GM 11-113

GAO Report Cites Need for Data Accuracy in Contract Health Services Funding Need

On September 23, 2011, the Government Accountability Office (GAO) released a congressionally mandated report on Indian Health Service (IHS) Contract Health Services (CHS) funding and the CHS payment process. The report, Increased Oversight Needed to Ensure Accuracy of Data Used for Estimating Contract Health Service Need (GAO-11-767), may be accessed at The IHS determines the CHS funding need based on the estimate of annual unfunded need data reported by federal and tribal CHS programs.

As required under the Patient Protection and Affordable Care Act (PL 111-148), the GAO study was to look at the adequacy of funding for the CHS program, which pays for health care services to patients from an outside provider when those services are not available at the IHS-funded (federal/tribal) facility. The GAO administered a web-based and mail survey to 177 tribal CHS programs and a web-based survey to 66 federal CHS programs, with response levels of 58 percent and 100 percent, respectively. They also conducted on-site visits at two IHS Area offices, and interviewed providers in four of the IHS Areas. The study focus and findings include:

1. Extent to which IHS ensures the data it collects on unfunded services are accurate to determine a reliable estimate of CHS program need
The following findings are based on survey responses:
• the unfunded services data is incomplete and inaccurate as not all CHS programs report their unfunded (deferral/denial) data
• there are inconsistencies among the CHS programs in how information about a specific type of unfunded service that IHS uses in its assessment of need is recorded, and
• the IHS instrument for collecting unfunded services data does not result in obtaining all the information the agency should collect.

The GAO states, “A reliable estimate of need will require complete and consistent data from each of the individual CHS programs.” The report discusses the efforts IHS has undertaken, via the Director’s Workgroup on Improving the CHS Program and the Unmet Needs Subcommittee, to improve or develop a new data method for estimating unfunded services funding needs. The Workgroup’s final report to the Director is expected by the end of 2011. In the interim, IHS continues to collect deferral and denial data. Thus, GAO believes some immediate steps should be taken to improve the accuracy of that data outlined in the Recommendations section of this Memorandum.

2. Extent to which federal and tribal CHS programs report having funds available to pay for contract health services

As would be expected, a majority of the CHS programs—tribal and federal—reported not having sufficient CHS funds to pay for all health services for which patients otherwise met the medical eligibility and program administration requirements. Nearly 45 percent of the tribal programs reported that tribal funds had subsidized the CHS funding shortage. In order to maximize CHS funds, some programs are able to help patients access alternate free or low-cost health care.

3. Experiences of external providers in obtaining payment from the CHS program

The majority of external health care providers interviewed cited challenges with the CHS payment process. These included problems in determining covered services (because, unlike non-IHS systems, patient eligibility is not electronically verifiable); difficulty receiving information on CHS policies and procedures regarding payment; inadequate, if any, training and guidance on determining patient eligibility in order to receive payment for service; and problems determining the status of claims or payments to be received.

Recommendations. The GAO made a number of recommendations designed to yield more accurate data for use in estimating CHS funding need and improving oversight by IHS:

1) ensure that Area offices submit data on unfunded services from all federal CHS programs
2) conduct outreach and technical assistance to tribal CHS programs to encourage and support their efforts to voluntarily provide data that can be used to better estimate the needs of tribal CHS programs
3) develop an annual data reporting template that requires Area offices to report available deferral and denial counts for each federal and tribal CHS program
4) develop a plan and timeline for improving the agency’s deferral and denial data
5) develop written guidance, provide training, and conduct oversight activities necessary to ensure unfunded services data are consistently and completely recorded by federal CHS programs
6) develop a written policy documenting how IHS evaluates need for the CHS program and disseminate it to Area offices and CHS programs to ensure they understand how unfunded services data are used to estimate overall program needs
7) provide written guidance to CHS programs on a process to use when funds are depleted and there is a continued need for services, and monitor to ensure that appropriate actions are taken
8) develop ways to enhance CHS program communication with providers, such as providing regular trainings on patient eligibility and claim approval decisions to providers
Department of Health and Human Services (DHHS) Response. The DHHS responded to the above GAO recommendations, agreeing that the data collected on the CHS program is “incomplete and inconsistent.” With regard to recommendations one through five, the IHS noted that “the CHS workgroup is discussing options for estimating unmet need and are conducting a pilot study of one such option.” One option under consideration for estimating CHS need is the Federal Disparity Index (FDI) which would look at the program as though it should be comparable to federal employees’ health care program, rather than measuring the program’s denials and deferrals.

For recommendation six the DHHS said, “The IHS will develop a written policy on how IHS evaluates CHS need and disseminate it to Area offices to ensure they understand how unfunded services data are used to estimate CHS need.” Regarding recommendations seven and eight, DHHS noted that IHS has a policy regarding the process to use when CHS funds are depleted and that it has a training manual for educating providers on CHS patient eligibility and claim approval processes.

Please let us know if we may be of further assistance regarding the GAO report on the IHS Contract Health Services program.