homes and other
types of long-term care, along with medical care for poor persons of
all ages. In addition, this booklet describes testimonies delivered
during fiscal year 1994 on subjects affecting older Americans and
lists 55 ongoing jobs related to older Americans.
HEALTH, EDUCATION,
EMPLOYMENT, SOCIAL SECURITY,
WELFARE, AND VETERANS
REPORTS (GAO/HEHS-95-261W,
SEPT. 1, 1995)
------------------------------------------------------- Appendix I:6.2
This booklet lists GAO documents on government programs related to
health, education, employment, social security, welfare, and veterans
issues, which are primarily run by the Departments of Health and
Human Services, Labor, Education, and Veterans Affairs. One section
identifies reports and testimony issued during the past months and
summarizes key products. Another section lists all documents
published in the past year, organized chronologically by subject.
Order forms are included.
HIGH-RISK REPORT
--------------------------------------------------------- Appendix I:7
HIGH-RISK SERIES: MEDICARE
CLAIMS (GAO/HR-95-8, FEB.
1995)
------------------------------------------------------- Appendix I:7.1
In 1990, GAO began a special effort to identify federal programs at
high risk of waste, fraud, abuse, and mismanagement. GAO issued a
series of reports in December 1992 on the fundamental causes of the
problems in the high-risk areas. This report on Medicare claims is
part of the second series that updates the status of this high-risk
area. Readers have the following three options in ordering the
high-risk series: (1) request any of the individual reports in the
series, including the Overview (HR-95-1), the Guide (HR-95-2), or any
of the 10 issue area reports; (2) request the Overview and the Guide
as a package (HR-95-21SET); or (3) request the entire series as a
package (HR-95-20SET).
FISCAL YEAR 1995 TESTIMONIES ON
ISSUES AFFECTING OLDER AMERICANS
========================================================== Appendix II
GAO testified 35 times before congressional committees during fiscal
year 1995 on issues relating to older Americans. Of these
testimonies, 1 was on employment, 20 on health, 12 on income
security, and 2 on veterans issues.
EMPLOYMENT ISSUES
-------------------------------------------------------- Appendix II:1
DEPARTMENT OF LABOR:
RETHINKING THE FEDERAL ROLE
IN WORKER PROTECTION AND
WORKFORCE DEVELOPMENT
(GAO/T-HEHS-95-125, APR. 4,
1995)
------------------------------------------------------ Appendix II:1.1
Although the Department of Labor has accomplished much over the
years, its current approaches to worker protection are dated and
frustrate both workers and employers. What is needed is greater
service orientation, improved communication, greater access to
compliance information, and expanded meaningful input into the
standard-setting and enforcement processes. By developing
alternative regulatory strategies that supplement and even replace
its current labor-intensive compliance and enforcement approach,
Labor can carry out its responsibilities in a less costly, more
effective manner. Similarly, in the workforce development area, the
government's job training effort consists of a patchwork of federal
programs with similar goals, conflicting requirements, overlapping
populations, and questionable outcomes. The roughly $20 billion
appropriated in fiscal year 1995 for job training assistance to
adults and out-of-school youth is disbursed to 15 agencies, including
Labor, which supports 163 separate programs. This situation suggests
that a major overhaul and consolidation of the programs is needed.
HEALTH ISSUES
-------------------------------------------------------- Appendix II:2
COMMUNITY HEALTH CENTERS:
CHALLENGES IN TRANSITIONING
TO PREPAID MANAGED CARE
(GAO/T-HEHS-95-143, MAY 4,
1995)
------------------------------------------------------ Appendix II:2.1
As states move to prepaid managed care to control costs and improve
access for their Medicaid clients, the number of participating
community health centers continues to grow. Medicaid prepaid managed
care is not incompatible with health centers' mission of delivering
health care to medically underserved populations. However, health
centers face substantial risks and challenges as they move into these
arrangements. Such challenges require new knowledge, skills, and
information systems. Centers lacking expertise and systems face an
uncertain future, and those in a vulnerable financial position are at
even greater risk. Today's debate over possible changes in federal
and state health programs heightens the concern over the financial
vulnerability of centers participating in prepaid managed care. If
this funding source continues to grow as a percentage of total health
center revenues, centers must face building larger cash reserves
while not compromising services to vulnerable populations.
EMPLOYER-BASED HEALTH PLANS:
ISSUES, TRENDS, AND
CHALLENGES POSED BY ERISA
(GAO/T-HEHS-95-223, JULY 25,
1995)
------------------------------------------------------ Appendix II:2.2
As the movement for comprehensive federal health care reform has lost
steam, the focus of reform has shifted to the states and private
market. States remain concerned about the growing number of persons
lacking health coverage and about financing health plans for poor
persons. Employers have become increasingly aggressive in managing
their health plans and have adopted various managed care plans and
innovative funding arrangements. However, ERISA effectively blocks
states from directly regulating most employer-based health plans,
although it allows states to regulate health insurers. GAO found
that nearly 40 percent of enrollees in employer-based health
plans--44 million people--are in self-funded plans. The divided
federal and state framework for regulating health plans produces a
complex set of trade-offs. Self-funded plans, which are exempt from
state regulation under ERISA, provide employers greater flexibility
to design a health benefits package that may have been less feasible
to provide under state regulation. At the same time, however, states
are unable to extend regulations, such as solvency standards,
preexisting condition clause limits, and guaranteed issue and renewal
requirements, even indirectly, to enrollees in these self- funded
plans.
HEALTH INSURANCE REGULATION:
NATIONAL PORTABILITY
STANDARDS WOULD FACILITATE
CHANGING HEALTH PLANS
(GAO/T-HEHS-95-205, JULY 18,
1995)
------------------------------------------------------ Appendix II:2.3
Many Americans face discontinuity in their health care coverage when
they change employers, and others do not change jobs because of
concerns about losing health care coverage. GAO surveyed the status
of federal and state insurance reforms and the number of individuals
who would be affected by legislation to establish national
portability standards. GAO found that federal and state laws reflect
steps taken to improve the portability of health insurance, but the
possibility remains that an individual's coverage would be reduced
when changing jobs because most private health plans still require
waiting periods before making people with preexisting conditions
fully eligible for coverage. On the basis of existing data on the
number of people who change jobs and studies on the effect of health
insurance on job mobility, GAO estimates that up to 21 million
Americans would benefit from legislation waiving preexisting
condition exclusions for individuals who have maintained continuous
health care coverage.
MEDICAID: EXPERIENCE WITH
STATE WAIVERS TO PROMOTE
COST CONTROL AND ACCESS TO
CARE (GAO/T-HEHS-95-115,
MAR. 23, 1995)
------------------------------------------------------ Appendix II:2.4
Congress has begun reexamining the $131 billion Medicaid program--one
of the fastest growing components of both federal and state budgets.
In 1993, Medicaid cost nearly $100 billion more and served about 10
million more low-income residents than it did a decade ago. To
contain exploding costs and enrollment, many states are seeking
greater flexibility in implementing statewide Medicaid managed care
programs. Currently, this flexibility is available only through the
waiver authority established by section 1115 of the Social Security
Act. Although many states have expressed interest in waivers, only
four states have waivers in place. Two additional states have
received federal approval, but their plans still must be ratified by
state legislatures. States face significant challenges as they move
from traditional fee-for-service systems into managed care.
Specifically, the emphasis that states put on program implementation
and oversight may affect whether states' managed care programs
successfully contain costs while increasing access to quality health
care.
MEDICAID: MATCHING
FORMULA'S PERFORMANCE AND
POTENTIAL MODIFICATIONS
(GAO/T-HEHS-95-226, JULY 27,
1995)
------------------------------------------------------ Appendix II:2.5
When the Medicaid program was established in 1965, a matching formula
was developed to narrow differences likely to arise among Medicaid
programs in wealthier and poorer states. By giving poorer states a
higher federal match, it was believed that disparities would be
reduced across states in (1) population groups and services covered
in each state program and (2) the tax burden imposed by the financing
of Medicaid relative to the size of the state's financial resources.
GAO testified that the matching formula, with its reliance on per
capita income as a measure of state wealth, has not significantly
reduced wide differences in states' Medicaid programs or the tax
burdens to support them. Large disparities persist in the coverage
of population groups and types of services as well as in the burdens
that state taxpayers bear in financing state programs. Modifying the
formula could enhance the ability of federal payments to narrow
program disparities.
MEDICAID: SPENDING
PRESSURES DRIVE STATES
TOWARD PROGRAM REINVENTION
(GAO/T-HEHS-95-129, APR. 4,
1995)
------------------------------------------------------ Appendix II:2.6
The $131 billion Medicaid program is at a crossroads. Between 1985
and 1993, Medicaid costs tripled and the number of beneficiaries rose
by more than 50 percent. Medicaid costs are projected to rise to
$260 billion, according to the Congressional Budget Office. Despite
federal and state budgetary constraints, several states are
pressuring to expand the program and enroll hundreds of thousands of
new beneficiaries. The cost of expanded coverage, they believe, will
be offset by the reallocation of Medicaid funds and the wholesale
movement of beneficiaries into some type of managed care arrangement.
This testimony examines (1) federal and state Medicaid spending, (2)
some states' efforts to contain Medicaid costs and expand coverage
through waiver of federal requirements, and (3) the potential impact
of these waivers on federal spending and on Medicaid's program
structure overall.
MEDICAID: STATE FLEXIBILITY
IN IMPLEMENTING MANAGED CARE
PROGRAMS REQUIRES
APPROPRIATE OVERSIGHT
(GAO/T-HEHS-95-206, JULY 12,
1995)
------------------------------------------------------ Appendix II:2.7
Requiring states to obtain waivers to broaden use of managed care may
hamper their efforts to aggressively pursue cost-containment
strategies. At the same time, because current program restrictions
on managed care were designed to reinforce quality assurance, their
absence requires the substitution of appropriate and adequate
mechanisms to protect both Medicaid beneficiaries and federal
dollars. Finally, the reinvestment of managed care savings to expand
Medicaid coverage to several million additional persons suggests the
need for up-front consultation with Congress because of (1) the
heavier financial burden such 1115 waivers may place on the federal
government and (2) the issue of whether the U.S. Treasury should
benefit from those savings.
MEDICAID: STATEWIDE SECTION
1115 DEMONSTRATIONS' IMPACT
ON ELIGIBILITY, SERVICE
DELIVERY, AND PROGRAM COST
(GAO/T-HEHS-95-182, JUNE 21,
1995)
------------------------------------------------------ Appendix II:2.8
The growth of Medicaid, which accounted for $142 billion in federal
and state outlays in 1994, is outpacing even the growth of Medicare.
This is happening at a time when states are feeling pressured
financially and are seeking ways to care for their uninsured
populations. In response, states are, one by one, reinventing their
Medicaid programs, using the authority of section 1115 waivers.
Named for section 1115(a) of the Social Security Act, these waivers
free states from some Medicaid restrictions on the use of managed
care delivery systems. They also allow states to expand
Medicaid-financed coverage to persons not normally eligible for
Medicaid. This testimony presents a detailed look at Medicaid's
growing expenditures, describes states' efforts to obtain section
1115 waivers, and summarizes the expenditures forecast of programs
operating with waivers.
MEDICARE: ADAPTING PRIVATE
SECTOR TECHNIQUES COULD CURB
LOSSES TO FRAUD AND ABUSE
(GAO/T-HEHS-95-211, JULY 19,
1995)
------------------------------------------------------ Appendix II:2.9
Medicare's loss of billions of dollars to fraud and abuse could be
curbed by adopting such private sector techniques as competitive
bidding, use of advanced software to detect gross overpayments, and
preferred networks to better control costs. Medicare's losses stem
from inappropriate pricing and inadequate scrutiny of claims for
payments. Further, abusive and poorly qualified providers of medical
services and supplies continue to participate in the program. These
problems are not unique to Medicare. However, private payers are
often able to react quickly, through a variety of management
approaches, whereas Medicare's pricing methods and controls over
utilization, which were consistent with health care financing and
delivery when the program started, have not been adapted to today's
environment.
MEDICARE: ALLEGATIONS
AGAINST ABC HOME HEALTH CARE
(GAO/T-OSI-95-18, JULY 19,
1995)
----------------------------------------------------- Appendix II:2.10
In response to a congressional request, GAO investigated allegations
against ABC Home Health Care, an HHA, and its participation in the
Medicare home health care program. In the Medicare program,
providers may receive reimbursement for only those expenses that are
reasonable in amount and related to patient care for eligible
patients. Current and former employees told GAO that local ABC
officer managers directed them to alter records to make it appear
that patients continued to need home health visits. Additionally,
managers directed employees to continue visiting patients who, in the
employees' opinion, did not qualify for home health care because they
no longer met Medicare rules defining homebound status. ABC also
reportedly charged Medicare for the cost of acquiring other HHAs by
paying owners a small sum up front and the balance in the form of
salary under employment agreements, a practice that is inconsistent
with Medicare regulations for reimbursement. Finally, according to
former employees, some managers directed employees to market ABC and
its services with the intent of charging Medicare for costs that were
not reimbursable. GAO has shared information concerning possible
illegal activities with appropriate law enforcement authorities.
MEDICARE CLAIMS BILLING
ABUSE: COMMERCIAL SOFTWARE
COULD SAVE HUNDREDS OF
MILLIONS ANNUALLY
(GAO/T-AIMD-95-133, MAY 5,
1995)
----------------------------------------------------- Appendix II:2.11
With an investment of only $20 million in off-the-shelf commercial
software, Medicare could save nearly $4 billion over 5 years by
detecting fraudulent claims by physicians--primarily manipulation of
billing codes. On the basis of a test in which four commercial firms
reprocessed samples of more than 20,000 paid Medicare claims, GAO
estimates that the software could have saved $603 million in 1993 and
$640 million in 1994. GAO estimates that because beneficiaries are
responsible for about 22 percent of the payment amounts--mainly in
the form of deductibles and copayments--Medicare could have saved
them $134 million in 1993 and $142 million in 1994. The test results
indicate that only a small portion of providers are responsible for
most of the abuses: fewer than 10 percent of providers in the sample
had miscoded claims.
MEDICARE: HIGH SPENDING
GROWTH CALLS FOR AGGRESSIVE
ACTION (GAO/T-HEHS-95-75,
FEB. 6, 1995)
----------------------------------------------------- Appendix II:2.12
The government faces strong obstacles to bringing Medicare
expenditures under control. Broad-based payment system reforms have
slowed overall spending, but Medicare growth rates remain higher than
overall inflation. And although more reforms may be needed, their
nature is the subject of much debate. There is less dispute,
however, that Medicare pays too much for some services and supplies.
Fiscal pressures have led private and state-government payers
increasingly to negotiate discounts with providers and to manage the
form and the volume of care. Medicare has not exercised its
potential market power in similar fashion when buying some services,
such as rehabilitation therapy. GAO suggests that the government
change the reimbursement policies for these excessively costly
services to ensure that it is acting as a prudent buyer. Also,
greater vigilance over wasteful or inappropriate payments could
better protect Medicare against fraudulent and abusive billings from
providers.
MEDICARE: INCREASED FEDERAL
OVERSIGHT OF HMOS COULD
IMPROVE QUALITY OF AND
ACCESS TO CARE
(GAO/T-HEHS-95-229, AUG. 3,
1995)
----------------------------------------------------- Appendix II:2.13
This testimony discusses problems that HCFA has had monitoring HMOs
it contracts with to provide services to Medicare beneficiaries and
ensuring that they comply with Medicare's performance standards. GAO
found weaknesses in HCFA's quality assurance monitoring, enforcement
measures, and appeal processes. Although HCFA routinely reviews HMO
operations for quality, these reviews are generally perfunctory and
do not consider the financial risks that HMOs transfer to providers.
Moreover, HCFA collects virtually no data on services received
through HMOs to enable HCFA to identify providers who may be
underserving beneficiaries. In addition, HCFA's HMO oversight has
two other major limitations: enforcement actions are weak and the
beneficiary appeal process is slow. HCFA's current regulatory
approach to ensuring good HMO performance appears to GAO to lag
behind the private sector.
MEDICARE MANAGED CARE:
ENROLLMENT GROWTH
UNDERSCORES NEED TO REVAMP
HMO PAYMENT METHODS
(GAO/T-HEHS-95-207, JULY 12,
1995)
----------------------------------------------------- Appendix II:2.14
Rapid growth in the number of Medicare beneficiaries in HMOs
increases the urgency of correcting rate-setting flaws that result in
unnecessary Medicare spending. By not tailoring its HMO capitation
payment to how healthy or sick HMO enrollees are, HCFA cannot realize
the savings that private-sector payers capture from HMOs. Two
lessons can be learned from GAO's review of ways to fix Medicare's
HMO capitation payments. First, a multipronged approach to rate
setting makes sense. The large disparities in market conditions
between states call for solutions keyed to market conditions.
Second, with respect to achieving the promise of such initiatives,
details matter. How these strategies are designed and implemented
could mean the difference between success and failure. GAO believes
that in the short term, HCFA can overcome its capitation problem by
introducing a better health status risk adjustor. HCFA should also
promptly test competitive bidding and other promising approaches to
setting HMO rates that reduce Medicare costs.
MEDICARE MANAGED CARE:
PROGRAM GROWTH HIGHLIGHTS
NEED TO FIX HMO PAYMENT
PROBLEMS (GAO/T-HEHS-95-174,
MAY 24, 1995)
----------------------------------------------------- Appendix II:2.15
Rapid growth in the number of Medicare beneficiaries enrolled in HMOs
increases the urgency of correcting rate-setting flaws that undermine
the cost-saving potential of managed care for Medicare. Medicare has
paid HMOs much more than it would have paid traditionally more
expensive fee-for-service providers. Two lessons can be learned from
GAO's review of ways to fix Medicare's HMO capitation payments.
First, a multipronged approach to rate setting makes sense. The
large disparities in market conditions between states--from
California to Maine--call for solutions keyed to market conditions.
Second, with respect to achieving the promise of such initiatives,
details matter. How these strategies are designed and implemented
could mean the difference between success and failure. GAO believes
that in the short term, HCFA can overcome its capitation rate problem
by introducing a better health status risk adjuster. HCFA should
also promptly test competitive bidding and other promising approaches
to setting HMO rates that reduce Medicare costs.
MEDICARE: MODERN MANAGEMENT
STRATEGIES COULD CURB FRAUD,
WASTE, AND ABUSE
(GAO/T-HEHS-95-227, JULY 31,
1995)
----------------------------------------------------- Appendix II:2.16
Medicare's vulnerability to waste, fraud, and abuse stems from
several factors: (1) higher than market rates for some services, (2)
inadequate checks for detecting fraud and abuse, (3) superficial
criteria for confirming the authenticity of providers billing the
program, and (4) weak enforcement efforts. Various health care
management techniques help private payers overcome these programs,
but Medicare generally does not use these methods. The program's
pricing methods and controls over utilization have not kept pace with
financing and delivery changes during the past 30 years. To some
extent, the predicament inherent in public programs--the uncertain
line between adequate managerial control and excessive government
intervention--helps explain the dissimilarity in the ways that
Medicare and private health insurers run their respective "plans."
GAO believes that a viable strategy for remedying the program's
weaknesses involves adapting the health care management approach of
private payers to Medicare's public payer role.
MEDICARE: MODERN MANAGEMENT
STRATEGIES NEEDED TO CURB
PROGRAM EXPLOITATION
(GAO/T-HEHS-95-183, JUNE 15,
1995)
----------------------------------------------------- Appendix II:2.17
Medicare's vulnerability to provider exploitation of its billing
system stems from a combination of factors: (1) higher than market
rates for some services, (2) inadequate checks for detecting fraud
and abuse, (3) superficial criteria for confirming the authenticity
of providers billing the program, and (4) weak enforcement efforts.
Various health care management techniques help private payers avoid
these problems, but Medicare generally does not use these techniques.
The program's pricing methods and controls over utilization have not
kept pace with changes in health care financing and delivery. To
some extent, the predicament inherent in public programs--the
uncertain line between adequate managerial control and excessive
government intervention--helps explain the dissimilarity in the ways
in which Medicare and private health insurers run their respective
"plans." GAO believes that a viable strategy for remedying the
program's weaknesses consists of adapting the health care management
approach of private payers to Medicare's public payer role. This
would entail (1) more competitively developed payment rates, (2)
beefed-up fraud and abuse detection that uses modern information
systems, and (3) more rigorous criteria for granting authorization to
bill the program.
MEDICARE: OPPORTUNITIES ARE
AVAILABLE TO APPLY MANAGED
CARE STRATEGIES
(GAO/T-HEHS-95-81, FEB. 10,
1995)
----------------------------------------------------- Appendix II:2.18
Although the private sector quickly embraced managed care as an
effective way to control the growth of health care costs, Medicare
has moved more slowly. GAO believes that Medicare could benefit from
the experience of the private sector and should test such managed
care strategies as competitive bidding for HMOs. Using market power
to negotiate with HMOs over price and increasingly over quality and
the production of report-card-type information, large employers are
becoming more prudent and sophisticated purchasers of health care.
The particulars of these efforts may not be directly transferable to
the federal government, but their goals of using incentive-based
solutions to contain costs, guarantee quality, and inform consumers
are worthy of consideration and testing.
MEDICARE: RAPID SPENDING
GROWTH CALLS FOR MORE
PRUDENT PURCHASING
(GAO/T-HEHS-95-193, JUNE 28,
1995)
----------------------------------------------------- Appendix II:2.19
Last year, federal spending for Medicare totaled $162 billion--more
than $440 million a day. In March 1995, the Congressional Budget
Office estimated that these outlays would approach $350 billion by
2002. In 2005, they could exceed $460 billion unless changes are
made. This testimony discusses ways in which the Medicare program
could avoid excessive or unnecessary spending. GAO examines areas of
rapid spending growth and ways to conserve program dollars--mainly by
revising reimbursement policies and better controlling unwarranted
use of services.
MEDICARE: REDUCING FRAUD
AND ABUSE CAN SAVE BILLIONS
(GAO/T-HEHS-95-157, MAY 16,
1995)
----------------------------------------------------- Appendix II:2.20
Medicare is overwhelmed in its efforts to keep pace with, much less
stay ahead of, those bent on cheating the system. Various factors
converge to create a particularly rich environment for profiteers.
These include the following: (1) weak fraud and abuse controls to
detect questionable billing practices, (2) few limits on those who
may bill--companies using post office box numbers have qualified to
bill the program for virtually unlimited amounts--and (3) overpayment
for services. This testimony describes how providers exploit the
system, why they are able to do so, and what steps Medicare has taken
and what remains to be done to protect the program and the taxpayers
against fraudulent reimbursement schemes and abusive billing
practices.
INCOME SECURITY ISSUES
-------------------------------------------------------- Appendix II:3
CONGRESSIONAL RETIREMENT
ISSUES (GAO/T-GGD-95-165,
MAY 15, 1995)
------------------------------------------------------ Appendix II:3.1
The retirement benefits provided by the Civil Service Retirement
System for Members of Congress are generally more generous than those
provided for other federal employees. The major differences are
found in the eligibility requirements for retirement and the formulas
used to calculate benefits. The Member benefit formula applies to
congressional staff, but they are covered by the general employee
retirement eligibility requirements. Law enforcement officers and
firefighters may retire earlier than general employees and are
covered by a more generous benefit formula than are general
employees. Under the Civil Service Retirement System, the provisions
for air traffic controllers fall between those for law enforcement
officers and firefighters and those for general employees. Many of
the advantages afforded to Members of Congress and congressional
staff under the Civil Service Retirement System were continued under
the Federal Employees Retirement System, which covers workers hired
in 1985 and thereafter. But under the Federal Employee Retirement
System, provisions for law enforcement officers, firefighters, and
air traffic controllers are very similar to provisions for Members.
DISABILITY INSURANCE:
BROADER MANAGEMENT FOCUS
NEEDED TO BETTER CONTROL
CASELOAD (GAO/T-HEHS-95-164,
MAY 23, 1995)
------------------------------------------------------ Appendix II:3.2
Rising numbers of applicants for disability benefits have increased
workloads at SSA and led to growing backlogs of claims. As a result,
applicants are waiting longer to find out if they have been awarded
benefits. Applicants wait almost 90 days to learn whether they have
been awarded benefits, while persons who appeal their claims to SSA's
administrative law judges wait more than a year. These long waits
can impose substantial hardship on applicants, particularly those
with limited incomes and no medical insurance. SSA has undertaken
several short-term initiatives to address the backlog problem. It
has also begun a long-term effort to redesign its disability
determination process. GAO shares congressional concerns that these
changes may sacrifice decisional accuracy for faster processing. SSA
is also addressing its workload increases while dealing with
substantial resource constraints. Nonetheless, SSA needs to focus
more attention on terminating benefits for those who are no longer
eligible and encouraging beneficiaries to return to work. SSA, now
an independent agency, also needs to provide more data and advice to
Congress on matters affecting disability insurance policy.
FEDERAL DOWNSIZING: THE
ADMINISTRATION'S MANAGEMENT
OF WORKFORCE REDUCTIONS
(GAO/T-GGD-95-108, MAR. 2,
1995)
------------------------------------------------------ Appendix II:3.3
The Federal Workforce Restructuring Act of 1994 requires the federal
government to eliminate about 270,000 positions between 1993 and
1999. To accomplish this downsizing without a reduction-in-force,
the act allows federal agencies to offer buyouts to employees who
agree to resign or retire by March 31, 1995. This testimony
discusses (1) the administration's compliance with the act, including
which positions are counted toward full-time-equivalent reductions
and from what baseline, and whether savings from the reductions are
being used to pay for the Violent Crime Control and Law Enforcement
Act of 1994; (2) the targets of workforce downsizing; and (3) how the
workforce reductions are being managed.
FEDERAL DOWNSIZING: THE
PRESIDENT'S FISCAL YEAR 1996
BUDGET AND ITS COMPLIANCE
WITH THE FEDERAL WORKFORCE
RESTRUCTURING ACT OF 1994
(GAO/T-GGD-95-105, MAR. 30,
1995)
------------------------------------------------------ Appendix II:3.4
GAO's analysis of the President's fiscal year 1996 budget shows that
government agencies are well on their way to achieving the downsizing
goals mandated by the Federal Workforce Restructuring Act. Although
payroll savings will no doubt accrue from these reductions, some of
the projected savings may be offset by costs associated with what
agencies do with the work previously done by separated employees. To
the extent that work is shifted to other employees, contracted out,
or transferred to other agencies, downsizing's true savings to
taxpayers may be reduced.
FEDERAL RETIREMENT ISSUES
(GAO/T-GGD-95-111, MAR. 10,
1995)
------------------------------------------------------ Appendix II:3.5
This testimony focuses on ongoing GAO work on two issues involving
federal employee retirement programs. First, GAO compares the
retirement provisions for Members of Congress and congressional staff
in the Civil Service Retirement System and the Federal Employees
Retirement System with the provisions applicable to other employees
covered by these systems. Second, GAO analyzes retirement programs
in the private sector and state government.
FEDERAL RETIREMENT SYSTEM
FINANCING (GAO/T-GGD-95-197,
JUNE 28, 1995)
------------------------------------------------------ Appendix II:3.6
Federal retirement system financing is a complex issue. This
testimony seeks to bring some perspective to the subject by
describing how the government finances its retirement system and by
describing the budget implications of the financing methods being
used and possible changes to these methods. GAO concentrates on the
Civil Service Retirement System and the Federal Employees Retirement
System because they are the largest retirement programs for federal
workers.
MEANS-TESTED PROGRAMS: AN
OVERVIEW, PROBLEMS, AND
ISSUES (GAO/T-HEHS-95-76,
FEB. 7, 1995)
------------------------------------------------------ Appendix II:3.7
Nearly 80 means-tested programs have been created over the years for
low-income people. In fiscal year 1992, the federal government spent
about $208 billion on these programs to meet the needs of poor
Americans of all ages. The many means-tested programs are costly and
difficult to administer. On the one hand, the programs sometimes
overlap one another; on the other hand, they are often so narrowly
focused that service gaps hinder clients. GAO notes that although
advanced computer technology is essential to the programs operating
efficiently, it is not being effectively developed or used. Due to
their size and complexity, many of these programs are vulnerable to
waste, fraud, and abuse. Moreover, the welfare system is often
difficult for clients to use effectively. Finally, administrators
have not articulated clear goals and objectives for some programs and
have not collected data on how well the programs are working.
OVERVIEW OF FEDERAL
RETIREMENT PROGRAMS
(GAO/T-GGD-95-172, MAY 22,
1995)
------------------------------------------------------ Appendix II:3.8
This testimony describes how the federal retirement systems work, the
benefits they provide, and how they compare with private sector
programs. GAO concentrates on the Civil Service Retirement System
and the Federal Employees Retirement System because they are the
largest retirement systems for federal civilian personnel. GAO
describes the history of the two retirement systems and discusses
four issues that are often raised in connection with federal
retirement: (1) retirement eligibility provisions, (2) benefit
formulas, (3) COLAs, and (4) system financing.
SOCIAL SECURITY DISABILITY:
MANAGEMENT ACTION AND
PROGRAM REDESIGN NEEDED TO
ADDRESS LONG-STANDING
PROBLEMS (GAO/T-HEHS-95-233,
AUG. 3, 1995)
------------------------------------------------------ Appendix II:3.9
SSA has serious problems managing its disability insurance and SSI
programs. First, the lengthy and complicated decision-making process
results in untimely decisions, especially for those who appeal, and
shows troubling signs of inconsistency. Second, SSA has a poor
record of reviewing beneficiaries to determine whether they remain
eligible for benefits and an even worse record of providing
rehabilitation to help move people off the disability rolls and into
employment. This reinforces the public perceptions that SSA pays
disability benefits to persons who are not entitled to them. Third,
SSA needs to make better decisions about work capacity to restore
public confidence and to better serve beneficiaries. Although these
problems are serious, solutions do exist. GAO believes that
relatively quick action could be taken to reduce inconsistent
decisionmaking, step up review of beneficiaries who may be able to
return to work, and improve rehabilitation outcomes. In some cases,
SSA has the authority to take action, in others, decisionmakers may
need to rethink the goals and objectives of the disability programs.
SOCIAL SECURITY: FEDERAL
DISABILITY PROGRAMS FACE
MAJOR ISSUES
(GAO/T-HEHS-95-97, MAR. 2,
1995)
----------------------------------------------------- Appendix II:3.10
This testimony discusses the reasons for the tremendous growth in
federal disability programs during the past 10 years, including
program factors and social changes. GAO also comments on the impact
of fraud and abuse on this growth and its effect on program
integrity. In addition, GAO notes legislative reforms included in
the Social Security Independence Act last year that tried to improve
program integrity. Finally, GAO discusses weaknesses in SSA's
efforts to return Disability Insurance and SSI beneficiaries to work.
SUPPLEMENTAL SECURITY
INCOME: RECENT GROWTH IN
THE ROLLS RAISES FUNDAMENTAL
PROGRAM CONCERNS
(GAO/T-HEHS-95-67, JAN. 27,
1995)
----------------------------------------------------- Appendix II:3.11
This testimony discusses the growth of SSI rolls and changes in the
characteristics of SSI recipients. Last year, SSA paid nearly $22
billion in federal benefit payments to about 6.3 million aged, blind,
and disabled SSI recipients. Since 1986, payments have risen by
$13.5 billion, more than doubling. Benefits for the disabled
accounted for nearly 100 percent of this increase. Since 1986, the
number of disabled SSI recipients under age 65 has increased an
average of more than 8 percent annually, adding nearly 2 million
younger recipients to the rolls, while the number of aged and blind
recipients has remained level. The trend toward younger
beneficiaries, coupled with low exit rates from the program, means
that costs will continue to burgeon in the near term. Without a
slowing in the growth of this younger population, SSI will become
even more costly. Since 1991, three groups--disabled children, legal
immigrants, and adults with mental problems--have accounted for
nearly 90 percent of the SSI caseload growth. Of the 2 million
mentally disabled adults, roughly 100,000 are disabled mainly by drug
addiction or alcoholism. The dramatic increases pose fundamental
questions about eligibility standards, accountability, and program
effectiveness.
SUPPLEMENTAL SECURITY
INCOME: RECIPIENT
POPULATION HAS CHANGED AS
CASELOADS HAVE BURGEONED
(GAO/T-HEHS-95-120, MAR.
27, 1995)
----------------------------------------------------- Appendix II:3.12
The SSI program provides means-tested income support payments to
eligible aged, blind, or disabled persons. Last year, more than 6
million SSI recipients received nearly $22 billion in federal
benefits and more than $3 billion in state benefits. SSI is one of
the fastest growing entitlement programs, with program costs soaring
20 percent annually during the past 4 years. This testimony focuses
on factors contributing to caseload growth, characteristics of SSI
recipients, and ways to improve SSI.
VETERANS/DOD ISSUES
-------------------------------------------------------- Appendix II:4
VA HEALTH CARE: CHALLENGES
AND OPTIONS FOR THE FUTURE
(GAO/T-HEHS-95-147, MAY 9,
1995)
------------------------------------------------------ Appendix II:4.1
VA lags far behind the private sector in improving the efficiency of
its hospitals. During the past decade, GAO has highlighted a series
of management problems limiting VA's ability to (1) improve the
efficiency and the effectiveness of its hospitals and (2) shift more
of its inpatient care to less costly ambulatory settings. Although
VA plans a major reorganization and other initiatives to improve its
management capabilities, GAO remains concerned that some of the
actions may not go far enough. Even if it improves the efficiency of
its hospitals, VA is at a crossroads in the evolution of its health
care system. The average daily workload in its hospitals dropped
about 56 percent during the past 25 years, and further decreases are
likely. At the same time, however, demand for outpatient care,
nursing home care, and some specialized services is expanding, taxing
VA's ability to meet veterans' needs. GAO concludes that a complete
reevaluation of the VA health care system is needed. Absent such an
effort, use of VA hospitals will likely continue to decline to a
point at which VA's ability to provide quality care and support its
secondary missions will be jeopardized.
VA HEALTH CARE: ISSUES
AFFECTING ELIGIBILITY REFORM
(GAO/T-HEHS-95-213, JULY 19,
1995)
------------------------------------------------------ Appendix II:4.2
In this testimony GAO summarizes the results of a number of reviews
that have detailed problems in administering VA's outpatient
eligibility provisions; compared VA benefits and eligibility to those
of other public and private health benefits programs; and assessed
VA's role in a changing health care marketplace. In summary,
veterans' eligibility for VA health care has evolved over time both
in terms of the types of veterans eligible for care and the services
they are eligible to receive. VA has gone from a system primarily
covering hospital care for veterans with war- related injuries to a
system covering a wide array of hospital and other medical services
for both wartime and peacetime veterans and both veterans with and
without service-connected disabilities. VA now has multiple
categories of veterans eligibility based on a number of factors.
ONGOING WORK AS OF SEPTEMBER 30,
1995, ON ISSUES AFFECTING OLDER
AMERICANS
========================================================= Appendix III
At the end of fiscal year 1995, GAO had 52 ongoing assignments that
affected older Americans. Of these, 1 was on employment, 29 on
health, 13 on income security, and 9 were on veterans issues.
EMPLOYMENT ISSUES
------------------------------------------------------- Appendix III:1
Survey of the Department of Labor's Administration of the Senior
Community Services Employment Program (code 205270)
HEALTH ISSUES
------------------------------------------------------- Appendix III:2
Alternative Methods of Payment in Medicare HMOs (code 101372)
Analysis of Factors That Determine Enrollment in Medicare HMOs
(code 101374)
Assistance and Analyzing Formula Options for Allocating Medicaid
Funds (code 118116)
Centers for Disease Control and Prevention (CDC) Public Health Block
Grant (code 118106)
Enrollment Bias May Result in Overpayments to Medicare HMOs
(code 101369)
Extent of Medical Underwriting in the Medical Supplemental Insurance
Market (code 106429)
Federal Programming and State Innovations in Long-Term Services for
Persons With Mental Retardation and Developmental Disabilities
(code 101341)
Fraud and Abuse in Managed Health Care (code 101349)
HCFA Management of Medicare Medical Policies (code 101307)
Health Care Reform: States' Use of Medicaid Waivers to Expand Access
(code 108200)
Implications of Limits on Hospital Lengths of Stay (code 108252)
Medicaid Prescription Abuse (code 600400)
Medicaid Prospective Drug Utilization Review (DUR) Impact (code
511188)
Medicare Billing Abuse (code 511194)
Medicare Managed Care: Access to Medical Specialist in HMOs and
Preferred Provider Organizations (PPO) (code 108255)
Medicare Quality Assurance Strategies (code 101468)
Medicaid: State Accountability for Financial and Quality Issues in
Managed Care Programs (code 101385)
Nursing Home Billing Abuses (code 101291)
Quality of Subacute Care in Medicare (code 101476)
Recent Growth of Medicare Home Health Care (code 106422)
Review of End Stage Renal Disease Medical Services (code 106416)
Review of Federal Oversight of Facilities for Persons With Mental
Retardation or Developmental Disabilities (code 101342)
Review of HUD's Hospital and Nursing Home Mortgage Insurance Programs
(code 108213)
Review of Implementation of Medicare Insured Group (MIG)
Demonstration Projects (code 106426)
Review of Medicare Marketing Practices (code 101381)
Review of Rural Health Clinic Program (code 108254)
Review of State Medicaid Managed Care Programs for the Chronically
Ill (code 101376)
Study of Medicare Managed Care Program Growth (code 101333)
Survey of Medicare Part B Appeal Process (code 106424)
INCOME SECURITY ISSUES
------------------------------------------------------- Appendix III:3
Costs of Congressional Retirement Benefits (code 966651)
Comparison of the Features of All Retirement Systems for Federal
Personnel (code 966678)
Effectiveness of SSI Matching (code 106800)
How Useful Are Personal Earnings and Benefits Estimate Statements to
the Public? (code 105934)
Improving SSA's Customer Service (code 105933)
Public Supplemental Pensions (code 207442)
Preventing SSI Overpayments (code 105145)
Transfer of Resources in SSI (code 106801)
Social Security and SSA Death List (code 600402)
SSI Redetermination Process (code 106900)
SSA Overpayments Recoveries (code 106805)
State and Local Pension Plans (code 105686)
Women and Social Security (code 105678)
VETERANS ISSUES
------------------------------------------------------- Appendix III:4
Hispanic Veterans (code 105741)
VA Disability Rating Schedule (code 105739)
VA Home Health Care (code 101454)
VA Major Construction Projects (code 406106)
VA Nursing Homes (code 101471)
VA Outpatient Clinic (code 406103)
VA's Community-Based Outreach (code 406077)
VA's Sale of Excess Service (code 406094)
VA's Vocational Rehabilitation Program (code 105744)
*** End of document. ***