united states General Accounting Office Washington, D.C. 20648 Human Resources Division B-217196 January 12,lDDO The Honorable David H. Pryor Chairman, Special Committee I on Aging United States Senate Dear Mr. Chairman: This report is in responseto the Committee’s October 11, 1989, request- for a compilation of our fiscal year 1989 activities regarding older Americans. _..ll.^*.....l,ll ..10. Our work covered a broad range of issues,including -~l-.“~“.l.* income““1 security, health care, housing, nut&ion, social, community and legal services, employment and age~discrimination.Someof the federal ...”policies that addressthese issuesare directed solely or primarily to the elderly, such m.&$al.Security and Medicare. Other federal policies target the elderly as one of several groups served by a program or funding mechanism, such as social services~,block grants or Medicaid. In the appendixes, we describe five types of GAO activities that relate to older Americans: . Reports on policies and programs directed primarily at older Americans (see app. I). l Reports on policies and programs in which the elderly were one of sev- eral target groups (see app. II). 9 Testimonies on issuesrelated to older Americans (see app. III). l Ongoing activities on issuesrelated to older Americans (see app. IV). . Other activities by GAO officials, such as speaking engagementsand pub- lications, on issuesrelated to older Americans (see app. V). These products and activities and the issuesaddressedare presented in table 1. The table shows that income security was the leading issue among activities directed primarily at the elderly, while health was the leading issue acrossall types of activities and products. Appendix I lists 69 issued reports on policies and programs directed pri- marily at the elderly (seetable 1). We include in this section reviews of income security, health, social and other services,housing and veterans Y issues.We also describe GAO'S managementreviews of the agenciesdeal- ing with the elderly, as well as reports on the infrastructures of such agencies,including their computer systems.These aspectsof agency Page1 GA0/HRD-90-60AgingIssuesinFiecdYear1989 operations determine how well agenciescan implement policies relating to the elderly. Reporta bie 1: GAO Actlvltier Relating to the Elderly In Flrcal Year 1999 Type of activity Report8 with elderly aa one of Ongoing focuwd on several target activities as Other the elderly groups Tebtimonv of 9130189 activities0 25 4 11 31 17 21 7 10 48 18 12b 5b 2b 20b 0 ociai and other services 0 8 2 11 2 0 4 1 3 1 @her 1 0 0 1 1 ‘iiotal + s9 28 26 114 39 %cludes speaking engagements and publications. blncludes veterans’ health issues Appndix II describes28 reports in which the elderly were one of sev- target groups for specific federal policies. With the exception of r Americans Act programs, social and other services are generally ted in conjunction with servicesto other populations. For example, block grants fund community servicesor energy assistancefor the eld- erly, as well as servicesfor other age groups; Medicaid finances nursing home care, as well as medical care for poor people of all ages;and Native American programs fund social and health services for Native American elderly, as well as programs for other Native Americans. We also describe two transition reports, which are broad policy overviews of health and human services and housing. Appendix III describesthe 26 testimonies given in fiscal year 1989 on subjects focused primarily on older Americans. We testified more times on income security than any other issue. In appendix IV we have listed the 114 studies directly related to older Americans that were ongoing as of September30, 1989. As table 1 shows, we are increasing our activities on all issuesrelating to the elderly. In addition to reports and testimonies, GAO officials are called upon to appear on news interviews and professional and academicpanels, as Page 2 GAO/HUD-SO-66 Aging Issues in Fiscal Year 1989 well as to publish on topics for which they have particular expertise. Appendix V describesthe 39 times GAO officials spoke or published on aging issues. You also asked for information on our employment of older Americans. Our policies prohibit age discrimination (see app. VI), On September30, 1989,64 percent of our work force was 40 years of age or older. We continue to provide individual retirement counseling and group prere- tirement seminars. As arranged with your office, we are sending copiesof this report to interested congressionalcommittees and subcommittees.Copies also will be available to others on request. This report was prepared under the direction of Joseph F. Delfico, Direc- tor, Income Security Issues.Should you have any questions concerning this report, please call him on (202) 275-6193.Other major contributors are listed in appendix VII. Sincerely yours, Lawrence H. Thompson Assistant Comptroller General w Page 3 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 Ckmtents wt er 1 ppendix I 12 iscal Year 1989 GAO Health Board and Care: Insufficient AssurancesThat Residents’ 12 12 eports on Issues NeedsAre Identified and Met (GAO/HRD-89-50,Feb. i rimarily Affecting 10,1989) Health Insurance: Bibliography of Studies on Health 13 4 lder Americans Benefits for the Uninsured (GAO/HRD-89-27FS,Feb. 24,1989) Information Technology: Health Care Financing 13 Administration’s Budget ProcessNeedsImprovement (GAOIIMTEC-89-31, Aug. 11, 1989) Internal Controls: Need to Strengthen Controls Over 13 Payments by Medicare Intermediaries (GAO/HRD-89- 8, Nov. 14, 1988) Long-Term Care for the Elderly: Issuesof Need, Access, 14 and Costs (GAO/HRD-89-4,Nov. 28,1988) Long-Term Care Insurance: State Regulatory 14 Requirements Provide Inconsistent Consumer Protection (GAO/HRD-89-67,Apr. 24, 1989) Medicaid: RecoveriesFrom Nursing Home Residents’ 15 Estates Could Offset Program Costs (GAO/HRD-89- 66, Mar. 7, 1989) Medicaid: SomeRecipients Neglect to Report U.S. 15 Savings Bond Holdings (GAO/HRD-89-43,Jan. 18, 1989) Medicare: An Assessmentof HCFA’s 1988 Hospital 15 Mortality Analyses (GAO/PEMD-89-llBR, Dec. 13, 1988) Medicare Catastrophic Act: Options for Changing 16 Financing and Benefits (GAO/HRD-89-166, Sept. 15, 1989) Medicare: Health Maintenance Organization Rate-Setting 16 Issues(GAO/HRD-89-46,Jan. 31,1989) Medicare: Impact of State Mandatory Assignment 17 Programs on Beneficiaries (GAO/HRD-89-128, Sept. 19,1989) Medicare: Incentives Neededto Assure Private Insurers 17 Pay Before Medicare (GAO/HRD-89-19,Nov. 29, 1988) Page 4 GAO/HRD-90-56 Aging Issues in Fiscal Year 1989 Medicare: Indirect Medical Education Payments Are Too 17 High (GAO/HRD-89-33,Jan. 6,1989) Medicare: Physician Incentive Payments by Prepaid 18 Health Plans Could Lower Quality of Care (GAO/ HRD-89-29,Dec. 12,1988) Medicare: Program Provisions and Payments Discourage 18 Hospice Participation (GAO/HRD89-111, Sept. 29, 1989) Medicare PROS:Extreme Variation in Organizational 18 Structure and Activities (GAO/PEMD-89-7FS,Nov. 8, 1988) Medicare: Reasonablenessof Health Maintenance 18 Organization Payments Not Assured (GAO/HRD-89- 41, Mar. 7, 1989) Medicare: Status Report on Medicare Insured Group 19 Demonstration Projects (GAb/HRD-89-64, June 27, 1989) Medicare: Statutory Modifications Neededfor the Peer 19 Review Program Monetary Penalty (GAO/HRD-89- 18, Mar. 30,1989) U.S. Employees Health Benefits: Rebate for Duplicate 20 Medicare Coverage(GAOIHRD-89-58,Mar. 23, 1989) Income Security 20 ADP Budget: SSA’sFiscal Year 1990 Information 20 Technology Systems Budget Request(GAO/IMTEC- 80-60, June 28,1989) ADP Planning: SSA’sFebruary 1989 Report on 20 Computer Modernization Is Incomplete (GAO/IMTEC- 89-76, Sept. 25, 1989) ADP Systems:SSAEfforts in Implementing Its Field 21 Office Modernization (GAO/IMTEC-89-45, May 17,1989) Age Discrimination: Use of Waivers by Large Companies 21 Offering Exit Incentives to Employees (GAOIHRD-89- 87, Apr. 18, 1989) Computer Operations: Improvements Neededin Social 21 Security’s Capacity ManagementProgram (GAO/ IMTEC-89-8, Jan. 18, 1080) District’s Workforce: Annual Report Required by the 22 District of Columbia Retirement Reform Act (GAO/ GGD-89-57,Mar. 22, 1980) Page 6 GAO/HRD-99-66 Aging Issues in Fiscal Year 1989 Employee Benefits: Company Actions to Limit Retiree 22 Health Costs(GAO/HRD-89-31BR,Feb. 1,1989) Employee Benefits: Companies’ Retiree Health Liabilities 22 Large, Advance Funding Costly (GAO/HRD-80-61, June 14,1989) Federal Employees:Early Retirements at the Defense 23 Department in Fiscal Year 1988 (GAO/GGD-80-63FS, Feb. 23,1989) Federal Retirement: Use of Contractors to Implement the 23 Federal Employees Retirement System (GAO/GGD- 89-29, Feb. 1, 1080) Federal Workforce: Positions Eligible for Law 23 Enforcement Officer Retirement Benefits (GAO/GGD- 89-24, Feb. 2, 1080) Leveraged Buy-Out Funds: Investments by Selected 24 Pension Plans (GAO/HRD-89-121, Aug. 1,1989) Pension Plans: Labor and IRS Enforcement of the 24 Employee Retirement Income Security Act (GAO/ HRD-89-32,Jan. 23, 1989) Poor Performers: How They Are Identified and Dealt 24 With in the Social Security Administration (GAO/ GGD-89-28,Jan. 27, 1989) Private Pensions:Plan Provisions Differ Between Large 25 and Small Employers (GAO/HRD-89-105BR,Sept. 26, 1089) Private Pensions:Portability and Preservation of Vested 25 Pension Benefits (GAO/HRD-80-lSBR, Feb, 3,1989) Railroad Retirement: Future Rail Employment and Trust 25 Fund Solvency (GAO/HRD-89-30,Apr. 5, 1980) Social Security: Leadership Structure for an Independent 26 Social Security Administration (GAO/HRD-89-154, Sept. 13, 1989) Social Security: Results of Required Reviews of 26 Administrative Law Judge Decisions(GAO/HRD-89- 48BR, June 13,1989) Social Security: Staff Reductions and Service Quality 26 (GAO/HRD-89-106BR,June 16,1989) Social Security: Status and Evaluation of Agency 27 ManagementImprovement Initiatives (GAO/HRD-89- 42, July 24, 1989) Social Security: Time Required to Approve and Pay 27 Attorney FeesCan Be Reduced(GAO/HRD-89-7,Oct. 18,1988) Page 6 GAO/HRD90-66 Aging Issues in Fiscal Year 1989 ,’ Social Security: The Trust Fund ReserveAccumulation, 27 the Economy, and the Federal Budget (GAOIHRDSO- 44, Jan. 10,1080) Social Security: Views of Agency Personnelon Service 28 Quality and Staff Reductions (GAO/HRD-89-3’7BR, Feb. 10,198O) Software Maintenance: SSA’sUse of Its Software 28 Maintenance Package(GAO/IMTEC-89-38, June l&1089) Veterans 20 Financial Audit: Veterans Administration’s Financial 29 Statements for Fiscal Years 1988 and 1987 (GAO/ AFMD-80-60, Sept. 16, 1989) Financial Management:Opportunities for Improving 29 VA’s Internal Accounting Controls and Procedures (GAO/AFMD-89-36, Aug. 11,1989) VA Benefits: Law Allows Compensation for Disabilities 29 Unrelated to Military Service (GAO/HRD-89-60,July 31,1989) VA Health Care: Allegations Concerning VA’s Patient 30 Mortality Study (GAO/HRD-80-80,May 18,1989) VA Health Care: Delays in Awarding Major Construction 30 Contracts (GAOjHRD-89-76,Mar. 31,1089) VA Health Care: Few Veterans Denied Care at Florida 30 Clinics (GAO/HRD-89-60,May 31,198O) VA Health Care: Improvements Neededin Proceduresto 30 Assure Physicians Are Qualified (GAO/HRD-80-77, Aug. 22,1089) VA Health Care: LanguageBarriers Between Providers 31 and Patients Have Been Reduced(GAO/HRD-80-40, Mar. 8,198O) VA Health Care: ResourceAllocation Methodology Has 31 Had Little Impact on Medical Centers’ Budgets (GAO/ HRD-89-03,Aug. 18,198O) Veterans’ Benefits: Improvements Neededin Processing 31 Disability Claims (GAO/HRD-80-24,June 22,1089) Veterans’ Benefits: Improvements Neededto Measure 32 the Extent of Errors in VA Claims Processing(GAO/ HRD-89-0,Apr. 13, 1980) Veterans’ Benefits: Need to Update Medical Criteria 32 Used in VA’s Disability Rating Schedule(GAO/HRD- 80-28, Dec. 29, 1088) Page 7 GAO/HRD-96-56 Aging Issues in F’iscal Year 1989 - contents , Other 32 Aging Issues:Related GAO Reports and Activities in 32 Fiscal Year 1988 (GAO/HRD-89-38,Jan. 26,108O) ppendix II ‘seal Year 1989 GAO Health ADP Planning: FDA’s Plans to Improve Processingof ii 33 eports on Issues Medical Device and Drug Applications (GAO/IMTEC- ffecting the Elderly !I 89-58, June 13,1989) ADP Systems:Better Control Over States’ Medicaid 33 d Others SystemsNeeded(GAO/IMTEC-89-10, Aug. 2,1989) Health and Human ServicesIssues(GAO/OCG-89-lOTR, 34 Nov. 1988) Medicaid: Federal Oversight of Kansas Facility for the 34 Retarded Inadequate (GAO/HRD-89-85,Sept. 20, 1089) Mental Health: Prevention of Mental Disorders and 34 Researchon Stress-RelatedDisorders (GAO/HRD-80- 07, Sept. 12, 1980) Prescription Drugs: Information on SelectedDrug 35 Utilization Review Systems(GAO/PEMD-89-18, May 25,1089) Prescription Drugs: HCFA’s ProposedDrug Utilization 35 Review System Ignores Quality of Care Issues(GAO/ PEMD-89-26BR,July 13,1989) Housing 36 Housing and Urban Development Issues(GAO/OGC-80- 36 22TR, Nov. 1988) Housing Conference:National Housing Policy Issues 36 (GAOIRCED-89174, Aug. 1989) Partnership Projects: Federal Support for Public-Private 36 Housing and Development Efforts (GAO/PEMD-80- 25FS,Sept. 14,1989) Tax Policy: Costs Associated With Low Income Housing 37 Tax Credit Partnership (GAO/GGD-89-lOOFS,July 10,198O) Page 8 GAO/HRD.~S6 A.&g Issuea in Fiscal Year 1989 8, “ia.,.‘, Income Security 37 Employee Stock Ownership Plans: Allocation of Assets 37 in SelectedPlans (GAO/HRD-80-01,June 5,198O) Federal Compensation:Premium Taxes Paid by the 37 Health Benefits Program (GAO/GGD-89-102,Aug. 8, 1989) Social Security: Selective Face-To-FaceInterviews With 38 Disability Claimants Could ReduceAppeals (GAO/ HRD-89-22,Apr. 20, 1989) Social and Other Services 38 Block Grants: Federal-StateCooperation in Developing 38 National Data Collection Strategies (GAO/HRD-89-2, Nov. 29,1988) Community Development: Distribution of Small Cities 30 Funds by Pennsylvania (GAO/RCED-89-111, May 3,1989) Financial Audit: Food and Nutrition Service’s Financial 30 Statements for 1087 (GAO/AFMD-80-22, Mar. 15, 1989) Food Stamp Program: Administrative Hindrances to 39 Participation (GAO/RCED-89-4,Oct. 2 1, 1988) Food Stamp Program: Participants Temporarily 40 Terminated for Procedural Noncompliance(GAO/ RCED-89-91,June 22,1989) Food Stamps: Reasonsfor Nonparticipation (GAO/ 40 PEMD-89-5BR,Dec. 8, 1088) Montana Indian Reservations:Funding of Selected 40 Services,Taxation of Real Property (GAO/HRD-89- IBR, Oct. 11, 1988) Parental Leave: RevisedCost Estimate Reflecting the 40 Impact of Spousal Leave (GAO/HRD-89-68,Apr. 6, 1080) Veterans 41 DefenseHealth Care: Patients’ Views on Care They 41 Received(GAO/HRD-80-137,Sept. 13,1989) DefenseHealth Care: Workload Reductions at Military 41 Hospitals Have Increased CHAMPUSCosts (GAO/ HRD-89-47,July 10, 1989) DOD Heath Care: IssuesInvolving Military Nurse 42 Specialists (GAO/HRD-89-20,Mar. 20, 1089) Page 9 GAO/HRD-90-86 Aging Issuea In Fiscal Year 1989 Contents DOD Health Care: OccurrenceScreenProgram 42 Undergoing Changes,but WeaknessesStill Exist (GAO/HRD-89-36,Jan. 6,198Q) DODHealth Care: Extent to Which Military Physicians 43 Perform Administrative Tasks (GAO/HRD-89-63, Feb. 13,198Q) 44 cal Year 1989 GAO Health 44 46 timony Relating to ~c~~\ecurity 45 Social Services 46 Elderly Veterans 47 4ppendix IV 48 Ongoing GAO Work as Health OQ September 30, 1989, EcyL\ecurity 48 61 62 IUating to Issues Social and Other Services 53 Affecting the Elderly E;Ews 64 65 Appendix V 66 &her Fiscal Year 1989 Health Housing 66 68 Activities by GAO Income Security 68 officials Relating to Social Services 60 Issues Affecting the Other 60 Mderly bppendix VI 61 GAO Activities Affecting Older Workers Y Page 10 GAO/HRD-90456 Aging Issues in Fiscal Year 1999 j. I . I I Cuntenta 62 r Contributors to Table 1: GAO Activities Relating to the Elderly in Fiscal I Year 1989 Abbreviations AAPCC adjusted average per capita cost ACR adjusted community rate ADP automated data processing ADL activities of daily living AU administrative law judge CHAMPUSCivilian Health and Medical Program of Uniformed Services DDS Disability Determination Service DOD Department of Defense ESOP employee stock ownership plan FEHBP Federal Employees Health Benefit Plan FERS Federal Employee Retirement System FDA Food and Drug Administration GAO General Accounting Office HCFA Health Care Financing Administration HHS Department of Health and Human Services HMO health maintenance organization HUD Department of Housing and Urban Development MIG Medicare Insured Group NIMH National Institute of Mental Health OPM Office of PersonnelManagement PRO peer review organization RAM resource allocation methodology SW Statistical Quality Control SSA Social Security Administration VA Department of Veterans Affairs Page 11 GAO/HRD-99456 Aging Issues in Fiscal Year 1989 . Appendix I i fi Flscal Year 1989 GAO Reportson Issues I P@mrily Affixting Older Americam 1, During fiscal year 1989, we issued 69 reports on issuesprimarily affect- ing the elderly. Of these, 26 were on income security, 21 were on health, 12 on veterans’ issues(including 6 on veterans’ health care), and 1 on ” other issues.An asterisk after the report title indicates that the review was performed at the request of Committees or Membersof Congress. Two asterisks indicate that the work was mandated by statute. 1 I Hbalth - Bbard and Care: Many elderly and disabled adults reside in board and care homes; little Irhfficient Assurances is known nationally, however, about the residents’ needs,the care they receive, or the total number of homes operating in the United States. In That Residents’ Needs Are 1976, the Congressenacted the Keys Amendment to the Social Security Identified and Met (GAO/ Act. The act required states to certify, to the Department of Health and H/RD-89-50,Feb. 10, 1989) Human Services(HHS), that all facilities in which a significant number of Supplemental Security Income recipients resided or were likely to reside met appropriate standards. HHSis only required to record that it received the states’ annual certificates concerning compliance. HHShas done little to monitor state actions or sanction states not in compliance. In the six states we visited, the states continue to find serious problems in somelicensed board and care homes.These problems range from very serious situations, such as residents being subjectedto physical and sex- ual abuse,to persistent unsanitary conditions. In somecasesresidents were denied heat, were suffering from dehydration, were denied ade- quate medical care, or had food withheld if they did not work. Situa- tions have occurred that have contributed to the death of board and care residents. HHSneeds(1) to conduct a comprehensiveassessmentof states’ oversight activities for their board and care population and (2) report to the Congressfindings and, if appropriate, recommendations as to further steps neededto assureprotection of residents and changes neededto the Keys Amendment to make it more effective. Page 12 GAO/HRD-994% Aging Issues in Fiscal Year 1999 Appendix I Piecal Year 1989 GAO Reporta on Lssues PrimarUy M&tfng Older Americans This annotated bibliography lists studies concerning health benefits for graphy of Studies on the uninsured. It cites literature, including books,journal articles, and Benefits for the research reports published between 1980 and 1988. Info mation Technology: The Health Care Financing Administration’s (HCFA’S) Information Tech- Heal‘1h Care Financing nology System budget request of $73.6 million for fiscal year 1990 may not accurately and fully estimate automated data processing(ADP) Administration’s Budget expenditures. HCFA’S cost estimate of $22 million for an ADP initiative to ( ProcpssNeeds expand system capacity for the Catastrophic CoverageAct of 1988 was ~ Improvement (GAO/ not supported by sufficient analysis becauseHCFA lacked time to make a IMTEC-89-31, Aug. 11, more accurate estimate. Fiscal years 1991-92costs of the PRISMsystem 1989)* have been increased by about $7.2 million. The system is intended to give HCFA additional ADP and telecommunications capacity to improve program operations and supply better data to assessthe impact of new health care proposals. Further, HCFA has not included in its information technology systems budget request over $947 million included in its pro- grammatic budget for Medicaid state and Medicare contractor ADP costs and for a major Medicare project. Although HCFA believes that contrac- tors can contribute to Medicare ADP cost reduction-by cutting the number of systems used and trimming maintenance costs through shar- ing arrangements or adopting a HCFA-compatible system-HCFA believes that it doesnot have the legal authority to direct system standardization and consolidation. Internal Controls: Need to HCFAis experiencing problems in resolving claims processingerrors con- Strengthen Controls Over cerning Medicare payments to institutions and needsto better use the results of external reviews in managing Medicare. HCFA has not ensured Payments by Medicare that intermediaries resolve potential claims processingerrors identified Intermediaries (GAOIHRD- by master record computer edits. This has resulted in a backlog of over 89-8, Nov. 14, 1988) 2 million unresolved errors as of July 1987. In reviewing 277 of these potential errors, GAOfound 73 overpayments totaling $272,011 and 7 underpayments totaling $6,468, GAOprojected that the three peer review organizations (PROS) had allowed millions of dollars in overpayments and underpayments. To more adequately ensure the appropriateness of Medicare payments to institutions, HCFA should more effectively use its internal controls and strengthen other controls. Page 13 GAO/HRD-9WXi Aging Issues in Fiscal Year 1989 Appendix I Nscal Year 1089 GAO Rqorta on Issuee PrimarUy Af’bcthg Older Axuerlcam 7 ng-Term Care for the E derly: Issues of Need, A and Costs (GAO/ In 1986, an estimated 6.2 to 6.6 million elderly dependedon others for help with activities of daily living (ADL) or instrumental activities of daily living. About 20 percent of these dependent elderly lived in nurs- ing homes;the majority lived in the community. Nearly all of the elderly H D-89-4, Nov. 28, 1988)* in the community received all or someof their care from informal caregivers-family and friends. A 1982 survey noted that despite help from family and friends, about 40 percent of the elderly with one or more ADL dependenciesstill had unmet needsfor help. Individuals with mental/behavioral problems and/or multiple ADL dependencieswho require extra nursing care and for whom payments will be made by Medicaid are likely to wait the longest for help. The majority of public and private expenditures are for nursing home care; in fiscal year 1985, almost $36 billion of the estimated $46 billion spent nationally for long- term care was for the dependent in the community. Out-of-pocket pay- ments by individuals and their families were an estimated $20 billion in 1986 and are expected to continue to rise. Any future strategy for han- dling the growing long-term care needsof the elderly will need to bal- ance the potentially conflicting goals of accessand cost containment. $ong-Term Care Insurance: Expenditures for long-term care servicesin the United States are Qtate Regulatory expected to exceed$46 billion in 1988, principally for nursing home care. Publicly funded health care programs-Medicare for the aged and Requirements Provide Medicaid for the poor-pay less than half, with consumerspaying the Inconsistent Consumer remainder. Private long-term care insurance offers potential to help Protection (GAO/HRD-89- defray these costs;it is intended to addressthese gaps and limitations in 67, Apr; 24, 1989)” other insurance, Typically, such policies pay a set amount over a speci- fied period for each day a policyholder uses a covered service. But poli- cies vary considerably in terms of coverage,the amounts payable per day, and other conditions affecting policy value and cost. State approachesto regulating long-term care insurance vary greatly. Half the states have adopted specific legislation, although they vary in the degreeto which they meet the National Association of Insurance Com- missioners’ recommendedminimum standards, Many states allow insur- ers to use policy provisions that offer consumersless protection than recommended.While such provisions can result in lower policy premi- ums, they can adversely affect policyholders by (1) decreasingthe likeli- hood that neededservices will be covered and (2) increasing the risk of policy terminations for reasonsother than nonpayment of premiums. Page 14 GAO/HRD-9066 Aging Issues in Fiscal Year 1989 . Appendix1 FlscaI Year 1989 GAO Iteporta on Issuer Prharily Affecting Older Amehans Medi aid: RecoveriesFrom Through assetrecovery programs, states can recover from the estatesof Nurs ng Home Residents’ nursing home recipients or their survivors a portion of the expensesthe state incurs in providing nursing home care. Estate recovery programs Esta es Could Offset require Medicaid recipients whose primary assetsare their homes to Prog am Costs (GAO/HRD- contribute toward the cost of their nursing home care in the sameman- 89-5 , Mar. 7, 1989) ner required of recipients whose assetsare in the form of stocks, bonds, i and cash. Unlike the payments made from liquid assets,however, pay- ments from the home’s equity are deferred until the recipient and his or her spouseand dependent children no longer need the home. Estate recovery programs provide a cost-effective way to offset state and fed- eral costs,while promoting more equitable treatment of Medicaid recipi- ents. GAOstudied Medicaid nursing home programs in eight states to determine the potential financial impact of assetrecovery programs on Medicaid and whether they provide a mechanism acceptableto the elderly for sharing the costs of nursing home care. Medicaid: SomeRecipients In a limited test in Massachusetts,GAOidentified 143 Medicaid nursing Neglect to Report U.S. home residents whose individual bond holdings could render them ineli- gible for benefits. Their combined outstanding bond holdings totaled Savings Bond Holdings about $15 million. Most of the holdings were not reported on the indi- (GAo/HRD-89-43, Jan. 18, viduals’ Medicaid applications, even though the form used in Massachu- 198b) setts specifically asks recipients to list government bonds/notes. Although the Social Security Act requires state agenciesthat administer certain federal benefit programs to verify income by comparing the income declared by program applicants and beneficiaries with informa- tion obtained from the Internal RevenueService and the Social Security Administration (SSA), it doesnot require verification of U.S. savings bond holdings. The Department of the Treasury maintains such informa- tion on the value of savings bond holdings, but this information is not currently available to the states. To help prevent ineligible individuals from obtaining Medicaid benefits, GAOrecommendsthat (1) procedures for verifying saving bond holdings be included in an Income and Eligibil- ity Verification System and (2) the Secretary of the Treasury, upon request, make such information available to the states, Medicare: An Assessment HCFAhas made several refinements in its analytical approach to hospital of HCFA’s 1988 Hospital mortality analyses.It has (1) modified the composition of the 17 broad categoriesused to characterize the principal diagnosis of all Medicare Mortality Andyses (GAO/ patients, (2) reported outcomesof each hospital over several years P&MD-89-1IBR, Dec. 13, rather than a single year, and (3) initiated studies to validate its analyti- 1988)* cal approach. However, its current analytical approach and associated Page 15 GAO/HRD-90-56 Aging Issues in Fiscal Year 1989 Appendix I FlrcalYear19I3BGAoReporteonxl4sueo prlnwlly Afmtlng Older Ameri4zan!S validation efforts still have several limitations that diminish its ability to ensure the validity of its analyses.Until HCFAexpands on its current efforts to validate its approach and to examine the effect of data defi- ciencies,it will be difficult to determine the actual proportion of hospi- tals that are correctly identified as having, or not having, quality of care problems. M dicare Catastrophic Membersof Congressand the public have expressedconcern about the A t: Options for Changil23 Medicare Catastrophic CoverageAct of 1988, particularly about the amount of supplemental premium that higher income Medicare benefi- Fi1 ancing and Benefits ciaries will pay. In this report, which provides a summary of options ( AO/HRD-89-156, available to either revise the benefits and financing under the act or s%,pt. 15,1989) phase out the program, GAOfinds no “painless way” to reduce benefici- ary funding, Revenuesfrom other sourceswill need to be raised or bene- fits provided under the act will need to be cut. Compounding the problem from a budget standpoint is that the act was designedto build a contingency reserve so that estimated revenuesexceedestimated costs for the catastrophic program in its early years. Therefore, repeal of the program would increase the federal deficit for Gramm-Rudman-Hollings deficit reduction purposes for the next few years. Medicare: Health The report provides an overview to three broad topics of concern relat- Maintenance Organization ing to current rate-setting methodology. These issuesare the (1) accu- racy of the forecasted adjusted average-per-capitacost (AAPCC) rates; (2) Rate-Setting Issues (GAO/ appropriateness of tying health maintenance organization (HMO) pay- HRD-89-46,Jan. 31, ment levels to county fee-for-service Medicare cost levels; and (3) poten- 1@39>** tial of the current capitation payment system to adversely affect Medicare, its beneficiaries, and HMOS. Forecastsof future costs are made using relatively old data for the base period, becausecomplete data on actual Medicare payments are gener- ally not available until 3 years after a given time period. Thus, the data must be inflated to account for price increasesover time and adjusted for factors such as changesin utilization rates and patterns. Questions have been raised about whether the county is the appropriate unit of local rate-setting, and whether there are alternatives to using local fee- for-service Medicare cost as the means of setting HMOpayment rates. Y While the capitation payment system creates strong incentives for the efficient use of resourcesand cost containment, AAPCCcapitation in a fee-for-service environment also creates incentives that may hamper the Page 10 GAO/IlRD4h%56 Aging Issues in Fiscal Year 1989 APpe-1 Fbcel Year19119GAO Reports on Imuee Prlmadly AffW OlderAmericans achievement of Medicare’s cost containment and quality-of-care goals. GAOwillpresent the results of its analysis in later reports. are: Impact of State Mandatory assignment laws reduced out-of-pocket health care costs for covered beneficiaries in four states that enacted laws requiring physi- cians, under certain circumstances,to accept Medicare’s approved amount as payment in full. The Massachusettslaw eliminated all billing by physicians that exceededthe amounts allowed under Medicare; the Septi.19,1989)* amount of savings in the other three states (Connecticut, Rhode Island, I and Vermont) was less clear. Indicators developed by GAOsuggestthat / physicians have not offset reducing bills for covered beneficiaries by I I increasing bills for noncoveredbeneficiaries. The volume and intensity I I of servicesprovided by physicians to Medicare beneficiaries in three I states did not increase as somepeople had feared. In Massachusetts,the I volume and intensity of servicesincreased,but the law’s relative impor- I tance in causing this increase is not clear. Accessto care was not reduced in the four states as a result of the mandatory assignment laws. 1 Medicare: Incentives Medicare . . . saved _. - _about .-_ $1.4 _ ^billion in fiscal year ._- 1987 . by paying _ _ benefi- .__ Neetied to Assure Private ciaries’ medical bills only after other responsible insurers had paid, but it is still paying many claims that other insurers should pay. While Insvrers Pay Before Medicare has taken steps to improve the information available for iden- Medicare (GAO/HRD-89- tifying claims that others should pay, insurers and contractors do not 19, $Vov.29, 1988) have adequate incentives to comply. Until they do, Medicare secondary payer provisions will not achieve all possible savings. Me&care: Indirect Medical Under Medicare’s prospective payment system, teaching hospitals Edbcation Payments Are receive extra payments. These payments are to compensatefor higher patient care costs associatedwith providing graduate medical education, ToQHigh (GAO/HRD-89- In fiscal year 1986, the additional payments were about $2.1 billion- 33,iJan. 5, 1989)** $1 billion for direct medical education costs and $1.l billion for the indi- rect cost of medical education. GAO'Sanalysis showed that the add-on payments to teaching hospitals for the indirect cost of medical education are too high, and GAOrecommendsreducing the teaching adjustments factor, which helps determine these payments. Y Page 17 GAO/HRD-99-56 Aging Issues in Fiscal Year 1989 Appendix I Fiscal Year 1989 GAO Reports on Issues Primarily Affecting Older Americans Concernshave been raised that the incentive payments made to physi- cians participating in Medicare may be so strong that they represent a potential threat to the quality of care by encouraging inappropriate reductions in service. Incentive features most likely to adversely affect quality are (1) shifting HMOS'risk to physicians, (2) distributing incen- tives basedon individual physician cost performance, (3) paying a per- centageof HMOsavings on patients, and (4) measuring physician cost performance over a short time period. Strong HMOmanagementcontrols are neededto identify and prevent physician behavior that adversely affects quality of care. M dicare: Program This report discusseswhy hospicesare not participating in Medicare, P ovisions and Payments the reasonablenessof hospice payment rates, and hospice quality requirements. At least one-half of the nonparticipating hospicessampled Dt scourage Hospice during GAO'Snational survey said the main concernsthat led them not to Participation (GAO/HRD- participate in Medicare were (1) the language required in hospices’certi- 89-111, Sept. 29,1989)* fication of terminal illness related to the certainty of the physician’s , prognosis of death, (2) the requirement that hospicesobtain contracts /, with hospitals for inpatient services,(3) limits placed on aggregatepay- ment amounts and inpatient days, and (4) payment rates. Medicare PROS:Extreme The Utilization and Quality Control PROSoperating under contract with HCFAand provide nurse and physician review of hospital medical Variation in records for discharged Medicare patients. In fiscal year 1987 these con- Organizational Structure tracts totaled $166 million. This fact sheet describesfour aspectsof PRO and Activities (GAO/ operations: (1) organizational characteristics, (2) review activities, PEMD-89-7FS,Nov. 8, (3) PROobjectives and interventions, and (4) relationships with other X988)* health and consumer groups in the state where the PROis located. Medicare: Reasonableness Under risk contracts, HMOSagreeto provide all Medicare-coveredser- of Health Maintenance vices for a fixed monthly amount per beneficiary (capitation payment) and to experience a profit or loss depending on their cost to do so. Medi- Organization Payments care law provides a payment safeguard to help ensure the accuracy of Not Assured (GAO/HRD- the methods used to calculate capitation rates. This safeguard, the 89-41, Mar. 7, 1989) adjusted community rate (ACR) process,is intended to prevent HMOSfrom retaining excessiveprofit from Medicare’s payments. HCFA'Sprocessfor reviewing, validating, and approving ACRsubmissionsprovides little * assurancethat the ACRprocessis meeting its payment safeguard objec- tive. GAO'Scasestudies of ACRSsubmitted by 4 HMOSand review of a Page 18 GAO/HRD-90-66 Aging Issues In Nscal Year 1989 ,’ Appendix I Fled Year 1989 GAO Reporta on Iesues Prlmdly A.ffectin.g Older Americans random sample of ACRSsubmitted by 15 other HMOSshowed that the pro- cessis susceptible to HMOmanipulation and error, This is becauseHCFA doesnot always enforce its requirements that an HMO(1) use its own historic cost and utilization data as a basis for calculating its ACR,(2) follow the prescribed computational methods to account for differences between Medicare and commercial members’ volume and cost of ser- vices, and (3) document the calculations. Me ‘care: Status Report on The Secretary of HHSis authorized to conduct demonstrations of con- 4 Meqicare Insured Group tracting on a prepaid capitation basis with Medicare Insured Groups (MIGS) to provide Medicare benefits to retirees. A MIG must agreeto pro- Demonstration Projects vide the full range of Medicare-coveredservicesto its Medicare-eligible (G4O/HRD-89-64, June 27, retirees for a per capita rate of payment. The MIG'Sloss or surplus for 198?)** servicing these retirees dependson whether its coststo provide the ! Medicare services are more or less than the capitation payment. HCFA has entered into cooperative agreementswith Chrysler Motors Corpora- tion, Southern California Edison Company, and Amalgamated Life Insurance Company to establish the three MIG projects authorized by the Omnibus Budget Reconciliation Act of 1987. In April 1989, HCFAofficials told GAOthat they were not certain when any of these projects would becomeoperational. Medicare: Statutory Medicare seeksto ensure that beneficiaries receive hospital care that is Mohifications Needed for medically necessaryand meets professionally acceptedstandards. To detect any violations of such standards, Medicare contracts with PROSto thk Peer Review Program examine beneficiaries’ inpatient hospital records. If they identify Mobetary Penalty (GAO/ instances of improper or unnecessarycare that are gross and flagrant or HR?-89-18, Mar. 30, numerous, PROSmust report them to HHS'SOffice of the Inspector Gen- lQqQ)* eral (OIG) and provide appropriate recommendations.In the most seri- ous casesMedicare can exclude the provider from the program. If exclusion is not warranted Medicare can impose monetary penalties instead. The dollar penalty, however, is based on the cost to Medicare of the improper or unnecessarycare, and this cost can be very small. In a 1987 memorandum, the OIG advised PROSnot to submit caseswith rec- ommendations for monetary penalties unless the penalty would be cost effective. Specifically, the memorandum indicated that PROSshould not recommendsuch penalties unless, among other things, (1) the provider displayed a pattern, rather than one or two instances,of unnecessaryor poor-quality care and (2) the Medicare program improperly reimbursed the provider a significant amount of money. To make the PROmonetary penalty a useful alternative when exclusion is not appropriate, the Page 19 GAO/HRD-90456 Aging Issues in Fiscal Year 1989 Appendix I NscaI Year 1989 GAO Reports on hmes IWmfwUy Affwting Older Amerlcnru Social Security Act should be amendedby substituting a fixed dollar limit on monetary penalties for the current cost-basedlimit. U ‘S.Employees Health The Medicare Catastrophic CoverageAct of 1988 extends catastrophic Bi nefits: Rebate for insurance protection to about 33 million elderly and disabled benefi- ciaries, including Medicare-eligible federal retirees. Many of these fed- D plicate Medicare era1retirees are also enrolled in the Federal Employees Health Benefits C verage (GAO/HRD-8IQ- Program (FEHBP).To finance the cost of the new catastrophic benefits, 5E, Mar. 23,1989)* additional Medicare premiums were imposed. Becausefederal employees already pay premiums to have many of these medical costs covered under FEHBP,the Office of Personnel Management(OPM) was directed to reduce FEHBPpremiums to prevent federal retirees from paying twice for the samebenefits. Ihcome Security ADP Budget: SSA’s Fiscal SSA’S fiscal year 1990 information systems budget request for $204 mil- *ear 1990 Information lion provides $160.5 million to fund ongoing data processingand tele- phone operations and maintenance. The request includes $43.5 million Technology Systems to fund capital investment projects directed at enhancing the capabili- Budget Request (GAO/ ties of its information systems, such as acquiring additional ADP and tel- IMTEC-89-60, June 28, ephone equipment, new software development, and related contractor 1989)” services. ADP Planning: SSA’s This report presents the results of a review of SSA’SADP report, which February 1989 Report on showed the context in which the agency’sfiscal year 1990 information technology budget supports the larger mission of ss~and prepares the Computer Modernization Is agency to meet its service demandsthrough the year 2000. The report, Incomplete (GAO/IMTEC- however, doesnot identify the specific long-term ADP activities to be 89-76, Sept. 25, 1989) undertaken; the objectives of each activity; the personnel, equipment, and financial resourcesneededto accomplish them; or their milestones. SSAofficials estimated that it could take the agency until September 1990 to develop such detailed information on its computer moderniza- tion activities. Page 20 GAO/HRD96-56 Aging Issues in Fiscal Year 1989 i. I / Appendix 1 Fiscal Year 1989 OAO Beports on Imuee PrharIly Affecting Older Americans In 1982, SSAbegan the field office modernization project to provide for more rapid client service. The project called for increasing the number of computer terminals available to provide automated capabilities for entering information and making benefits calculations on new accounts, thereby eliminating the paper-oriented manual process.GAO found that: (1) SSAmet its initial field office hardware installation schedule by installing 22,892 computer terminals and the new communications net- work in some 1,300 field offices and (2) .%Ahad redesignedportions of its retirement software and planned to complete this redesign by 1992. Also, SSAfield office personnel believed the increasedquantity of termi- nals and the ability to quickly accessdata baseinformation for retire- ment and supplemental income accounts allow personnel to promptly answer client inquiries while clients are in a field office or on the phone. Agd Discrimination: Use of GAO reviewed Fortune 100 companies’use of waivers to releaseemploy- Waivers by Large ers from certain legal claims under the Age Discrimination in Employ- ment Act of 1967 in special short-term exit incentive programs. These Cotipanies Offering Exit programs were designedto encourageemployees’early departure Incbntives to Employees through someform of financial incentive. About 80 percent of Fortune (GAO/HRD-89-87, Apr. 18, 100 companiessponsoredan exit incentive program at least once during 19gs)* 1979-88.About 30 percent of these companiesrequired their employees to sign a waiver as a condition for receiving enhancedbenefits. Overall, the use of waivers increased during the years 1985-88 and was highest in 1987 and 1988. During those peak years, 35 percent of the companies with exit incentives used them. Officials from companiesthat required waivers said such a practice protected the company from lawsuits. Com- panies not using waivers contended that they were unnecessarybecause of the voluntary nature of exit incentive programs and the adverse effect that waivers would have on employee relations. Computer Operations: SSAhas estimated that since 1982, it has spent about $643 million for its Iniprovements Needed in computer systems and planned to spend about $170 million in fiscal year 1989 to maintain and further modernize its systems. SSA has not SoFial Security’s Capacity effectively performed capacity management activities neededto accu- Management Program rately assessits computer capacity needs.For instance, while the (GAO/IMTEC-89-8, agency prepares various reports on total system utilization, these Jan. 18, 1989) reports do not have sufficient detail at the transaction level; therefore, SSAcannot determine whether the current computer processingenviron- I) ment is operating effectively and efficiently. The agency has initiated improvements, but until they are completed, SSA cannot determine its Page 21 GAO/HRIMO-56 Aging Issues in Fiscal Year 1989 Appendix I FlscaI Year 1999 GAO Reporta on Emm PrharIly Afl’ectlng Older Americam ongoing capacity requirements and provide assurancethat future com- puter acquisitions are justified. Di. trict’s Workforce: The District of Columbia Retirement Reform Act provides for annual A nual Report Required federal payments to the District of Columbia’s Police Officers and Fire Fighters’ Retirement Fund. Thesepayments, however, are to be reduced byi4 the District of Columbia when the disability retirement rate exceedsan established limit. An Reitirement ReformMar. (G+O/GGD-89-57, Act 22, enrolled actuary determined the disability retirement rate to be 0.733 percent. Sincethis rate is lessthan the established limit of 0.8 percent, 19js9>** no reduction is required in the fiscal year 1990 payment to the fund. Employee Benefits: Company group health plans, generally financed at least in part by the Cqmpany Actions to Limit companies,play a major role in giving retirees and their dependents accessto lifesaving services.However, significant and increasing costs, Retiree Health Costs and the potential adverse effects on businessoperations from disclosing (GAO/HRD-89-31BR, unfunded benefits, could prompt companiesto take action to change Feb. 1,1989) their health plan provisions. GAOlooked at the retiree health plans of 29 medium and large companiesin the Chicago area and found the follow- ing. All 29 companieshave the right to modify or terminate health bene- fits for active workers and retirees due to specific language in the plans. During the 4-year period 1984-88,all the companieschangedtheir plans by adding cost-containment measuresto help ensure that the health ser- vices provided are medically necessaryand qualify for coverageor by raising the amount plan participants pay for health coverageand for medical services received. Employee Benefits: Companieshave been financing retiree health care for years. Although Companies’ Retiree Health seenas a low-cost employee benefit decadesago, such care now has becomea major concern for employers becauseof demographic and eco- Liabilities Large, Advance nomic trends. Retiree health costs have skyrocketed, in part because Funding Costly (GAO/ there are more retirees than ever before-workers retire earlier and live BRD-89-51, June 14, longer. The growing cost has raised questions about the security of 1989)* retiree health benefits and companies’ ability to pay future costs. In con- trast to pension plans, where moneys are set aside to pay future bene- fits, companiesgenerally handle costs for retiree health benefits on a pay-as-you-gobasis out of current revenue. By and large, companiesdo Y not prefund retiree health care costs. The Congressmay wish to protect retirees’ health care coverageby requiring employers to advance-fund such benefits or provide coveragethat retirees can buy at group rates. Page 22 GAO/HRJSSO-50 Aging Issues in Fiscal Year 1989 / /* . Appendix I Flncal Year 1989 GAO Repot on Imwa Rimarlly Af’?ecting Older Americana Fed&al Employees: Early This fact sheet examined certain aspectsof the Department of Defense’s Retikments at the Defense (DOD'S)managementof the voluntary early retirement program autho- rized in fiscal year 1988 at the Army Material Command,the Army Avi- Depgrtment in Fiscal Year ation Systems Command,the Army Troop Support Command,and the 1989 (GAO/GGD-89-53FS, Air Force Air Logistics Center. The fact sheet focused on the cost and Feb.1 I 23, 1989)* possible adverse affects of large numbers of DODemployeeselecting 1 early retirement. Fed ral Retirement: Use of The use of contractors and other agenciesby OPM,SSA,and the Federal Con ractors to Implement Retirement Thrift Investment Board to implement the Federal Employ- eesRetirement System (FERS)was appropriate. OPMpaid about $3.8 mil- the ederal Employees lion primarily to develop and print information to help federal s Ret’rement System (GAO/ employeesbetter understand and compare the features of the new sys- GG$ -89-29, Feb. 1,1989)* tem and the Civil Service Retirement System. SSAcontracted through the Government Printing Office for an automated system, using machine- I readable forms to respond to federal employees’ requests for social security earnings and coverageinformation at a total cost of $621,506. ! The Thrift Board paid about $14.6 million primarily to develop and operate an automated recordkeeping system and to prepare, print, and distribute materials and forms. Federal Workforce: Concernwas raised that agenciesmay be inappropriately classifying Positions Eligible for Law jobs as law enforcement positions to help employee recruitment and retention, since federal employeesin the law enforcement officer retire- Enforcement Officer ment program receive more generousbenefits that are more costly to Retirement Benefits (GAO/ provide than the retirement program for other employees.Various laws GGD-89-24,Feb. 2, 1989) enacted since 1947 allow employeesin such positions to retire earlier and to receive higher annuities for the samelength of service to main- tain a young and vigorous law enforcement work force. The most recent data available showed that 44,646 employeeswere covered by the spe- cial retirement benefits as of June 30, 1987. From January 1985 through June 1987, the Department of Justice’s law enforcement work force increased by 5,680, and the Department of the Treasury’s U.S. Customs Service law enforcement work force increasedby 817. The majority of the new hires were placed in previously approved positions; thus, the new positions generally did not appear to contribute to the work force increase or to aid in recruitment and retention. Y Page 23 GAO/HRDSO-56 Aging Issues in F’iscal Year 1989 , Appendix I Fiscal Year 1881) GAO Reports on Issuee Prharlly Mfectlng Older Amerlcena Le+ isragedBuy-Out Funds: GAO’S review of the extent to which eight selectedpension plan sponsors In estments by Selected participated in limited partnerships, or leveraged buyout (LBO) funds, which pool capital for buy-outs, showed that they have invested a rela- PeIlt jion Plans (GAO/HRD- tively small portion of their assetsin LB0 funds. Most sponsorshave 89i 121, Aug. 1, 1989)* received higher returns than achieved on other plan investments. Fur- ther, the sponsorsappear to be selective in choosingthe funds to invest in, and most had diversified their investments among different funds. iG jion Plans: Labor and The Employee Retirement Income Security Act of 1974 was enacted to IR1 Enforcement of the eliminate mismanagementand abusesof private pension plan assetsand II to ensure that participants of these plans receive the benefits to which En bloyeeRetirement they are entitled. The Department of Labor and the Internal Revenue Inc me Security Act Service are responsible for enforcing the act’s provisions. Labor’s (G O/HRD-89-32, Jan. 23, enforcement activities included: (1) an increasein the number of indi- 19 a>* vidual pension plan investigations closed from 1,269 in fiscal year 1986 to 1,323 in fiscal year 1987 and (2) an increase from about $42 million in fiscal year 1986 to about $106 million in fiscal year 1987 in the value of plan assetsrestored and transactions reversed as a result of its actions against plans with fiduciary violations. The Internal RevenueService’s efforts included increasing (1) the amount of excise taxes and penalties assessedfrom $7.9 million in fiscal year 1985 to $12.6 million in fiscal year 1987 and (2) the proportion of plans examined that were cited for violations from 20.6 percent in fiscal year 1985 to 32 percent in fiscal year 1987. Poor Performers: How This report provides insight into how the SSAidentifies and deals with They Are Identified and poor performers. SSA’S performance managementsystem provides super- visors with a mechanism for dealing with poor performers. Generally, Dealt With in the Social the system produced positive results in caseswhere poor performance Security Administration was identified. Although S&I experienced somesuccess,GAOalso learned (QAO/GGD-89-28, Jan. 27, that poor performers were not always identified and that the process 1989) for dealing with poor performers was not always used. Moreover, some supervisors said they would be reluctant to initiate performance actions against unsatisfactory performers in the future. Page 24 GAO/HRDBO-56 Aging Issues in Fiscal Year 1888 ,” . Appendix I Fiscal Year 1888 GAOReports on Ireuea Rlmarlly AtYectlng Older Americana Pensions: Plan Employer-sponsoredpension plans that qualify for preferential tax isions Differ Between treatment must meet several federal rules designedto improve the equity and security of pension benefits. The Joint Committee on Taxa- tion has estimated that tax preferences for these plans will result in a $46 billion loss in tax revenue in 1989. The report focuseson the most prevalent types of pension plans in industries having most employer- sponsoredplans. It describessomeof the options that large and small companiessponsoring these plans chosein designing their pension plans to meet federal rules. GAO focuseson four provisions: (1) how long work- ers must wait to participate in the plans, (2) how long workers must wait to gain a legal right to receive earned benefits, or “vest,” (3) how plans coordinate or “integrate”’ benefits with social security, and (4) how long workers must wait to be eligible for full retirement bene- fits. The report also discussesthe impact of someof the changesman- dated by the Tax Reform Act of 1986. Private Pensions: This briefing report answers questions about pension portability and Pofiability and preservation. Portability refers to the ability to transfer years of service credits or pension benefits from one employer to another. Preservation Prkservation of Vested refers to encouraging workers to save cashed-outpension benefits for Pehsion Benefits (GAO/ retirement income. HRD-89-15BR,Feb. 3, 1989)* Railroad Retirement: Rail employment has steadily declined, from 1,680,OOO in 1945 to Future Rail Employment 307,000 at the end of 1988. A number of forces are at work that likely will causethis decline to continue to 200,000 or less. The overall drop in and Trust Fund Solvency rail employment since 1945 has been influenced somewhat by this coun- (GAO/HRD-89-30, Apr. 5, try’s evolution toward a more service-oriented economy. The principal lti89) causeswere the losesof passengerand freight traffic to other means of transportation. Despite lower employment levels in the future, current projections show that the railroad retirement account should be able to pay benefits into the first decadeof the next century. These projections show an improvement in the financial status of the program becauseof a 1988 payroll tax increase,the extension of federal contributions from general revenues, and changesin certain other actuarial assumptions. Page 25 GAO/HRD90-56 Aging Issues in Fiscal Year 1989 Appendix1 Flscd Year1889GAOReqort@ on Lmea PrlmarUyAf%ct&OlderAmerlcana Social Security: Leadershi,p On the basis of its own reviews of the managementexperiencesof dif- St cture for an ferent agenciesand studies by others, GAOconcludesthat a single admin- istrator rather than a board would be the best managementstructure for In ependent Social SSA.Under a board form of organization, board members are, in princi- Se urity Administration ple, able to bring different points of view and different experiencesto (GT O/HRD-89-164, the decision-making process.GAO'Swork, however, suggeststhat, in Se t. 13,1989)* practice, boards have not proven effective in providing stable leader- ship, insulating decisionsfrom political pressures,and ensuring that diverse viewpoints are consideredin the decision-making process.Con- versely, the single administrator form of organization offers the advan- tage of allowing for clear delineation of authority and responsibility- an operational characteristic found in most successfulpublic enterprises. So’ ial Security: Results of Social Security disability claimants whose initial benefit applications are R&, uired Reviews of denied may appeal through several layers of administrative and judicial review. The appeal process,however, is very time-consuming. For some Administrative Law Judge claimants, even favorable decisionsby administrative law judges (AUS) Decisions (GAO/HRD-89- are delayed becausethey are chosenat random for further review by 48BR, June 13,1989) W’S Appeals Council. This random review processis carried out under the Bellmon Amendment. Early reviews under the amendment were directed at ALJSwho issued favorable decisionsin 70 percent or more of their casesand were so controversial they led to a lawsuit by the Associ- ation of AWS. GAOstudied 5,860 casesreviewed by the Appeals Council in fiscal year 1986. About 91 percent of the decisionsreviewed were approved without objection. Over 80 percent of the casesnot approved initially by the Council eventually becamebenefit awards anyway, In total, only 1.6 percent of the casesreviewed initially were kept off the benefit rolls, Nonetheless,benefit savings resulting from Bellmon reviews appear to be significantly greater than estimated costs. Sqcial Security: Staff Morale at SSAhas been identified as a problem in various surveys since Reductions and Service 1986. SSAemployeesand managers attribute the low morale primarily to staff reductions, which have been underway since fiscal year 1986. In a Quality (GAO/HRD-89- 1988 GAOsurvey, ss~ field office managers and employeesranked the 106BR, June 16,1989)* quality of SSA’S service in processingpost-entitlement work loads lower than most of its other services.The agency has assertedthat its quality Y of service has remained high over the last several years. Its most recent service quality reports submitted to the Congressin March 1989, gener- ally indicates stable performance in the agency,with a major exception being the backlogs and processingtime for hearings before ALJS, which Page 26 GAO/IiRDBO-66 Agiug Issues in Fiscal Year 1888 . Appendix I Fiscal Year 1999 GAO Reports on Issues Frhadly Affecting Older Americans have remained relatively high over the last 2 years. (SeeGAO/ HRD-89.37BR.) Security: Status and In March 1987, GAOissued a report on the managementof SSA;it con- tained recommendationsto improve program operations and better pre- pare for the future. SSAhas made good progress in beginning to agement Improvement implement these recommendations.The Commissioner and her staff have exhibited much neededleadership in establishing agencywide goals and objectives and developing tracking systems to assure accountability. SSAhas made a number of organizational changes,appointed a senior executive officer, and set up offices for financial managementand stra- tegic planning. It has also made substantive progress in setting up a structured planning processand taken steps to integrate planning with budgeting. The Commissionerhas instituted several major changesto improve the managementof ADP,but SSAneedsto appoint a full-time information resource manager to ensure that efforts are integrated and coordinated and support long-range goals. In someareas, however, addi- tional managementaction is neededto redirect initiatives or to take more effective actions to correct the problems pointed out in the man- agementreport. Social Security: Time A median of 7 months is neededfor attorney fees to be approved and Required to Approve and paid by %A. The approval and payment processinvolves five steps: (1) notice of disability decision, (2) benefit calculation, (3) fee petition, Pay Attorney FeesCan Be (4) fee approval, and (6) fee payment. SSAcan shorten the processby Reduced(GAO/HRD-89-7, requiring attorneys to have claimants sign fee petitions before they are O& 18, 1988) sent to the hearing offices, which could save up to 30 days and by per- forming a detailed review of the entire processto determine where other efficiencies may shorten the processtime. S&al Security: The Trust The Social Security Amendments of 1977 and 1983 moved the Old-Age, Fund Reserve Survivors’ and Disability Insurance trust funds away from their tradi- tional, pay-as-you-gofinancing basis toward the accumulation of a sub- Accumulation, the stantial, though temporary, reserve. Revenues(mainly payroll taxes) Economy, and the Federal were set higher than neededto cover current expenditures (mainly Budget (GAO/HRD-89-44, retirement benefits), causing the trust fund balance to grow. As annual Jan. 19,198$* trust fund surpluses accumulate, they are invested in special issue US. Treasury securities. That is, the cash receipts that are not currently neededto pay benefits are loaned to the Treasury, which usesthat cash to meet its current requirements. Page 27 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 ‘3 Appendix I Fiecal Year 1989 GAO Re~rta on Iseuea Primarily Affecting Older Americana In 1986, legislation was enacted that removed social security from the unified budget. Now budget documents routinely report separate totals for the on-budget programs and the off-budget social security program. At the sametime, however, the budget documents routinely combine the on-budget and off-budget financial results and projections into a single series of numbers, labeled the “total deficit.” In fiscal year 1988 the social security trust funds had a surplus of $39 billion, The rest of the government ran a deficit of $194 billion, and together with the social security surplus, this produced a combined deficit of $166 billion. The budgetary reality is that the payroll taxes are being used to finance the current operations of the government and are masking the size of the on-budget deficit. The economicreality is that the trust fund reservesconsisting of Treasury securities that are financing current con- sumption rather than productive investment are illusory. They will remain so until the rest of the government achievesapproximate bal- ance between revenues and outlays. Soc$alSecurity: Views of GAO was asked to obtain the views of SSApersonnel on the quality of the Ag&ncy Personnel on agency’sservice to the public and the impact of staff reductions. Ques- tionnaires were mailed to a sample of 467 managers and 643 employees Service Quality and Staff in SSA’Sdistrict, branch, and hearing offices in June 1988. Both employ- Reductions (GAO/HRD-89- eesand managers said that quality of service to the public has gone 37BR, Feb. 10,1989)* down and that morale had gone down due to staff reductions. (See GAO/HRD-89-106.) Software Maintenance: One important measure of a computer program’s quality is how well it is SSA’s Use of Its Software structured. A well structured program is clearly organized; its logic is apparent and easily understood by a programmer. In contrast, a poorly Maintenance Package structured program is not well organized; its logic is complex, making it (GAO/IMTEC-89-38, difficult to understand, and increasing maintenance time and cost. Jurje 15,1989) Between June 1987 and September 1988, SSAperiodically evaluated the quality of the batch programs supporting its retirement system using a measurement package.GAOanalyzed the package’sevaluation of these programs and found that 1,992 of the 2,441 retirement systems pro- grams evaluated appeared to be poorly structured. SSAhad not taken full advantage of the benefits of the measurement package becauseit had not (1) developed a complete inventory of its programs, (2) ensured P that programs are consistently named, or (3) issued specific written guidance to managerson using the package. Page 28 GAO/HRD-90-56 Aghg Issues in Fiscal Year 1989 AppendixI Fbcal Year 1999 GAOReportaon Isaue~ I3harily Affecting OlderAmerkam Vet&ins Fina cial Audit: Veterans This report presents the results of GAO’Saudit of the consolidated finan- Ad inistration’s Financial cial statements of the Veterans Administration (which became,in March 1989, the Department of Veterans Affairs (VA)) for the fiscal years Stat ments for Fiscal ended September30, 1988 and 1987. In addition, it addressesthe finan- Yea s 1988 and 1987 cial condition of VA'Slife insurance and housing credit assistancepro- (GAII /AFMD-89-69, grams, which are designedto be financed primarily from self-generated Sept/.15,1989) revenues.The report contains separate reports on VA’Ssystem of inter- 1 nal accounting controls and on its compliance with laws and regulations. ,~ -~~ Fin&tcial Management: VA has demonstrated a commitment to strengthen financial management Opphtunities for and was one of the first federal agenciesto prepare consolidated finan- cial statements in accordancewith generally acceptedaccounting princi- Impkoving VA’s Internal ples for the federal government. However, GAO’Saudit disclosed Acchnting Controls and weaknessesin internal controls, which VA has subsequently initiated Probedures (GAO/AFMD- actions to correct. The principal weaknessesGAOfound were: (1) a lack 89-Q5,Aug. 11, 1989) of financial reporting systems that automated the financial system con- solidation processand financial statements; (2) a lack of effective inter- nal controls in the medical care, veterans’ benefits, and housing credit assistanceareas that are intended to ensure proper recoveries of cost and accuracy of account balances;and (3) inadequate automated payroll system controls for ensuring that all VAemployees are paid correctly and on time. VA iBenefits: Law Allows In fiscal year 1986, the VApaid about $8.4 billion in compensation bene- Compensation for fits to 2.2 million veterans disabled by injuries or diseasesincurred or aggravated during military service. On the basis of a random sample of DiSabilities Unrelated to 400 veterans receiving compensation,GAOestimated that about 19 per- Mifitary Service (GAO/ cent of the compensatedveterans had disabilities resulting from dis- H&D-89-60, July 3 1, 1989) easesthat were probably neither causednor aggravated by military service, Many of the diseaseswere related to heredity or lifestyle rather than to military service. Basedon the sample, GAOestimates that bene- fits paid for these types of disabling diseasestotaled about $1,7 billion in 1986, Current law doesnot require VA to determine if military service was a contributing factor in the causeof a disease;the Congressmay Y wish to reconsider whether these diseasesshould be compensatedas service-connecteddisabilities. Any such changesshould be prospective in order not to affect veterans already receiving compensationbenefits. Page29 GAO/HRD90-60 AgingIssuesin FiscalYear1989 AppendIxI Fiscal Year lB8B GAOBeporta on Issues PrhwiIy Affeetlng Older AmerIcam Health Care: GAOwas asked to examine allegations that the VA altered the design of - egations Concerning its patient mortality study to obtain results more favorable to the agency.It was alleged in a newspaper article that VA'S Chief Medical ‘s Patient Mortality Director ordered that the confidence level used in calculating the Idy (GAO/HRD-89-80, number of VA medical centers that had higher-than-expected mortality rates be changed from 96 to 99 percent in order to arrive at a lower number of hospitals with potential quality assuranceproblems. Based on information provided by VA, GAO cannot conclude that the Chief Medi- cal Director or any agency official inappropriately attempted to give the appearancethat it had fewer hospitals with higher-than-expected mor- tality rates than actually exist. ii Health Care: Delays in VA was given funding in fiscal year 1988 for 15 major construction Al ,arding Major projects, each estimated to cost $2 million or more. Public Law loo-202 required that (1) working drawings contracts be awarded by September C( lstruction Contracts 30,1988, and (2) construction contracts be awarded by September30, (G 4O/HRD-89-75,Mar. 31, 1989. VA reported that, as of September30,1988, working drawings con- 1s 19) tracts for 2 of the 16 fiscal year 1988 projects and construction con- tracts for 3 of the 11 fiscal year 1987 projects had not been awarded as required. Information provided by VA officials indicated that various programmatic considerations causedthe contracting delays. The most common reasonscited for delays were changesin the projects’ scopeor design or receipt of bids that exceededthe available funds. VA Health Care: Few Concernwas raised that VA clinics might be denying care to large num- Veterans Denied Care at bers of veterans who apply for outpatient medical care in high-demand areas.GAO visited 4 of the 14 VA clinics in Florida, which VA considersto Florida Clinics (GAO/HRD- be a high-demand area. GAO estimates the four clinics denied outpatient 89-69, May 3 1, 1989)* care to less than 1.4 percent of the applicants during fiscal year 1988. These applicants were denied care becauseeither they were not eligible to receive care at VA clinics or the servicesneededwere not available. VA Health Care: Verifying physicians’ credentials and examining their ability to perform Improvements Needed in specified procedures are important elements of an effective quality assuranceprogram. Despite legislation requiring VA to improve its Procedures to Assure credentialing and privileging processes,GAO found after reviewing eight Physicians Are Qualified medical centers during 1987-88,that problems still exist. State licenses (GAO/HRD-89-77, Aug. 22, were not being consistently verified with state boards; residents’ back- 1989)* grounds were not being adequately checked;privileges were not reviewed in a timely manner; credentialing and privileging decisions Page 30 GAO/IIRD-90-56 Aging Issues in Fiscal Year 1989 ,’ / I- . I I Appendix I Fiscal Yew 1080 GAO Reporta on huea I Rimwily Affecting Older Amerkans 1 were not documented;physicians found to be deficient did not have their privileges formally reduced; and the names of physicians found to be incompetent were either not submitted to state licensing boards and/ or the Federation of State Medical Boards or not submitted in a timely manner, I /1 Public Law 96-201 requires the Secretary of Veterans Affairs to ensure that VA health care personnel have the basic proficiency in spoken and written English to carry out their responsibilities satisfactorily. VA'S iders and Patients efforts since the law was enacted have significantly reduced the prob- lems with English languageproficiency among its direct health care providers. VA health Care: Resource VA'SResourceAllocation Methodology (RAM)is designedto link medical Allocation Methodology centers’ budgets to actual work load and to provide a financial incentive for centers to improve their efficiency. Since 1986, VA has used RAMto Has Had Little Impact on transfer funds, through its budget formulation process,from less effi- Me&Cal Centers’ Budgets cient medical centers to centersjudged to be more efficient, The RAM- (GAO/HRD-89-93, Aug. 18, related adjustments to medical centers’ fiscal year 1989 budgets gener- 1089) ally represented less than 2 percent of the total dollars budgeted. The budget adjustments were small in relation to the centers’ budgets becauseVA established a maximum amount that a center’s budget would be increased or reduced in order to cushion the W’S financial impact. In addition, as medical centers incur expensesthat cannot be financed through their existing budgets, the centers’ directors can request further funds from regional directors. The regional directors thus serve as safety nets to help centers cope with financial pressurescausedby RAM- related budget adjustments. Veterans’ Benefits: Each year VA pays more than $14 billion for disability benefits and Improvements Needed in processesmore than 600,000 initial and reopened applications for these benefits. GAOinvestigated numerous allegations about VA'Sclaims- Processing Disability processingpractices and found that the rate of occurrencefor most of Claims (GAO/HRD-89-24, the alleged problems was very low or did not appear to adversely affect June 22,1989) benefit decisions.Significant problems, however, were found in these areas: notices to veterans concerning VA decisionson disability claims Y did not give veterans meaningful information; development of claims was sometimesinadequate; and claims were not always controlled promptly, Overall, these problems resulted in adverse effects on veter- ans in about 13 percent of both the compensation and pension claims. Page 31 GAO/HRD-90-66 Aging Issues ln Fiscal Year 1989 AppendixI FiscalYeul~8~GAORe~rtaonIoi1u~ FrimarUy AfYecting Older Americans With the exception of notice problems, it was difficult to identify any single causeof these problems. Each year VApays about $14 billion in compensation and pension bene- provements Needed to fits to about 3.8 million veterans and their dependentsor survivors, and about $126 million in burial benefits to veterans’ survivor or estates.VA relies on Statistical Quality Control (sqc) system to determine the extent of errors made in adjudicating claims for these benefits. VA’S SQC system does not provide reliable estimates of the extent of errors made in processingclaims because(1) its casesampling is not consistently ran- dom; (2) regional staff performing SQCreviews are not independent of claims processing;and (3) the central office doesnot ensure that the regions comply with SQCprocedures or that they report errors accu- rately. Moreover, the system does not break out error rate data by pro- gram. As a result, VA lacks the information neededto produce accurate reports or take corrective actions within a given program. VA can improve the reliability of its measurementsof claims adjudication qual- ity by addressingthese problems. Veterans’ Benefits: Need to VA cannot ensure that veterans are given accurate and uniform disability Update Medical Criteria ratings becausethe rating schedule has not been adjusted to incorporate the results of many recent medical advances.Without current medical Used in VA’s Disability criteria, it is difficult for rating specialists to classify a diseaseor injury Rating Schedule (GAO/ correctly. As a result, veterans may be assignedinconsistent ratings, HRD-89-28, Dec. 29, 1988) and someveterans may be undercompensatedor overcompensated.To better ensure that the rating schedule servesas a practical tool in assigning uniform disability rates, VA should (1) prepare a plan for a comprehensivereview of the rating schedule and, based on the results, revise medical criteria accordingly and (2) implement a procedure for systematically reviewing the rating scheduleto keep it updated. Other Aging Issues: Related GAO This report lists GAOissued products-36 reports, 10 briefing reports, Reports and Activities in and 3 fact sheets-concerning activities of the elderly. It also lists 69 assignmentsin processas of September30,1988. The reports cover var- Fiscal Year 1988 (GAO/ ious topics, such as age discrimination and health care. HRD-89-38,Jan. 26, 1989)* Page 32 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 i_ 1 Appendix II F’$cal Year 1989 GAO Reportson Issues A$fecting , the Elderly and Others GAOissued 28 reports in fiscal year 1989, on policies and programs in which the elderly were one of several target groups. Of these, 8 were on social and other services,7 on health, 6 on veterans issues,4 on income security, and 4 on housing issues.An asterisk after the report title indi- cates that the review was performed at the request of Committees or Membersof Congress.Two asterisks indicate that the work was man- dated by statute. He/alth AD/PPlanning: FDA’s Plans As part of its mission, the Food and Drug Administration (FDA) is to timprove Processing of responsible for assuring consumersthat medical devices and drugs are safe and effective for their intended uses.Responsibility for reviewing Medical Device and Drug and approving medical device and drug applications is divided between Ap’ lications (GAO/ two centers within FDA.The Center for Devicesand Radiological Health, IM f EC-89-58, June 13, which reviews medical device applications, has prepared an automated lQ+Q> , data processingsystem to improve the quality and timeliness of its application reviews. The Center estimates that carrying out its plan will cost $3 million through fiscal year 1993. The Center for Drug Evaluation and Research,which reviews drug applications, has not prepared a plan. The Center is, however, participating in several activities aimed at improving its drug-review process,and Center officials say that they are developing a plan. ADP Systems: Better The Health Care Financing Administration (HCFA) and the states depend Control Over States’ heavily on automated systems to manageand control the annual $48 billion in Medicaid program costs.GAOreviewed 129 state requests for Medicaid Systems Needed federal funds, submitted between November 1986 and July 1988, to (GAO/IMTEC-89- 19, either acquire or enhanceautomated Medicaid systems.GAOfound that Adg. 2, 1989)* becauseHCFAhas not issued guidelines concerning the requirement for states to prepare cost-benefit analyses,HCFAapproved 116 of these requests- costing about $119 million-without the means to determine if the projects would be worth their costs or whether the most cost- effective alternative was selected.In addition, GAOnoted that HCFAfunds 90 percent of the costs of approved state enhancementsto automated Medicaid systems, rather than 76 percent, as specified in federal Y guidelines. Page33 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 Appendix II Need Year 1989 GAO lCeport8 on Issuw AffiwtIng the Elderly and Others :dalth and Human This report highlights actions that should be taken in four critical areas e’vices Issues (GAO/ affecting the large and diverse operations of the Department of Health and Human Services.The areas include improving departmental man- G-89-1OTR,Nov. 1988) agement,containing the cost of health care, enhancing the financing and 7 delivery of social security benefits, and implementing the recently enacted welfare reform legislation. I iI ii 1 dicaid: Federal 0 ,ersight of Kansas F:a$ility for the Retarded One month after it was terminated from the Medicaid program in 1987 for deficiencies deemedto pose an “immediate and serious threat” to the health and safety of its residents, the Winfield (Kansas) State Hospital and Training Center for the mentally retarded was reinstated as a Medi- Ir +dequate (GAO/HRD-89- caid provider. Staff abuseof residents, resident neglect, inadequate 8151/ Sept. 29, 1989) medical and nurse services,inadequate dental services, and poor sanita- /, tion were the deficiencies cited for termination. Controversy surround- I I ing the reinstatement of the facility, after so short a time, led to a , request for GAO to determine whether the regional office complied with Medicaid requirements in its oversight of Winfield. This report contains our analysis of the facility’s termination from the Medicaid program and its subsequentreinstatement. :hntal Health: Prevention In 1980, the Congressamendedthe Public Health Service Act to give ?IMentalDisorders and special attention to efforts, both at the national and at the state and local levels, to prevent mental disability. As of April 1989, however, GAO Researchon Stress-Related found that the national prevention goals, priorities, policies, and pro- Disorders (GAO/HRD-89- grams required by the 1980 amendment had not been established. The 97, Sept. 12, 1989)* Deputy Director for Prevention and Special Projects at the National Institute of Mental Health (NIMH) is responsible for carrying out the requirements of the amendment. GAO believes that the Deputy Director lacks the resourcesand authority to accomplish the task. In addition, only one person has served as the Assistant Administrator for Preven- tion at the Alcohol, Drug Abuse, and Mental Health Administration since the position’s creation in 1983; he was appointed in August 1986 and served until June 1987. During fiscal year 1987, NIMH funded 42 grants, totaling over $9 million, that investigated loss-related stress and effec- tive measuresto prevent the development of stress-related disorders. However, the Institute’s stress-related activities were spread among sev- eral divisions with no central direction. Page 34 GAO/HRD-90456 Aging Issues ln Nscal Year 1989 Appendix II Fiscal Year 1989 GAO Repor@ on bsues Affecting the Elderly and Others gcription Drugs: GAOwas asked to provide information on the extent to which drug utili- lrmation on Selected zation review systems can identify adverse reactions that may result from (1) the interaction of the prescribed drug with one or several other g Utilization Review drugs, (2) the interaction of the prescribed drug with a known physical ;ems(GAO/PEMD-SQ- condition or illness, (3) the interaction of a prescribed drug with May 25,lQSQ) over-the-counter drugs, (4) incorrect dosages,and (6) the under- and over-utilization of the prescribed drug. The systems reviewed were those at Giant Pharmacies,Long Pharmacies,Thrift Pharmacies,Wal- green Pharmacies,National Data Corporation, Clinical ScreeningPro- gram, Home Shopping Network, and the Tri-Service Mirco Pharmacy System of the Department of Defense.In summary, the information neededto identify adverse reactions through the drug utilization review system and the patient profiles is currently available in at least some operating systems. In addition, issuesconcernedwith data security were dealt with, to somedegree,by all systems. Pr ‘scription Drugs: Current research on prescription practices for the elderly clearly indi- HC A’s Proposed Drug cates that inappropriate drug prescription can causeadverse drug reac- 1 tions, which can lead to drug-induced illness, hospitalization and even Utilization Review System death. In addition, inappropriate drug prescription leads to enormously Igtiores Quality of Care wasteful expenditures by the government, private insurance companies, Issires (GAO/PEMD-SQ- and of course,the recipients of these prescriptions. The Medicaid Cata- 26BR, July 13, 1989)* strophic CoverageAct of 1988 covers outpatient prescription drug costs for an estimated 17 percent of the elderly and provides a mechanism for checking the safety of drugs for all the elderly who use a participating pharmacy. This mechanism is an electronic drug utilization review sys- tem for prescription at the point of sale. The review system function proposed by HCFAis very basic with regard to drug information to be produced: it will only compare drug-to-drug interactions for a limited number of drugs. Several important issuesremain unresolved. It is also questionable whether HCFA'Ssystem will meet the legislative objectives of being operational by January 1, 1991, and be consistent with the law’s requirements. Page 35 GAO/HRD90-56 Aging Issues in Fiscal Year 1989 I I E I 1 Appendix II Fiscal Year 1@13@ GAO Reporta on Issues Afhcting the Elderly and Others I This report on the Department of Housing and Urban Development (HUD) describesGAO'Sconcernsabout two important issuesthat need closer attention-low-income housing and homelessness.If these issues are not addressed,the Secretary of HUD can expect (1) continuing decreasesin the supply of rental housing that is available and afforda- ble to low-income people and (2) a growing national homelessnessprob- lem. In this report, we offer a wide range of observations and suggestionson how the Secretary can best addressthese concerns. Hobsing Conference: For many years, the federal government has played an important role in Nqkional Housing Policy ensuring and providing an adequate and affordable supply of decent safe, and sanitary housing for many citizens. However, since 1980, fed- Isskes (GAOIRCED-89-174, eral funding for housing programs has been reduced substantially for Ajg. 1989) someprograms, and others have been targeted for further reduction or even elimination. The Congressand the administration have again begun to emphasizethe need for immediate attention to programs that would provide an adequate and affordable supply of housing, including hous- ing for the homeless.This staff study was sponsoredby GAOto help it plan its future work on the problems of availability and affordability of housing for low-income households,homelessindividuals and families, and first-time buyers. In view of the recently disclosedproblems in mis- managementat HUD, GAOalso plans to undertake studies of internal con- trols in various Hun programs. PGrtnership Projects: This fact sheet focuseson federal programs that support public-private Ftideral Support for Public- partnerships in housing and community development. It describesfed- eral programs currently supporting partnerships and, in particular, four Private Housing and characteristics of those programs: (1) purpose, (2) types of assistance, Dqvelopment Efforts (3) mediating agents, and (4) target populations. (GAO/PEMD-89-25FS, Sept. 14,1989) Y Page 36 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 F&W Year 1989 OAO Reports on Issues Af%cthg the Elderly and Others Tax The 19 publicly offered partnerships being marketed for low income Ass housing tax credit projects on averageuse a higher proportion of equity to pay fees and expensesthan those for residential and residential/com- Incc e Housing Tax Credit mercial investments. The low income housing partnerships devote an Par7 average 27 percent of equity for fees and expenses,while the other ( 89-l types of investments use about 21 percent for this purpose. According to industry analysts, the proportion of fees and expensesspent by these low income housing partnerships are generally within guidelines issued by the North American Securities Administrators Association, Inc. bme Security bloyeeStock Employee Stock Ownership Plans (ESOPS)are recognizedunder the hership Plans: Employee Retirement Income Security Act as a type of defined contribu- tion plan. Unlike other defined contribution plans, ESOPShave multiple All&ation of Assets i purposes. In addition to providing retirement or deferred income to par- Se1‘cted Plans (GAO/;~HRD- ticipants, their objectives include (1) improving productivity by giving 89-3 1, June 5, 1989)* workers an owner’s stake in the successof the company, (2) broadening stock ownership and transferring company ownership to employees, and (3) providing a way to finance company operations or buy out existing owners. GAOreviewed nine ESOPSestablished in 1986. The data obtained on the nine plans showed that their ownership of company stock ranged from 2.2 to 100 percent; five plans owned less than 15 per- cent and four owned over 60 percent. Individual participant account balancesranged from $467 to $38,311. All nine plans allocated assets basedon participant salaries. In three plans, the participants with the highest percentageof ESOPassetswere company officers who also held company stock that was not in the plan. Federal Compensation: State and other governmental entities impose premium taxes on insur- Premium Taxes Paid by ante underwriters that service participating plans in the Federal Employees Health Benefits Program. In 1987, 22 of the 26 participating the’ Health Benefits fee-for-service plans charged the health benefits program about $44 mil- Program (GAO/GGD-89- lion for premium taxes imposed by the 60 states and other entities, 102, Aug. 8, 1989) including the District of Columbia and the Republic of Panama. These taxes are included in the plans’ premiums charged to enrolles and the Y federal government. In 1980, the Congressexempted Federal Employees Group Life Insurance Program premiums from similar premium-based taxes becauseit consideredthe program to be self-insured and because Page 37 GAO/IUD-90-50 Aging Issues in Fiscal Year 1989 AppendixII Fiscal Year 1989 GAOReporta on Issuers AffeetJng the Elderly and Others - states generally do not tax self-insured programs. Sincethe health bene- fits program operates in a similar fashion, the Congressmay want to consider exempting the health insurance program from premium taxes as well. SC 1 ) ial Security: Selective Nearly two-thirds of the people who apply to SSAfor disability benefits Fr ce-To-FaceInterviews are initially denied them. The state Disability Determination Service (DDS) makes the initial disability determinations for claimants. Many W’ th Disability Claimants appeal this decision, asking for reconsideration; someappeal to an cc ‘uld ReduceAppeals administrative law judge (ALJ). ALJS reverse DDSdecisions in over 60 per- t O/HRD-89-22, Apr. 20, (Glp. cent of the casesthey decide, often disagreeing with DDSdeterminations 1:$89)* about claimants’ remaining ability to work. Someof these appeals might be avoided if DDSinterviewed selectedclaimants at the reconsideration stage. To date, the limited experience with face-to-face interviews at the reconsideration stage suggeststhat these interviews improve decisional quality and resolve somecasesthat would otherwise go to AWS for appeal. I E jcial and Other SCirvices ock Grants: Federal- Current flexibility of states in collecting data on block grant programs State Cooperation in contrasts markedly with data collection requirements under previous programs, which required states to adhere to federal standards. The Developing National Data Congress,in an effort to receive uniform data, legislated the develop- Collection Strategies ment of model criteria and standardized forms for someblock grants (GAO/HRD-89-2, Nov. 29, that rely heavily on voluntary state cooperation. Through this approach 1?88)* the data were timely, and officials in the six states GAOreviewed-cali- fornia, Maryland, Pennsylvania, Rhode Island, Texas, and Virginia- perceived the collection efforts to be less burdensome.However, data collected through this approach for block grants were not always com- parable acrossstates. National leadership in developing standard forms and definitions can improve data comparability. Y Page 38 GAO/HRD-90-66 Aging Issues ln Fiscal Year 1989 Appendix II Flucal Year lBS9 GAO aeporta on Imtes Mlrectlng the Elderly andOthers Co munity Development: Under the Community Development Block Grant, Small Cities Program, Dis ribution of Small Cities funds are allocated to the states on a formula basis for the development of viable communities by providing decent housing and a suitable living Fun s by Pennsylvania environment and expending economicopportunities for low- and (G O/RCED-89-111, moderate-incomepersons.GAOwas asked to review the methodology Ma 3,1989)* Pennsylvania used to distribute its funds. Someof GAO'Sfindings showed that the state’s methodology for estimating the percentageof low- and moderate-incomepersons is not consistent with the Housing and Com- i munity Development Act of 1974. The act says that estimates should be developed using income criteria and income data for the sameyear. Pennsylvania’s methodology compared 1979 income levels with 1983 income criteria. The result is that the number of communities that are predominately of low and moderate income is higher than if HUD'Sesti- mates were used. The Department believes that the methodology the state usesoverestimates the low- and moderate-incomepopulation in certain areas and has required the state to use HUD’S estimates or some other appropriate alternative to distribute Small Cities funds. Finhcial Audit: Food and This report examines the statement of financial position of the Food and Nutrition Service’s Nutrition Service, an agency of the Department of Agriculture, as of September30, 1987. This is the first year that the Service’sfinancial Finkncial Statements for statements have been subjected to an audit in accordancewith generally 1987 (GAO/AFMD-89-22, acceptedgovernment auditing standards. In addition, we also report on Mar. 15, 1989) our study and evaluation of the Service’sinternal accounting controls and on its compliance with laws and regulations. Foqd Stamp Program: States have adopted a number of procedures to assureeligibility for Adhinistrative Hindrances Food Stamp Program benefits and ensure that needy people receive the appropriate amount of assistancein the most economical and efficient to Farticipation (GAO/ way possible. However, under certain circumstances,procedures RCED-89-4,Oct. 21, 1988)* adopted by the states GAOvisited (California, Illinois, Maryland, Oklahoma, and Texas) have prevented or delayed eligible households from applying for food stamps and participating in the program. For example, GAOfound that two offices conducted normal businessonly four days each week, which limited accessto food stamp services;all local offices in one state and one local office in each of two other states did not consider applicants for expedited benefits or provide expedited benefits on time; and three local offices in one state did not always help applicants obtain the documentsthey neededto complete their applications. Page 39 GAO/IUD-90-56 Aging Issues in Fiscal Year 1989 Appendlx II Nucd Yew 1989 GAO Bepartn on Issue Affecting the Elderly and Others Fbod Stamp Program: The Food Stamp Program is designedto provide low-income household Pbticipants Temporarily members additional food-purchasing power to help them acquire an ade- quate low-cost diet. However, eligible program participants can be tem- Tkrminated for Procedural porarily terminated from the program if they do not comply with procedural requirements. GAO,on the basis of its sample, estimates that about 49 percent of the householdsin Georgia and about 68 percent in Wisconsin experienced breaks in service. Participant-caused breaks resulting in benefit losseswere causedby participants not (1) submitting timely monthly reports, (2) providing requested verification documents, (3) notifying their local office regarding the nonreceipt of stamps, or (4) meeting work requirements. Other participant-caused breaks were due to participants not filing timely or complete new applications for recertification. Food Stamps: Reasonsfor In both 1979 and 1986 slightly more than half of the householdseligible Nonparticipation (GAO/ for food stamps did not participate in the program becausethey did not think they were eligible. Approximately one-third of the 60 percent who PEMD-89-5BR,Dec. 8, did not think they were eligible thought their assetsor income were too liSSS)* high for the program. About two-thirds of the eligible nonparticipants / who thought they were eligible for benefits did not try to get food stamps. The reasonsthis group gave most frequently for not participat- ing in the program were: (1) they did not need the benefits and (2) they were concernedabout the likely administrative “hassles.” Montana Indian This briefing report contains information applicable to the Blackfeet, Reservations: Funding of Flathead, Fort Balknap, and Northern CheyenneIndian Reservationsin Montana. Specifically, it mentions (1) state and county health care and SelectedServices, social servicesfor Indians, (2) funding information for school districts Taxation of Real Property serving Indian students, and (3) taxes billed by counties for real prop- (GAO/HRD-89-lBR, erty located on the reservations and taxes not billed due to the tax- (i)&. 11, 1988)* exempt status of trust and tribally owned properties. Parental Leave: Revised GAOwas asked to estimate the cost of adding a provision allowing 10 Cost Estimate Reflecting weeks of unpaid leave to care for a seriously ill spouseto H.R. 770, the Family and Medical Leave Act of 1989. H.R. 770 permits an employee to the Impact of Spousal take up to 10 weeks of unpaid leave over a 2-year period upon the birth Leave (GAO/HRD-89-68, or adoption or placement for foster care of a child, or the serious health Apr. 6, 198S)* condition of a child or parent, and up to 15 weeks every year for per- sonal illness. Upon returning to work, the employee is guaranteed the Page 40 GAO/HRD90&3 Aging Issues in Fiscal Year 1989 Appendix II Flucal Year 1989 GAOReporta on Issues Affecting the Elderly and Others same or equivalent job. The legislation requires employers to continue health benefits for workers while on unpaid leave on the samebasis as if they were still working, but doesnot require the continuation of other employee benefits. The proposed provision would provide the samejob protection and health benefits for spousal leave. The estimated cost of H.R. 770 to employers having 60 or more workers would be about $188 million annually. If the legislation is expanded to include leave to care for a seriously ill spouse,the cost increasesby $142 million to about $330 million annually. When firms employing between 36 and 49 people are included, the cost of H.R. 770 is estimated to be $212 million annually, which increasesto $368 million annually when the provision to care for seriously ill spousesis included. mns Defdnse Health Care: Overall, patients expressedsatisfaction with the care they received in Patients’ Views on Care all nine military treatment facilities GAOsurveyed. High percentagesof patients said they would want to go again to the samefacility, for both Thei Received (GAO/HRD- inpatient and outpatient care. Despite generally favorable ratings, 53 89-437, Sept. 13, 1989) percent of the outpatients and 39 percent of the inpatients commented negatively on someelement of the care they received. Each facility sur- veyed had established patient representative programs to handle com- plaints and conduct surveys. Defense Health Care: The first priority of military hospitals is to treat active duty members, Workload Reductions at When space,staff, and other resourcesare available, however, they also care for military retirees and dependents.For outpatient care, these Military Hospitals Have beneficiaries can choosebetween military facilities and civilian hospitals Increased CHAMPUS Costs and physicians under Civilian Health and Medical Program of the Uni- (GAO/HRD-89-47, July 10, formed Services(CHAMPUS).The amount and cost of care provided under 198p)** CHAMPUShave increased in part becausethe amount of care provided to beneficiaries at military facilities has declined. Other reasonsfor CHAMPUScost increasesinclude increases(1) overall in the cost of pro- viding medical care, (2) in the number of military beneficiaries, and (3) in the rate at which they utilize the medical care system. DoD has initi- Y ated several actions designedto increasethe availability of services at military facilities and reduce CHAMPUScosts. These initiatives, however, have not been in operation long enough to determine their impact, Page 41 GAO/HRJMO-56 Aging Issues in Fiscal Year 1989 Appendix II Fled Year 1989 GAO Report@ on Ieeuee Affectlug the Elderly and Others &D Health Care: Issues I Various private sector nursing organizations had expressedconcern that IdVolVing Military ~~~~~ military nurse specialists-nurse anesthetists, nurse midwives, and nurse practitioners-are not being granted the administrative and Sbecialists (GAO/HRD-89- clinical responsibilities that their training justifies. Nurse specialists are 2p, Mar. 29, 1989)* individually privileged or authorized to perform specific functions (e.g., initiate, alter, or terminate medical care regimens) within established medical protocols and service guidelines. As matter of practice, how- ever, DODphysicians are ultimately responsible for the care provided to patients in military treatment facilities. For this reason, a health care provider who is not a physician may not practice totally independent of a physician. Other issuesraised involved military nurse specialists’ pro- motions and their input to DODpolicy. According to DODofficials, nurse specialists who are promoted to the rank of lieutenant colonel (Army and Air Force) or commander (Navy) and higher ranks may be required to assumesupervisory or managementresponsibilities. In most instances,however, they will also continue to do clinical work within their specialties. Concerning input to policy, according to most specialty advisers, their input is solicited and used by the services but less so in DOD. I l$OD Health Care: Occurrencescreening is one of several elements in the DOD'Shospital Occurrence Screen quality assuranceprogram. It involves a review of patient records by trained personnel who use designated criteria to identify occurrences Program Undergoing that represent deviations from normal procedures or expected out- Changes,but Weaknesses comes.Examples include a patient who had a drug or transfusion reac- Still Exist (GAO/HRD-89- tion or was unexpectedly returned to an operating room after initial 36, Jan. 5, 1989)* surgery. Substantial numbers of occurrenceswere not being identified during the initial screeningprocess.DOD'Srecent policy changeswere designedto improve the utility of the program at the hospital level and were neededto achieve greater acceptanceof the program by the hospi- tals. The extent to which these changeshelp to improve individual hos- pitals’ programs will depend on how the hospitals and services design and implement their programs within the revised policy framework. Page 42 GAO/HRDM-56Aging Issues in Fiscal Year 1989 - Appendix II I Fiscal Year 1989 GAO Reports on Issues Affecting the Elderly and Others ii 1 Health Care: Extent Concern was raised that military physicians were spending time per- to WhichMilitary forming office managementtasks, such as answering phones and typing documents,that would be better spent providing medical care. There is PI rsicians Perform general agreementwithin DODand the military servicesthat physicians Al ninistrative Tasks are performing clerical and administrative tasks and that this detracts (G ,O/HRD-89-53, Feb. 13, from their clinical practice time and adversely affects their productiv- 1E g>* ity. Although the full extent of the administrative support problem and its effects are unknown, DODhealth care professionals agree that it is a serious matter requiring priority attention. Each service has initiated or planned various actions to addressthis issue,but the impact of these actions may not be felt for a long time. Page 43 GAO/HRD-90-66 Agiug Issues in Fiscal Year 1989 Appendix III F’iscalYear 1989 GAO Testimony Relating to ’ i Qsues Affecting the Elderly \:2 I 1I i GAOtestified 26 times before congressionalcommittees during fiscal year 1989 on issuesrelating to older Americans. We testified 11 times on income security issues, 10 times on health issues,twice on social service issues,twice on veterans’ issues,and once on housing issuesrelated to the elderly. J Federal Employees Health Benefits Program, by Bernard L. Ungar, Gen- k.ealth eral Government Division, before the Subcommittee on Compensation and Employee Benefits, HouseCommittee on Post Office and Civil Ser- vice (GAO/T-GGD-89-26,May 24, 1989). Insufficient AssurancesThat Board and Care Residents’ NeedsAre Being Identified and Met, by Janet L. Shikles, Human ResourcesDivi- sion, before the SenateSpecial Committee on Aging (GAO/T-HRD-89-9, Mar. 9, 1989). Medicare: Cutting Payment SafeguardsWill Increase Program Costs,by Michael Zimmerman, Human ResourcesDivision, before the Subcommit- tee on Labor, Health and Human Services,and Education, SenateCom- mittee on Appropriations (GAO/T-HRD-89-6,Feb. 28, 1989). Medicare: GAOViews On the Payment System For Outpatient Cataract Surgery, by Michael Zimmerman, Human ResourcesDivision, before the Subcommittee on Health, House Committee on Ways and Means(GAO/T- ~~~-89-16,Apr. 10, 1989). Medicare: Indirect Medical Education Payments Too High, by Michael Zimmerman, Human ResourcesDivision, before the Subcommittee on Health, House Committee on Ways and Means(GAO/T-HRD-89-14,Apr. 11, 1989). Medicare: Physician Incentive Payments by Prepaid Health Plans Could Lower Quality of Care, by Sarah F. Jaggar, Human ResourcesDivision, before the Subcommittee on Health, HouseCommittee on Ways and Means(GAO/T-HRD-89-19,Apr. 25, 1989). Medicare: Referring Physicians’ Ownership of Laboratories and Imaging Centers, by Michael Zimmerman, Human ResourcesDivision, before the Subcommittee on Health, HouseCommittee on Ways and Means(GAO/T- HRD-89-24,June 1, 1989). Page 44 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 . Appendix IIl Fbcd Year 1989 GAO Testimony Relating to beuea At’fbcting the Elderly I Medicare: Referring Physicians’ Ownership of Laboratories and Imaging Centers, by Michael Zimmerman, Human ResourcesDivision, before the Subcommitteeon Health and Environment, HouseCommittee on Energy and Commerce(GAO/T-HRD-89-26,June 8, 1989). Medigap: Insurance Effects of the Catastrophic CoverageAct of 1988 on Future Benefits, by Michael Zimmerman, Human ResourcesDivision, before the SenateCommittee on Finance (GAO/T-HRD-89-22,June 1, 1989). Medigap Insurance. Effects of the Catastrophic CoverageAct of 1988 on Benefits and Premiums, by Michael Zimmerman, Human ResourcesDivi- sion, before the Subcommittee on Commerce,Consumer Protection, and Competitiveness,HouseCommittee on Energy and Commerce(GAO/T- Han-89-13,Apr. 6, 1989). GAOAudits of Accounting and Financial ManagementSystems at the Hcusing Federal Housing Administration, by Charles A. Bowsher, Comptroller General of the United States, before the Subcommittee on Housing and Urban Affairs, SenateCommittee on Banking, Housing and Urban Affairs (GAO/T-AFMD-89-13,Aug. 2, 1989). Age Discrimination: Use of ADEA Waivers by Large Corporations, by In come Security Joseph F. Delfico, Human ResourcesDivision, before the Subcommittee on Labor, SenateCommittee on Labor and Human Resources(GAO/T- HRD-89-11,Mar. 16, 1989). Employee Benefits: Companies’Retiree Health Liabilities Large, Even With Medicare Catastrophic Insurance Savings,by Lawrence H. Thomp- son, Human ResourcesDivision, before the Subcommittee on Oversight, HouseCommittee on Ways and Means(GAO/T-HRD-89-29,June 14, 1989). Federal Employees Health Benefits Program, by Bernard L. Ungar, Gen- eral Government Division, before the Subcommittee on Compensation and Employee Benefits, HouseCommittee on Post Office and Civil Ser- vice (GAO/T-GGD-89-26,May 24, 1989). GAO'SViews on H.R. 791, A Bill to Establish the Social Security Adminis- tration As an Independent Agency, by Joseph F. Delfico, Human Y ResourcesDivision, before the Subcommitteeon Social Security, House Committee on Ways and Means(GAO/T-HRD-89-7,Mar. 1, 1989). Page 45 GAO/HRD90-66 Aging Issues in Fiscal Year 1989 Appendix m Fkal Year 1080 GAO Testimony Relating to Issues Aff’ecting the Elderly GAO'SViews on an Independent Social Security Administration and the Personal Earnings and Benefit Statement, by Joseph F, Delfico, Human ResourcesDivision, before the Subcommitteeon Social Security and Family Policy, SenateCommittee on Finance (GAO/T-HRD89-23, June 2, 1989). H,R. 2614: Federal Retirement Thrift Savings Plan, by Bernard L. Ungar, General Government Division, before the Subcommitteeon Compensa- tion and Employee Benefits, HouseCommittee on Post Office and Civil Service (GAO/T-GGD-89-36,July 26, 1989). Pension Plans and Leveraged Buy-Outs, by Joseph F. Delfico, Human ResourcesDivision, before the Subcommitteeon Oversight, House Com- mittee on Ways and Means(GAO/T-HRD-89-20,Apr. 27, 1989). Pension Plan Participation in Leveraged Buyout Funds, by Joseph F. Delfico, Human ResourcesDivision, before the Subcommittee on Labor- ManagementRelations, HouseCommittee on Education and Labor (GAO/ T-HRD-89-6,Feb. 9, 1989). Social Security Administration’s System Modernization Plan, by Michael Zimmerman, Information Managementand Technology Division, before the Subcommittee on Social Security, House Committee on Ways and Means(GAO/T-IMTEC89-11,Sept. 28,1989), Social Security Administration- The First 6 Months of 800 Phone Ser- vice, by Joseph F. Delfico, Human ResourcesDivision, before the Senate Gial Committee on Aging (GAO/T-HRD-m-16, Apr. 10, 1989). The Social Security Notch Issue, by Joseph F. Delfico, Human Resources Division, before the Subcommittee on Social Security and Family Policy, SenateCommittee on Finance (GAO/T-HRD-89-2,Jan. 23, 1989). GAO'SCost Estimate of the Family and Medical Leave Act of 1989 (H.R. cl? -V UULlUl Services 7701. bv William .J. Gainer. - ---~---I -- lrn& HIResourcesDivision, before the Sub- committee on Labor-ManagementRelations, HouseCommittee on Educa- tion and Labor (GAO/T-HRDI89-4,Feb. 7,1989). GAO'SCost Estimate of the Family and Medical Leave Act Proposal, by Y William J. Gainer, Human ResourcesDivision, before the Subcommittee on Children, Families, Drugs, and Alcoholism, SenateCommittee on Labor and Human Resources(GAO/T-HRD-89-3,Feb. 2, 1989). Page 46 GAO/HRD-90-50 Aging Issues in Fiscal Year 1989 Neal Year 1989 GAO Testimony Relating to Iames Affecting the Elderly Implementation of the CHAMPUSReform Initiative, by David P. Baine, r;erans Human ResourcesDivision, before the Subcommitteeon Military Person- nel and Compensation,HouseCommittee on Armed Services(GAO/T- HRD-89-17,Apr. 18, 1989). Implementation of the CHAMPUSReform Initiative, by David P. Baine, Human ResourcesDivision, before the Subcommittee on Manpower and Personnel,SenateCommittee on Armed Services(GAO/T-HRD-89-26,June 6, 1989). Page 47 GAO/HRD-90-66 Aging Issues in Fiscal Year 1989 , :i/~ ‘1 ‘Ij elating to IssuesAffecting the Elderly ’ At the end of fiscal year 1989, GAOhad 114 ongoingjobs that were directed primarily at the elderly, or had older Americans as one of sev- eral target groups. Of these, 48 were on health issues,31 on income security issues,20 on veterans’ issues, 11 on social and other services,3 on housing issues,and 1 on other issues.One asterisk after the title indi- cates that the activity was requested by Committees or Members of Con- gress.Two asterisks indicate that the work was mandated by statute. Further information on these studies is available from the following: Joseph F. Delfico, 275-6193,Director, Income Security Programs, for income security and veterans issues;Janet Shikles, 2756451, Director, Public and National Health Issuesfor general health issues;David P. Baine, 2758027, Director, Federal Health Care Delivery Issues,for Department of Defenseand veterans’ health studies; Linda Morra, 275 1666, Director, Intergovernmental Issuesand Management,for social and other service issues;John Ols, 275-5526,Director, Housing and Community Development Issues,for housing studies; Robin Nazarro, 276-3198,Issue Area Coordinator, Information Management and Tech- nology, for ADP studies; Kay Drake, 276-9422,Issue Area Planner, Accounting and Financial ManagementDivision, for financial studies. For studies followed by a “+,” contact Carl E. Wisler, 275-1864,Direc- tor, Planning and Reporting, Program Evaluation and Methodology Division. Alternatives to the Current Method of Computing Beneficiary Coinsur- Health ance for Outpatient Surgery* Analysis of Initiatives to Increase Provider Participation in Medicaid Analysis of Medicare’s Automated Data ProcessingSystem* AssessingPRO Review of Ambulatory Surgery Under Medicare by Ana- lyzing Patient-Reported Outcomes-Development and Testing of a Patient Survey Instrument* + Characteristics of the Uninsured in Michigan and Other SelectedStates Comparative Analysis of Hospital Costs and Revenues* Y Costsof Home Dialysis When Paid on a ReasonableCharge Versus Pro- spective Rate Basis* Page 48 GAO/HRD-90-56 Aging Issues in Nscal Year 1989 Effects on Medicare and Beneficiary Costsof Implementation of Durable Medical Equipment Fee Schedule** Evaluating the Relative Effectiveness of Alternative Medical Review Protocols* + Evaluation of Impact of Medicare Secondary Payer Provisions on Dis- abled Beneficiaries** Evaluation of the Existing Hospital Cost Reporting System and the Costs and Benefits of the Reporting System Developedin the Required Demon- stration Project** FnA’sSystem and Proceduresfor Assuring the Safety and Effectiveness of Medical Devices*+ Identification of Characteristics of Rural Hospitals Vulnerable to Clo- sure and Impact of Loss of Serviceson Community and Federal Reim- bursement Systems* Identification of Federal, State, and Hospital-Specific Programs/Strate- gies Addressing Problems for Rural Hospitals* Identifying Goals and Information Needsfor Effective Health Care Deci- sions* + Impact of Applying Home Health Cost Limits by Discipline** Impact of Changesin the Medicare Part B Appeals Process* Impact of UncompensatedCare and Changesin the Nature of Emer- gency Patient Loads on Major Urban Area Hospitals* Medicare Carriers and PROS and State Medicaid AgenciesNeed to Exchange Information on Problem Providers Medicare Reimbursementsfor Conventional EyeglassesFollowing Cat- aract Surgery* Medigap Insurance and Employer Maintenance-of-Effort Actions Under Medicare Catastrophic Coverage* Quality Assurance Issuesin Expanding Health Coverage**+ Page49 GAO/MU)-90-56AgingIssuesinFiecalYearl989 AppandixN Ongoing GAO Work as of September 90,19@9, Itelating to Issuea Affecting the Elderly Quality Assurance Under Arizona’s Long Term Care Medicaid Demon- stration Project* Quality of Care of ScreeningMammography in Different Settings Review of Denials by Medicare Intermediaries of Home Health Care Claims* Review of HCFAOversight of State Income Eligibility Verification System Review of Home Health Agency Certification Including the OBRA 1987 Changes* Review Implementation of Medicare Insured Group Demonstration Projects** Review of Independent Clinical Laboratories’ Profits under the Medicare Fee Schedule** Review of Legislative History of the Current Medicare Reimbursement Methodology for Risk-BasedHMOS* Review of Medicaid-Funded HMOSin the Chicago Area* Review of Medicare Payments to Anesthesiologists** Review of Medicare’s Professional Review Organization Program for Health Maintenance Organizations* Review of Methodological Soundnessand Technical Adequacy of Clinical Trials Performed in Connection with Drug Applications Submit- tedto FDA*+ Review of Quality Assurance Requirements and Practices for Health Care Delivered in Nonhospital Settings* Review of the Appropriateness of Medicare Payments for Durable Medi- cal Equipment* Statistics on the Medicare Part B Administrative Law Judge Hearings P Process Page 50 GAO/HRLb99-56 AgingIssues in F’bcal Year 1989 Appendix N Ongoing GAO Work as of September 90,1999, Iblathg to Iuuee Affecting the Elderly Survey of Alternatives for Increasing Accessto Nursing Homes for Medicaid Beneficiaries* Survey of Cost and Use of Contracting with Noncertified Nursing Agen- ties to Provide Medicare Home Health Services* Survey of Drug Acquisition Costs and Overhead Costsof Retail Pharmacies** Survey of Effects of Employer and Insurer Health Insurance Coverage Initiatives on Employees* Survey of FDA's Drug-Application ProcessingSystems Survey of Medicaid Third Party Recovery Issues Survey of Medicare’s HMORate Setting Methodology** / Survey of Recoveriesin Michigan for ServicesCoveredby Private I Insurers* Survey of the Paperwork Requirements Associated with Medicare Claims* Survey of Transfer Problems Associated with the Expanded Skilled Nursing Facility Benefit Under the Medicare Catastrophic CoverageAct of 19@3** Survey of WholesalePricing Practices of Prescription Drug Manufacturers* Review of the Elderly’s Use of Housing Vouchers as Compared With Other Forms of Assisted Housing* Review of the Chronically Mentally Ill in Public Housing and Their Impact on Elderly Tenants* Page 51 GAO/HRD-90-56 Aging Issues in Fiscal Year 1989 - Appendix N Ongoing GAO Work as of Ssptember 89,1989, Relating to Issues AfYecting the Elderly America’s Underclass:Size,Causes,and Cures Il/lcomeSecurity Benefit Distribution in Small and Large Employers’ PensionPlans** Comparing Vesting Status Under the Tax Reform Act of 1986 Rules and Analysis of Impact of Top-Heavy Minimum Benefit and Contribution Rules** Demographic and Economic Characteristics of Social Security Disability Program Participants: Observations and Policy Implications* Effect of Tax Reform Rules on Workers’ Pension Benefits Effects on Social Security, Unemployment Insurance, and Federal Budget of Misclassifying Employees as Independent Contractors Effects of Tax Reform Rules on Workers’ Pension Benefits** Evaluation of Staffing and Productivity IssuesInvolving SSA’S Office of Hearings and Appeals* IRS Enforcement of the Employee Retirement Income Security Act of 1974 Leveraged Buy-Outs’ Effect on Pension Benefit Security* Offsetting Excise Tax Rates for a Small Sample of Pension Plan Spon- sors Who Terminated Overfunded Plans for Reversions* Review of Employers’ Implementation of Retirement Equity Act’s Rules on Survivor Pension Plan Benefits* Review of the Extent that Employers Provide Retiree Health Benefits* Review of the Extent that Private Employers Provide Retiree Health Benefits Through Multiemployer Plans* Social Security Independence-Effectiveness of Board Leadership* Y SomeProvisions in Retiree Health Plans Overlap Provisions in the Medi- care Catastrophic CoverageAct of 1988* ss~/1RSCooperative Efforts to ResolveUncredited Earnings Cases* Page 52 GAO/HRD=99-56 Agiug Issues in Fiscal Year 1989 b - Appendix N Ongoing GAO Work as of &ptember 30,1989, aelating to Issuea Affecting the Elderly Study of Tenant Income Reporting and Verification in HUDAssisted Housing* Survey of Black Lung Benefits Program Survey of Employee Stock Ownership Plans as a DefenseAgainst Corpo- rate Takeovers Survey of Feasibility of Enhancing SSA'SEnumeration Verification Sys- tem to Detect Dual Welfare Benefit Claims Survey of Improvements Neededin SSADebt ManagementSystems Survey of SSA Death Notice Procedures Survey of the Accuracy of the Answers Provided via SSA’S 800 Tele- phone Service* Survey of the Activities of the Social Security Protection Bureau* Survey of the Nature and Extent of SSAOutreach Activities* Survey of the Pension Benefit Guaranty Corporation’s Benefit Approval Process* Tax-Recapture from the l&Percent Excise Tax on PensionAssets Reverting to Plan Sponsors Testimony on Nonqualified Deferred CompensationProvisions of the Tax Code as Related to Collecting Social Security Taxes* The Results of SSA’S Efforts to Telephone Employers to ResolveWage Reporting Errors* What Are the Alternatives to the Combined Annual WageReporting Process? Americans with Disabilities Act Social and Other Services ’ An Analysis of Alternative Methods for Defining a Household Within the Food Stamp Program Page 53 GAO/HRD-90-50 Aging Issues in Fiscal Year 1989 AppendtxN Ongoing GAO Work as of September 30,1989, Relating to Issues Affecting tlw Elderly Elderly Community Services* Food and Nutrition Problems on Indian Reservations Implementation of Commodity Distribution Reform Provisions Review of the General Managementof HHS Review of Intrastate Funding Formulas Used to Distribute Title III Older Americans Act Funds* Review of Internal Control WeaknessAssociated with Food Stamp Issuanceand Redemption Review of IRS’s Implementation of Its Integrated Test Call Survey System State In-Home Servicesfor the Elderly* Survey of Low Income Home Energy Assistance Program Block Grant* Effect of Staffing Shortageson VA'SBudget and Health Care Delivery Veterans Evaluation of VA'SProgram for HomelessChronically Mentally Ill Veterans* Evaluation of VA'SProcessingof Appealed Benefit Claims* Evaluation of VA'SEstimates of the Demand for and Supply of Nursing Home Beds* Evaluation of VA'SImplementation of Public Law 99-272 to Identify and Collect Medical Care Costs from Private Health Insurers* Examination of the Financial Statements of the VA for Fiscal Year 1989 Financial ManagementReview of the VA HCFA'Sand Joint Commissionon Accreditation of Health Care Organiza- tions Efforts to Assure Hospitals Meet Medicare’s Requirements* Page 54 GAO/HRD-90-56 Aging Issues in Fiscal Year 1989 How DoesVA Assure That Veterans in Its Psychiatric Facilities Receive Quality Care? Monitoring of VA Mortality Study Follow-up* Quality of Care IssuesRaisedby Nurses at VA'SAlbuquerque Medical Center* Recovery of Copayments from Veterans Receiving Medical Care and VA Facilities* Review of HCFA'SProcessfor Validating the Joint Commissionon Accreditation of Health Care Organizations Accreditation of U.S. Hospi- tals Receiving Medicare Benefits Review of Staffing and Use of Resourcesat Military Hospitals* Review of VA's Ability to Assessthe Quality of Care Provided in State Veterans’ Homes* Study of the VA'SInfection Control Program* Survey of Medical Reports Used for VA Disability Compensation Eligibil- ity Determinations* Survey of Medical Technicians Acting as Providers in DODOutpatient Treatment Facilities Survey of the Present Supply of Nurses in U.S. Labor Force and Effect of Permanent and Temporary Foreign Nurses* Termination of VA Benefits to DeceasedBeneficiaries FAA’s Age 60 Rule for Commercial Pilots Other Page65 GAO/~99-66 Aging Iseues in FUcal Year 1989 , I A3pendix V Other FiscallYear 1989 Activities by GAO * ! Officials Relating to IssuesAffkcting the Elderly 1 I During fiscal year 1989, GAO officials spoke or published 39 times on issuesrelating to aging: 18 times on health, 17 times on income security issues,twice on social services,once on housing, and once on age dis- crimination Specifically, we presented 22 papers, published 7 articles and chapters in books, participated in 6 panels, and were interviewed on 4 radio and television programs. icy Issues:Impact on Nursing,” at the annual meeting of the Association of State and Territorial Directors of Nursing, Honolulu, April 26, 1989. JamesCantwell, Human ResourcesDivision, discussed“Medicare and HMOS: What Have We Learned From Five Years of Research?”at the meeting of the American Public Health Association, Boston, November 16-17, 1988. Mary Ann Curran, Human ResourcesDivision, discussedGAO'S reviews of actions by the Health Care Financing Administration and the Joint Commissionon the Accreditation of Healthcare Organizations to assure quality of care in hospitals, at the annual meeting of the Association of Health Facility Licensing and Certification Directors, Orlando, Florida, October 13, 1989. Terry Davis, Human ResourcesDivision, spoke on GAO'S use of national health data basesin its reviews of Medicare payment policies, at a data baseusers conferencesponsoredby the Health Care Financing Adminis- tration, in Baltimore’, June 16, 1989. Linda Demlo, Program Evaluation and Methodology Division, discussed implications for research and policy at a conferenceon “Measuring Health Care Effectiveness: The Use of Large Data Sets for Technology Assessmentand Quality Assessment,” sponsoredby the International Society for Technology Assessmentin Health Care, Washington, DC., September8, 1989. Gerald Dillingham and JamesSolomon,Program Evaluation and Meth- odology Division, are coauthors of the article, “Medicare’s Outpatient Prescription Drug Benefit,” in the winter 1989 issue of the Pride Insti- Y tute of Long-Term Health Care. Darryl Dutton and David Lewis, Los Angeles Regional Office, spoke on GAO'Smission and responsibilities and its reviews of health related Page66 other Flacxl Year 1899 Actlvltles by GAO ofxldalo ltelatlug to Ioslles AfMthg the Elderly issues,before the Institute of Internal Auditors, in Los ‘Angeles,January 24, 1089. Mitchell Karpman and Timothy Armstrong, Program Evaluation and Methodology Division, presented a paper, “The Relationship Between Health Status, Social Support, and Health Beliefs on Physical Activity in the Healthy Elderly,” at the annual meeting of the American Public Health Association, Boston, November 16, 1988. SusanLabin, Program Evaluation and Methodology Division, discussed GAO'Sbriefing report, Medicare: Catastrophic Illness Insurance, (GAO/ PEMPST-B~BR, July 30, 1087), and state catastrophic illness programs, before the American SociologicalAssociation, Atlanta, August 26,1988. Marsha Lillie-Blanton, Human ResourcesDivision, spoke on . “Medicare and Medicaid Program Barriers in Meeting Minority Health Care Needs,” before the First National Conferenceon Accessand Health Care Financing Alternatives for Minorities, sponsoredby HHS'SOffice of Minority Health, Washington, D.C., September 11, 1989. . “Rural Hospital Closures” before the Comptroller General’s Health Advisory Committee, Washington, DC., May 17,1989, Sushi1Sharma, Program Evaluation and Methodology Division, is author of a chapter, “Attritions in the Baltimore Longitudinal Study of Aging During the First Twenty Years,” in the text Special ResearchMethods for Gerontology, Janet Shikles, Human ResourcesDivision, was interviewed on GAO'S report, Board and Care: Insufficient AssurancesThat Residents’ Needs Are Identified and Met (GAO~HRD-89-60,Feb. 10, 1989), by WWJ radio, Detroit, April 12, 1989. Sheila Smythe, Human ResourcesDivision: l spoke on “Shaping a System for Universal Accessto Health Care,” before the annual conferenceof the Task Force on Life and the Law, New York, May 16,198O. l participated in a panel on “Changes in the Health Care System: Implica- tions for Government.” 60th national conferenceof the American Soci- . ety for Public Administration, in Miami, April 8-12, 1989. Page 67 GAO/HRD-99-56 Aging Issues in Fiscal Year 1999 i I Appendix V Other IUcal Year 1999 Activities by GAO omcialo Relating to Iooueo &4ffectlng the Elderly . participated in a panel on “Health Care-Quality, Access,and Cost- and the Value of Caring,” sponsoredby the University of Colorado and the Rocky Mountain Health Care Corporation, Denver, October 27, 1989. Elizabeth Wennar and Marsha Lillie-Blanton, Human ResourcesDivision, spoke on GAO'Sreviews of issuesaffecting rural hospitals, before the annual meeting of the Rural Health ResearchCenters, sponsoredby the Office of Rural Health Policy, Rockville, Maryland, May 22, 1989. Fred Wiener and Karyn Bell, Chicago Regional Office, discussedrural hospital closures and the impact on accessto care, before the Illinois Governor’s Health Care Summit on Medicaid Reform, Chicago, May 19, 1989. Mark Rom, Program Evaluation and Methodology Division, presented a vousing ! paper, “Federalism, Welfare Policy, and Residential Choice,” at the Association for Public Policy Analysis and Management’snational research conference,Seattle, October 27-29,1988. Joseph F. Delfico, Human ResourcesDivision: Income Security l discussed“Social Security and the Deficit,” before students and faculty of the Master of Public Administration program at the Rio Pedras cam- pus of the University of Puerto Rico, April 20, 1989. l spoke on “Financing Retiree Health Plans,” before the Washington Jour- nalism Center, Washington, D.C., January 26, 1989. Burma Klein, Human ResourcesDivision, discussedGAO'Stestimony, Future Security of Retiree Health Benefits in Question (GAO/T-HRD-88-30, Sept. 16, 1988), at a policy forum sponsoredby the Employee Benefits ResearchInstitute, Washington, D.C., October 6, 1988. Daniel McCafferty, Cincinnati Regional Office, spoke on GAOreviews of the disability review process,before the regional conferenceof the National Association of Disability Examiners, Columbus, Ohio, May 6, 1989. Cynthia Maher, Human ResourcesDivision, participated in a round table discussionon “Company Actions to Limit Retiree Health Costs,” before AARP’s National Legislative Council, Dearborn, Michigan, August 2, 1989. Page 58 GAO/HRD-99-56 Aglng Issues in F’iscal Year 1999 Appendix V Other Fiscal Year 1989 Activities by GAO officials Relating co Ioslles AfYecting the Elderly Donald Snyder, Human ResourcesDivision: spoke on “Retiree Health Benefits: More Costly Than Pensions?” at the 1989 Health Care Compliance Conference,Chicago,September 18, 1989. is the author of a chapter, “Measuring Corporate Liabilities,” in the Bureau of National Affairs’ publication, Retiree Benefits: The Complete Guide to FASB Compliance & Health Care Cost Control. discussed“The Funding Dilemma,” at a conferenceon the retiree health care crisis, sponsoredby the University of California, Los Angeles, Insti- tute of Industrial Relations, January 23, 1989. is the author of an article, “A Data Basewith Income and Assets of New Retirees by Raceand Hispanic Origin,” published in the spring 1989 Review of Black Political Economy. is the author of an article, “The Benefits and the Costs,” published in Institutional Investor’s, July 1989 Retiree Health Benefits Forum. Lawrence H. Thompson, Human ResourcesDivision: participated in a panel on “Can We Afford to Age?” in “FutureView: The 1990s and Beyond,” the sixth general assembly of the World Future Society, Washington, DC., July 16-20, 1989. discussedlegislation to put Social Security on an off-budget status, on a call-in television program, “Ask Senator Heinz,” carried on cable TV sys- tems throughout Pennsylvania, April 18, 1989. discussedGAO'Sreport, Social Security: The Trust Fund Reserve Accumulation, the Economy, and the Federal Budget (GAO/HRD-89-44, Jan. 19, 1989) on a call-in radio show on WARM,Wilkes-Barre, Penn- sylvania; and was interviewed by CBSradio news, Detroit. . participated in a panel discussionon “Should Accrual Accounting Be Used to RecognizeFederal Retirement Costs?” in the American Associa- tion for Budget and Program Analysis fall symposium on “Good Budget- ing Is Good Government,” Washington, DC., November 3, 1988. was interviewed for CNN’s nightly businessnews program on the unfunded liability for retirees’ health benefits, September 16, 1988. spoke on retiree health liabilities in the session“Issues in Employer Health Benefits” of The Foundation of Health ServicesResearch,Chi- cago,June 19,1989, Mark Rom, Program Evaluation and Methodology Division, authored “The Family Support Act of 1988: Federalism, Developmental Policy, and Welfare Reform,” Publius, Summer 1989, and coauthor of “Federal- ism, Welfare Reform, and Residential Choice,” in the fall 1989 American Political ScienceReview. Page 69 GAO/HRD-90-56 Aging Issues in Fiscal Year 1989 N. :“’ ( l, :i 4. ‘d I, i, Appendix V Other F&al Year 1989 Activities by GAO Officials Relating to Issues Affecting the Elderly Deborah Ritt and Carolyn Boyce, Resources,Community and Economic Social Services Development Division, moderated panels on food and nutrition on Indian reservations and conducted focus group discussionswith Indian recipi- ents of federal food assistanceat the Fort Berthold, Navajo, Pine Ridge, and White Earth Reservationsduring June and July 1989. Ben Ross,Human ResourcesDivision, and Peter Plumeau, Albany Sub- Office, discussedGAO'Sreview of support servicesfor the homelessmen- tally ill, before the National Association of State Mental Health Program Directors, Arlington, Virginia, December13, 1988. Linda Morra, Human ResourcesDivision, spoke on “The Quality of (Xher EEOCand State Agencies’ Investigations of Employment Discrimination Charges,” before faculty and students at the Mayaguez campus of the University of Puerto Rico, April 26, 1989. Y Page 60 GAO/HRD-90-56 Aging Issues in Fiscal Year 1999 ndix VI i0 Activities Affixting Older W&km& GAOappointed 726 persons to permanent and temporary positions dur- ing fiscal year 1989, of whom 123 (17 percent) were age 40 and older. Of GAO'Stotal work force of 6,627 on September30, 1989,3,095 (55 per- cent) were age 40 and older. GAOemployment policies prohibit discrimination basedon age.GAO'S Civil Rights Office continues to (1) provide information and advice and (2) processcomplaints involving allegations of age discrimination. GAOcontinues to provide individual retirement counseling and preretire- ment seminars for employeesnearing retirement. The counseling and seminars are intended to assist employeesin . calculating retirement income available through the Civil Service and Social Security systems and understanding options involving age,grade, and years of service; . understanding health insurance and survivor benefit plans; . acquiring information helpful in planning a realistic budget based on income, tax obligations, and benefits, and making decisions concerning legal matters; . gaining insights and perspectives concerning adjustments to retirement; . increasing awarenessof community resourcesthat deal with preretire- ment planning, secondcareer opportunities, and financial planning; and . increasing awarenessof lifestyle options available during the transition from work to retirement. Y Page 61 GAO/HRD-BO-66Aging IssuesinFiscalYear1989 Appendix VII w Major Contributors to This Report I \ p Cynthia A. Bascetta, Assistant Director, (202) 276-0624 kuman Resources SusanE. Arnold, Assignment Manager Division, Washington, Eleanor L. Johnson, Evaluator-in-Charge pc . . Page 62 GAO/IiRD-96-66 Aging Issues in Fiscal Year 1989 (loaaas) ‘i
Aging Issues: Related GAO Reports and Activities in Fiscal Year 1989
Published by the Government Accountability Office on 1990-01-12.
Below is a raw (and likely hideous) rendition of the original report. (PDF)