DOD AND VA HEALTH CARE Federal Recovery Coordination Program Continues to Expand but Faces Significant Challenges

Why GAO Did This Study

In 2007, following reports of poor case management for outpatients at Walter Reed Army Medical Center, the Departments of Defense (DOD) and Veterans Affairs (VA) jointly developed the Federal Recovery Coordination Program (FRCP) to coordinate the clinical and nonclinical services needed by severely wounded, ill, and injured servicemembers and veterans. The FRCP, which continues to expand, is administered by VA, and the care coordinators, called Federal Recovery Coordinators (FRC), are VA employees. This report examines

(1) whether servicemembers and veterans who need FRCP services are being identified and enrolled in the program,

(2) staffing challenges confronting the FRCP, and

(3) challenges facing the FRCP in its efforts to coordinate care for enrollees.

GAO reviewed FRCP policies and procedures and conducted over 170 interviews of FRCP officials, FRCs, headquarters officials and staff of DOD and VA case management programs, and staff at medical facilities where FRCs are located.

What GAO Recommends

GAO recommends that VA direct the FRCP Executive Director to establish systematic oversight of enrollment decisions, complete development of a workload assessment tool, document staffing decisions, and develop and document a rationale for FRC placement. GAO received comments from DOD and VA; VA concurred with GAO’s recommendations.

Full Report

U.S. GAO - Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments

GAO Report-11-409T March 9, 2011
Highlights Page (PDF) Full Report (PDF, 31 pages) Accessible Text

GAO has designated Medicare and Medicaid as high-risk programs because they are particularly vulnerable to fraud, waste, abuse, and improper payments (payments that should not have been made or were made in an incorrect amount). Medicare is considered high-risk in part because of its complexity and susceptibility to improper payments, and Medicaid because of concerns about the adequacy of its fiscal oversight to prevent inappropriate spending. In fiscal year 2010, the Centers for Medicare & Medicaid Services (CMS)--the agency that administers Medicare and Medicaid--estimated that these programs made a total of over $70 billion in improper payments. This statement focuses on how implementing prior GAO recommendations and recent laws, as well as other agency actions, could help CMS carry out five key strategies GAO identified in previous reports to help reduce fraud, waste, and abuse and improper payments in Medicare and Medicaid. It is based on 16 GAO products issued from April 2004 through June 2010 using a variety of methodologies, such as analyses of Medicare or Medicaid claims, review of relevant policies and procedures, and interviews with officials. In February 2011, GAO also received updated information from CMS on agency actions.

The amount of improper payments creates urgency for CMS to effectively implement prior GAO recommendations, provisions in recently enacted laws, and recent guidance related to five key strategies to help reduce fraud, waste, abuse, and improper payments in Medicare and Medicaid. 1. Strengthening provider enrollment standards and procedures. Strengthening the standards and procedures for provider enrollment can help reduce the risk of enrolling entities intent on defrauding the program. The Patient Protection and Affordable Care Act as amended (PPACA) strengthens aspects of provider enrollment in Medicare and Medicaid. CMS is implementing these provisions, which include designating providers by levels of risk and providing more stringent review of high-risk providers. 2. Improving prepayment review of claims. Prepayment reviews of claims help ensure that Medicare pays correctly the first time. CMS is implementing a PPACA provision requiring states to add automated prepayment controls in their Medicaid programs. In addition, CMS is seeking contractors to apply predictive modeling analysis to claims as a way to develop new prepayment controls to add to Medicare; however, CMS has not implemented certain GAO recommendations related to prepayment review. 3. Focusing postpayment claims review on most vulnerable areas. Postpayment reviews are critical to identifying payment errors and recouping overpayments. CMS is instituting recovery audit contractor (RAC) programs in Medicare and Medicaid to increase postpayment review. However, CMS contractors generally choose their focus for claims review, and GAO continues to contend that CMS should make it a priority to focus claims administration contractors' postpayment review on the most vulnerable areas. 4. Improving oversight of contractors. CMS's oversight of contractors' activities to address fraud, waste, and abuse is critical. CMS has taken action to address GAO recommendations to improve oversight of prescription drug plan sponsors' fraud and abuse programs and to comply with other contractor oversight provisions in PPACA. 5. Developing a robust process for addressing identified vulnerabilities. Having mechanisms in place to resolve vulnerabilities that lead to improper payment is critical, but CMS has not developed a robust corrective action process for vulnerabilities identified by Medicare RACs, and has not fully implemented GAO recommendations to improve it. Further, CMS's guidance to states on Medicaid RAC programs did not include steps to address vulnerabilities through a corrective action process. Effective implementation of these recommendations, provisions of law, and guidance will be a key factor in helping to reduce future improper payments.


U.S. GAO - Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments

U.S. GAO - Medicare Advantage: Comparison of Plan Bids to Fee-for-Service Spending by Plan and Market Characteristics

GAO-11-247R February 4, 2011
Full Report (PDF, 36 pages) Accessible Text

Summary

While most of Medicare's 46 million beneficiaries are covered by the traditional fee-for-service (FFS) program, about one in four beneficiaries receives benefits through private health plans under the Medicare Advantage (MA) program. Under the FFS program, Medicare pays health care providers for each covered service they furnish. While Medicare sets the price it pays, the volume of services--and, as a consequence, total spending--remains largely uncontrolled. In contrast, MA plans have more control over both the price they pay to providers and the quantity of services they deliver. As of September 2010, more than 11 million beneficiaries were enrolled in approximately 3,900 MA plans sponsored by 181 parent MA organizations (MAO). MAOs generally offer beneficiaries one or more plans to choose from--with different coverage, premiums, and cost sharing features--in the areas they serve. Also, MA plans may provide additional benefits not offered under FFS Medicare, such as reduced cost sharing or vision and dental coverage. Medicare pays plans a fixed amount per enrolled beneficiary monthly. In 2010, Medicare payments to MA plans totaled an estimated $115 billion. In June of each year, MA plans submit bids to the Centers for Medicare & Medicaid Services (CMS)--the agency that administers the Medicare program--prior to the start of the contract year that begins January 1. To assist plans in preparing their bids, CMS publishes projections of FFS spending by county. Plans' bids consist of their projected revenue requirements (including profit) for providing standard Medicare services to an average enrollee (risk- adjusted for differences in health status) in its service area. The bids also include county-level projections of enrollment and average beneficiary risk scores. Comparisons of plan bids to projected FFS spending indicate the extent to which MA revenue requirements are less or greater than spending for the same services under traditional Medicare. The payment to each plan is determined by the bid and a benchmark--the maximum amount Medicare will pay in each county within the plan's service area. The relationship of the bid to the benchmark determines whether the plan's enrollees pay additional premiums or receive additional benefits. If a plan's bid is higher than the benchmark, Medicare pays the plan its benchmark and enrollees pay the remainder in their monthly premium. If the bid is lower than the benchmark, the plan receives its bid and a portion of the difference as a rebate, which must be used to reduce premiums, reduce cost sharing, or provide extra coverage. However, because the benchmarks are generally greater than spending in FFS, even plans that bid below FFS spending levels in their service areas are paid above FFS spending amounts. Congress asked us to examine the relationship between MA plan bids and service area spending. In this report, we assessed:

(1) how MA plan bids compare to FFS spending in their service areas overall and by plan type, FFS spending level, and payment benchmarks;

(2) the association between the level of MAO market concentration and plan bids relative to FFS spending in their service areas; and

(3) how the components of MA plan bids compare by plan and market characteristics.

Complete Summary

GAO Launches Flickr Page

Image via WikipediaThe U.S. Government Accountability Office’s (GAO) latest step into the world of new and social media communication is an agency presence on the image-sharing website Flickr. The GAO Flickr page features selected photos and graphics from GAO reports that are searchable, viewable, and downloadable by visitors to the site.

“GAO continues to seek out new, innovative ways to convey our findings,” said Gene L. Dodaro, Comptroller General of the United States and head of the GAO. “The images in our reports help tell the story of government accountability by making complex concepts and data more understandable. Our Flickr page will allow us to highlight selected images and share them more easily with Congress and the public.”

The GAO Flickr page can be found at http://www.flickr.com/photos/usgao/. Flickr has over 51 million registered members who upload about 3,000 images per minute. Over 5 billion images are available for viewing on the site, including those posted by government entities such as the Library of Congress, NASA, and the White House.

Appointments AnnouncedTo Methodology Committee Of The Patient-Centered Outcomes Research Institute (PCORI)

Gene L. Dodaro, Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO), today announced the appointment of 15 members to the Methodology Committee of the Patient-Centered Outcomes Research Institute (PCORI).

 

“The Methodology Committee has the responsibility of helping PCORI develop and update methodological standards and guidance for comparative clinical effectiveness research.  The  men and women named today bring impressive credentials and experience to this important task,” Dodaro said.

 

The Patient Protection and Affordable Care Act authorized PCORI as a non-profit corporation to assist patients, clinicians, purchasers, and policymakers in making informed health decisions by providing quality, relevant evidence on how best to prevent, diagnose, treat, and monitor diseases and other health conditions.

 

The Act directs the Comptroller General to appoint up to 15 members to PCORI’s Methodology Committee.  In addition to the 15 members appointed today, the Director of the Agency for Healthcare Research and Quality and the Director of the National Institutes of Health, or their designees, will also serve on the committee.

 

The members appointed to the Methodology Committee are:

 

•     Naomi Aronson, PhD, Executive Director, Blue Cross and Blue Shield Association Technology Evaluation Center.

 

•     Ethan Basch, MD, MSc, medical oncologist and health services researcher, Department of Medicine and Department of Epidemiology, Memorial Sloan-Kettering Cancer Center.

 

•     Alfred Berg, MD, MPH, Professor, Department of Family Medicine, University of Washington.

 

•     David Flum, MD, MPH, Professor, Department of Surgery and Adjunct Professor, Department of Health Services, University of Washington Schools of Medicine and Public Health; Attending physician, General Surgery, University of Washington Medical Center.

 

•     Sherine Gabriel, MD, MSc, Professor of Medicine and of Epidemiology, and the William J. and Charles H. Mayo Professor, Mayo Clinic.

 

•     Steven Goodman, MD, PhD, Professor of Oncology, of Pediatrics, of Epidemiology and of Biostatistics, Johns Hopkins School of Medicine and Bloomberg School of Public Health. 

 

•     Mark Helfand, MD, MS, MPH, Professor of Medicine and of Medical Informatics and Clinical Epidemiology, Oregon Health & Science University; Staff physician, Portland VA Medical Center.

 

•     John Ioannidis, MD, DSc, the C.F. Rehnborg Professor in Disease Prevention, Professor of Medicine and Director, Stanford Prevention Research Center, Stanford University School of Medicine. 

 

•     David Meltzer, MD, PhD,  Director, Center for Health and the Social Sciences, Chief of the Section of Hospital Medicine, and Associate Professor, Department of Medicine, Department of Economics, and Graduate School of Public Policy Studies, University of Chicago.

 

•     Brian Mittman, PhD, Director, VA Center for Implementation Practice and Research Support, Department of Veterans Affairs Greater Los Angeles Healthcare System. 

 

•     Robin Newhouse, PhD, RN, Assistant Dean, Doctor of Nursing Practice Program and Associate Professor, Organizational Systems and Adult Health, University of Maryland School of Nursing. 

 

•     Sharon-Lise Normand, MSc, PhD, Professor of Health Care Policy, Harvard Medical School and Professor of Biostatistics, Harvard School of Public Health. 

 

•     Sebastian Schneeweiss, MD, ScD, Associate Professor, Department of Medicine, Harvard Medical School and Associate Professor, Department of Epidemiology, Harvard School of Public Health;  Vice Chief and Director,  Drug Evaluation and Outcomes Research, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women’s Hospital.

 

•     Mary Tinetti, MD, Professor of Medicine, Epidemiology, and Public Health, Division of Geriatrics, Yale University School of Medicine;  Director, Program on Aging, Yale University School of Medicine.

 

•     Clyde Yancy, MD, MSc, Chief, Cardiology, Northwestern University Feinberg School of Medicine; Associate Director, The Bluhm Cardiovascular Institute, Northwestern Memorial Hospital.

 

 

Attached are brief biographies of the new committee members. The official announcement of the appointments will be published in the Federal Register. For more information, contact Mary Giffin of GAO's Health Care team at (202) 512-7114 or Chuck Young in GAO's Office of Public Affairs at (202) 512-4800, or visit the GAO Health Care Advisory Committees web page at http://www.gao.gov/about/hcac/index.html. The Act requires the Comptroller General to disclose any conflicts of interest in appointing members of the Methodology Committee on GAO’s website. Please click here (http://www.gao.gov/about/hcac/pcori_methodology_comm_conflicts.html) for more information.

 

The Comptroller General is required to disclose any conflicts of interest on GAO’s website. Please click here (http://www.gao.gov/about/hcac/pcori_methodology_comm_conflicts.html) for a list of the Methodology Committee members’ associations the Comptroller General has determined fit within the Act’s definition of a “conflict of interest.”

Payments for Ambulatory Surgical Center Services Provided to Beneficiaries in Skilled Nursing Facility Stays Covered Under Medicare Part A

Ambulatory surgical center (ASC) facility services, such as nursing, recovery care, anesthetics, drugs, and other supplies, provided to SNF residents are subject to consolidated billing and must be billed to the SNF rather than Medicare Part B. Physicians’ professional services are statutorily excluded from consolidated billing and may be billed to Medicare Part B.

The nationwide audit covered 20,906 Medicare Part B ASC facility services valued at $7,113,542 with dates of service in calendar years (CY) 2006 through 2008 that matched 14,192 Part A SNF stays and that thus represented potential overpayments. GAO sampled 100 services provided by 88 ASCs.

Full GAO Report

U.S. GAO - Medicare: CMS Needs to Collect Consistent Information from Quality Improvement Organizations to Strengthen Its Establishment of Budgets for Quality of Care Reviews

Full Report (PDF, 24 pages) Accessible Text Recommendations (HTML)

Summary

Medicare funds health care services for more than 46 million beneficiaries. The Centers for Medicare & Medicaid Services (CMS)--the agency that administers Medicare--contracts with private organizations known as Quality Improvement Organizations (QIO) to, among other core functions, improve the quality of care for Medicare beneficiaries. CMS contracts with one QIO for each of the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. One of the QIOs' many responsibilities is to review quality of care concerns, raised by Medicare beneficiaries or others, to determine whether Medicare-financed medical services meet professionally recognized standards of health care. Quality of care reviews may address a range of issues, such as inappropriate treatment or hospital staff not administering medications on time; may involve a variety of health care services and settings; and may include a range of Medicare providers or practitioners. CMS enters into 3-year contracts with QIOs for a range of activities and reviews, including quality of care reviews. For each QIO contract, CMS establishes a budget reflecting the estimated costs of these activities and reviews. For the most recent contracts, which cover August 1, 2008, through July 31, 2011, CMS's budgets for the QIOs totaled about $1.1 billion, with approximately $208 million for all types of reviews, including QIOs' quality of care reviews, as well as some other activities. Questions have been raised about CMS's ability to set budgets appropriately for QIOs' quality of care reviews. A 2006 report by the Institute of Medicine (IOM) and a 2008 internal report commissioned by CMS identified weaknesses in CMS's ability to accurately compare costs across QIOs. Based on reports of wide variation in the costs that QIOs report for conducting these reviews, Congress raised questions about how CMS establishes QIOs' budgets. Ensuring that QIOs' budgets are based on accurate information is particularly important because CMS's contracts with the QIOs are funded from the Medicare Trust Funds, which are primarily used to support inpatient and outpatient health care services for Medicare beneficiaries. QIO contracts are funded from the Medicare Trust Funds in proportions from each that CMS determines to be fair and equitable, and the QIO program is not subject to the same kind of congressional oversight as other CMS programs, which are funded through the annual appropriations process. Policymakers are concerned about the long-term solvency of these Trust Funds and thus their ability to fund health care services for Medicare beneficiaries in the future. Congress raised questions about the information QIOs report to CMS for budgeting purposes and how CMS uses this information. To assist congressional consideration of this matter, this report describes and assesses the information CMS uses to establish the portion of QIOs' budgets for quality of care reviews.

To help establish QIOs' budgets for quality of care reviews for the current contract, the 9th Statement of Work, CMS used information that QIOs are required to provide to the agency about the volume of QIOs' quality of care reviews and the costs associated with conducting these reviews. CMS requires the QIOs to record information about the volume of their quality of care reviews in CMS's Case Review Information System (CRIS) and to record information about their labor costs in CMS's Financial Information and Vouchering System (FIVS). However, CMS has not established clear instructions for how QIOs should record volume and cost information in these systems. We found inconsistencies among some QIOs in the ways they record certain volume and cost information in CRIS and FIVS. As a result, the historical quality of care review volume and cost information CMS obtains is inconsistent across QIOs and CMS cannot be assured that the budgets it establishes for QIOs' quality of care reviews are appropriate.


Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director:	Kathleen M. King
Team:	Government Accountability Office: Health Care
Phone:	No phone on record

Recommendations for Executive Action

Recommendation: To ensure that QIOs consistently record volume and cost information for their quality of care reviews and to help ensure that the budgets CMS establishes for these reviews are appropriate, the Administrator of CMS should develop clear instructions specifying how QIOs should record information about the volume and costs of their quality of care reviews in CRIS and FIVS.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

U.S. GAO - Medicaid Outpatient Prescription Drugs: Estimated Changes to Federal Upper Limits Using the Formula under the Patient Protection and Affordable Care Act

GAO-11-141R December 15, 2010 Full Report (PDF, 15 pages)

Spending on prescription drugs in Medicaid--the joint federal-state program that finances medical services for certain low-income adults and children--totaled $15.2 billion in fiscal year 2008. State Medicaid programs do not directly purchase prescription drugs; instead, they reimburse retail pharmacies for covered prescription drugs dispensed to Medicaid beneficiaries. The federal government provides matching funds to state Medicaid programs to help cover a portion of the cost of these reimbursements. For certain outpatient prescription drugs for which there are three or more therapeutically equivalent versions, state Medicaid programs may only receive federal matching funds for reimbursements up to a maximum amount, which is known as a federal upper limit (FUL). FULs were designed as a cost-containment strategy and have historically been calculated as 150 percent of the lowest published price for the therapeutically equivalent versions of a given drug from among the prices published nationally in three drug pricing compendia. The prices from these compendia are list prices suggested by drug manufacturers and do not reflect actual transaction prices. State Medicaid programs have the authority to determine their own reimbursement amounts to retail pharmacies for covered prescription drugs. However, for drugs subject to a FUL, the federal government will only provide matching funds to the extent that a state's annual reimbursements do not exceed the sum of the FULs for all such drugs. Concerns have been raised about FULs calculated based on compendia prices. For example, a 2005 report by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) found that FULs calculated in this manner were ineffective at controlling spending on these drugs. The 2005 OIG report found that the prices in the three price compendia used to set FULs often greatly exceeded prices in the marketplace. The Deficit Reduction Act of 2005 (DRA) established a FUL formula based on average manufacturer price (AMP) rather than compendia prices. In contrast to compendia prices, AMP represents the average of actual transaction prices paid to manufacturers for a given drug and is typically less than any of a drug's published compendium prices. Drug manufacturers are required to report AMPs to the Centers for Medicare and Medicaid Services (CMS) on a monthly basis. DRA also expanded the list of drugs subject to a FUL from those with three or more therapeutically equivalent versions to include drugs with two or more therapeutically equivalent versions. Congressional interest in controlling prescription drug costs using AMP-based FULs continues. The Patient Protection and Affordable Care Act (PPACA) established a new AMP-based formula for calculating FULs and changed the definition of AMP.8 Under PPACA, FULs are to be calculated as no less than 175 percent of the utilization-weighted average of the most recently reported monthly AMPs for the pharmaceutically and therapeutically equivalent versions of a drug. Congress expressed interest in an early indication of the potential effects of PPACA on FULs and asked us to examine the likely effects of PPACA's AMP-based formula by drawing upon data from 2008 that we gathered for our November 2009 report, including 2008 AMPs that pre-date PPACA's changes to the definition of AMP. This report examines how, for selected drugs, estimated FULs using PPACA's AMP-based formula and 2008 data compare to pre-PPACA FULs and to average retail pharmacy acquisition costs.

We found that for most of the drugs in our sample, using AMP and other data from 2008, FULs based on PPACA's formula were lower than pre-PPACA FULs and higher than average retail pharmacy acquisition costs.
Full Summary

U.S. Government's 2010 Financial Reprot Shows Significant Financia Mangement & Fiscal Chanllenges

Image via WikipediaThe U.S. Government Accountability Office (GAO) cannot render an opinion on the 2010 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations. 

"Even though significant progress has been made since the enactment of key financial management reforms in the 1990s, our report on the U.S. government's consolidated financial statement illustrates that much work remains to be done to improve federal financial management.  Shortcomings in three areas again prevented us from expressing an opinion on the accrual-based financial statements," said Gene Dodaro, Acting Comptroller General of the United States.

The main obstacles to a GAO opinion were: (1) serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable, (2) the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government's ineffective process for preparing the consolidated financial statements.

In addition GAO was unable to render an opinion on the 2010 Statement of Social Insurance because of significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth. The consolidated financial statements discuss these uncertainties, which relate to reductions in physician payment rates and to productivity improvements, and provide an illustrative alternative projection to illustrate the uncertainties. 

Dodaro also cited material weaknesses involving an estimated $125.4 billion in improper payments, information security across government, and tax collection activities. He noted that three major agencies-DOD, the Department of Homeland Security, and the Department of Labor-did not get clean opinions. Nineteen of 24 major agencies did get clean opinions on all their statements.

"Given the federal government's fiscal challenges, it's imperative that Congress, the administration, and federal managers have reliable, useful, and timely financial and performance information. Improved accuracy and transparency in financial reporting are urgently needed," Dodaro said.

Dodaro commended the commitment and professionalism of the Inspectors General across government who are responsible for auditing the annual financial statements of individual federal entities each year.

The fiscal year 2010 Financial Report of the United States Government, which includes financial information from the 24 major federal departments and agencies along with GAO's audit report, is being released today by the Treasury Department. The report is also available on GAO's web site at http://www.gao.gov/financial.html.

Gail Gibson Hunt Appointed to the Governing Board of the Patient Centered Outcomes Research Institute (PCORI)

Washington DC - (Nov. 12, 2010) - Acting Comptroller General of the United States Gene Dodaro today announced the appointment of Gail Gibson Hunt, President and CEO of the National Alliance for Caregiving, to the Governing Board of the Patient Centered Outcomes Research Institute (PCORI).

"Ms. Hunt brings to the PCORI Board the important perspective of a broad spectrum of patients and their caregivers," Dodaro said.

Hunt has been appointed to the Board to replace Andrew Imparato. Imparato is leaving his position as President and CEO of the American Association of People with Disabilities and his appointment to the PCORI Board of Governors to become Senior Counsel and Disability Policy Director for the Senate Committee on Health, Education, Labor & Pensions (HELP).

Gail Gibson Hunt is President and CEO of the National Alliance for Caregiving, located in Bethesda, MD. The Alliance is a diverse coalition of national organizations that seeks to advocate for and serve as a research and training resource for family caregivers of patients/consumers across the lifespan. Ms. Hunt's previous positions include President of a management consulting firm specializing in aging and a senior manager for human services at KPMG Peat Marwick. Ms. Hunt serves as a member of the Advisory Panel for Medicare Education, and as a board member of the Center for Advancing Health and of Vinson Hall in McLean, VA, and was on the NIH State of the Science Panel on Preventing Alzheimer's and Cognitive Decline. She was a member of the Policy Committee of the 2005 White House Conference on Aging. She has been active in many national and international conferences on family caregiving, and also helped to develop an international coalition of caregiving groups. Ms. Hunt received her BA from Columbia University.

Government Auditing Standards: 2010 Exposure Draft

Image via WikipediaAugust 2010

TO AUDIT OFFICIALS AND OTHERS INTERESTED IN GOVERNMENT AUDITING STANDARDS

GAO invites your comments on the accompanying proposed changes to Government Auditing Standards (GAGAS), commonly known as the “Yellow Book.” This letter describes the process used by GAO for revising GAGAS, summarizes the proposed major changes, discusses proposed effective dates, and provides instructions for submitting comments on the proposed standards.

Process for Revising GAGAS

To help ensure that the standards continue to meet the needs of the audit community and the public it serves, the Comptroller General of the United States appointed the Advisory Council on Government Auditing Standards to review the standards and recommend necessary changes.
The Advisory Council includes experts in financial and performance auditing drawn from federal, state, and local government, the private sector, public accounting, and academia. This exposure draft includes the Advisory Council’s input regarding the proposed changes. We are currently requesting public comments on the proposed revisions in the exposure draft.

Summary of Major Changes

The proposed revision to GAGAS will be the sixth since GAO first issued the standards in 1972. The proposed changes contained in the 2010 Exposure Draft update GAGAS to reflect major developments in the accountability and audit profession and emphasize specific considerations applicable to the government environment.

The major changes in the proposed revision were made to:
•  consolidate and reorganize the foundation and ethical principles for government audits and the standards for use and application of GAGAS (chapters 1 and 2);
•  add a conceptual framework approach for independence (chapter 3);
•  update the financial audit standards to  (1) reflect recent updates to the auditing standards issued by the American Institute of Certified Public Accountants (AICPA), where applicable, (2) more clearly identify the GAGAS requirements and guidance that supplement AICPA requirements for financial audits, and (3) consolidate the financial audit standards into a single chapter (chapter 4);

Enclosure 1 to this letter contains a more comprehensive listing of the major changes.

 Effective Dates

When issued in final form, the 2011 revision will supersede the July 2007 revision of the standards and the guidance provided in Government Auditing Standards: Answers to Independence Standard Questions (GAO-02-870G). The effective date for the 2011 revision of GAGAS will be established when the standards are issued in final form.

 Instructions for Commenting

The draft of the proposed changes to Government Auditing Standards, 2010 Exposure Draft, is only available in electronic format and can be downloaded from GAO’s Yellow Book Web Page at http://www.gao.gov/govaud/ybk01.htm.

We are requesting comments on this draft from audit officials and financial management at all levels of government, the public accounting profession, academia, professional organizations, public interest groups, and other interested parties. To assist you in developing your comments, specific issues are presented in enclosure 2 to this letter.

We encourage you to comment on these issues and any additional issues that you note. Please associate your comments with specific references to question numbers in the enclosure and/or paragraph numbers in the proposed standards and provide your rationale for any suggested changes, along with suggested revised language. Please send your comments electronically to yellowbook@gao.gov no later than November 22, 2010.

If you need additional information please call Michael Hrapsky, Specialist, Auditing Standards, at (202) 512-9535, or Jim Dalkin, Director, at (202) 512-3133.

Sincerely yours,

Jeanette M. Franzel
Managing Director
Financial Management and Assurance
Read Full Report

Legal Service Corporation Improvements Needed

Image via Wikipedia

The Legal Services Corporation (LSC) was created as a private, nonprofit corporation to support legal assistance for low-income individuals on civil legal matters, primarily through federal grants and is primarily funded through federal appropriations. Effective internal controls over grant awards and oversight of grantees’ performance are critical to LSC’s mission. GAO and the LSC Inspector General have previously reported weaknesses and made recommendations. GAO’s objectives for this report were to determine the extent to which LSC (1) implemented key internal controls in awarding and overseeing grantees, (2) measured its performance, (3) evaluated staffing needs, and (4) adhered to its budget execution processes.

GAO analyzed key records and prior recommendations as well as interviewed LSC officials regarding LSC’s internal control and performance frameworks, staffing, and contract processes.

What GAO Recommends

GAO makes recommendations to LSC management to improve internal controls over grant awards and oversight including such key areas as
(1) documenting specific controls over the grant application review, evaluation, and approval processes,
(2) implementing a tracking system for LSC’s recommendations, and
(3) establishing comprehensive performance measures linked to responsible offices. LSC agreed with GAO’s recommendations.
Read/Download Full Report

U.S. GAO - Nonprofit Sector: Treatment and Reimbursement of Indirect Costs Vary among Grants, and Depend Significantly on Federal, State, and Local Government Practices

GAO-10-477 May 18, 2010

Nonprofits are key partners in delivering federal services yet reportedly often struggle to cover their indirect costs (costs not readily identifiable with particular programs or projects). This raises concerns about fiscal strain on the sector. To provide information on nonprofits' indirect cost reimbursement, especially when funding flows through entities such as state and local governments, GAO was asked to review, for selected grants and nonprofits, (1) how indirect cost terminology and classification vary, (2) how indirect costs are reimbursed, and (3) if gaps occur between indirect costs incurred and reimbursed, steps taken to bridge gaps. GAO selected six Departments of Health and Human Services and Housing and Urban Development grants and 17 nonprofits in Louisiana, Maryland, and Wisconsin. GAO selected these agencies for their historical relationship with nonprofits. GAO reviewed policies and documents governing indirect costs and interviewed relevant officials. GAO also reviewed research on nonprofits' indirect costs.
Continue Reading

VETERANS’DISABILITY BENEFITS Expanded Oversight Would Improve Training for Experienced Claims Processors

Image via Wikipedia

Why GAO Did This Study
The Veterans’ Benefits Improvement Act of 2008 (P.L. 110-389) mandated that GAO evaluate the Department of Veterans Affairs VA training for disability claims processors. This report answers the following two questions: (1) How appropriate is the training provided to experienced disability claims processors? (2) How adequate is the Veterans Benefits Administration’s (VBA) monitoring and assessment of this training? To address these questions, GAO conducted a web-based survey of a nationally representative sample of claims processors, interviewed VBA headquarters and regional office officials, and reviewed VBA training material, relevant federal statutes, regulations, and court cases.

What GAO Recommends
GAO recommends that VBA (1) adopt procedures for routinely monitoring and ensuring compliance with annual training requirements, including more fully using its available electronic data to ensure that training requirements are met, (2) develop clear written guidance on the types of activities all regional offices should and should not count toward completion of annual training requirements, and (3) develop and implement a written strategy for routinely assessing the appropriateness of the training regional offices provide to experienced claims processors.

In its comments, VA generally concurred with GAO’s conclusions and concurred with all of GAO’s recommendations.
Read/Download Complete Report)

Social Security Administration: Better Planning Needed to Improve Service Delivery

GAO Testimony by Barbara D. Bovbjerg, managing director, education, workforce, and income security, before the Subcommittee on Social Security, House Committee on Ways and Means

While SSA is managing increasing workloads resulting from growing retirement and disability claims, it still faces the challenge of providing quality service. SSA’s management of increased workloads came at a cost—the accuracy rate for SSI overpayments fell to the lowest level in 30 years, and some customer service continues to decline. These problems may become more severe as workloads continue to grow from the nation’s baby boom generation, waves of SSA’s most experienced staff retire, and the current level of field office staffing stays flat. Such challenges make it essential for SSA to develop a plan to manage its increasing workload. Whether SSA will need more resources or an altered field office infrastructure, or both, is unclear. We still believe that a detailed service delivery plan should make this clear, and if additional resources are needed to achieve agencywide goals, SSA should identify the resources required to meet long-term service delivery needs.
Read More

DOMESTIC FOOD ASSISTANCE Complex System Benefits Millions, but Additional Efforts Could Address Potential Inefficiency and Overlap among Smaller Programs

Image via Wikipedia

Why GAO Did This Study

The federal government spends billions of dollars every year on domestic food assistance programs. The U.S. Department of Agriculture administers most of these programs and monitors the prevalence of food insecurity—that is, the percentage of U.S. households that were unable to afford enough food sometime during the year. Other federal agencies also fund food assistance programs; however, comprehensive and consolidated information on the multiple programs is not readily available. Congress asked GAO to examine: 1) the prevalence of food insecurity in the United States, 2) spending on food assistance programs, 3) what is known about the effectiveness of these programs in meeting program goals, and 4) the implications of providing food assistance through multiple programs and agencies. GAO’s steps included analyzing food security and program spending data, analyzing studies on program effectiveness, analyzing relevant federal laws and regulations, conducting site visits, and interviewing relevant experts and officials.

What GAO Recommends

We recommend that the Secretary of Agriculture identify and develop methods for addressing potential inefficiencies and reducing unnecessary overlap among smaller programs while ensuring access to the programs for those who are eligible. USDA agreed to consider the value of examining potential inefficiencies and overlap among smaller programs.
Read/Download Report

Spending, Beneficiary Cost Sharing, and Cost-Containment Efforts for High-Cost Drugs Eligible for a Specialty Tier

Image via Wikipedia

Why GAO Did This Study

The Centers for Medicare & Medicaid Services (CMS) allows Part D plans to utilize different tiers with different levels of cost sharing as a way of managing drug utilization and spending. One such tier, the specialty tier, is designed for high-cost drugs whose prices exceed a certain threshold set by CMS. Beneficiaries who use these drugs typically face higher out-of-pocket costs than beneficiaries who use only lower-cost drugs.

GAO was asked to provide information about high-cost drugs eligible for a specialty tier. This report provides information on these drugs including spending under Medicare Part D in 2007, the most recent year for which claims data were available; how different cost-sharing structures could be expected to affect beneficiary out-of-pocket costs; how negotiated drug prices could be expected to affect beneficiary out-of-pocket costs; and information Part D plan sponsors reported on their ability to negotiate price concessions and to manage utilization.
Read/Download Report

U.S. GAO - Fiscal Year 2009 Financial Report of the United States Government

Image via Wikipedia

The U.S. Government Accountability Office (GAO) could not render an opinion on the consolidated financial statements of the federal government (other than the Statement of Social Insurance) because of widespread material internal control weaknesses and other limitations.

“While financial management has improved significantly since the government began preparing consolidated financial statements, for the 13th year in a row now shortcomings in three areas again prevented us from expressing an opinion,” said Gene L. Dodaro, Acting Comptroller General of the United States. “I’m referring to serious financial management problems at the Department of Defense (DOD), the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between agencies, and the ineffective process the federal government uses to prepare the consolidated financial statements.”

Dodaro also cited material weaknesses involving improper payments estimated to be at least $98 billion, information security across government, and tax collection activities. He noted that four major agencies-DOD, the Department of Homeland Security, the Department of State, and NASA-did not get clean opinions.

The material weaknesses discussed in GAO’s audit report hinder the government’s ability to (1) reliably report on many of its assets,liabilities, and costs; (2) accurately measure the full cost as well as the financial and non-financial performance of certain programs and activities; (3) adequately safeguard significant assets and properly record various transactions; and (4) have reliable information to operate efficiently and effectively.

“Long term, the federal government faces huge structural deficits driven by rising health care costs and demographics. Focused attention from Congress and the administration is needed to address these problems and put the government on a more sustainable path,” Dodaro said.

Beginning this year, new financial reporting standards will require a clearer and more comprehensive assessment of the federal government’s financial condition over the long term. “Sound data on federal operations will be essential to the nation’s efforts to return the country to a sustainable fiscal path,” Dodaro said.

He also singled out meaningful financial regulatory reform as especially urgent. “Problems in the nation’s financial sector have exposed major weaknesses in the current U.S. financial regulatory system. If those weaknesses are not adequately addressed, we could see similar or even worse crises in the future,” Dodaro cautioned.

Dodaro commended the commitment and professionalism of the Inspectors General across government who are responsible for auditing the annual financial statements of individual federal entities each year.

Link to Report

Electronic Personal Health Information Exchange

Image via Wikipedia

Why GAO Did This Study

Health Care Entities' Reported Disclosure Practices and Effects on Quality of Care Highlights of GAO-10-361, a report to congressional committees

To promote the use of information technology for the electronic exchange of personal health information among providers and other health care entities, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act. It provides incentives intended to promote the widespread adoption of technology that supports the electronic sharing of data among hospitals, physicians, and other health care entities. Pursuant to a requirement in the HITECH Act, GAO is reporting on practices implemented by health information exchange organizations, providers, and other health care entities that disclose electronic personal health information.

GAO’s specific objectives were to describe (1) the practices implemented for disclosing personal health information for purposes of treatment, including the use of electronic means for obtaining consent, as reported by selected health information exchange organizations, their participating providers, and other entities; and (2) the effects of the electronic sharing of health information on the quality of care for patients as reported by these organizations.

To address both objectives, GAO conducted case studies of 4 of more than 60 operational health information exchanges and a selection of each of the exchanges’ participating providers.

What GAO Found

The health care entities GAO studied reported that they implement disclosure practices that reflect widely accepted practices for safeguarding personal information–the Fair Information Practices–to help ensure the appropriate use and disclosure of electronic personal health information for treatment purposes. For example, providers in the study described various implementations of practices that require direct interaction with patients, such as informing patients of the use and disclosure of personal health information and providing patients access to their own records. Some of them inform patients that their electronic personal health information may be shared through health information exchanges–entities that were formed to facilitate the electronic sharing of patients’ health information among providers. Both the providers and exchanges in the study described practices that limit disclosure of information, secure electronic information that they store and transmit, and help ensure accountability for safeguarding electronic personal health information.

Although the health information exchanges reported that they have not conducted formal studies or evaluations of the overall effect of electronically sharing personal health information, both the exchanges and providers reported examples of ways that sharing electronic personal health information about patients has had a positive effect on the quality of care that providers deliver to patients.

Full Report

MEDICARE Per Capita Method Can Be Used to Profile Physicians and Provide Feedback on Resource Use September 2009 GAO-09-

Image via Wikipedia

What GAO Found

Using 2005 and 2006 Medicare claims data and a per capita methodology, GAO found that specialist physicians showed considerable stability in resource use despite high patient turnover. This stability suggests that per capita resource use is a reasonable approach for profiling specialist physicians because it reflects distinct patterns of a physician’s resource use, not the particular population of beneficiaries seen by a physician in a given year. GAO also found that our per capita method can differentiate specialists’ patterns of resource use with respect to different types of services, such as institutional services, which were a major factor in beneficiaries’ resource use. In particular, patients of high resource use physicians used more institutional services than patients of low resource use physicians.

GAO identified four key considerations in developing feedback reports on physician performance (see table).
Read More