.L I \ ‘-- UMTEDSTATESGENERAL ACCO~JNTING OFFiCE WASHINGTON. D C 20548 ’ r’.‘lL DlVlSlON Dear Mr. Hyde During our review of the Model Cltles Program at selected locations, we noted certain weaknesses In the practices of City Demonstration Agen- cles (CDAs) relative to the colLectLon of payments from State agencies and private organlzatlons (generally referred to as third-party payments) for services provided to residents of model neighborhoods. We noted that, in many cases, residents of the model neighborhoods, who were provided medical care under the Model Cltles Program, were also ellglble beneflclarles of this type of care under State and federally- aided programs and under programs &.dmlnlstered by private organlzatlons. Our review showed that although CDAs, in some cases, were aware that pay- ments should be made by State agencies and private organlzatlons for care provided to model nelghborhood residents, they did not take the necessary steps to collect such payments. On the other hand, we found that CDA of- flclals in certain cities were not aware that State agencies and private organlzatlons should reimburse the CDA or its operating agencies for ser- vices they provided to model neighborhood residents. City Demonstration Agencies, under the Demonstration Cltles and Met- ropolltan Development Act of 1966, are expected to make use of all avail- able sources of flnanclal assistance. In carrying out comprehensive dem- onstratlon programs, Federal, State, and local resources are, according to HUD, to be effectively coordznated by the CDAs In order to help improve the quality of life for the residents of the model neighborhoods. Detazls of our review, which was performed at the central office of the Department of Housing and Urban Development (HUD) and at HUD reglonal offices in Boston, Massachusetts, and Fort Worth, Texas and at the Boston, Massachusetts, and San Antonlo, Texas, CDA offlces, follow. NEED FOR ACTION BY HUD TO HELP ENSURE %iI-IAr CDAs RECFIVE -il THTRD-PARTY PAYMENrS In our cevlew In Boston, Massachusetts, we noted that the CDA, in planning model cltles projects, Included a comprehensive health care pro- gram under which medica+ care and services were to be provided to model neighborhood residents at three health caze facllltles. These facllltles, com;lonly referred to as family ilie centers, were lo;ate8 . In the model neighborhood. --- 50Tti ANNIVERSARY 4 1 I_ 6 Y :- The CDA indicated, In the HUD-approved budget, that during Its sec- ond year of program opera tlons , 1 t wou Id receive from State agencies and private organlzatlons about $200,000 in third-party payments for medical services that were to be provided at the three health care centers to model neighborhood residents who were also ellglbfe for services under other programs. CDA offlclals stated that the Federal/State supported MedIcaId program was the primary source of these payments. These offs- clals added that about 70 percent of the model nelghborhood residents re- ceiving health care under the Model Cl’cles Program were also ellglble to receive assistance under other programs. Although In April 1970 the CDA estimated that It would receive about $200,000 In reimbursement from State agencies and private organlzatlons, prlmarl ly for medlcal servLces provided to beneflclarles of the MedIcaId program, as of April 1, 1971, It had not collected any of these funds. CDA offzclals advised us that under existing State laws the fam-Lly life canters are not eligable to re’celve such payments unless they are ( 11 licensed as medical clinics by the State of Massachusetts, or (2) become outpatlent cllnlcs through an affLllatlon with an accredlted hos- pltal. We discussed this matter with HUD regional offlce offlclals in Bos- ton in April 1971, and these offlclals agreed with our posltLon that third-party payments should be collected by the CDA. These offlclals then informed CDA representatives to take action to collect such funds. CDA of- flclaLs stated that actlon to have the family life centers licensed as med- ical cllnlcs or to have the cllnlcs affl llated w1 th accredlted hospitals would be taken, In May 1971 the CDA had one of the three centers af fl lla ted w1 th an accredl ted hospl ta l-- the Peter Bent Brlgham Hospital. In July 1971 CDA offlclals advised us that they took action to begin collecting funds from State agencies for medical services provided to the model nalghborhood resxdents at this center. As of July 30, 1971, we noted that health care was also being provided to model neighborhood residents at one of the two rcmalnlng health care centers but the CDA was not collecting payments from State agencies and private organlzatlons for such care because the center was not licensed as a c 1lnl.c or affl llated with an accredl ted hospital. We were advlsed by CDA offlclals that the remalnlng family life center was not yet provldlng medlcal services which were ellglble for reimbursement. In another mode 1 cl ty--San Antonlo, Texas--we found that the CDA lnz- tlated two health care proJec ts for residents of the model neighborhood Under these proJec ts , services are provided for the treatment and rehabll- ltatlon of narcotic adcllc ts. We discussed the types of services being pro- vised under these proJects with @EflcLals of the Texas Department of Public -2- <a Welfare and were advlsed that costs incurred by the CDA in provldlng certain services may, 1n their oplnlon, be e llglble for reimbursement under the Federal/State f lnanced Medicaid program, In dlscusslng these projects with the CDA dlrec tor and other CDA officials, we were advised that they were not aware that funds could be collected from responsible State agenczes for services provided to the model neighborhood residents, We dIscussed the subJect of third-party payments with HUD central office of flclals who lnf ormed us that a number of CDAs have not received third-party payments under various health care projects which were es- tabllshed under the Model Cltles Program. HUD officials stated that many CDAs were not aware that the costs of provldlng medical services to model neighborhood residents should be paid for by agencies admln- lsterlng other programs, such as the Medicaid program. These offlclals said that certain CDAs, which were aware of these funding sources, did not attempt to collect such funds because of the admlnlstratlve burden involved in collecting such funds and because HUD supplemental funds could more readily be obtaIned to finance the model cities projects. These offlclals added, however, that HUD regional of- _ flee personnel often Identify funding sources for the CDAs which are of some assistance In carrying out the model cities projects. In a HUD internal audit report, issued In December 1970 on a review of the Eagle Pass, Texas, Model Cltres Program, IC was pointed out that the CDA did not utlllze avaLlable Federal, State, and local resources in carrying out Its program. The HUD report stated that under a mrnl-bus project whzch was financed, In part, by model cltles supplemental funds, transportation to obtarn medlcal aid was provided to elderly residents of the mode 1 neighborhood , Representatives of the Department of Health, Education and Welfare stated that flnanclal assistance under the Medl- cald program 1s avallable for transportation services to obtain medzcal ald. In concluding rts dI.scusslon of this matter, the HUD Office of Aud1.t recommended that the HUD RegIonal Admlnlstrator require that the CDA make use of all available Federal, State, and local resources In carrying out Its Model Cltles Program so that supplemental funds would be used as an addltlon to and not as a substitute for flnanclal assist- ante from other available sources. CONCLUSIONS AND RECOMMEN!ATIONS We belleve that full utlllzatlon of all available resources--Fed2 eral, State, and local--1s a basic requirement of the model cities con- cept pursuant to achlcvlng an effective, coordinated cl ty demons tratlon program, -3- The results of our review efforts re latlve to one aspect of such coordlnatlon --the receipt of third-party payments--clearly show, In our view, that certain corrective measures by HUD are warranted to help en- sure that CDAs ( 11 are aware of thus source of flnanclal assls tance and (2) adopt measures to ensure that such funds are collected from State agencies and private organlzatlons, as 1s appropriate, for services pro- vided to model neighborhood residents who are also e lrglble beneflclar- les of such assistance under other programs, such as the Federal/State financed Medlcald program. Accordingly , we recommend that you gzt.ve conslderatlon to elamlnlng into this matter for the purpose of ascertalnlng the extent to which this weakness exists throughout the Model Cltles Program, and based upon the results of your examination, we recommend also that you take the neces- sary corrective action to help ensure that -4DAs do not overlook, In the execution of their model cities projee ts , third-party paym@nts which may represent a slgnrfl- cant source of flnanclal assistance; and --CDAs, with appropriate follow-up actlon by HUD, actively pur- sue such sources of flnanclal assistance. We appreciate the cooperation given to our representatives during this review and we shall be pleased to discuss with you or members of your staff the matters dlscussed In this report. A copy of this re- port IS being forwarded to the Asslstant Secretary for Admlnlstratlon. Please advise us of any actlons you take or plan to ln;Ltlate with regard to the matters presented above. Sincerely yours, B. E. Blrkle Assls tant Director Honorable Floyd H. Hyde hsslstant Secretary for Commune ty Development Department of Houslng and Urban Development -4-
Collection of Third-Party Payments for Medical Services Provided to Model Neighborhood Residents
Published by the Government Accountability Office on 1971-08-25.
Below is a raw (and likely hideous) rendition of the original report. (PDF)