Government Accountability Office Archives - Safety-Net Association of Pennsylvania

GAO Reports on 340B Program

The U.S. Government Accountability Office (GAO) recently completed a review of the federal 340B Drug Pricing Program.
The program, which requires pharmaceutical companies to provide drug discounts to qualified hospitals that serve especially large proportions of low-income patients, has come under fire recently because approximately 40 percent of U.S. hospitals now participate in the program and there have been questions about how hospitals use the program and its drug discounts.
The GAO found that Medicare Part B spending on drugs was much higher at participating 340B hospitals than it was at non-participating hospitals, suggesting that participating hospitals prescribe more drugs and more expensive drugs. It found that

The Centers for Medicare & Medicaid Services (CMS), which administers the Medicare program, uses a statutorily defined formula to pay hospitals for drugs at set rates regardless of hospitals’ costs for acquiring the drugs. Therefore, there is a financial incentive at hospitals participating in the 340B program to prescribe more drugs or more expensive drugs to Medicare beneficiaries.

In the review, GAO recommended that

Congress should consider eliminating the incentive to prescribe more drugs or more expensive drugs than necessary to treat Medicare Part B beneficiaries at 340B hospitals.

Go here to find the GAO report Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals.
A number of groups have criticized GAO’s findings. Learn about their perspective in articles in Healthcare Finance News, Modern Healthcare, and Becker’s Hospital Review.

PA Safety Net Admin2015-07-13T06:00:49+00:00July 13th, 2015|Medicare|Comments Off

5% of Medicaid Recipients Account for 50% of Costs

Just five percent of all Medicaid recipients are responsible for nearly half of the program’s expenditures.
Or so says a new report by the U.S. Government Accountability Office (GAO).
Conversely, the 50 percent of Medicaid’s least costly recipients account for only eight percent of the program’s costs.
Disabled Medicaid recipients, while fewer than 10 percent of the overall total, represent nearly two-thirds of the highest-cost group.
These figures reflect spending from 2009 through 2011.
The greatest Medicaid expenditures were invested in seven types of care: for patients with asthma, diabetes, HIV/AIDS, mental health conditions, substance abuse, and delivery or childbirth along with those residing in long-term-care facilities.
To learn more about the GAO’s findings, see a summary of the report Medicaid: A Small Share of Enrollees Consistently Accounted for a Large Share of Expenditures and find a link to the complete report here on the GAO web site.

PA Safety Net Admin2015-05-14T06:00:46+00:00May 14th, 2015|Uncategorized|Comments Off

GAO Questions Cost of Private Market Medicaid Expansion

Permitting states to use Medicaid money to enable newly eligible Medicaid recipients to purchase health insurance on the private market may cost more than expansion of traditional state Medicaid programs.
Or so says the U.S. Government Accountability Office (GAO).
Writing in response to a request from the chairman of the House Energy and Commerce Committee and the ranking minority member of the Senate Finance Committee to look at the approved federal waiver that will permit Arkansas to expand its Medicaid program through the purchase of private insurance for newly eligible recipients, the GAO concluded that the federal government may spend $778 million more over three years on such an approach than it would have spent if the state had expanded its traditional Medicaid program.
The GAO said that the U.S. Department of Health and Human Services (HHS) did not perform a budget-neutrality calculation, which would have revealed the increased cost, instead accepting the state’s alternative methodology for determining cost-effectiveness.
Arkansas officials rejected the GAO’s conclusions, asserting that newly eligible Medicaid recipients would have been unable to find providers willing to serve them under a traditional Medicaid expansion.
GAO concluded that CMS may be approving waivers that are not budget-neutral. CMS disagreed with this conclusion.
The GAO letter, written before HHS granted Pennsylvania its Medicaid waiver, specifically mentions Pennsylvania as another state seeking to expand its Medicaid program through the purchase of private insurance for newly eligible Medicaid recipients.
Learn more about the GAO analysis, why it was undertaken, and what it found by reading the GAO letter to the two members of Congress who requested the analysis.

PA Safety Net Admin2014-09-16T06:00:21+00:00September 16th, 2014|Affordable Care Act, Healthy PA, Pennsylvania Medicaid policy|Comments Off

GAO Questions State Medicaid Financing

States are now financing more than a quarter of their share of Medicaid expenditures with money from sources other than state general funds, according to a new study by the Government Accountability Office (GAO).
According to the GAO, 26 percent of state share of Medicaid funding comes from taxes on health care providers, transfers from local governments and local government providers, and other sources. Such funding, the GAO noted, shifts additional Medicaid costs to the federal government.
Pennsylvania uses such funding mechanisms, including its gross receipts tax on Medicaid managed care organizations and state-wide and Philadelphia hospital assessments.
Exacerbating this problem, the GAO reports, is that the Centers for Medicare & Medicaid Services (CMS), which oversees Medicaid, does not assure that it receives complete and accurate data on funding sources from the states, leaving CMS without a complete understanding of how states are financing their Medicaid expenditures. In the report, the GAO recommends a stronger CMS effort to gather such data – a recommendation that CMS did not accept.
Learn more about the GAO study “States Increased Reliance on Funds From Health Care Providers and Local Governments Warrants Improved CMS Data Collection” by finding the complete report and a summary here, on the GAO web site.

PA Safety Net Admin2014-07-31T06:00:42+00:00July 31st, 2014|Pennsylvania Medicaid policy|Comments Off

GAO Finds Problems With Medicaid DSH Payments

The U.S. Government Accountability Office (GAO) is now reviewing audits of states’ Medicaid disproportionate share payments (Medicaid DSH) to hospitals and is raising questions about states’ compliance with federal requirements for those payments.
Based on its analysis of state Medicaid DSH audits, GAO found that states are making Medicaid DSH payments to hospitals that exceed those hospitals’ uncompensated care costs and are inaccurately calculating those hospital uncompensated care costs. The GAO also found that states are not always targeting their Medicaid DSH payments to the hospitals that provide the most uncompensated care.
States are required to submit audits and data as a condition of receiving Medicaid DSH funds from the federal government. Currently, the Centers for Medicare & Medicaid Services (CMS) is not acting on the information it receives but will begin doing so after a transition period that ends when 2014 audits are completed. In anticipation of that time, GAO is reviewing the information CMS receives for state compliance with six federal standards for Medicaid DSH payments.
This data also may eventually be used to help implement the Medicaid DSH payment reduction mandated under the Affordable Care Act.
According to the report, Pennsylvania did not provide some of the required data, so in several instances in which the document provides specific information about individual state performance, it has nothing about Pennsylvania. It does note, however, that in FY 2007, six hospitals in the state received Medicaid payments greater than their Medicaid costs.
Because Pennsylvania’s safety-net hospitals care for so many uninsured and low-income patients and receive higher Medicaid DSH payments than other hospitals, they are far more dependent on these payments than other hospitals and will need to watch this situation closely in the future.
Learn more about GAO’s examination of Medicaid DSH payments – why it is undertaking this review, what it found, and how its findings may be used in the future – in the report More Transparency of and Accountability for Supplemental Payments are Needed, which can be found here , on GAO’s web site.

PA Safety Net Admin2012-12-28T06:00:33+00:00December 28th, 2012|Health care reform, Medicaid supplemental payments, Pennsylvania Medicaid policy|Comments Off

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