Aging Issues: Related GAO Reports and Activities in Fiscal Year 1996
(Letter Report, 12/31/96, GAO/HEHS-97-41).

Pursuant to a congressional request, GAO provided a listing of its
fiscal year (FY) 1996 products and ongoing work regarding programs and
issues affecting older Americans and their families.

GAO work during FY 1996 covered many issues, including: (1) federal
government employment activities, health care, housing, income security,
and veterans' issues; and (2) reports directed primarily at older
Americans or affecting older Americans as one of several target groups
and testimonies on issues related to older Americans.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-97-41
     TITLE:  Aging Issues: Related GAO Reports and Activities in Fiscal 
             Year 1996
      DATE:  12/31/96
   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:  Federal Employees Health Benefits Program
             DOD TRICARE Program
             Department of Labor Senior Community Service Employment 
             Program
             Medicare Program
             Medicaid Managed Care Program
             Medigap
             DOD Composite Health Care System
             MediGrant Program
             Minnesota Family Investment Program
             Food Stamp Program
             Civil Service Retirement System
             Federal Employees Retirement System
             Supplemental Security Income Program
             SSA PASS Program
             DOD Uniformed Services Treatment Facilities Program
             Blue Cross-Blue Shield Benefits Insurance Plan
             Bibliographies
             
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Cover
================================================================ COVER


Report to the Special Committee on Aging, U.S.  Senate

December 1996

AGING ISSUES - RELATED GAO REPORTS
AND ACTIVITIES IN FISCAL YEAR 1996

GAO/HEHS-97-41

Aging Issues, Fiscal Year 1996

(106713)


Abbreviations
=============================================================== ABBREV

  AARP - American Association of Retired Persons
  AFIP - Armed Forces Institute of Pathology
  CSRS - Civil Service Retirement System
  DI - disability insurance
  DOD - Department of Defense
  DSH - disproportionate share hospital
  FDA - Food and Drug Administration
  FECA - Federal Employees' Compensation Act
  FEHBP - Federal Employees Health Benefits Program
  FERS - Federal Employees Retirement System
  HCFA - Health Care Financing Administration
  HHS - Department of Health and Human Services
  HMO - health maintenance organization
  HUD - Department of Housing and Urban Development
  MAF - medical assistance facilities
  MTS - Medicare transaction system
  OIG - Office of Inspector General
  PASS - plan for achieving self-support
  PBGC - Pension Benefit Guaranty Corporation
  PBM - pharmacy benefit manager
  PCS - ABC
  RIF - reduction in force
  RSI - retirement and survivors insurance
  SSA - Social Security Administration
  SSI - supplemental security income
  TRICARE - DOD's new nationwide managed health care program
  TSP - Thrift Savings Plan
  USTF - Uniformed Services Treatment Facility
  VA - Department of Veterans Affairs
  VBA - Veterans Benefits Administration

Letter
=============================================================== LETTER


B-275585

December 31, 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 1996 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.  By the year 2020, the
number of older Americans who are 65 years old and older, 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 1996 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 1996

                       Reports and
                      corresponden  Testimonie     Ongoing
Elderly issues                  ce           s        work
--------------------  ------------  ----------  ----------
Education and                    2           1           0
 employment
Health                          37          15          18
Housing                          1           3           0
Income security                 21           8           6
Veterans/Department             15           7           8
 of Defense
Related issues                   3           0           0
==========================================================
Total                           79          34          32
----------------------------------------------------------

---------------------------------------------------------- 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 Vernette G.  Shaw, Evaluator-in-Charge, who may be
reached at (202) 512-7234. 

Diana S.  Eisenstat
Associate Director, Income Security Issues


FISCAL YEAR 1996 REPORTS AND
CORRESPONDENCE ON ISSUES AFFECTING
OLDER AMERICANS
=========================================================== Appendix I

During fiscal year 1996, GAO issued 79 reports on issues affecting
older Americans.  Of these, 2 were on education/employment, 37 on
health, 1 on housing, 21 on income security, 15 on
veterans/Department of Defense (DOD), and 3 on other related issues. 


   EDUCATION ISSUES
--------------------------------------------------------- Appendix I:1


      DEPARTMENT OF LABOR:  SENIOR
      COMMUNITY SERVICE EMPLOYMENT
      PROGRAM DELIVERY COULD BE
      IMPROVED THROUGH LEGISLATIVE
      AND ADMINISTRATIVE ACTIONS
      (GAO/HEHS-96-4, NOV.  2,
      1995)
------------------------------------------------------- Appendix I:1.1

The Department of Labor's Senior Community Service Employment Program
finances part-time minimum-wage community service jobs for about
100,000 poor elderly Americans.  GAO found that Labor distributes
program funds through noncompetitive grants to 10 national
organizations, called national sponsors, and to state agencies. 
These national sponsors and state agencies, in turn, use the grant
funds to finance local employment projects run by community service
host agencies, such as libraries, nutrition centers, and parks, that
directly employ older Americans.  GAO found that the relative
distribution of funds to the national sponsors and state agencies
along with Labor's method of implementing the hold-harmless
provisions have resulted in the distribution of funds among and
within states that bears little relationship to actual need.  GAO
also found that, under Labor's regulations, expenditures that GAO
believes to be administrative in nature may be charged to another
cost category, allowing grantees to exceed the statutory 15-percent
limit on administrative costs.  GAO summarized this report in
testimony before Congress; see:  Senior Community Service Employment: 
Program Delivery Could Be Improved Through Legislative and
Administrative Actions, (GAO/T-HEHS-96-57, Nov.  2, 1995), by
Cornelia M.  Blanchette, Associate Director for Education and
Employment Issues, before the Subcommittee on Early Childhood, Youth
and Families, House Committee on Economic and Educational
Opportunities. 


      PEOPLE WITH DISABILITIES: 
      FEDERAL PROGRAMS COULD WORK
      TOGETHER MORE EFFICIENTLY TO
      PROMOTE EMPLOYMENT
      (GAO/HEHS-96-126, SEPT.  3,
      1996)
------------------------------------------------------- Appendix I:1.2

How efficient are federal efforts to help people with disabilities? 
In 1994, the government provided a range of services to people with
disabilities through 130 different programs, 19 federal agencies, and
a host of public and private agencies at the state and local levels. 
Although research groups and independent panels have stressed the
need to simplify and streamline programs serving the disabled,
creating a new service delivery system may prove difficult.  GAO
urged caution in 1992 when Congress was considering proposals that
would have made fundamental changes in human service delivery systems
at the federal, state, and local levels.  GAO also urges caution with
regard to programs serving people with disabilities.  Although the
potential benefits of creating a new system to deliver services more
comprehensively to people with disabilities may be great, so are the
barriers and the risks of failure.  Obstacles preventing officials
from reorganizing service agencies, creating new funding and service
agreements, and divesting authority from their own agencies are hard
to overcome.  Mandates alone are unlikely to secure the major time
and resource commitments needed from officials--whether they are
charged with directing reforms or have responsibility for
administering services.  In the current fiscal environment, a renewed
focus by federal agencies on improving coordination would be a useful
step toward improving services and enhancing the customer orientation
of their programs. 


   HEALTH ISSUES
--------------------------------------------------------- Appendix I:2


      AARP MEDIGAP PREMIUM
      INCREASES, 1996
      (GAO/HEHS-96-119R, APR.  19,
      1996)
------------------------------------------------------- Appendix I:2.1

Pursuant to a congressional request, GAO examined why Medigap
premiums offered through the American Association of Retired Persons
(AARP) were increasing.  GAO noted that:  (1) premiums for more than
3 million AARP Medigap policyholders increased an average of 26
percent; (2) the increases varied by state and ranged between 0 to 40
percent for both standardized and prestandardized policies; (3) in
1994 and 1995, premiums increased in 8 and 10 states, respectively;
(4) because benefit payments were less than expected, AARP
standardized policyholders received an average credit of $75 and
prestandardized policyholders received an average credit of $79 in
1994 and 1995; (5) in 1992, policyholders in 45 states received
refunds averaging $47 because of lower-than-expected benefit
payments; (6) AARP believes that the 1996 Medigap rate increases are
justified because the number of services received and costs incurred
by policyholders substantially increased; (7) although the average
Medigap loss ratio decreased to 81 percent between 1991 and 1993, in
1994, the average loss ratio increased to 93 percent; (8) in 1994,
the average loss ratio for prestandardized policies was 98 percent
and 82 percent for standardized policies; and (9) the average loss
ratio for 1995 policies was 100 percent and could increase to 112
percent without a rate increase. 


      ANALYSIS OF "FLORIDA'S FAIR
      SHARE" (GAO/HEHS-96-168R,
      JUNE 10, 1996)
------------------------------------------------------- Appendix I:2.2

Pursuant to a congressional request, GAO commented on the
appropriateness of the Medicaid funding formula contained in H.R. 
3507.  GAO noted that:  (1) over time, the proposed formula would
cause Medicaid funding distribution to more closely reflect states'
poverty and elderly populations; (2) there are more generous matching
rates for low-income states that spend more on Medicaid services for
eligible recipients; (3) because Florida spends less on benefits for
eligible recipients than the other states reviewed, it receives less
matching federal funds; (4) the new funding formula would establish
targets for federal funding in proportion to the poor population in
each state; (5) each state's federal allocation would increase
depending on the differences between the level of federal funding and
the target amount; and (6) by giving states like Florida higher
growth rates, the new formula would enable states to receive federal
funding in proportion to their poverty population. 


      ARIZONA MEDICAID: 
      COMPETITION AMONG MANAGED
      CARE PLANS LOWERS PROGRAM
      COSTS (GAO/HEHS-96-2, OCT. 
      4, 1995)
------------------------------------------------------- Appendix I:2.3

Many states are converting their traditional fee-for-service Medicaid
programs to managed care delivery systems.  Arizona's Medicaid
program offers valuable insights--especially in fostering competition
and monitoring plan performance.  Since 1982, Arizona has operated a
statewide Medicaid program that mandates enrollment in managed care
and pays health plans a capitated fee for each beneficiary served. 
Although the program had problems in its early years, such as the
dismissal of the program administration and the state's takeover of
the administration, it has successfully contained health care costs
while maintaining beneficiaries access to mainstream medical care. 
Arizona's recent cost containment record is noteworthy.  According to
one estimate, Arizona's Medicaid program saved the federal government
$37 million and the state $15 million in acute care costs during
fiscal year 1991 alone.  Arizona succeeded in containing costs by
developing a competitive Medicaid health care market.  Health plans
that submit capitation rates higher than their competitors' bids risk
not winning Medicaid contracts.  Other states considering managed
care programs can benefit from Arizona's experience.  GAO concludes
that the key conditions for holding down Medicaid costs without
compromising beneficiaries' access to appropriate medical care
include freedom from some federal managed care regulations,
development and use of market forces, controls to protect
beneficiaries from inadequate care, and investment in data collection
and analysis capabilities. 


      BLUE CROSS FEHBP PHARMACY
      BENEFITS (GAO/HEHS-96-182R,
      JULY 19, 1996)
------------------------------------------------------- Appendix I:2.4

Pursuant to a congressional request, GAO provided information on the
Blue Cross and Blue Shield Association's two pharmacy benefit
managers (PBM) and the services they provide to the Federal Employees
Health Benefits Program (FEHBP).  GAO noted that:  (1) to control
drug costs, the Association is requiring Medicare part B participants
to pay the standard copayment for drugs bought at participating
retail pharmacies, but it is waiving copayments on drugs bought
through its mail-order program for those participants; (2) the
Association expects this change to achieve significant savings and
prevent a premium increase in standard option coverage; (3) the
Association's mail-order subcontractor has had significant difficulty
meeting its customer-service performance measures because the
increase in mail orders has been much larger and quicker than
expected; (4) the subcontractor has increased its processing capacity
to meet the unexpected demand; (5) retail pharmacies have experienced
a 36-percent decrease in drug sales to part B participants and a
7-percent decrease in drug sales to all enrollees; and (6) the
Association believes its pharmacy benefits managers provide valuable
services to FEHBP, meet most of their contractual performance
measures, and produce significant savings. 


      CONSUMER HEALTH INFORMATICS: 
      EMERGING ISSUES
      (GAO/AIMD-96-86, JULY 26,
      1996)
------------------------------------------------------- Appendix I:2.5

Technology has increased the amount of health information available
to the public, allowing consumers to become better educated and more
involved in their own health care.  Government and private health
care organizations rely on a variety of technologies to disseminate
health information on preventive care, illness and injury management,
treatment options, post-treatment care, and other topics.  This
report discusses consumer health informatics--the use of computers
and telecommunications to help consumers obtain information, analyze
their health care needs, and make decisions about their own health. 
GAO provides information on (1) the demand for health information and
the expanding capabilities of technology; (2) users' and developers'
views on potential systems advantages and issues surrounding systems
development and use; (3) government involvement--federal, state, and
local--in developing these technologies; and (4) the status of
related efforts by the Department of Health and Human Services (HHS). 
As part of this review, GAO surveyed consumer health informatics
experts and presents their views on issues that need to be addressed
when developing consumer health information systems.  GAO summarized
this report in testimony before Congress; see:  Consumer Health
Informatics:  Emerging Issues (GAO/T-AIMD-96-134, July 26, 1996), by
Patricia T.  Taylor, Director of Information Resources Management
Issues, before the Subcommittee on Human Services and
Intergovernmental Relations, House Committee on Government Reform and
Oversight. 


      FRAUD AND ABUSE:  PROVIDERS
      TARGET MEDICARE PATIENTS IN
      NURSING FACILITIES
      (GAO/HEHS-96-18, JAN.  24,
      1996)
------------------------------------------------------- Appendix I:2.6

Nursing home patients are an attractive target for fraudulent and
abusive health care providers that bill Medicare for undelivered or
unnecessary services.  A wide variety of providers, ranging from
durable medical equipment suppliers to laboratories to optometrists
and doctors, have been involved in fraudulent and abusive Medicare
billing schemes.  Several features make nursing home patients
attractive targets.  First, because a nursing facility houses many
Medicare beneficiaries under one roof, unscrupulous billers of
services can operate their schemes in volume.  Second, nursing homes
sometimes make patient records available to outsiders, contrary to
federal regulations.  Third, providers are permitted to bill Medicare
directly, without certification from the nursing home or the
attending physician that the items are necessary or have been
provided as claimed.  In addition, Medicare's automated systems do
not collect data to flag improbably high charges or levels of
services.  Finally, even when Medicare spots abusive billings and
seeks recovery of unwarranted payments, it often collects little
money from wrongdoers, who either go out of business or deplete their
resources so that they cannot repay the funds. 


      HCFA:  MEDICARE
      PROGRAM--CHANGES TO THE
      HOSPITAL INPATIENT
      PROSPECTIVE PAYMENT SYSTEMS
      AND FISCAL YEAR 1997 RATES
      (GAO/OGC-96-41, SEPT.  13,
      1996)
------------------------------------------------------- Appendix I:2.7

Pursuant to a legislative requirement, GAO reviewed the Health Care
Financing Administration's (HCFA) new rule on changes to the Medicare
program's hospital inpatient prospective payment systems and fiscal
year 1997 rates.  GAO found that:  (1) the rule would adjust the
classifications and weighting factors for diagnosis related groups,
update the wage index associated with hospital operating costs, and
make certain clarifications regarding the calculation of hospital
payments excluded from the prospective payment systems; and (2) HCFA
complied with applicable requirements in promulgating the rule. 


      HEALTH CARE FRAUD: 
      INFORMATION-SHARING
      PROPOSALS TO IMPROVE
      ENFORCEMENT EFFORTS
      (GAO/GGD-96-101, MAY 1,
      1996)
------------------------------------------------------- Appendix I:2.8

Estimates of health care fraud range from between 3 and 10 percent of
all health care expenditures--as much as $100 billion based on
estimated 1995 expenditures.  In late 1993, the Attorney General
designated health care fraud as an enforcement priority second only
to violent crime initiatives.  This report discusses (1) the extent
of federal and state immunity laws protecting persons who report
information on health care fraud and (2) the advantages and
disadvantages of establishing a centralized health care fraud
database to strengthen information-sharing and support enforcement
efforts. 


      HEALTH INSURANCE:  COVERAGE
      OF AUTOLOGOUS BONE MARROW
      TRANSPLANTATION FOR BREAST
      CANCER (GAO/HEHS-96-83, APR. 
      24, 1996)
------------------------------------------------------- Appendix I:2.9

Although many insurers now cover the cost of autologous bone marrow
transplantation, a new and expensive treatment for breast cancer,
issues surrounding the procedure have put several goals of the U.S. 
health care systems in conflict:  access to the best, most advanced
care; cost containment; and research adequate to assess the value of
new treatments.  Proponents of insurance coverage argue that
autologous bone marrow transplantation provides breast cancer
patients with a promising, potentially life-saving treatment. 
Critics say that the proliferation of such unproven treatments is
costly and harmful, potentially hindering clinical research to
determine whether the treatment is effective.  This report discusses
(1) the factors that have influenced insurers' decisions on whether
to cover the treatment, (2) the status of research on autologous bone
marrow transplantation for breast cancer and the consensus on what is
known about its effectiveness, and (3) the consequences of increased
use and insurance coverage of the treatment while it is still being
evaluated in clinical trials. 


      HEALTH INSURANCE REGULATION: 
      VARYING STATE REQUIREMENTS
      AFFECT COST OF INSURANCE
      (GAO/HEHS-96-161, AUG.  19,
      1996)
------------------------------------------------------ Appendix I:2.10

As concern about the affordability of health coverage has grown, the
costs attributed to state regulation of health insurance have come
under increasing scrutiny.  State health insurance regulation is
intended to protect consumers through oversight of health plans'
financial solvency, monitoring of insurers' market conduct to prevent
abuses, and mandated coverage for particular services.  Although
these measures do benefit consumers, they result in costs to insurers
that are ultimately passed on to consumers in their premiums.  These
costs may influence an employer to self-fund its health plan--a move
that avoids state insurance regulation.  This report examines the
costs associated with (1) premium taxes and other assessments, (2)
mandated health benefits, (3) financial solvency standards, and (4)
state health insurance reforms affecting small employers.  GAO
discusses the impact of these requirements on the costs of insured
health plans compared with the cost of self-funded health plans. 


      LONG-TERM CARE:  SOME STATES
      APPLY CRIMINAL BACKGROUND
      CHECKS TO HOME CARE WORKERS
      (GAO/PEMD-96-5, SEPT.  27,
      1996)
------------------------------------------------------ Appendix I:2.11

Pursuant to a congressional request, GAO examined federal and state
requirements for criminal background checks of home health care
workers.  GAO found that:  (1) there are few formal safeguards to
protect elderly persons from unscrupulous home care workers; (2) the
federal government indirectly regulates home care workers by
requiring home care organizations or the individual provider to meet
certain requirements for participation in Medicaid or Medicare; (3)
states may be directed to disqualify home care providers convicted of
fraudulent health care delivery, obstruction of justice, or the
illegal manufacture, distribution, prescription, or dispensing of
controlled substances; (4) state and local governments, as well as
professional boards, impose certain restrictions on home care
organizations and individual providers; (5) some states require all
home care organizations to meet state imposed licensure or Medicare
certification requirements; (6) some states incorporate home care
workers into their state nursing home aide registry; (7) few states
require criminal background checks of home care workers; and (8) most
states do not use the Federal Bureau of Investigation's national
criminal database system to check home care workers' backgrounds due
to cost concerns. 


      MAMMOGRAPHY SERVICES: 
      INITIAL IMPACT OF NEW
      FEDERAL LAW HAS BEEN
      POSITIVE (GAO/HEHS-96-17,
      OCT.  27, 1995)
------------------------------------------------------ Appendix I:2.12

The Mammography Quality Standards Act of 1992 imposed uniform
standards for mammography in all states, requiring certification and
annual inspection of mammography facilities.  GAO found that the act
has had a positive impact, resulting in higher quality equipment,
personnel, and practices.  Mammography quality standards are now in
place in all states, and these standards do not appear to have
hampered access to services.  To avoid large-scale closure of
facilities, however, the Food and Drug Administration (FDA) settled
on an approach that allowed some delay in meeting the certification
requirements.  For this and other reasons, such as the availability
of outcome data, more time will be needed before the act's full
impact can be determined.  GAO is required to assess the effects of
the act again in 2 years and to issue a report in 1997. 


      MEDICAID FUNDING FORMULA
      CHANGES (GAO/HEHS-96-164R,
      JUNE 10, 1996)
------------------------------------------------------ Appendix I:2.13

Pursuant to a congressional request, GAO provided information on the
proposed changes to Medicaid funding formulas under H.R.  3507.  GAO
noted that:  (1) states with large numbers of poor and disabled
persons receive less federal assistance than states with larger
numbers of poor and weaker tax bases; (2) states that offer extensive
services and provide high provider reimbursement rates receive more
federal funding; (3) the revised Medicaid formula would link the
amount of federal aid a state receives to the number of poor people
in need of Medicaid services; (4) over 90 percent of the federal
formula grant programs target funding on the basis of need; (5) H.R. 
3507 would realign federal Medicaid funding over a number of years,
so that funding is more related to state need rather than state
spending patterns; (6) H.R.  3507 would place greater weight on the
number of elderly and disabled people that require expensive
services; and (7) the proposed formula change would enable states
with low funding to acquire more federal funds. 


      MEDICAID LONG-TERM CARE: 
      STATE USE OF ASSESSMENT
      INSTRUMENTS IN CARE PLANNING
      (GAO/PEMD-96-4, APR.  2,
      1996)
------------------------------------------------------ Appendix I:2.14

GAO examined how publicly funded programs assess the need for home
and community-based long-term care for the elderly with disabilities. 
This care is provided to persons living at home who, because of a
chronic condition or illness, cannot care for themselves.  Services
ranges from skilled nursing to assistance with day-to-day activities,
such as bathing and housekeeping.  Under the Medicaid program, 49
states have obtained waivers to provide home and community-based
services to low-income elderly persons who would otherwise need
institutional care paid for by Medicaid.  These states are
responsible for developing a care plan tailored to a client's
specific needs.  A well-designed assessment instrument helps identify
all appropriate needs--increasing the likelihood that important
aspects of the client's situation will not be overlooked in care
planning.  Standardized administration of the assessment instrument
increases the likelihood that the needs of all clients will be
determined in the same way.  This report provides information on the
(1) comprehensiveness of assessment instruments, (2) uniformity of
their administration, and (3) training for staff who do the
assessments. 


      MEDICAID MANAGED CARE: 
      SERVING THE DISABLED
      CHALLENGES STATE PROGRAMS
      (GAO/HEHS-96-136, JULY 31,
      1996)
------------------------------------------------------ Appendix I:2.15

With its emphasis on primary care, restricted access to specialists,
and control of services, managed care is seen as a way to control
spiraling Medicaid costs, which totaled $159 billion in fiscal year
1995.  So far, states have extended prepaid care largely to
low-income families--about 30 million persons--but to few of the
additional 6 million Medicaid beneficiaries who are mentally or
physically disabled.  Managed care's emphasis on primary care and
control of services is seemingly at odds with the care requirements
of disabled beneficiaries, many of whom need extensive services and
access to highly specialized providers.  However, because more than
one-third of all Medicaid payments go for the care of the disabled,
policymakers have been exploring the possibility of enrolling
disabled persons in managed care plans.  These efforts affect three
key groups:  disabled beneficiaries, who include a small number of
very vulnerable persons who may be less able to effectively advocate
on their own behalf for access to needed services; prepaid care
plans, which are concerned about the degree of financial risk in
treating persons with extensive medical needs; and the state and
federal governments, which run Medicaid.  This report examines the
(1) extent to which states are implementing Medicaid prepaid managed
care programs for disabled beneficiaries and (2) steps that have been
taken to safeguard the interests of all three groups.  GAO's review
of safeguards focuses on two areas:  efforts to ensure quality of
care and strategies for setting rates and sharing financial risk. 


      MEDICAID SECTION 1115
      WAIVERS:  FLEXIBLE APPROACH
      TO APPROVING DEMONSTRATIONS
      COULD INCREASE FEDERAL COSTS
      (GAO/HEHS-96-44, NOV.  8,
      1995)
------------------------------------------------------ Appendix I:2.16

Several states have been given waivers allowing them to use savings
from managed care Medicaid programs to cover additional
beneficiaries.  GAO found that contrary to assertions that such
waivers would be "budget neutral," most of them could increase
federal Medicaid expenditures.  Specifically, approved spending
limits for demonstration waivers in Oregon, Hawaii, and Florida could
boost federal Medicaid outlays.  Only Tennessee's 1115 waiver
agreement should cost no more than the continuation of its smaller,
prewaiver program and, in fact, should yield savings.  Federal
Medicaid spending could rise significantly if the administration
continues to show a similar flexibility in reviewing state 1115
financing strategies.  Five waivers have been approved since
Florida's in late 1994, and the large backlog of pending waivers
includes three states with large Medicaid programs--New York,
Illinois, and Texas.  Additional federal dollars are available along
with other funding sources identified in state waiver applications. 
GAO believes that the potential for additional federal funding serves
as a hedge against the many uncertainties states face in implementing
these ambitious demonstrations--including changing economic
conditions, the accuracy of cost-containment assumptions, the
availability of anticipated funding cited in waiver applications, and
the lack of reliable cost data on the uninsured. 


      MEDICAID:  WAIVER PROGRAM
      FOR DEVELOPMENTALLY DISABLED
      IS PROMISING BUT POSES SOME
      RISKS (GAO/HEHS-96-120, JULY
      22, 1996)
------------------------------------------------------ Appendix I:2.17

More than 300,000 adults with developmental disabilities--typically
mental retardation--receive long-term care paid for by Medicaid or,
to a lesser extent, state and local programs.  Such long-term care
often involves supervision and assistance with everyday activities,
such as dressing or managing money.  Persons with developmental
disabilities receive more than $13 billion annually in public funding
for long-term care, second only to the elderly.  Recently, states
have begun to significantly expand the use of the Medicaid waiver
program, which seeks to provide alternatives to institutional care
for persons with developmental disabilities.  The waiver program has
two advantages.  First, it helps states to control costs by allowing
them to limit the number of recipients being served.  Without the
waiver, states must serve all eligible persons in the regular
Medicaid program.  Second, it permits states to meet the needs of
many persons with developmental disabilities by offering them a
broader range of services in less restrictive settings, such as group
or family homes, rather than in an institutional setting.  This
report examines (1) expanded state use of the waiver program, (2) the
growth in long-term care costs for individuals with developmental
disabilities, (3) how costs are controlled, and (4) strengths and
limitations in states' approaches to ensuring quality in community
settings. 


      MEDICAL ADP SYSTEMS: 
      DEFENSE ACHIEVES WORLDWIDE
      DEPLOYMENT OF COMPOSITE
      HEALTH CARE SYSTEM
      (GAO/AIMD-96-39, APR.  5,
      1996)
------------------------------------------------------ Appendix I:2.18

As the backbone of the military's medical operations, the Composite
Health Care System--an automated medical system developed by DOD at a
cost of $2.8 billion--will provide doctors and nurses with almost
instant access to patient information, from medical history to
current treatment and vital statistics.  DOD should be able to
significantly improve operations at its medical facilities while
reducing costs.  Improved appointment scheduling will increase
patients' access to health care, while better access to patient
information will save medical personnel time.  If DOD is to realize
the system's full potential, however, physicians and other health
care providers must be able to access the system at all times. 
Although DOD's backup and recovery plan provides for recovery from
disruptions in computer service because of power outages, it does not
effectively address major disruptions requiring the repair or the
replacement of equipment damaged by a natural disaster.  Health care
providers have become dependent on the patient data in the system, so
any major disruption could result in injury or even death.  DOD could
greatly reduce this risk by developing a more effective backup and
recovery plan for its equipment. 


      MEDICARE:  EARLY RESOLUTION
      OF OVERCHARGES FOR THERAPY
      IN NURSING HOMES IS UNLIKELY
      (GAO/HEHS-96-145, AUG.  16,
      1996)
------------------------------------------------------ Appendix I:2.19

Nursing homes and therapy companies continue to bill Medicare at very
high rates for occupational and speech therapy.  Moreover, the bills
do not specify the amount of time spent with patients or the
treatments provided.  The weaknesses that GAO reported more than a
year ago--the lack of salary guidelines setting limits on Medicare
reimbursements for occupational and speech therapist's services and
unclear billing for these services--persist.  Although HCFA
recognized as early as 1990 that inappropriate charges for
occupational speech therapy were a problem, it is still trying to
establish salary equivalency guidelines for these services.  HCFA
proposed guidelines based on a Bureau of Labor Statistics survey of
average salaries for hospital therapists, but the industry was not
satisfied and did its own survey.  HCFA is now analyzing those survey
results.  The prospect for a quick resolution to the billing problem
with therapy services is unlikely.  Historically, it has taken HCFA
years to reduce high payment rates for supplies or services.  Given
the typical time involved in meeting federal notification and
publication requirements for changing Medicare prices, salary
equivalency guidelines may not be implemented until the summer of
1997 at the earliest.  GAO urges Congress to consider granting HCFA
legislative relief from these requirements. 


      MEDICARE:  FEDERAL EFFORTS
      TO ENHANCE PATIENT QUALITY
      OF CARE (GAO/HEHS-96-20,
      APR.  10, 1996)
------------------------------------------------------ Appendix I:2.20

In the past decade, Medicare costs have risen on average more than 10
percent per year.  Expanding managed care options for Medicare
patients has been proposed as a way to contain costs.  Concerns have
been raised, however, that such changes may undermine the quality of
care provided to Medicare beneficiaries.  Currently, Medicare
reimburses only for care provided in health maintenance organizations
(HMO) and by the fee-for-service sector.  This report (1) discusses
the present and future strategies of HCFA, which administers the
Medicare program, to ensure that Medicare providers furnish quality
health care in both fee-for-service and HMO arrangements and (2)
provides the views of experts on attributes a quality assurance
program should have if more managed care options are made available
to Medicare beneficiaries. 


      MEDICARE HMOS:  RAPID
      ENROLLMENT GROWTH
      CONCENTRATED IN SELECTED
      STATES (GAO/HEHS-96-63, JAN. 
      18, 1996)
------------------------------------------------------ Appendix I:2.21

Private-sector insurers cite extensive use of HMO and other managed
care approaches as a key factor in slowing the growth of their
insurance premiums.  As a result, part of the current interest in
controlling Medicare costs has centered on ways to increase HMO use
among Medicare beneficiaries.  This report provides information on
trends in the number of (1) Medicare beneficiaries enrolling in HMOs
and (2) HMOs enrolling beneficiaries.  GAO analyzes these data for
factors that might be influencing decisions by HMOs to enroll
Medicare beneficiaries and decisions by beneficiaries to enroll in
HMOs.  GAO found that about 2.8 million Medicare beneficiaries--about
7 percent of the total--were enrolled in risk-contract HMOs as of
August 1995.  This was double the percentage enrolled in 1987.  The
growth has been particularly rapid during the past 4 years and has
centered on certain states.  California and Florida, for example,
have more than half of all enrollees. 


      MEDICARE:  HOME HEALTH
      UTILIZATION EXPANDS WHILE
      PROGRAM CONTROLS DETERIORATE
      (GAO/HEHS-96-16, MAR.  27,
      1996)
------------------------------------------------------ Appendix I:2.22

Use of the Medicare home health benefit has increased dramatically,
with spending rising from $2.7 billion in 1989 to $12.7 billion in
1994.  Costs are projected to reach $21 billion by the year 2000.  In
earlier reports (GAO/HRD-81-155 and GAO/HRD-87-9), GAO cited lax
controls over the use of the home health benefit and recommended
measures to improve Medicare's ability to detect claims that were not
medically necessary or did not meet the coverage criteria. 
Medicare's escalating home health outlays continue to raise concerns
about the extent of benefit abuse.  This report examines the factors
underlying the growth in the use of the home health benefit.  GAO
discusses (1) changes in the composition of the home health industry,
(2) changes in the composition of Medicare home health users, (3)
differences in utilization patterns across geographic areas, (4)
incentives to overuse services, and (5) the effectiveness of payment
controls in preventing payments for services not covered by Medicare. 


      MEDICARE INSURED GROUPS
      (GAO/HEHS-96-93R, MAY 1,
      1996)
------------------------------------------------------ Appendix I:2.23

Pursuant to a legislative requirement, GAO examined Medicare insured
groups, focusing on (1) the status of the demonstration program and
individual projects; and (2) efforts to establish a reliable payment
system.  GAO found that:  (1) with the passage of the Omnibus
Reconciliation Act of 1987, five groups had entered into agreements
with HCFA to operate Medicare insured groups; (2) HCFA expenditures
for the agreements totalled $1.1 million over the last 8 years; (3)
all the agreements have been terminated due to concerns over the
projects' financial viability; (4) HCFA terminated one of the
projects after experiencing prolonged delays and problems with
contract negotiations; (5) another company encountered delays in
obtaining employer commitments and data needed for rate-setting
analysis; (6) the most recent group to terminate had developed an
operating plan and proposed a payment rate-setting method before
experiencing lengthy delays and problems with payment update
methodology; (7) the proposed payment methodology would have
established a base rate using 1986 to 1990 claims data and updated
the rate on the basis of revised per capita costs; and (8) in using
more recent claims data, groups would have faced financial risk, as
well as additional time and expense. 


      MEDICARE MANAGED CARE: 
      GROWING ENROLLMENT ADDS
      URGENCY TO FIXING HMO
      PAYMENT PROBLEM
      (GAO/HEHS-96-21, NOV.  8,
      1995)
------------------------------------------------------ Appendix I:2.24

Enrollment of Medicare beneficiaries in HMOs has soared in recent
years, concentrated in some states and locales.  This rapid growth in
enrollment highlights the urgency of correcting Medicare's excessive
payment rates to HMOs--particularly in certain areas.  Likewise,
enrollment stagnation elsewhere underscores the need to examine the
causes of payment rate disparities among states and counties. 
Medicare's HMO payment method is plagued by three flaws.  First, the
rigidity of the formula-based fixed payment rate does not allow
Medicare to capitalize on the competition among HMOs that, in the
private market, leads to lower rates.  Second, rate adjustment for
differences in beneficiaries' health status are so imprecise that
Medicare overpays HMOs that enroll beneficiaries who are in good
health.  Third, the reliance on a country's fee-for-service health
care costs to establish a payment rate produces rates that vary
considerably within market areas.  GAO concludes that a sensible
approach would be to pursue three promising strategies
concurrently--foster price competition among HMOs, improve risk
adjusters' accuracy, and allow for adjustments in the current formula
to reflect market competition and HMO's local health care costs. 
HCFA plans demonstration projects using competitive bidding and
improved risk adjustment but results of a full-scale evaluation of
these projects are years away.  In the interim, HCFA should promptly
gather and use valuable design and implementation data as they become
available.  HCFA's legislative authority to carry out these projects
does not address managed care options explicitly, which raises
questions about HCFA's authority to mandate HMO participation in the
projects. 


      MEDICARE MANAGED CARE GROWTH
      (GAO/HEHS-96-47R, OCT.  18,
      1995)
------------------------------------------------------ Appendix I:2.25

Pursuant to a congressional request, GAO reviewed the growth of
Medicare beneficiaries in managed health care plans.  GAO noted that: 
(1) although more than 50 percent of employees covered by
employer-provided insurance are enrolled in managed health care
plans, fewer Medicare beneficiaries are enrolled in such plans; (2)
the only managed care option Medicare offers is HMOs and they are not
uniformly available; (3) the percentage of Medicare beneficiaries
enrolled in an HMO has increased from about 3 percent in 1987 to
about 7 percent in 1995; (4) although Medicare beneficiaries are
increasingly choosing HMOs, about 87 percent of these beneficiaries
live in 10 states, while about 55 percent live in just 2 states; and
(5) only 3 states have Medicare HMO enrollment of 20 percent or more,
while 7 states have non-Medicare HMO enrollments of 30 percent or
more. 


      MEDICARE:  MILLIONS CAN BE
      SAVED BY SCREENING CLAIMS
      FOR OVERUSED SERVICES
      (GAO/HEHS-96-49, JAN.  30,
      1996)
------------------------------------------------------ Appendix I:2.26

Medicare contractors routinely pay hundreds of millions of dollars in
Medicare claims without first determining if the services provided
are necessary.  GAO reviewed payments to doctors for six groups of
high-volume medical procedures--ranging from eye examinations to
chest X rays--that accounted for nearly $3 billion in Medicare
payments in 1994.  GAO also surveyed 17 contractors to determine if
they had used medical necessity criteria in their claims processing
to screen for these six groups of procedures.  For each of the six
groups, more than half of the 17 contractors failed to use automated
screens to flag claims for unnecessary, inappropriate, or overused
treatments.  These prepayment screens could have saved millions of
taxpayer dollars now wasted on questionable services.  Problems with
controlling payments for widely overused procedures continue because
HCFA lacks a national strategy to control these payments.  HCFA now
relies on contractors to focus on procedures where local use exceeds
the national average.  Although this approach helps reduce local
overuse of some procedures, it is not designed to control overuse of
a procedure nationwide.  GAO summarized this report in testimony
before Congress; see:  Medicare:  Millions Can Be Saved by Screening
Claims for Overused Services (GAO/T-HEHS-96-86, Feb.  8, 1996), by
Sarah F.  Jaggar, Director of Health Financing and Public Health
Issues, before the Subcommittee on Human Resources and
Intergovernmental Relations, House Committee on Government Reform and
Oversight. 


      MEDIGAP INSURANCE: 
      ALTERNATIVES FOR MEDICARE
      BENEFICIARIES TO AVOID
      MEDICAL UNDERWRITING
      (GAO/HEHS-96-180, SEPT.  10,
      1996)
------------------------------------------------------ Appendix I:2.27

Although the Medicare program covers a substantial share of its
beneficiaries' health expenses, it does require deductibles and
coinsurance that can amount to thousands of dollars a year.  Most
beneficiaries obtain private insurance to supplement Medicare when
they become eligible for the program at age 65.  On occasion,
beneficiaries decide to change Medigap policies and may then become
subject to medical underwriting; that is, the insurer can take into
account a person's health status or medical history in deciding
whether to sell a policy.  GAO found that few beneficiaries decide
later to change their policies and those that do have at least one
alternative for changing without being subject to medical
underwriting.  These alternatives, however, are not guaranteed by
federal law, and it is possible that circumstances could change in
the future.  Federal Medigap law could be amended to furnish such a
guarantee to beneficiaries who have been continuously covered by
Medigap.  Such a change should not have any major effect because it
would not alter beneficiary incentives for Medigap coverage. 


      MEDIGRANT:  FLORIDA
      (GAO/HEHS-96-11R, OCT.  2,
      1995)
------------------------------------------------------ Appendix I:2.28

Pursuant to a congressional request, GAO provided information on how
the proposed MediGrant Program will affect Florida's federal Medicaid
funding between fiscal years 1996 to 2002.  GAO noted that:  (1)
Florida state officials estimate that Florida would receive $7.6
billion less under the proposed MediGrant program; (2) Florida is
expected to match $30.6 billion under Medicaid spending law and $15.8
billion under the MediGrant proposal; (3) the MediGrant program would
guarantee minimum growth rates for some states and place limits on
the maximum growth a state receives annually; and (4) the MediGrant
program would increase Florida's share of federal Medicaid spending
from 3.67 percent in fiscal year 1994 to 4.13 percent in fiscal year
2002. 


      MONTANA'S MEDICAL ASSISTANCE
      FACILITIES (GAO/HEHS-96-12R,
      OCT.  2, 1995)
------------------------------------------------------ Appendix I:2.29

Pursuant to a congressional request, GAO provided information on
Montana's medical assistance facilities (MAF), focusing on the (1)
services performed at MAF; (2) inpatient service costs to Medicare at
MAF and acute-care hospitals; and (3) number of hospitals nationwide
that qualify as MAF.  GAO noted that:  (1) MAF mainly serve patients
with uncomplicated conditions or stabilize patients with more severe
conditions before transferring them to full-service hospitals; (2)
MAF serve as primary care providers for Medicare beneficiaries living
in rural areas; (3) Medicare costs are generally less at MAF than at
urban hospitals; (4) patients who are transferred from MAF to
acute-care hospitals increase Medicare costs, because the two
facilities receive payments for the same patient; and (5) although
over 500 hospitals nationwide meet the qualifying criteria for MAF,
no more than 150 hospitals would convert to MAF or rural primary care
hospitals due to various circumstances. 


      NONPHYSICIAN SPECIALISTS
      (GAO/HEHS-96-135R, MAY 29,
      1996)
------------------------------------------------------ Appendix I:2.30

Pursuant to a congressional request, GAO provided information on the
policies and procedures governing the participation of certain
nonphysician health specialists in several federal health care
programs.  GAO noted that:  (1) although nonphysician specialists are
authorized to participate and provide services in federal health care
programs, participation requirements and allowable services vary
among and within the programs; (2) participation requirements vary as
to training, supervision, and specialty autonomy; and (3) some
agencies that administer federal health programs are more involved in
setting requirements and establishing service parameters for
nonphysician specialists than other agencies. 


      PRACTICE GUIDELINES: 
      MANAGED CARE PLANS CUSTOMIZE
      GUIDELINES TO MEET LOCAL
      INTERESTS (GAO/HEHS-96-95,
      MAY 30, 1996)
------------------------------------------------------ Appendix I:2.31

The inappropriate use of medical services can be costly and raises
quality-of-care concerns.  For example, a 1988 study found that 14
percent of bypass surgeries were performed inappropriately.  To
narrow the gap between current and optimal practice, some federal
agencies and other groups develop clinical practice guidelines on the
best practices for effective and appropriate care.  Managed care
plans, which employ various techniques intended to reduce
inappropriate care, are likely sites of guideline use.  This report
discusses (1) the purposes clinical practice guidelines serve and (2)
how health plans make use of already published guidelines developed
by federal agencies and other groups. 


      PSYCHIATRIC HOSPITAL
      OVERSIGHT (GAO/HEHS-96-132R,
      MAY 24, 1996)
------------------------------------------------------ Appendix I:2.32

Pursuant to a congressional request, GAO reviewed federal and state
oversight of state-operated and private psychiatric hospitals.  GAO
noted that:  (1) as of August 1995, 702 psychiatric hospitals were
certified to participate in Medicare and Medicaid; (2) to become
certified for participation in Medicare and Medicaid, psychiatric
hospitals must satisfy general hospital requirements for health and
safety, and special psychiatric hospital requirements for active
treatment; (3) hospital medical records must reflect the degree of
active treatment and hospitals must have qualified staff to evaluate
and treat patients; (4) HCFA requires states to conduct surveys of
psychiatric hospitals to determine whether they satisfy certification
requirements; (5) surveys of psychiatric hospitals include
examinations of hospital and patient records, direct observations of
patients, and interviews with staffs and patients; (6) as of August
1995, most certified psychiatric hospitals satisfied HCFA
requirements for medical records and staffing; and (7) the failure to
evaluate a patient's strengths when developing a treatment plan,
specify each patient's treatment goals, and indicate the methods of
treatment were the most common deficiencies cited in surveys of
psychiatric hospitals that failed to satisfy HCFA certification
requirements. 


      STATE MEDICAID FINANCING
      PRACTICES (GAO/HEHS-96-76R,
      JAN.  23, 1996)
------------------------------------------------------ Appendix I:2.33

Pursuant to a congressional request, GAO provided information on
state Medicaid financing arrangements in Michigan, Tennessee, and
Texas.  GAO noted that:  (1) until HCFA ruled in 1985 that states
could use Medicaid provider donations to reduce their share of
Medicaid expenditures, states could only use provider donations for
the cost of training administrative personnel; (2) Michigan raised
$684 million for its Medicaid program through hospital donations and
federal matching funds in fiscal years 1991 through 1993, allowing it
to fund $566 million in additional Medicaid payments; (3) in 1993,
Tennessee required certain medical providers to pay a $2,600 tax on
their nursing home beds and a 6.75-percent tax on services, but it
discontinued the hospital services tax in 1994 when it implemented
the TennCare program; (4) Tennessee earned $458 million from nursing
home and hospital taxes in fiscal year 1993 and received $954 million
in federal matching funds, which accounted for over half of its 1993
Medicaid spending; (5) Congress enacted legislation in 1993 that
restricted state financing arrangements by limiting disproportionate
share hospital (DSH) program payments, causing states to modify their
DSH programs and overall DSH payments to decline; and (6) despite the
1993 legislation, states were able to use intergovernmental transfers
and other creative funding arrangements to reduce their share of
Medicaid costs. 


      CHOLESTEROL TREATMENT:  A
      REVIEW OF THE CLINICAL
      TRIALS EVIDENCE
      (GAO/PEMD-96-7, MAY 14,
      1996)
------------------------------------------------------ Appendix I:2.34

Clinical trials and other scientific studies have consistently shown
that cholesterol-lowering treatment benefits middle-aged white men
with high cholesterol levels and a history of heart disease.  Medical
research also shows that men with moderate-to-high cholesterol levels
and no history of heart disease have lower rates of nonfatal heart
attacks but no statistically significant reductions in death rates as
a result of cholesterol-lowering treatment.  Clinical trials
generally have not evaluated the value of cholesterol-lowering
treatment for several important groups, including women, the elderly,
and minorities.  Thus, they provide little or no evidence of benefits
or possible risks for these groups.  Two recent trials using a new
drug class--the statins--show greater reductions in heart problems
with their greater reductions in cholesterol and no increase in
fatalities from coronary heart disease.  One trial studied men and
women with coronary heart disease and found a significant reduction
in total fatalities; the other, which studied only men who did not
have coronary heart disease, showed encouraging but not statistically
significant reductions in fatalities from coronary heart disease. 


      DISTRICT OF COLUMBIA: 
      INFORMATION ON HEALTH CARE
      COSTS (GAO/AIMD-96-42, APR. 
      22, 1996)
------------------------------------------------------ Appendix I:2.35

Recent studies on the District of Columbia's health care system have
concluded that the city's health care problems are aggravated by such
social factors as high rates of poverty, crime, substance abuse, and
unemployment.  These factors account for the sizable numbers of
persons who do not seek preventive health care and cannot pay for
medical treatment, the inappropriate use of D.C.  General Hospital
for primary care, and the many trauma care patients at area
hospitals.  To help Congress evaluate various restructuring proposals
being considered for the District, this report discusses the
District's health care budget and the composition of the District's
health care system, including the number of Medicaid recipients and
uninsured and the distribution of hospitals and clinics. 


      MEDICARE:  ENROLLMENT GROWTH
      AND PAYMENT PRACTICES FOR
      KIDNEY DIALYSIS SERVICES
      (GAO/HEHS-96-33, NOV.  22,
      1995)
------------------------------------------------------ Appendix I:2.36

Medicare is the predominant health care payer for people with
end-stage renal disease--the permanent and irreversible loss of
kidney function.  Medicare's cost for this program has increased,
mainly because of the substantial increase in new program enrollees. 
The average annual rate of increase averaged 11.6 percent between
1978 and 1991.  In addition to the rise in enrollment, the mortality
rate for new patients decreased.  For example, deaths among
beneficiaries during the first year in the program fell from 28
percent to 24 percent between 1982 and 1991.  Because the program
began in 1973, technological advances and greater availability of
kidney dialysis machines have meant that persons who were not
considered good candidates for kidney dialysis in 1973--those 65
years old or older and those whose kidney failure was caused by
diabetes and hypertension--are now routinely placed on dialysis. 
GAO's review of medical services and supplies provided to all
Medicare end-stage renal disease patients in 1991 shows that no
separately billable service or supply was provided often enough to
make it a good candidate to be considered part of the standard
dialysis treatment and thus included in a future composite rate. 


      PRESCRIPTION DRUGS AND
      MEDICAID:  AUTOMATED REVIEW
      SYSTEMS CAN HELP PROMOTE
      SAFETY, SAVE MONEY
      (GAO/AIMD-96-72, JUNE 11,
      1996)
------------------------------------------------------ Appendix I:2.37

Inappropriate use of prescription drugs can lead to drug-induced
illness, hospitalization, and even death.  Inappropriate drug use can
also prove expensive for the Medicaid program.  As a result, Congress
mandated that states establish utilization review programs--called
prospective reviews--to review Medicaid prescriptions before drugs
are dispensed.  Automated prospective drug utilization review systems
are proving a low-cost way for states to help both doctors and
pharmacies safeguard Medicaid recipients from potentially harmful
medical reactions.  Although the main emphasis of these
systems--appropriately--has been safety, both safety benefits and
dollar savings accrue from their use.  Because results vary on the
basis of how such systems are administered, it is important that
states share their experiences.  Absent any analysis of data from the
Iowa demonstration project or any concerted effort by HCFA to collect
and share other states' experiences, states have had only limited
access to both safety and cost data--information that is critical to
informed decisionmaking and to maximizing the effectiveness and
efficiency of automated prospective drug utilization review systems. 


   HOUSING ISSUES
--------------------------------------------------------- Appendix I:3


      RURAL HOUSING PROGRAMS: 
      OPPORTUNITIES EXIST FOR COST
      SAVINGS AND MANAGEMENT
      IMPROVEMENT (GAO/RCED-96-11,
      NOV.  16, 1995)
------------------------------------------------------- Appendix I:3.1

The Agriculture Department's Rural Housing and Community Development
Service provides about $2.85 billion each year for rural housing
loans.  As of June 1995, the Service had an outstanding single-family
and multifamily housing loan portfolio of about $30 billion, which
represented a significant federal investment in affordable housing
for the rural poor.  The largest portion of the loan portfolio is for
single-family direct and guaranteed mortgage loans that are made to
families or individuals who are without adequate housing and who are
unable to obtain loans from private lenders at reasonable costs. 
Rural multifamily rental housing loans, made to finance
apartment-style housing or to buy and rehabilitate existing rental
units, make up the rest of the portfolio.  This report provides
information on the Service's single- and multifamily housing loan
programs and discusses suggestions made by GAO and others that could
yield cost savings or improve management in these programs. 


   INCOME SECURITY ISSUES
--------------------------------------------------------- Appendix I:4


      SOCIAL SECURITY:  TELEPHONE
      ACCESS ENHANCED AT FIELD
      OFFICES UNDER DEMONSTRATION
      PROJECT (GAO/HEHS-96-70,
      FEB.  23, 1996)
------------------------------------------------------- Appendix I:4.1

The Social Security Administration (SSA) runs a nationwide toll-free
telephone number and is testing enhanced local office telephone
service at selected offices.  In February 1995, SSA began installing
new telephone equipment, called automated attendant and voice mail,
at 30 of its 800 nationwide field offices that list their telephone
numbers in local telephone directories.  The equipment was installed
in different configurations.  Telephone access--calls reaching an SSA
employee with the caller spending less than 2 minutes on
hold--improved 23 percent under one of the configurations being
tested by SSA.  In addition, busy signals dropped by more than 55
percent.  Staffing, however, did not increase, and many callers
reaching SSA did spend some time on hold before reaching an SSA
representative.  SSA field office staff viewed the installation of
voice mail equipment at their desks as having a very positive effect
on office efficiency and public service.  SSA has not yet completed
its two internal evaluations of the demonstration project.  GAO
concludes that the technology tested in the demonstration projects
has the potential to further SSA's public service goals.  Public
reaction and the effect on operations, however, will need to be
considered as SSA weighs the costs and the benefits of this
technology. 


      FOOD STAMP PROGRAM: 
      ACHIEVING COST NEUTRALITY IN
      MINNESOTA'S FAMILY
      INVESTMENT PROGRAM
      (GAO/RCED-96-54, FEB.  12,
      1996)
------------------------------------------------------- Appendix I:4.2

In 1994, Minnesota began a 5-year federally authorized welfare reform
project known as the Minnesota Family Investment Program.  Aimed at
simplifying the welfare system, the project consolidates the food
assistance and the cash benefits provided by three programs--Aid to
Families With Dependent Children, the Food Stamp Program, and
Minnesota's Family General Assistance Program--into a single monthly
payment.  The Food Stamp Act of 1977 requires that the federal
government spend no more for this project's food assistance component
in any fiscal year than it would have spent for the Food Stamp
Program.  That is, the project must be cost neutral.  To ensure cost
neutrality, the act requires the Agriculture Department and the state
of Minnesota to agree upon methodologies for estimating what the
costs of the Food Stamp Program for both benefits and administration
would have been had there been no project.  This report (1) describes
the methodologies that Minnesota agreed to use for estimating Food
Stamp Program costs that would have been incurred if the project had
not been implemented; (2) determines if Minnesota implemented these
methodologies; (3) assesses the reasonableness of these
methodologies, as implemented, for estimating the cost of the Food
Stamp Program for fiscal year 1994; and (4) compares the payments
that would have been paid to Minnesota using the agreed-upon
methodologies with the actual payments in fiscal year 1994. 


      CONGRESSIONAL RETIREMENT
      COSTS (GAO/GGD-96-24R, OCT. 
      12, 1995)
------------------------------------------------------- Appendix I:4.3

Pursuant to a congressional request, GAO provided information on the
proposal to change the congressional retirement system, focusing on
(1) the cost of congressional retirement benefits; (2) the potential
savings from the proposal; (3) how private sector retirement systems
compare with the congressional retirement system; and (4) the extent
to which private sector employers are replacing defined benefit
pension plans with defined contribution plans.  GAO noted that:  (1)
the estimated cost of providing future retirement benefits to 1994
congressional members would total $14,327,224; (2) over a 5-year
period, the cost of providing retirement benefits would total $71.5
million; (3) if the proposal were enacted, it would significantly
reduce the cost of member retirement programs; (4) the cost of
providing retirement benefits to 1994 congressional staff members
would total $116.5 million; (5) although federal employees receive
greater benefit amounts under the Civil Service Retirement System
(CSRS) than nonfederal employees before age 62, they receive smaller
amounts after age 62 and older when social security benefits are
available to nonfederal employees; and (6) the private sector does
not appear to be moving toward replacing defined benefit plans with
defined contribution plans. 


      DISTRICT'S WORKFORCE: 
      ANNUAL REPORT REQUIRED BY
      THE DISTRICT OF COLUMBIA
      RETIREMENT REFORM ACT
      (GAO/GGD-96-95, MAR.  29,
      1996)
------------------------------------------------------- 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 disability retirement
rates exceed a certain limit.  GAO concludes that no reduction is
required in the fiscal year 1997 payment to the fund. 


      FEDERAL EMPLOYEES'
      COMPENSATION ACT:  ISSUES
      ASSOCIATED WITH CHANGING
      BENEFITS FOR OLDER
      BENEFICIARIES
      (GAO/GGD-96-138BR, AUG.  14,
      1996)
------------------------------------------------------- Appendix I:4.5

The Federal Employees' Compensation Act (FECA) now allows
beneficiaries who are at or beyond retirement age to receive worker's
compensation benefits.  Possible changes to the legislation would
reduce these benefits.  This briefing report provides (1) a profile
of beneficiaries on the long-term FECA rolls, (2) views of proponents
and opponents of changing FECA benefits for older beneficiaries, and
(3) questions and issues that Congress might consider if crafting
benefit changes. 


      FEDERAL PENSIONS:  THRIFT
      SAVINGS PLAN HAS KEY ROLE IN
      RETIREMENT BENEFITS
      (GAO/HEHS-96-1, OCT.  19,
      1995)
------------------------------------------------------- Appendix I:4.6

As of September 1994, about 940,000 federal workers covered by the
Federal Employees Retirement System (FERS) were voluntarily
contributing an average of 5.7 percent of their salaries to the
Thrift Savings Plan (TSP).  Most of the remaining 300,000 workers
covered by FERS who were not contributing were in the lower pay
ranges.  Lower-paid workers who were contributing were doing so at
lower rates than higher-paid workers--an average of 4.4 percent of
their salaries.  However, lower-paid workers may achieve satisfactory
retirement income levels even with low contribution rates because
Social Security benefits are proportionately greater for them than
for higher-paid workers.  Higher-paid workers need to defer at least
5 percent of their salaries throughout their careers--if not more--to
achieve retirement income of 60 to 80 percent of their preretirement
salaries.  Educating FERS workers can play a key role in their making
wise preretirement investment choices.  Although TSP materials
discuss the plan's financial aspects, they do not explicitly discuss
how TSP can help workers covered by FERS achieve their retirement
income goals.  The TSP Board is seeking legislation that would enable
employees to invest in a domestic small capitalization fund and an
international stock fund.  GAO found that these two additions would
make TSP's investment options more closely resemble those in similar
private sector plans. 


      OLDER AMERICANS ACT FUNDING
      FORMULA (GAO/HEHS-96-137R,
      APR.  24, 1996)
------------------------------------------------------- Appendix I:4.7

Pursuant to a congressional request, GAO provided information on how
proposed changes to the funding formula for title III of the Older
Americans Act would affect equity in state funding and
per-person-in-need income.  GAO found that:  (1) the proposed formula
changes would improve funding equity and target more aid to the
elderly in the oldest age groups and low-income states; (2) the
formula changes would not affect small states that are guaranteed at
least 0.5 percent of the funds made available for state distribution;
(3) the changes would reduce cross-state disparities, increase
funding for states whose funding is below the national average, and
decrease funding for those states whose funding is above the average;
and (4) funding disparities could be further reduced if minority
status and poverty were included in the formula changes. 


      PASS PROGRAM:  SSA WORK
      INCENTIVE FOR DISABLED
      BENEFICIARIES POORLY MANAGED
      (GAO/HEHS-96-51, FEB.  28,
      1996)
------------------------------------------------------- Appendix I:4.8

SSA is poorly managing a small but growing program to encourage
disability beneficiaries to seek employment.  The plan for achieving
self-support (PASS) program, established in 1972, is currently
small--only about 10,300 persons participated in December 1994--but
the number of participants has swelled more than fivefold during the
past 5 years as awareness of the program has increased and millions
more disabled beneficiaries have become eligible to participate.  The
PASS program is vulnerable to abuse because of vague guidelines, and
its impact on employment is unknown because SSA does not collect
basic data on participants and their employment.  In addition, SSA
top management has not adequately considered the potential problems
posed by professional PASS preparers, whose fees--as much as
$800--are often included as PASS expenses.  SSA is trying to address
some of these internal control weaknesses, but it cannot guarantee
today that taxpayer dollars are being well spent. 


      PROPOSED PENSION REVERSION
      (GAO/HEHS-96-54R, OCT.  24,
      1995)
------------------------------------------------------- Appendix I:4.9

Pursuant to a congressional request, GAO provided information on
pension plan underfunding, focusing on a proposed legislative
provision that would allow companies to transfer excess assets out of
their defined benefit pension plans for any purpose.  GAO noted that: 
(1) current and termination liabilities are measures of liabilities
that a plan has accrued as of its valuation date and each relies on
different assumptions and yields very different estimates; (2) plans
that are significantly funded over their current liability can lose
plan funding rapidly due to bankruptcy, early retirements, or a
decline in interest rates; (3) participants can lose benefits when a
plan is terminated because the Pension Benefit Guaranty Corporation
(PBGC) generally does not insure all benefit amounts; (4) companies
may not transfer or obtain excess assets from a defined benefit plan
under current law, but some transfers may be permissible if the plans
merge and participants' benefits are not reduced; (5) it is unclear
whether the transfer of excess plan assets would release capital for
investment; and (6) although the proposed provision would allow
withdrawal of overfunded assets, plan sponsors may be required to
make longer cash contributions in the future. 


      PUBLIC PENSIONS:  SECTION
      457 PLANS POSE GREATER RISK
      THAN OTHER SUPPLEMENTAL
      PLANS (GAO/HEHS-96-38, APR. 
      30, 1996)
------------------------------------------------------ Appendix I:4.10

Millions of state and local government employees are trying to
increase their future retirement benefits by deferring some of their
wages to supplement pension plans, known as salary reduction
arrangements or plans.  The amount deferred or contributed to these
plans, however, may be at risk.  Recent media stories have recounted
instances of imprudent investment, improper use of plan funds by
sponsors, and possible seizure of plan funds by sponsoring
governments' creditors.  This report examines the risks of financial
loss inherent in such plans and discusses whether the provisions of
such plans treat participants comparably.  See also Public Pensions: 
Summary of Federal Pension Plan Data (GAO/AIMD-96-6, Feb.  16, 1996)
and Public Pensions:  State and Local Government Contributions to
Underfunded Plans (GAO/HEHS-96-56, Mar.  14, 1996). 


      PUBLIC PENSIONS:  STATE AND
      LOCAL GOVERNMENT
      CONTRIBUTIONS TO UNDERFUNDED
      PLANS (GAO/HEHS-96-56, MAR. 
      14, 1996)
------------------------------------------------------ Appendix I:4.11

State and local governments with underfunded pension plans risk tough
budget choices in the future if they do not make progress toward full
funding.  Their taxpayers will face a liability for benefits earned
by current and former government workers, forcing these governments
to choose between reducing future pension benefits or raising taxes. 
Funding of state and local pension plans has improved significantly
since the 1970s.  After adjusting for inflation, the amount of the
unfunded liability has been cut in half.  Still, in 1992, 75 percent
of state and local government pension plans in the Public Pension
Coordinating Council survey were underfunded; 38 percent were less
than 80 percent funded.  Sponsors of slightly more than half of the
plans in the survey made contributions on schedule to pay off any
unfunded liability.  One-third of the pension plans, however, were
underfunded in 1992 and were not receiving the actuarially required
sponsor contributions.  Of all plans with complete data, one-fifth
were underfunded and were not receiving full contributions in both
1990 and 1992.  See also Public Pensions:  Summary of Federal Pension
Plan Data (GAO/AIMD-96-6, Feb.  16, 1996) and Public Pensions: 
Section 457 Plans Pose Greater Risk Than Other Supplemental Plans
(GAO/HEHS-96-38, Apr.  30, 1996). 


      PUBLIC PENSIONS:  SUMMARY OF
      FEDERAL PENSION PLAN DATA
      (GAO/AIMD-96-6, FEB.  16,
      1996)
------------------------------------------------------ Appendix I:4.12

This report--one in a series of three reports on the status of public
pension plan funding--provides summary data on federal government
pension plans.  The other two reports in the series address state and
local government pension plans.  GAO focuses on federally sponsored
defined benefit and defined contribution plans.  See also Public
Pensions:  State and Local Government Contributions to Underfunded
Plans (GAO/HEHS-96-56, Mar.  14, 1996) and Public Pensions:  Section
457 Plans Pose Greater Risk Than Other Supplemental Plans
(GAO/HEHS-96-38, Apr.  30, 1996). 


      SOCIAL SECURITY
      ADMINISTRATION:  EFFECTIVE
      LEADERSHIP NEEDED TO MEET
      DAUNTING CHALLENGES
      (GAO/HEHS-96-196, SEPT.  12,
      1996)
------------------------------------------------------ Appendix I:4.13

With a staff of 64,000, SSA runs the nation's largest federal
program--social security--as well as the largest cash welfare
program--the supplemental security income (SSI) program.  SSA's
expenditures totaled $363 billion in fiscal year 1995, nearly
one-fourth of the $1.5 trillion federal budget.  SSA programs touch
the lives of nearly every American, providing benefits to the
retired, the disabled, and their dependents and survivors.  This
report, which is based on July 1995 testimony before Congress
(GAO/T-OCG-96-7), discusses SSA's progress in meeting the challenges
of managing for results and accountability; funding future retirement
benefits; rethinking SSI fraud, waste, and abuse; handling increasing
workloads with fewer resources; and establishing effective
leadership. 


      SOCIAL SECURITY DISABILITY: 
      BACKLOG REDUCTION EFFORTS
      UNDER WAY:  SIGNIFICANT
      CHALLENGES REMAIN
      (GAO/HEHS-96-87, JULY 11,
      1996)
------------------------------------------------------ Appendix I:4.14

SSA runs the nation's largest programs providing cash benefits to
people with severe long-term disabilities.  The number of persons
receiving either disability insurance (DI) or SSI benefits has soared
during the past decade.  At the same time, SSA has struggled to deal
with unprecedented growth in appeals of its disability decisions and
the resulting backlog of cases awaiting hearing decisions. 
Processing delays stemming from a backlog of more than half a million
appealed cases have created hardships for disability claimants, who
often wait more than a year for final disability decisions.  This
report discusses (1) factors contributing to the growth in appealed
cases, (2) SSA initiatives to reduce the backlog, and (3) long-term
steps that need to be taken to make the disability appeals process
more timely and efficient. 


      SOCIAL SECURITY:  ISSUES
      INVOLVING BENEFIT EQUITY FOR
      WORKING WOMEN
      (GAO/HEHS-96-55, APR.  10,
      1996)
------------------------------------------------------ Appendix I:4.15

When the social security program was established in the 1930s, less
than 15 percent of married women held paying jobs outside the home;
today, about 60 percent of married women are paid workers.  Despite
the movement of women into the labor market, the social security
benefit structure has remained essentially unchanged over the years. 
The fairness of the benefit structure has come under increasing
scrutiny, especially as it affects women who have earned benefits in
their own right.  For example, a two-earner couple will receive lower
combined benefits in retirement than an identical one-earner couple. 
Also, a married woman who works and pays social security taxes might
not, because of the dual entitlement limitation, receive higher
benefits than if she had never worked and received only a spousal
benefit.  Several proposals seek to remedy these inequities.  These
include two broad proposals--"earnings sharing" and a "double-decker"
plan--and several narrower proposals, such as reducing spousal
benefits.  None of the measures has been adopted, however, partly
because they would either boost program costs or reduce benefits for
some beneficiaries.  Their enactment could also impose a large
administrative burden on SSA. 


      SOCIAL SECURITY TRUST FUNDS
      (GAO/AIMD-96-30R, DEC.  12,
      1995)
------------------------------------------------------ Appendix I:4.16

Pursuant to a congressional request, GAO reviewed the Secretary of
the Treasury's actions during the 1995 debt ceiling crisis, focusing
on whether the Department of the Treasury followed normal investment
and redemption policies regarding the Social Security trust funds. 
GAO noted that Treasury records show that the Secretary followed
normal investment and redemption policies for all transactions
affecting the trust funds between November 1, 1995, and December 8,
1995. 


      SSA DISABILITY:  PROGRAM
      REDESIGN NECESSARY TO
      ENCOURAGE RETURN TO WORK
      (GAO/HEHS-96-62, APR.  24,
      1996)
------------------------------------------------------ Appendix I:4.17

During the past decade, the number of persons receiving benefits from
Social Security's DI and SSI programs increased 70 percent because of
program changes and economic and demographic factors.  These
programs, which provide assistance to persons with disabilities until
they return to work, if that is possible, provided $53 billion in
cash benefits to 7.2 million people in 1994.  Advances in technology,
such as standing wheelchairs and synthetic voice systems, and the
medical management of some physical and mental disabilities have
allowed some persons to work.  Moreover, there has been a greater
trend toward inclusion of and participation by people with
disabilities in the mainstream of society.  Yet both programs have
done little to identify recipients who might benefit from
rehabilitation and employment assistance and ultimately return to
work. 


      SSA OVERPAYMENT RECOVERY
      (GAO/HEHS-96-104R, APR.  30,
      1996)
------------------------------------------------------ Appendix I:4.18

Pursuant to a congressional request, GAO reviewed how SSA recovers
overpayments of benefits.  GAO found that:  (1) the amount of SSI,
RSI, and DI payments that SSA withholds to recoup overpayments is not
upwardly adjusted with cost-of-living increases in the many cases in
which the withholding is based on a fixed dollar amount negotiated
with the beneficiary, as opposed to a fixed percentage of the
recipient's monthly income or monthly benefit amount; (2) basing the
withholding on a percentage instead of a dollar amount would
accelerate the recovery of overpayments without imposing an undue
burden on recipients or causing excessive administrative costs; ( 3)
accelerating recoveries while recipients are still receiving benefits
improves the chance of collecting overpayments; (4) SSA
administrative costs would likely increase only in the first year of
implementation; and (5) the cost of notifying recipients of the new
withholding procedures would be negligible, because SSA already
notifies recipients when overpayments occur. 


      SUPPLEMENTAL SECURITY
      INCOME:  SOME RECIPIENTS
      TRANSFER VALUABLE RESOURCES
      TO QUALIFY FOR BENEFITS
      (GAO/HEHS-96-79, APR.  30,
      1996)
------------------------------------------------------ Appendix I:4.19

Existing law does not prohibit people from transferring resources to
qualify for benefits under the SSI program--the largest cash
assistance program for the poor and one of the fastest growing
entitlement programs.  Between 1990 and 1994, 3,500 SSI recipients
transferred assets, including cash, houses, land, and other items,
valued at $74 million.  Transfer values ranged as high as $800,000;
most transfers fell between $10,000 and $25,000.  The total amount of
resources transferred, however, is likely to be larger than GAO's
estimate because SSA is not required to verify the accuracy of
resource transfer information, which is self-reported by individuals. 
Moreover, because the information is self-reported, SSA is unlikely
to detect unreported transfers.  Without a transfer-of-resource
restriction, SSI recipients who transferred assets to qualify for
benefits would receive nearly $8 million in benefits in the 24 months
after they transferred resources.  Many of these recipients also
could have received Medicaid acute-care benefits at an annual value
of between $2,800 and $5,300 per recipient.  GAO estimates that from
1990 through 1995, SSA could have saved $14.6 million with a
transfer-of-income restriction similar to that used for Medicaid. 
Such a restriction could also boost the public's confidence in the
program's integrity. 


      THRIFT SAVINGS PLAN
      (GAO/HEHS-96-66R, NOV.  14,
      1995)
------------------------------------------------------ Appendix I:4.20

Pursuant to a congressional request, GAO reviewed (1) why Congress
replaced CSRS with FERS; and (2) the Federal Retirement Thrift
Investment Board's response to the GAO recommendation concerning the
inclusion of participant information on contributions to TSP
retirement accounts.  GAO noted that:  (1) Congress replaced CSRS
with FERS to provide federal employees with a retirement benefit that
included a Social Security payment, a basic FERS annuity, and
payments from amounts accumulated in a TSP account; and (2) the Board
did not implement the recommendation because it believed that it
would be violating its fiduciary duty to TSP participants and
misusing its funds. 


      401(K) PENSION PLANS:  MANY
      TAKE ADVANTAGE OF
      OPPORTUNITY TO ENSURE
      ADEQUATE RETIREMENT INCOME
      (GAO/HEHS-96-176, AUG.  2,
      1996)
------------------------------------------------------ Appendix I:4.21

Many workers fill the gap between social security and an adequate
retirement income with pension benefits, and one in four workers with
pension coverage participates in a 401(k) program.  GAO found, among
other survey results, that workers with higher incomes and college
educations tended to contribute more to 401(k) plans than others and
women tend to invest more conservatively than do men.  Also,
higher-income workers and better-educated workers with 401(k) pension
plans tend to contribute a larger percentage of their salaries to
their pension accounts and to invest their pension funds in
higher-yielding assets than do other 401(k) plan participants. 
Consequently, although many workers will have enough retirement
income, some workers, especially those with less education and lower
incomes, risk inadequate retirement incomes. 


   VETERANS/DOD ISSUES
--------------------------------------------------------- Appendix I:5


      NEOPLASMS IN PERSIAN GULF
      VETERANS (GAO/PEMD-96-15R,
      JUNE 21, 1996)
------------------------------------------------------- Appendix I:5.1

Pursuant to a congressional request, GAO reviewed Department of
Veterans Affairs' (VA) data on the frequency of abnormal tissue
growths among Persian Gulf War veterans and other military personnel. 
GAO noted that:  (1) VA data show that Persian Gulf War veterans have
a neoplasm-diagnosis rate that is more than three times higher than
that of nonwar veterans; (2) the higher neoplasm rate for war
veterans may be due to causes other than service in the Persian Gulf,
such as war veterans seeking VA hospital treatment more often than
nonwar veterans; (3) the rate of surgical procedures for the two
groups is not significantly different, which could mean that war
veterans' neoplasms are not as serious as those diagnosed among
nonwar veterans; and (4) analyzing alternative explanations for war
veterans' neoplasm rates would require extensive statistical analysis
and professional judgment. 


      DEFENSE HEALTH CARE: 
      EFFECTS OF MANDATED COST
      SHARING ON UNIFORMED
      SERVICES TREATMENT
      FACILITIES LIKELY TO BE
      MINOR (GAO/HEHS-96-141, MAY
      13, 1996)
------------------------------------------------------- Appendix I:5.2

The establishment of uniform benefits and cost sharing for DOD
beneficiaries is a key component of the TRICARE program--DOD's new
nationwide managed health care program--and is something that GAO and
others have long advocated.  Such uniformity would, in GAO's view,
eliminate inequities and confusion that now exist among beneficiaries
of military health plans.  Although adopting TRICARE cost shares may
cause some minor adverse selection for the Uniformed Services
Treatment Facilities (USTF), there should be no lasting negative
financial impact on its operations.  Moreover, the new cost shares,
which are similar to HMOs, are appropriate for the risks to be borne
by the USTFs and will likely make the USTF population more similar to
DOD's general beneficiary population.  More importantly, there should
be a financial impact.  DOD's current USTF capitation methodology
takes into account and allows for adjusted reimbursement levels for
such higher costs that result from changes in the enrollee cost
shares and population characteristics. 


      DEFENSE HEALTH CARE: 
      MEDICARE COSTS AND OTHER
      ISSUES MAY AFFECT UNIFORMED
      SERVICES TREATMENT
      FACILITIES' FUTURE
      (GAO/HEHS-96-124, MAY 17,
      1996)
------------------------------------------------------- Appendix I:5.3

Since fiscal year 1994, Congress has appropriated nearly $1 billion
for USTF to deliver health care to what now totals 124,000
beneficiaries.  In recent years, Congress has grown concerned about
the rising cost to treat USTF members, in part because some members
retain dual eligibility and unrestricted access to other government
health care services, such as Medicare and DOD hospitals.  Congress
directed DOD in 1991 to reform the USTF program by introducing a
managed care program.  As DOD begins to implement its new nationwide
managed care program--TRICARE--
questions about the program's future persist.  This report discusses
(1) whether unnecessary costs result from USTF members' use of other
federally funded health care sources and (2) other issues that need
to be considered as Congress deliberates reauthorization of the USTF
program. 


      DEFENSE HEALTH CARE:  NEW
      MANAGED CARE PLAN
      PROGRESSING, BUT COST AND
      PERFORMANCE ISSUES REMAIN
      (GAO/HEHS-96-128, JUNE 14,
      1996)
------------------------------------------------------- Appendix I:5.4

The DOD health care system, which costs $15 billion annually, is
undergoing sweeping reform.  Through TRICARE, DOD is trying to
improve access to care among its 8.3 million beneficiaries while
containing costs.  How well DOD implements and operates TRICARE may
define and shape military medicine for years to come.  Because of
TRICARE's complexity, scale, and impact on beneficiaries, GAO
reviewed the program, focusing on (1) whether DOD's experiences with
early implementation yielded the expected results, (2) how early
outcomes may affect costs, and (3) whether DOD has defined and is
capturing data needed to manage and assess TRICARE's performance. 
GAO concludes that despite initial confusion among beneficiaries
arising from marketing and education problems, as well as problems
with the compatibility of computer systems, early implementation of
TRICARE is progressing consistent with congressional and DOD goals. 
However, the success of DOD's efforts to implement resource-sharing
agreements and utilization management is critical to containing
health care costs.  DOD also needs to gather enrollment and
performance data so that it and Congress can assess TRICARE's success
in the future. 


      READJUSTMENT COUNSELING
      SERVICE:  VET CENTERS
      ADDRESS MULTIPLE CLIENT
      PROBLEMS, BUT IMPROVEMENT IS
      NEEDED (GAO/HEHS-96-113,
      JULY 17, 1996)
------------------------------------------------------- Appendix I:5.5

VA operates 205 community-based facilities known as Vet Centers to
help veterans make a successful transition from military to civilian
life.  Vet Center counselors reported visiting with about 138,000
veterans during fiscal year 1995, 84,000 of whom were new to Vet
Centers.  Most veterans do not establish long-term relationships with
Vet Center counselors; however, those who do represent a core group
who use services over extended periods for serious psychological
problems, such as post-traumatic stress disorder.  Other veterans
usually visit Vet Center counselors only once or twice for social
concerns, such as employment or benefit needs. 


      VA HEALTH CARE:  EFFECTS OF
      FACILITY REALIGNMENT ON
      CONSTRUCTION NEEDS ARE
      UNKNOWN (GAO/HEHS-96-19,
      NOV.  17, 1995)
------------------------------------------------------- Appendix I:5.6

As part of the fiscal year 1996 budget, the President requested $524
million for major VA construction projects.  These projects include
the construction of two new VA medical facilities and major
renovations at seven existing facilities.  This report discusses how
the projects are expected to benefit veterans and the relationships
between the proposed projects and VA's recent efforts to realign all
of its facilities into a new service network.  GAO also discusses the
potential effects of funding delays on VA's construction award dates
and costs. 


      VA HEALTH CARE:  EXPLORING
      OPTIONS TO IMPROVE VETERANS'
      ACCESS TO VA FACILITIES
      (GAO/HEHS-96-52, FEB.  6,
      1996)
------------------------------------------------------- Appendix I:5.7

Since its creation in 1930, VA's health care system has become one of
the nation's largest networks of direct delivery health care
providers, with 173 hospitals and 376 outpatient clinics nationwide. 
But because public and private health insurance programs have also
grown, most veterans now have alternatives to VA health care.  Many
veterans indicate that they use private providers because they live
too far from VA hospitals or outpatient clinics.  VA has recently
encouraged its facilities to improve veterans' access to VA health
care.  This report discusses (1) characteristics of recent users of
VA medical facilities; (2) the geographic accessibility of VA and
private medical facilities that provide standard benefits; and (3)
options that VA facilities might want to consider to improve the
accessibility of VA health care, such as locating new medical
facilities closer to where veterans live and contracting with private
providers. 


      VA HEALTH CARE:  HOW
      DISTANCE FROM VA FACILITIES
      AFFECTS VETERANS' USE OF VA
      SERVICES (GAO/HEHS-96-31,
      DEC.  20, 1995)
------------------------------------------------------- Appendix I:5.8

Living within 5 miles of a VA Hospital or outpatient clinic
significant increases the likelihood that a veterans will use VA
health care services.  Although most veterans live within 25 miles of
a VA hospital or outpatient clinic, use of VA facility declines
significantly among veterans living more than 5 miles from a VA
facility.  Only about 11 percent of veterans live within 5 miles of a
VA hospital providing acute medical and surgical care and 17 percent
within 5 miles of a VA outpatient clinic.  Use of VA health care
services does not decline with distance as rapidly among veterans
receiving VA compensation or pension payments.  Even those veterans
with a service-connected disability who live more than 100 miles from
a VA outpatient clinic are more likely to avail themselves of VA
outpatient services than are higher-income veterans with
nonservice-connected disabilities who live within 5 miles of a VA
outpatient clinic.  Other factors that may contribute to differences
in the use of VA services include broader eligibility and entitlement
to outpatient care for service-connected and low-income veterans,
veterans' ages, and differences in available resources. 


      VA HEALTH CARE:  ISSUES
      AFFECTING ELIGIBILITY REFORM
      EFFORTS (GAO/HEHS-96-160,
      SEPT.  11, 1996)
------------------------------------------------------- Appendix I:5.9

Pursuant to a congressional request, GAO reviewed various proposals
that would simplify and expand eligibility for veterans' health care
benefits. 

GAO found that:  (1) eligibility requirements for veterans health
care benefits have become increasingly complex and a source of
frustration to veterans, VA physicians, and administrators; (2) VA
does not have a defined or uniform benefits package and cannot ensure
the availability of covered services; (3) VA has forced physicians to
either deny needy veterans ineligible services or provide these
services illegally free of charge; (4) VA health care eligibility
reform could expand the types of services provided and allow veterans
lacking supplemental insurance access to needed services; (5) the
four legislative proposals reviewed could more than double the demand
for VA outpatient services, cause VA to ration care, and force VA to
seek larger appropriations to preserve its safety-net mission; (6)
alternative approaches including limiting the number of eligible
veterans and range of benefits added or increasing cost sharing could
preserve VA ability to provide specialized services; (7) although the
American Legion proposal incorporates all three of these approaches
and is a basis for future reform proposals, changes need to be made
to reduce the number of veterans covered, exempt VA from most federal
contracting laws, and designate VA as a Medicare provider; and (8)
one option to reduce the number of veterans who would be eligible
under the proposal and target those veterans who have low incomes and
lack supplemental insurance, would be to limit VA benefits for
veterans with no service-related disabilities. 


      VA HEALTH CARE: 
      OPPORTUNITIES FOR SERVICE
      DELIVERY EFFICIENCIES WITHIN
      EXISTING RESOURCES
      (GAO/HEHS-96-121, JULY 25,
      1996)
------------------------------------------------------ Appendix I:5.10

VA, which operates one of the nation's largest health care systems,
faces increasing pressure to contain or reduce spending as part of
governmentwide efforts to balance the budget.  This report discusses
ways VA could operate more efficiently and reduce the resources
needed to meet the needs of veterans in what is commonly referred to
as the mandatory care category.  GAO addresses (1) VA's forecasts of
future resource needs, (2) opportunities to run VA's system more
efficiently, (3) differences between VA and the private sector in
efficiency incentives, and (4) recent VA efforts to reorganize its
health care system and create efficiency incentives.  GAO concludes
that successful implementation of a range of reforms, coupled with
reduced demand for services, could save the VA health care system
billions of dollars during the next 7 years.  The success of these
efforts, however, depends on introducing efficiency incentives at VA
that have long existed in the private sector. 


      VA HEALTH CARE:  TRAVIS
      HOSPITAL CONSTRUCTION
      PROJECT IS NOT JUSTIFIED
      (GAO/HEHS-96-198, SEPT.  3,
      1996)
------------------------------------------------------ Appendix I:5.11

Pursuant to a congressional request, GAO provided information on VA's
planned construction of an outpatient clinic and additional bed space
at the David Grant Medical Center, focusing on (1) whether the
project could be adequately justified and (2) if there are
cost-effective alternatives to planned hospital construction. 

GAO found that:  (1) VA planned construction of additional bed space
and an outpatient clinic at Travis Air Base appears to be
unjustified; (2) VA has not revised its construction plans to reflect
the changes that have occurred in the health care marketplace and
advances in medical practices and technology that have reduced the
demand for hospital beds in Northern California; (3) VA has not
considered whether its construction plans will negatively affect
surrounding community hospitals; (4) the veteran population in
Northern California is expected to decline by 25 percent between 1995
and 2010 and may not be large enough to support a new outpatient
clinic; (5) VA is adequately meeting the health care needs of
Northern California Health Care System veterans; (6) although VA
clinics have experienced some space constraints, they have had no
problem in placing veterans needing hospital care and using community
hospitals for medical emergencies; (7) alternatives to VA
construction plans include modifying VA hospital referral patterns,
expanding use of other military and VA hospitals, granting VA more
authority to contract for lower cost community hospital services, or
allowing it to purchase a local Air Force hospital for use as a
hospital or outpatient clinic; (8) VA Sierra Pacific Network
officials are evaluating the best way to meet veterans' future health
care needs, make better use of VA facilities, and increase the use of
private and other public facilities; and (9) Congress' decision on
whether to fund the construction plan will significantly affect the
alternatives and options that can be implemented. 


      VA HEALTH CARE:  TRENDS IN
      MALPRACTICE CLAIMS CAN AID
      IN ADDRESSING QUALITY OF
      CARE PROBLEMS
      (GAO/HEHS-96-24, DEC.  21,
      1995.)
------------------------------------------------------ Appendix I:5.12

From fiscal year 1990 to fiscal year 1994, malpractice claims against
VA medical centers have steadily increased, from 678 to 978, with
payments made to claimants totaling more than $200 million.  In 1992,
VA entered into an agreement with the Armed Forces Institute of
Pathology (AFIP) to analyze trends in VA malpractice claims.  VA's
quality assurance staff, however, are making only limited use of the
information being developed by AFIP.  Although malpractice claim
information is available from DOD, it is not comparable to the
malpractice data that VA collects.  The main reason for the lack of
comparability is the absence of a standard data collection format. 
Nonetheless, GAO found that DOD information may be useful to VA to
draw comparisons in areas in which malpractice claims are being
generated, such as incidents related to surgery, diagnosis, and
medication. 


      VETERANS' HEALTH CARE: 
      FACILITIES' RESOURCE
      ALLOCATIONS COULD BE MORE
      EQUITABLE (GAO/HEHS-96-48,
      FEB.  7, 1996)
------------------------------------------------------ Appendix I:5.13

VA confronts the challenge of equitably allocating more than $16
billion in health care appropriations across a nationwide network of
hospitals, clinics, and nursing homes.  The challenge is made greater
by the changing demographics of veterans.  Although nationally the
veteran population is declining, some veterans have relocated from
the Northeast and the Midwest to southern and southwestern states in
the past decade, offsetting veteran deaths in these states.  VA has
tried for years to implement an equitable resource allocation
method--one that would link resources to facility workloads and
foster efficiency.  The need for such a system has become more urgent
in recent years because of the demographic shift in veterans and the
dramatic changes in health care resulting from increasingly limited
resources.  The resource allocation system can help VA achieve this
goal by forecasting workload changes and providing comparative data
on facilities' costs.  Nonetheless, VA has not taken steps to
overcome several barriers that can prevent it from acting on the data
the system produces.  If the system is to live up to its potential,
several changes must be made, including linking resource allocation
to VA's strategic plan, conducting a formal review and evaluation of
facility cost variations, evaluating the basis for not allocating
funds through resource planning and management, and using resource
planning and management to overcome differences in veterans' access
to care. 


      VETERANS' HEALTH CARE:  VA'S
      APPROACHES TO MEETING
      VETERANS' HOME HEALTH CARE
      NEEDS (GAO/HEHS-96-68, MAR. 
      15, 1996)
------------------------------------------------------ Appendix I:5.14

In fiscal year 1994, VA provided home health care to more than 40,000
veterans at a cost of $64 million to VA and millions more to
Medicare.  By providing them with home health care, VA allows these
veterans to continue living at home and in their communities, rather
than receive care in institutions.  Veterans may need home health
care for various reasons.  Some veterans may have chronic health
problems, such as heart disease, and require periodic visits, while
others may be discharged from VA medical centers following surgery
and need dressings changed or medications administered.  The number
of veterans needing home health care is expected to grow as the
veteran population ages and as VA discharges patients from its
hospitals to reduce the costs of hospitalization.  This report
provides information on (1) the characteristics and the services of
the home health care programs that VA uses, (2) the available data on
program costs, and (3) the way in which VA ensures that veterans
receive quality service. 


      VOCATIONAL REHABILITATION: 
      VA CONTINUES TO PLACE FEW
      DISABLED VETERANS IN JOBS
      (GAO/HEHS-96-155, SEPT.  3,
      1996)
------------------------------------------------------ Appendix I:5.15

Pursuant to a congressional request, GAO reviewed VA's vocational
rehabilitation program, focusing on (1) the percentage of
rehabilitated veterans, (2) the services provided, (3) the
characteristics of clients served, (4) the cost of rehabilitation,
and (5) VA's efforts to improve program effectiveness. 

GAO found that:  (1) the VA vocational rehabilitation program
continues to focus on training and higher education, but it places
few veterans in jobs; (2) from 1991 to 1995, VA rehabilitated only
about 8 percent of eligible veterans, while 51 percent continued to
receive program services; (3) those program participants with a
serious employment handicap declined from 40 percent to 29 percent
over the last 5 years and those with a 10-to-20 percent disability
increased from 34 percent to 42 percent; (4) over 90 percent of
program applicants were male and had completed high school and almost
25 percent had some college courses; (5) VA spent on average about
$20,000 on each employed veteran and $10,000 on each program dropout;
(6) over one-half of VA rehabilitation costs were for veterans'
subsistence allowances; (7) state vocational rehabilitation agencies
rehabilitated 37 percent of eligible individuals, while the remaining
individuals continued to receive state program services; (8) the
state vocational rehabilitation programs provided a wide range of
rehabilitation services and had a majority of severely disabled
clients; (9) almost 60 percent of the state program applicants were
male and had completed high school and 17 percent had completed some
college courses; (10) the state programs spent on average about
$3,000 on each rehabilitated client and about $2,000 on each dropout,
none of which covered clients' living expenses; (11) VA established a
design team in 1995 to improve program effectiveness, primarily by
increasing the percentage of suitably employed veterans, improving
staff job finding and placement skills, and developing a data
management system; and (12) VA plans to implement these program
changes in fiscal year 1997. 


   OTHER RELATED ISSUES
--------------------------------------------------------- Appendix I:6


      AGING ISSUES:  RELATED GAO
      REPORTS AND ACTIVITIES IN
      FISCAL YEAR 1995
      (GAO/HEHS-96-82, MAR.  6,
      1996)
------------------------------------------------------- Appendix I:6.1

This report provides a compilation of GAO's fiscal year 1995 products
and ongoing work on older Americans.  Because the elderly are one of
the fastest-growing segments of American society, Congress faces a
host of issues--from health care to social security to pensions--in
which the federal government will play an important role.  This
booklet is divided into three sections, which summarize different
types of GAO products relating to older Americans:  reports and
correspondence, testimony before Congress, and ongoing work. 
Overall, health, income security, and veterans issues were the areas
most frequently addressed by GAO work on older Americans. 


      HEALTH, EDUCATION,
      EMPLOYMENT, SOCIAL SECURITY,
      WELFARE, AND VETERANS
      REPORTS:  FIVE-YEAR REPORT
      1991-96 (GAO/HEHS-96-98W,
      MAR.  1, 1996)
------------------------------------------------------- Appendix I:6.2

GAO published a listing of reports and testimonies issued from March
1991 through February 1996, regarding such issues as:  (1) health
care services and access; (2) health insurance and financing; (3)
health care reform; (4) long-term care; (5) Medicare and Medicaid;
(6) public health and education; (7) early childhood, elementary,
secondary, and higher education; (8) school-to-work transition; (9)
equal employment opportunities; (10) labor-management relations; (11)
workplace quality; (12) children; (13) social security, disability,
and welfare benefits; (14) pensions; (15) military health care; and
(16) veterans' benefits. 


      HEALTH, EDUCATION,
      EMPLOYMENT, SOCIAL SECURITY,
      WELFARE, AND VETERANS
      REPORTS (GAO/HEHS-96-15W,
      OCT.  1, 1995)
------------------------------------------------------- Appendix I:6.3

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 month and
summarizes key products.  Another section lists all documents
published during the past year, organized chronologically by subject. 
Order forms are included. 


FISCAL YEAR 1996 TESTIMONIES ON
ISSUES AFFECTING OLDER AMERICANS
========================================================== Appendix II

GAO testified 34 times before congressional committees during fiscal
year 1996 on issues relating to older Americans.  Of these
testimonies, 1 was on education/employment, 15 on health, 3 on
housing, 8 on income security, and 7 on veterans/DOD issues. 


   EDUCATION AND EMPLOYMENT ISSUES
-------------------------------------------------------- Appendix II:1


      SENIOR COMMUNITY SERVICE
      EMPLOYMENT:  PROGRAM
      DELIVERY COULD BE IMPROVED
      THROUGH LEGISLATIVE AND
      ADMINISTRATIVE ACTIONS
      (GAO/T-HEHS-96-57, NOV.  2,
      1995)
------------------------------------------------------ Appendix II:1.1

The Labor Department's Senior Community Service Employment Program
finances part-time minimum-wage community service jobs for about
100,000 poor elderly Americans.  GAO found that Labor distributes
program funds through noncompetitive grants to 10 national
organizations, called national sponsors, and to state agencies. 
These national sponsors and state agencies, in turn, use the grant
funds to finance local employment projects run by community service
host agencies, such as libraries, nutrition centers, and parks, that
directly employ older Americans.  GAO found that the relative
distribution of funds to the national sponsors and state agencies
along with Labor's method of implementing the hold-harmless
provisions have resulted in the distribution of funds among and
within states that bear little relationship to actual need.  GAO also
found that, under Labor's regulations, expenditures that GAO believes
to be administrative in nature may be charged to another cost
category, allowing grantees to exceed the statutory 15-percent limit
on administrative costs. 


   HEALTH ISSUES
-------------------------------------------------------- Appendix II:2


      BLUE CROSS AND BLUE SHIELD: 
      CHANGE IN PHARMACY BENEFITS
      AFFECTS FEDERAL ENROLLEES
      (GAO/T-HEHS-96-206, SEPT. 
      5, 1996)
------------------------------------------------------ Appendix II:2.1

Of the 400 health plans available to federal workers, the Blue Cross
and Blue Shield plan is the largest, covering nearly 42 percent of
the 4 million federal enrollees.  To control drug costs, Blue Cross
and Blue Shield recently began requiring federal enrollees to pay 20
percent of the price of prescriptions purchased at participating
retail pharmacies.  Previously, federal enrollees did not have to pay
anything for prescription drugs.  Enrollees may continue to receive
drugs free of charge, however, if they buy them through the plan's
mail order program.  Members of Congress and retail pharmacies have
raised concerns about the quality of mail order services and the
effect of the change on the business of retail pharmacies that serve
plan enrollees.  To provide pharmacy services to its federal employee
health plan, Blue Cross and Blue Shield contracts with two PBMs:  PCS
Health Systems, Inc., which provides retail prescription drug
services, and Merck-Medco Managed Care, Inc., which provides mail
order drug services.  This testimony discusses (1) Blue Cross and
Blue Shield's reasons for the benefit change, (2) how it was
implemented, (3) the change's effect on retail pharmacies, and (4)
the extent to which PCS and Merck-Medco have met their contract
requirements for services provided to the federal health plan. 


      CONSUMER HEALTH INFORMATICS: 
      EMERGING ISSUES
      (GAO/T-AIMD-96-134, JULY 26,
      1996)
------------------------------------------------------ Appendix II:2.2

Technology has increased the amount of health information available
to the public, allowing consumers to become better educated and more
involved in their own health care.  Government and private health
care organizations rely on a variety of technologies to disseminate
health information on preventive care, illness and injury management,
treatment options, post-treatment care, and other topics.  This
report discusses consumer health informatics--the use of computers
and telecommunications to help consumers obtain information, analyze
their health care needs, and make decisions about their own health. 
GAO provides information on (1) the demand for health information and
the expanding capabilities of technology; (2) users' and developers'
views on potential systems advantages and issues surrounding systems
development and use; (3) government involvement--federal, state, and
local--in developing these technologies; and (4) the status of
related efforts by HHS.  As part of this review, GAO surveyed
consumer health informatics experts and presents their views on
issues that need to be addressed when developing consumer health
information systems. 


      FRAUD AND ABUSE:  MEDICARE
      CONTINUES TO BE VULNERABLE
      TO EXPLOITATION BY
      UNSCRUPULOUS PROVIDERS
      (GAO/T-HEHS-96-7, NOV.  2,
      1995)
------------------------------------------------------ Appendix II:2.3

Most Medicare providers try to abide by program rules and strive to
meet beneficiaries' needs.  Nevertheless, Medicare is overwhelmed in
its attempts to keep pace with, much less stay ahead of, those bent
on cheating the system.  GAO's recent investigations of Medicare
fraud and abuse have implicated home health agencies, medical
suppliers, pharmacists, rehabilitation therapy companies, and
clinical laboratories.  They are attracted by the high reimbursement
levels for some supplies and services, and the few barriers to entry
into this lucrative marketplace.  Once engaged in these profitable
activities, exploitative providers too often escape detection because
of inadequate claims scrutiny, elude pursuit by law enforcement
authorities because of the authorities' limited resources and
fragmented responsibilities, and face little risk of speedy or
appropriate punishment. 


      FRAUD AND ABUSE:  PROVIDERS
      EXCLUDED FROM MEDICAID
      CONTINUE TO PARTICIPATE IN
      FEDERAL HEALTH PROGRAMS
      (GAO/T-HEHS-96-205, SEPT. 
      5, 1996)
------------------------------------------------------ Appendix II:2.4

Although HHS' Office of Inspector General (OIG) has excluded
thousands of health care providers from state Medicaid programs
because they committed fraud or delivered poor care to beneficiaries,
weaknesses in the OIG's process could leave such providers on the
rolls of federal health programs for unacceptable periods of time. 
This puts at risk the health and safety of beneficiaries and
compromises the financial integrity of Medicaid, Medicare, and other
federal health programs.  The weaknesses include (1) lengthy delays
in the OIG's decision process, even in cases where a provider has
been convicted of fraud or patient abuse and neglect; (2)
inconsistencies among OIG field offices regarding which providers
will be considered for nationwide exclusion; (3) states not informing
the OIG about providers who agree to stop participating in their
Medicaid programs even though the provider withdrew because of
egregious patient care or abusive billing practices; and (4) how
states use information from the OIG to remove excluded providers from
state programs.  Because of incomplete records in the OIG field
offices, GAO could not reach a conclusion as to the magnitude of
these problems. 


      MEDICAID:  SPENDING
      PRESSURES SPUR STATES TOWARD
      PROGRAM RESTRUCTURING
      (GAO/T-HEHS-96-75, JAN.  18,
      1996)
------------------------------------------------------ Appendix II:2.5

Several factors, including federal mandates that expand eligibility,
medical price inflation, and creative financing schemes, have boosted
Medicaid costs.  To contain these expenses, 22 states have recently
sought waivers from federal regulations that limit their ability to
run extensive managed care programs.  Some of these states have
required the enrollment of their acute care patients--primarily
low-income women and children--into managed care programs and have
expanded coverage to previously ineligible persons.  Arizona, which
runs a Medicaid managed care program under a federal waiver obtained
more than 10 years ago, has lowered Medicaid spending by millions of
dollars.  It also leads the states in its development of information
systems for collecting medical encounter data essential for assessing
quality of care. 


      MEDICARE:  EXCESSIVE
      PAYMENTS FOR MEDICAL
      SUPPLIES CONTINUE DESPITE
      IMPROVEMENTS
      (GAO/T-HEHS-96-5, OCT.  2,
      1995)
------------------------------------------------------ Appendix II:2.6

Despite improvements by HCFA in claims monitoring, problems in
payments for medical supplies persist.  The inflexibility of
Medicare's fee schedule results in payment rates that are higher than
wholesale and many retail prices.  In addition, in the case of many
part A claims, claims processing contractors do not know what they
are paying for and in the case of part B claims, have not had a basis
for questioning unreasonably high charges.  Neither type of
contractor has been able to test claims for possible duplicate
payments.  For these reasons, Medicare has lost hundreds of millions
of dollars in unnecessary payments.  By obtaining the legislative
authority to modify payment rates in accordance with market
condition, requiring providers to itemize claims, and introducing the
relevant medical policies before paying for new benefits, HCFA could
reduce its dollar losses arising from medical supply payments. 
Contractors could avoid paying unreasonable charges and making
duplicate payments. 


      MEDICARE:  MILLIONS CAN BE
      SAVED BY SCREENING CLAIMS
      FOR OVERUSED SERVICES
      (GAO/T-HEHS-96-86, FEB.  8,
      1996)
------------------------------------------------------ Appendix II:2.7

Medicare contractors routinely pay hundreds of millions of dollars in
Medicare claims without first determining if the services provided
are necessary.  GAO reviewed payments to doctors for six groups of
high-volume medical procedures--ranging from eye examinations to
chest X rays--that accounted for nearly $3 billion in Medicare
payments in 1994.  GAO also surveyed 17 contractors to determine if
they had used medical necessity criteria in their claims processing
to screen for these six groups of procedures.  For each of the six
groups, more than half of the 17 contractors failed to use automated
screens to flag claims for unnecessary, inappropriate, or overused
treatments.  These prepayment screens could have saved millions of
taxpayer dollars now wasted on questionable services.  Problems with
controlling payments for widely overused procedures continue because
HCFA lacks a national strategy to control these payments.  HCFA now
relies on contractors to focus on procedures where local use exceeds
the national average.  Although this approach helps reduce local
overuse of some procedures, it is not designed to control overuse of
a procedure nationwide. 


      MEDICARE:  PRIVATE PAYER
      STRATEGIES SUGGEST OPTIONS
      TO REDUCE RAPID SPENDING
      GROWTH (GAO/T-HEHS-96-138,
      APR.  30, 1996)
------------------------------------------------------ Appendix II:2.8

Improvements to Medicare's traditional fee-for-service program could
yield much-needed savings.  With better management, this program,
which now serves about 90 percent of beneficiaries, could run more
efficiently while continuing to provide good service to the nation's
elderly.  This means allowing Medicare to use tools similar to those
used by private payers to manage health care costs.  Negotiated
discounts, competitive bidding, preferred providers, case management
utilization reviews--these and other tools allow private payers to
use market forces to control health care costs.  Most, however, are
not authorized for general use by HCFA, which runs Medicare.  This
results in a publicly financed program that pays higher-than-market
rates for some goods and services and sometimes pays without question
for improbably high bills.  Recent HCFA efforts and pending
legislation to address these problems appear promising.  In addition,
HCFA should test the feasibility of applying management strategies in
high-cost high-utilization areas.  Finally, Congress needs to give
HHS the flexibility to make prompt price adjustments. 


      MEDICARE:  PRIVATE-SECTOR
      AND FEDERAL EFFORTS TO
      ASSESS HEALTH CARE QUALITY
      (GAO/T-HEHS-96-215, SEPT. 
      19, 1996)
------------------------------------------------------ Appendix II:2.9

HCFA now estimates that 4.3 million Medicare beneficiaries are
enrolled in HMOs.  Enrollment is believed to be growing at a rate of
100,000 new members per month.  This testimony discusses ways to
ensure that quality care is provided to the Medicare beneficiaries
joining these HMOs.  HCFA, which runs Medicare, finds the potential
cost savings associated with managed care attractive.  Concerns have
been raised, however, that the cost control strategies employed by
HMOs could undermine the quality of care.  This testimony discusses
(1) quality assessment methods used by large corporate purchasers of
health insurance from HMOs, (2) quality assessment methods used by
HCFA in administering the Medicare HMO program, (3) quality
assessment methods HCFA plans for the future, and (4) what both
corporate purchasers and HCFA are doing to share information about
quality with employees and Medicare beneficiaries. 


      MEDICARE TRANSACTION SYSTEM: 
      STRENGTHENED MANAGEMENT AND
      SOUND DEVELOPMENT APPROACH
      CRITICAL TO SUCCESS
      (GAO/T-AIMD-96-12, NOV.  16,
      1995)
----------------------------------------------------- Appendix II:2.10

HCFA is developing a critical new claims-processing system, the
Medicare transaction system (MTS), to replace the nine systems now
used by Medicare.  MTS' goal is to better protect program funds from
waste, fraud, and abuse; allow better oversight of Medicare
contractor operations; improve service to beneficiaries and
providers; and cut administrative expenses.  The weaknesses in HCFA's
development of MTS stem from a lack of a disciplined management
process that has as its hallmark managing information systems and
technology as investments.  Not managing MTS in this way has led to
system design and development proceeding despite (1) difficulties in
defining requirements, (2) a compressed scheduled containing
significant overlap of system-development phases, and (3) a lack of
reliable information on costs and benefits.  These risks in the
development of MTS can be substantially reduced if HCFA adopts some
of the best practices that have proven effective in other
organizations:  managing systems as investment, changing information
management practices, creating line manager ownership, better
managing resources, and measuring performance. 


      PHARMACY BENEFIT MANAGERS: 
      EARLY RESULTS ON VENTURES
      WITH DRUG MANUFACTURERS
      (GAO/T-HEHS-96-85, FEB.  7,
      1996)
----------------------------------------------------- Appendix II:2.11

Recently, some of the largest drug companies have merged or formed
alliances with some of the largest PBMs.  PBMs manage the
prescription drug part of health insurance plans covering millions of
Americans.  These ventures gained attention not only because of their
size but because of concerns that the PBMs would automatically give
preference to their manufacturer partners' drugs over those made by
competitors.  The results of GAO's analysis of PBM formularies--a
list of preferred prescription drugs by therapeutic class, often with
cost designations--indicate that continued oversight of mergers and
alliances between pharmaceutical manufacturers and PBMs is warranted
to ensure competition in the marketplace.  For example, the changes
in Medco's formulary that appear to favor Merck drugs do not
necessarily show that Medco automatically gave preference to Merck
drugs over those of competitors.  However, the formulary changes
support the Federal Trade Commission's decision to continue
monitoring the Merck/Medco merger and other such ventures. 


      PRESCRIPTION DRUG PRICING: 
      IMPLICATIONS FOR RETAIL
      PHARMACIES
      (GAO/T-HEHS-96-216, SEPT. 
      19, 1996.)
----------------------------------------------------- Appendix II:2.12

Congressional hearings during the late 1980s highlighted the fact
that the prices that consumers paid for prescription drugs were
increasing more rapidly than the rate of inflation.  In 1990,
Congress tried to control prescription drug expenditures by
significantly changing the way that Medicaid pays for outpatient
drugs.  Vertical integration in the pharmaceutical market later
became a concern, particularly mergers between large drug companies
and PBMs.  This testimony responds to the following three questions: 
How and why has the process by which drugs get from manufacturers to
patients changed?  What have been the consequences for retail
pharmacies of changes in this process?  What general strategies are
retail pharmacies undertaking or proposing to respond to an
increasingly competitive environment? 


      PRESCRIPTION DRUGS AND THE
      ELDERLY:  MANY STILL RECEIVE
      POTENTIALLY HARMFUL DRUGS
      DESPITE RECENT IMPROVEMENTS
      (GAO/T-HEHS-96-114, MAR. 
      28, 1996)
----------------------------------------------------- Appendix II:2.13

GAO's analysis of 1992 data found that 17.5 percent of nearly 30
million Medicare recipients were still being prescribed drugs that
were generally unsuitable for their age group.  Although this is an
improvement over the almost 25 percent reported for 1987 data, the
inappropriate use of prescription drugs remains a major health
problem for the elderly.  Insufficient coordination of patient drug
therapies and weaknesses in communication between providers,
pharmacists, and patients have compounded the problem.  Inappropriate
prescribing practices and the ensuing drug use have caused many
elderly persons to suffer harmful effects that, according to FDA,
have resulted in hospitalizations costing $20 billion annually.  The
costs are partly covered by Medicare and Medicaid.  States, advocacy
groups, and physician and pharmacy organizations have, however, taken
steps to reduce inappropriate drug use.  In addition, managed care,
pharmacy benefit management, and other coordinated health care
systems have features designed to reduce inappropriate prescription
drug use among the elderly. 


      PRESCRIPTION DRUGS: 
      IMPLICATIONS OF DRUG
      LABELING AND OFF-LABEL USE
      (GAO/T-HEHS-96-212, SEPT. 
      12, 1996)
----------------------------------------------------- Appendix II:2.14

Physicians use a drug off-label when they prescribe an FDA-approved
drug for treatments other than those specified on the label.  GAO
testified that off-label prescribing is prevalent and presents
various problems for policymakers at different times.  As it stands
now, the problem is that the drug industry believes that labels
overly constrain its ability to promote its products.  This problem
can be solved either by relying on sources in addition to the label
to define appropriate promotion or by improving the process for
updating the label.  These two options are not necessarily mutually
exclusive and both have benefits and drawbacks. 


      STATUS OF MEDICARE'S FEDERAL
      HOSPITAL INSURANCE TRUST
      FUND (GAO/T-HEHS-96-94, FEB. 
      29, 1996)
----------------------------------------------------- Appendix II:2.15

This testimony focuses on GAO's ongoing review of the status of
Medicare's Federal Hospital Insurance (part A) Trust Fund.  GAO
discusses (1) when the administration became aware that the trust
fund had an operating deficit--that is, cash outlays exceeded cash
receipts--of $36 million for fiscal year 1995 and how the information
was disseminated and (2) what the status is of current projections
regarding the trust fund. 


   HOUSING ISSUES
-------------------------------------------------------- Appendix II:3


      HOUSING AND URBAN
      DEVELOPMENT:  LIMITED
      PROGRESS MADE ON HUD REFORMS
      (GAO/T-RCED-96-112, MAR. 
      27, 1996)
------------------------------------------------------ Appendix II:3.1

Despite the promise of reform, reinvention, and transformation
initiatives aimed at solving problems at the Department of Housing
and Urban Development (HUD), much more remains to be done.  HUD is
very much an agency in limbo, and few of the proposals in its
reinvention blueprint have been adopted.  This testimony addresses
HUD's difficulties in addressing (1) its long-standing management
shortcomings, (2) its portfolio of multi- and single-family housing
insured by the Federal Housing Administration, (3) budget and
management problems plaguing the public housing program, (4) the
spiraling cost of assisted housing programs, and (5) the need for
consensus on HUD reforms. 


      HOUSING AND URBAN
      DEVELOPMENT:  PUBLIC AND
      ASSISTED HOUSING REFORM
      (GAO/T-RCED-96-22, OCT.  13,
      1995)
------------------------------------------------------ Appendix II:3.2

Current federal housing programs are seen as overly regulated and
leading to warehousing of the poor, and Congress is asking state and
local governments to assume a larger role in defining how the
programs work.  Congress is now reconsidering the most basic aspects
of public housing policy--whom it will house, the resources devoted
to it, the amount of existing housing stock that will be retained,
and the rules under which it will operate.  These statements provide
GAO's views on legislation then pending before Congress--S.  1260 and
H.R.  2406--that would overhaul federal housing policy.  GAO
testified that the two bills contain provisions that will likely
improve the long-term viability of public housing, such as allowing
mixed incomes in public housing and conversion of some public housing
to housing vouchers or tenant-based assistance when that makes the
most sense.  GAO also supports provisions to significantly beef up
HUD's authority to intervene in the management of troubled housing
authorities, but GAO cautions that questions remain about the
reliability of the oversight system that HUD uses to designate these
agencies as troubled. 


      MULTIFAMILY HOUSING:  ISSUES
      AND OPTIONS TO CONSIDER IN
      REVISING HUD'S LOW-INCOME
      HOUSING PRESERVATION PROGRAM
      (GAO/T-RCED-96-29, OCT.  17,
      1995)
------------------------------------------------------ Appendix II:3.3

HUD's program for preserving low-income housing seeks to maintain the
affordable low-income housing that was created mainly under two
federal housing programs during the 1960s and 1970s.  Under these
programs, when owners received HUD-insured mortgages with 40-year
repayment periods, they entered into agreements with HUD that imposed
affordability restrictions, such as limits on the income level of
tenants and on the rents that could be charged at the properties. 
After 20 years, however, owners had the right to pay off their
mortgages in full without prior HUD approval and terminate the
affordability restrictions.  The preservation program has proven to
be complex and costly, prompting recommendations from HUD and others
to change or repeal the program.  This testimony focuses on (1) how
the current preservation program works, (2) the status of
preservation eligible projects, (3) concerns that have been raised
about the program, and (4) options for revising the program. 


   INCOME SECURITY ISSUES
-------------------------------------------------------- Appendix II:4


      FINANCIAL MANAGEMENT: 
      INTERIOR'S EFFORTS TO
      RECONCILE INDIAN TRUST FUND
      ACCOUNTS AND IMPLEMENT
      MANAGEMENT IMPROVEMENTS
      (GAO/T-AIMD-96-104, JUNE 11,
      1996)
------------------------------------------------------ Appendix II:4.1

Although the Department of the Interior has brought to a close its
project to reconcile the Indian trust funds, tribal accounts were
never fully reconciled because of missing records and the lack of an
audit trail in Interior's automated accounting systems.  In addition,
the 1996 report package that Interior provided to each tribe on the
reconciliation results did not explain or describe the many changes
in reconciliation scope and methodologies or the procedures that had
been planned but were not implemented.  As a result, the limitations
of the reconciliation were not evident.  Also, because of cost
considerations and the potential for missing records, individual
Indian trust fund accounts were not included in the reconciliation
project.  Indian tribes have raised concerns about the scope and the
results of the reconciliation process.  The vast majority of tribes
have yet to decide whether to accept or dispute their account
balances.  If Interior cannot resolve the tribes' concerns, a
legislated settlement process could be used to settle disputes over
account balances.  Interior has taken steps during the past 3 years
to correct these long-standing problems with the accuracy of the
Indian trust fund accounts, but these efforts will take years to
complete.  Moreover, the existing trust fund management and
accounting systems cannot ensure accurate trust fund accounting and
asset management.  The appointment of a Special Trustee for American
Indians was an important step in establishing high-level leadership
at Interior for Indian trust fund management. 


      SUPPLEMENTAL SECURITY
      INCOME:  NONCITIZEN CASELOAD
      CONTINUES TO GROW
      (GAO/T-HEHS-96-149, MAY 23,
      1996)
------------------------------------------------------ Appendix II:4.2

Noncitizens are one of the fastest growing groups of recipients of
SSI benefits.  They represent nearly one-third of aged SSI recipients
and about 6 percent of disabled recipients.  Although the growth rate
for noncitizen caseloads has slowed, it is still higher than that for
citizens, and the percentage of noncitizens relative to other SSI
recipients continues to rise.  About two-thirds of noncitizens
recipients--roughly 520,000--live in three states:  California, New
York, and Florida.  On the whole, noncitizens are more likely to
receive SSI than are citizens, but this may be primarily true for
refugees and asylees.  Adult children of aged immigrants and others
who say they are willing to financially support them sometimes do
not.  Eventually, some of these older immigrants receive SSI.  Also,
some translators have helped noncitizens to fraudulently obtain SSI
disability benefits. 


      SOCIAL SECURITY:  DISABILITY
      PROGRAMS LAG IN PROMOTING
      RETURN TO WORK
      (GAO/T-HEHS-96-147, JUNE 5,
      1996)
------------------------------------------------------ Appendix II:4.3

Each week, the DI and SSI programs make more than $1 billion in cash
payments to persons with disabilities.  Although these payments
provide a measure of income security, they do little to enhance the
work capacities and promote the economic independence of recipients. 
Societal attitudes have shifted, and current law, such as the
Americans With Disabilities Act, promotes economic self-sufficiency
among the disabled.  A growing number of private companies are
exploring ways to return people with disabilities to the workforce. 
Moreover, medical advances and new technologies provide greater
opportunities for people with disabilities to work.  This testimony
discusses how the structure of the DI and SSI programs impedes
recipients return to work and how strategies used in other disability
systems could help restructure the programs to encourage recipients
to return to work. 


      FEDERAL DOWNSIZING:  THE
      STATUS OF AGENCIES'
      WORKFORCE REDUCTION EFFORTS
      (GAO/T-GGD-96-124, MAY 23,
      1996)
------------------------------------------------------ Appendix II:4.4

The downsizing of the federal workforce is ahead of the schedule set
by the Workforce Restructuring Act.  At the same time, the
administration has called on agencies to restructure their workforces
by reducing management positions.  These jobs have yet to be reduced
to the extent called for by the National Performance Review.  With
regard to future workforce reductions, GAO found that in terms of
absolute numbers--and given historical quit rates--the remaining
employment ceilings called for by the act probably could be achieved
governmentwide through attrition.  Nevertheless, some agencies may be
forced to downsize more than others.  In such situations, buyouts or
reductions in force (RIF) may be necessary.  GAO found that buyouts
offer greater savings than RIFs, except when employees affected by a
RIF do not bump and retreat and are eligible to retire. 


      SSA BENEFIT STATEMENTS: 
      STATEMENTS ARE WELL RECEIVED
      BY THE PUBLIC BUT DIFFICULT
      TO COMPREHEND
      (GAO/T-HEHS-96-210, SEPT. 
      12, 1996)
------------------------------------------------------ Appendix II:4.5

The personal earnings and benefit estimate is a six-page statement
produced by SSA that supplies information about a worker's yearly
earnings on record at SSA; eligibility for social security
retirement, survivor, and disability benefits; and estimates of these
benefits.  SSA has tried to improve the statement, and the public has
found it to be helpful for retirement planning.  However, the
statement falls short in clearly communicating the complex
information that readers need to understand concerning SSA's programs
and benefits.  For example, the document's design and organization
make it difficult for readers to locate important information. 
Readers are also confused by several important explanations, such as
who in their family is also eligible for benefits and how much these
family members might receive.  SSA is considering redesigning the
statement, but only if this effort reduces printing costs.  This
approach overlooks hidden costs, such as (1) inquiries from people
who do not understand the statement and (2) the possibility that a
poorly designed statement can undermine public confidence. 


      SUPPLEMENTAL SECURITY
      INCOME:  NONCITIZENS HAVE
      BEEN A MAJOR SOURCE OF
      CASELOAD GROWTH
      (GAO/T-HEHS-96-88, FEB.  6,
      1996)
------------------------------------------------------ Appendix II:4.6

Noncitizens are among the fastest growing groups receiving benefits
from the SSI program, which provides means-tested benefits to
eligible blind, elderly, or disabled persons.  Noncitizens represent
nearly one-third of aged SSI recipients and 5.5 percent of disabled
recipients.  About two-thirds of noncitizen SSI recipients live in
three states--California, New York, and Florida.  On the whole,
noncitizens are more likely to receive SSI than citizens, but this
may be true primarily for refugees and asylum seekers.  Adult
children of aged immigrants and others who say they are willing to
financially support them sometimes do not.  Eventually, many of these
aged immigrants receive SSI.  Also, some translators help noncitizens
to fraudulently obtain SSI disability benefits. 


      SSA DISABILITY
      REENGINEERING:  PROJECT
      MAGNITUDE AND COMPLEXITY
      IMPEDE IMPLEMENTATION
      (GAO/T-HEHS-96-211, SEPT. 
      12, 1996)
------------------------------------------------------ Appendix II:4.7

Given the high cost and lengthy processing times of SSA's current
disability claims process, the agency needs to continue its redesign
efforts.  SSA's redesign plan is proving to be overly ambitious,
however.  Some initiatives are also becoming more complex as SSA
expands the work required to complete them.  The agency's approach is
likely to limit the chances for the project's success and has delayed
implementation:  testing milestones have slipped and support for the
redesign effort has waned.  In addition, the increasing length of the
overall project and specific initiatives heighten the risk of
disruption from turnover among key executives.  GAO believes that as
SSA proceeds with its redesign project it should focus on key
initiatives, starting first with those that will quickly and
significantly reduce claims processing time and administrative costs. 


      SOCIAL SECURITY
      ADMINISTRATION:  EFFECTIVE
      LEADERSHIP NEEDED TO MEET
      DAUNTING CHALLENGES
      (GAO/T-OCG-96-7, JULY 25,
      1996)
------------------------------------------------------ Appendix II:4.8

With a staff of 64,000, SSA runs the largest federal program--Social
Security--as well as the largest cash welfare program--SSI.  The
agency's expenditures totaled $363 billion in fiscal year 1995,
almost one-fourth of the $1.5 trillion federal budget.  This
testimony discussed the difficult challenges facing SSA in the coming
decades:  taking part in the debate over future financing of Social
Security; encouraging disability recipients to return to work;
reducing fraud and abuse; and managing workforce and technology
investments so that SSA can meet the needs of America's retired,
disabled, and poor. 


   VETERANS/DOD ISSUES
-------------------------------------------------------- Appendix II:5


      DEFENSE HEALTH CARE: 
      TRICARE PROGRESSING, BUT
      SOME COST AND PERFORMANCE
      ISSUES REMAIN
      (GAO/T-HEHS-96-100, MAR.  7,
      1996)
------------------------------------------------------ Appendix II:5.1

DOD's nationwide managed health care program--TRICARE--represents a
sweeping reform of the $15 billion per year military health care
system.  TRICARE seeks to improve access to care and ensure
high-quality, consistent health care benefits for the 1.7 million
active-duty service members and some 6.6 million nonactive-duty
beneficiaries.  It also seeks to preserve choice for nonactive-duty
beneficiaries by allowing them to choose whether to enroll in TRICARE
Prime, which resembles an HMO; use a preferred provider organization;
or use civilian health care providers under a fee-for-service
arrangement.  Despite initial beneficiary confusion caused by
education and marketing problems, early implementation of the program
is progressing consistent with congressional and DOD goals.  Measures
may be necessary, however, such as gathering cost and access-to-care
data, to help Congress and DOD better assess the program's future
success.  In addition, retirees, who make up half of those eligible
for military health care, remain concerned about TRICARE's effect on
their access to medical services. 


      VA HEALTH CARE:  APPROACHES
      FOR DEVELOPING
      BUDGET-NEUTRAL ELIGIBILITY
      REFORM (GAO/T-HEHS-96-107,
      MAR.  20, 1996)
------------------------------------------------------ Appendix II:5.2

Reforming eligibility for health care benefits offered by VA would
pose a major challenge even with unlimited resources.  But with
Congress and VA facing mounting pressure to limit VA health care
spending as part of governmentwide efforts to reduce the deficit,
this challenge has become even greater.  This testimony discusses (1)
the problems that VA's current eligibility and contracting provisions
create for veterans and providers, (2) the relationship between
inappropriate admissions to VA hospitals and VA eligibility
provisions, (3) proposals to reform VA eligibility and contracting
rules and their potential impact on the deficit, and (4) options to
achieving budget-neutral eligibility reform. 


      VA HEALTH CARE:  EFFORTS TO
      IMPROVE VETERANS' ACCESS TO
      PRIMARY CARE SERVICES
      (GAO/T-HEHS-96-134, APR. 
      24, 1996)
------------------------------------------------------ Appendix II:5.3

VA runs one of the nation's largest health care systems, including
173 hospitals and 220 clinics.  Last year, VA spent about $16 million
serving 2.6 million veterans.  This testimony focuses on VA's efforts
to increase veterans' access to health care.  GAO discusses legal,
financial, and equity-of-access issues facing VA managers as they try
to establish new access points--a VA clinic or a VA-funded or
VA-reimbursed private clinic, group practice, or individual
practitioner that is geographically separate from the parent
facility.  Access points are intended to provide primary care to all
veterans and refer those needing specialized services or inpatient
stays to VA hospitals. 


      VA HEALTH CARE: 
      OPPORTUNITIES TO INCREASE
      EFFICIENCY AND REDUCE
      RESOURCE NEEDS
      (GAO/T-HEHS-96-99, MAR.  8,
      1996)
------------------------------------------------------ Appendix II:5.4

With a fiscal year 1995 appropriation of $16.2 billion, the VA health
care system faces mounting pressure to contain or reduce spending as
part of governmentwide efforts to reach a balanced budget.  This
testimony addresses (1) VA's forecasts of future resource needs, (2)
opportunities to run the VA system more efficiently, (3) differences
between VA and the private sector in terms of initiatives to become
more efficient, and (4) recent VA efforts to reorganize its health
care system and create incentives to operate more efficiently. 


      VA HEALTH CARE: 
      OPPORTUNITIES TO REDUCE
      OUTPATIENT PHARMACY COSTS
      (GAO/T-HEHS-96-162, JUNE 11,
      1996)
------------------------------------------------------ Appendix II:5.5

VA allows its doctors to prescribe over-the-counter products because
concerns have been raised that some veterans may lack the money to
buy needed items.  VA requires prescriptions as a way to control
veterans' access to over-the-counter products in VA pharmacies.  In
fiscal year 1995, for example, VA pharmacies dispensed analgesics,
such as aspirin and acetaminophen, nearly 3 million times.  The
benefits package that most VA facilities offer for over-the-counter
products is more generous than that available from other health
plans.  VA also provides other features, such as free
over-the-counter product mail service and deferred credit for
copayments owed, that are not common in other plans.  GAO makes
several suggestions for reducing the amount of money VA spends to
dispense over-the-counter products.  First, VA staff could more
strictly adhere to statutory eligibility rules.  Second, VA could
more efficiently dispense over-the-counter products and collect
copayments.  Third, VA facilities could further reduce the number of
over-the-counter products available to veterans on an outpatient
basis.  Finally, Congress could expand copayment requirements. 


      VETERANS BENEFITS
      MODERNIZATION:  MANAGEMENT
      AND TECHNICAL WEAKNESSES
      MUST BE OVERCOME IF
      MODERNIZATION IS TO SUCCEED
      (GAO/T-AIMD-96-103, JUNE 19,
      1996)
------------------------------------------------------ Appendix II:5.6

If the Veterans Benefits Administration (VBA) is to reduce operating
costs and improve critical service to nearly 27 million veterans and
their dependents, it needs to streamline its business processes and
take more advantage of information technology.  However, VBA is
experiencing many of the classic management and technical problems
that have prevented federal agencies from reaping the benefits of
substantial investment in information technology.  This testimony
discusses the steps VBA needs to take in the following three areas to
improve its chances for success:  (1) creating a credible business
strategy and supporting an information resources management plan; (2)
developing a better investment strategy for choosing and managing its
portfolio of information technology projects in a more disciplined,
businesslike way; and (3) strengthening its technical ability to
develop software applications that are critical to its efforts to
control costs and improve service to veterans. 


      VETERANS' HEALTH CARE: 
      CHALLENGES FOR THE FUTURE
      (GAO/T-HEHS-96-172, JUNE 27,
      1996)
------------------------------------------------------ Appendix II:5.7

With a budget of $16.6 billion and a network of hundreds of
hospitals, outpatient clinics, and nursing homes, VA's health care
system provides medical services to more than 26 million veterans. 
VA was seeking to fundamentally change the way in which it runs its
health care delivery and financing systems.  It was also seeking
authority to significantly expand eligibility for health care
benefits and to both buy health care services from and sell them to
the private sector.  This testimony discusses (1) changes in the
veterans population and the demand for VA health care services; (2)
how well the existing VA system, and other public and private health
benefits programs, meet the health care needs of veterans; (3) steps
that could be taken using existing resources and legislative
authority to address veterans' unmet health care needs and increase
equity of access; (4) how other countries have addressed the needs of
an aging and declining veteran population; and (5) approaches for
preserving VA's direct delivery system, alternatives to preserving
the direct delivery system, and combinations of both. 


ONGOING WORK AS OF SEPTEMBER 30,
1996, ON ISSUES AFFECTING OLDER
AMERICANS
========================================================= Appendix III

At the end of fiscal year 1996, GAO had 32 ongoing assignments that
affected older Americans.  Of these, 18 were on health, 6 on income
security, and 8 on veterans/DOD issues. 


   HEALTH ISSUES
------------------------------------------------------- Appendix III:1

Enrollment Bias May Result in Overpayments to Medicare HMOs (code
101369)

Review of Medicare Marketing Practices (code 101381)

Limiting the HMO Enrollment Period to Once a Year for Medicare
Beneficiaries (code 101392)

Can Medicare Learn From Private Sector Market-Oriented Purchasing
Strategies (code 101398)

Study of Key Factors Contributing to Enrollment in the Medicare Risk
Contract Program (code 101400)

Medicare Certification of Home Health Agencies (code 101501)

Medicare Payments for Durable Medical Equipment (code 101502)

Medicare Spending Trends and the Impact of Managed Care (code 101507)

Care Management in Continuing Care Retirement Communities (code
101509)

Long-Term Care Use Spending by Medicare and Medicaid (code 101510)

Review of Lab Service Utilization Rates for Medicare End-Stage Renal
Disease Patients (code 106433)

Review of Modern Management Practices That Can Be Implemented in
Medicare to Achieve Savings and Improve Operations (code 106437)

Compliance With Federal Loss Ratio Standards in 1994 and 1995 (code
106438)

Review of Medicare Payments for Oxygen Equipment and Supplies (code
108281)

Skilled Nursing Facilities (code 106432)

Medicare Diabetes Care (code 108255)

HMO Enrollment of Chronically Ill (code 108269)

Epidemiology of Alzheimer's Disease (code 973430)


   INCOME SECURITY ISSUES
------------------------------------------------------- Appendix III:2

SSI Management Oversight (code 105153)

SSI/Medicaid Computer Matching (code 106809)

SSA's 800 Number Telephone Service (code 105936)

Update on SSA's Challenges (code 105938)

Report on Retirement Income Issues (code 207444)

Beneficiary Employability (code 106515)


   VETERANS/DOD ISSUES
------------------------------------------------------- Appendix III:3

Military Retirement Alternatives (code 703128)

Military Retiree Health Issues (code 101491)

VA Substance Abuse Programs (code 101482)

VA Hospital Issues (code 406117)

VA's Disability Rating Schedule (code 105746)

VA Nursing Home Issues (code 101471)

VA Health Care Access (code 406125)

Maximizing Use of VA's Excess Health Care Capacity (code 406126)


*** End of document. ***