GAO-13-279SP, 2013 Annual Report - US Government ...

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For example, we identified duplication in the Medicaid Integrity Program, which provides federal support and oversight of state programs. 3 Specifically, we identified duplication in two Medicaid Integrity program activities: (1) the National Medicaid Audit Program, which consists of audits of state Medicaid claims data to identify overpayments, and (2) state program integrity assessments, one of several tools through which the Centers for Medicare & Medicaid Services (CMS) collects data on state program integrity activities. To address this duplication, we suggested that CMS merge certain functions of the federal review and audit contractors and discontinue the annual state program integrity assessment to eliminate or avoid duplicative activities. In addition to these 17 areas of fragmentation, overlap, and duplication in federal efforts, we present 14 areas in which we identified opportunities for executive branch agencies or Congress to reduce the cost of government operations or enhance revenue collections for the Treasury. For example: We report concerns about CMS’s Medicare Advantage Quality Bonus Payment Demonstration, which will cost $8.35 billion over 10 years, most of which will be paid to plans with average performance. Medicare Advantage provides health care coverage through private health plans offered by organizations under contract with CMS. The agency’s stated research goal for the demonstration is to test whether an alternative bonus structure leads to larger and faster annual quality improvement for Medicare Advantage plans. We found that the demonstration’s design precludes a credible evaluation of its effectiveness because it lacks an appropriate comparison group needed to isolate the demonstration’s effects, and because the demonstration’s bonus payments are based largely on plan performance that predates the demonstration. Based on these concerns, we suggest that HHS cancel the Medicare Advantage Quality Bonus Payment Demonstration. In addition, the demonstration’s design raises legal concerns about whether it falls within the Department of Health and Human Services’ (HHS) 3 Medicaid is the joint federal-state health care financing program for certain low-income individuals and is one of the largest social programs in federal and state budgets. We have had long-standing concerns about Medicaid’s program integrity because of problems with the sufficiency of federal and state oversight. For example, the Centers for Medicare & Medicaid Services estimated that in fiscal year 2012, $19.2 billion (7.1 percent) of Medicaid’s federal expenditures involved improper payments. Page 5 GAO-13-279SP 2013 Annual Report
demonstration authority. Although the demonstration is now in its second year, HHS still has an opportunity to achieve significant cost savings—about $2 billion, based on GAO’s analysis of CMS actuaries’ estimates—if it cancels the demonstration for 2014. Additional cost savings and increased revenue collections may be realized by improving the Internal Revenue Service’s (IRS) enforcement of tax laws. IRS has estimated that the net tax gap—the difference between taxes owed and taxes paid on time or recovered— was $385 billion for tax year 2006 (the most recent year for which data were available). To help reduce this gap, in fiscal year 2012, Congress appropriated $7.5 billion to IRS for its enforcement and taxpayer service activities. Notwithstanding IRS’s enforcement and service programs, the net tax gap remains large. To help close this gap, we have identified several areas where IRS can improve its programs, reduce its costs, and facilitate voluntary compliance with existing tax laws. For example, we suggested that IRS should complete a broad strategy, including a timeline and performance measures, for how it intends to use information collected to improve tax compliance. These and other actions we have identified could help the federal government increase revenue collections by billions of dollars. As we have previously reported, the net tax gap has been a persistent problem and reducing it will require applying multiple strategies over a sustained period of time. 4 One such strategy is additional information reporting. Taxpayers are much more likely to report their income accurately when the income is also reported to IRS by a third party. By matching information received from third-party payers with what payees report on their tax returns, IRS can detect income underreporting, including the failure to file a tax return. Additionally, taxpayers who rent out real estate are required to report to IRS expense payments for certain services, such as payments for property repairs, only if their rental activity is considered a trade or business. Expanding third-party information reporting on rental real estate service payments and service payments to corporations could increase revenues by an estimated $5.9 billion over 10 years, according to the Joint Committee on Taxation. 4 GAO, Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting Enforcement Resources, GAO-13-151 (Washington, D.C.: Dec. 5, 2012). Page 6 GAO-13-279SP 2013 Annual Report
Page 1 and 2: GAO United States Government Accoun
Page 3 and 4: Figure 1: Definitions of Fragmentat
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Page 9 and 10: as maintaining roads and responding
Page 11 and 12: overall effectiveness of the federa
Page 13 and 14: The Executive Branch and Congress H
Page 15 and 16: Consolidated areas and actions were
Page 17 and 18: To help maintain attention on these
Page 19 and 20: Our systematic examination required
Page 21 and 22: information. In particular, we revi
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Page 25 and 26: data-driven reviews of their perfor
Page 27 and 28: guide to help ensure that these con
Page 29 and 30: Abbreviations AFF Assets Forfeiture
Page 31 and 32: Report at a Glance Section I of thi
Page 33 and 34: Mission Areas Identified Page Gener
Page 35 and 36: Agriculture 1. Catfish Inspection R
Page 37 and 38: GAO provided a draft of this report
Page 39 and 40: Services’ Camouflage Uniforms, Da
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Page 45 and 46: Related GAO Products Warfighter Sup
Page 47 and 48: What GAO Found DOD contracts for a
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expected reduction or avoidance of
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eport, where GAO recommended that i
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Health 5. Joint Veterans and Defens
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enefit from collaboration, such as
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Actions Needed GAO recommended in S
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6. Medicaid Program Integrity The C
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data resulted in a significant comm
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might not provide adequate data to
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processes and procedures for overse
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unnecessary duplication increases b
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Internal Control in the Federal Gov
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State and major urban area fusion c
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activities are uncoordinated, as we
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a Collection management is the iden
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c Analytical products involve the c
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However, GAO also reported in April
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highly dependent on local circumsta
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9. Justice and Treasury Asset Forfe
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consolidation proposals and activit
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of both agencies, which affects the
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Information Technology 10. Dissemin
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the reports GAO was searching for w
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NTIS acknowledged in its 2011-2016
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ased on random selections, its samp
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What GAO Found In November 2012, GA
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data themes, as shown in the follow
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designate a senior agency official
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How GAO Conducted Its Work The info
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Select Features and Limitations of
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SBA and other agencies could also b
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GAO assessed interagency coordinati
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Overlap of BBG Entities’ Language
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variety of factors, including wheth
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of capitalization grants to revolvi
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GAO’s October 2012 report also de
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purpose of this document is to summ
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Social Services 15. Drug Abuse Prev
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prevention or treatment services to
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minimize the risk of potential dupl
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22 more program evaluations were un
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Training, Employment, and Education
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education expenses. While many mean
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Considering these factors can help
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Related GAO Products Higher Educati
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significant barriers to employment,
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ut it does not consistently report
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Program. In examining coordination,
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Agriculture 18. Agricultural Quaran
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customs fee collection mechanisms t
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The Secretaries of Agriculture and
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19. Crop Insurance To achieve up to
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federal government. 4 If the limit
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GAO has continued to monitor DOD’
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will not be in the best position to
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Finally, DOD partially agreed with
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Energy 21. Department of Energy’s
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already exists in the commercial ma
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General Government 22. Additional O
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implementation of its data analytic
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GAO reported that the complexity of
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Higher Education: Improved Tax Info
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additional savings. 1 By contrast,
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Agency Comments and GAO’s Evaluat
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24. Opportunities to Help Reduce Go
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to identify opportunities and imple
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U.S. and foreign satellite operator
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plan to rely on foreign companies
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policies established by CMS or by l
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ased on their local coverage determ
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26. Medicaid Supplemental Payments
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Medicaid payment principles, in par
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GAO provided a draft of this report
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Demonstration extends the bonuses t
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Actions Needed and Potential Financ
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Homeland Security/Law Enforcement 2
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Based on data provided by TSA for G
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or a preference for funding initiat
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2007 as being a definitive statemen
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existing IT services to or offering
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ecause legacy systems may not be re
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30. Information Technology Operatio
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identifying investment improvements
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ecommendations and that the departm
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Examples of Cigarette and Cigar Pro
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cigars. In addition, Treasury faces
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Appendix I: List of Congressional A
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duplication government-wide over th
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of funding devoted to overlapping p
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means the administration, the agenc
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Table 1: GAO Identified Areas of Du
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Mission General government Annual r
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Mission Science and the environment
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Table 2: GAO Identified Areas of Co
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Mission Annual Report Areas identif
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Mission Income security Information
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Table 1: Catfish Inspection: List o
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Table 3: Renewable Energy Initiativ
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Agency Program name Fiscal year 201
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Table 5: Medicaid Program Integrity
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Table 7: Field-Based Information Sh
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Table 9: Export Promotion: List of
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Table 11: Rural Water Infrastructur
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subagency Program name Program desc
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subagency Program name Program desc
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Table 13: Higher Education Assistan
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Table 14: Higher Education Assistan
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Table16: Crop Insurance: Program an
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Table 18: Medicare Prepayment Contr
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Table 20: Checked Baggage Screening
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Table 22: Tobacco Taxes: List of Pr
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GAO’s Mission Obtaining Copies of
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