Medicare and Medicaid: COVID-19 Program Flexibilities and Considerations for Their Continuation

What GAO Found

In response to the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for overseeing Medicare and Medicaid, made widespread use of program waivers and other flexibilities to expand beneficiary access to care. Some preliminary information is available on the effects of these waivers. Specifically:

Medicare. CMS issued over 200 waivers and cited some of their benefits in a January 2021 report. For example, CMS reported that:

  • Expansion of hospital capacity. More than 100 new facilities were added through the waivers that permitted hospitals to provide care in non-hospital settings, including beneficiaries’ homes.
  • Workforce expansion. Waivers and other flexibilities that relaxed certain provider enrollment requirements and allowed certain nonphysicians, such as nurse practitioners, to provide additional services expanded the provider workforce.
  • Telehealth waivers. Utilization of telehealth services—certain services that are normally provided in-person but can also be provided using audio and audio-video technology—increased sharply. For example, utilization increased from a weekly average of about 325,000 services in mid-March to peak at about 1.9 million in mid-April 2020.

Medicaid. CMS approved more than 600 waivers or other flexibilities aimed at addressing obstacles to beneficiary care, provider availability, and program enrollment. GAO has reported certain flexibilities such as telehealth as critical in reducing obstacles to care. Examples of other flexibilities included:

  • Forty-three states suspended fee-for-service prior authorizations, which help ensure compliance with coverage and payment rules before beneficiaries can obtain certain services.
  • Fifty states and the District of Columbia waived certain provider screening and enrollment requirements, such as criminal background checks.

While likely benefitting beneficiaries and providers, these program flexibilities also increase certain risks to the Medicare and Medicaid programs and raise considerations for their continuation beyond the pandemic. For example:

  • Increased spending. Telehealth waivers can increase spending in both programs, if telehealth services are furnished in addition to in-person services.
  • Program integrity. The suspension of some program safeguards has increased the risks of fraud, waste, and abuse that GAO previously noted in its High-Risk report series.
  • Beneficiary health and safety. Although telehealth has enabled the safe provision of services, the quality of telehealth services has not been fully analyzed.

Why GAO Did This Study

Medicare and Medicaid—two federally financed health insurance programs—spent over $1.5 trillion on health care services provided to about 140 million beneficiaries in 2020. Recognizing the critical role of these programs in providing health care services to millions of Americans, the federal government has provided for increased funding and program flexibilities, including waivers of certain federal requirements, in response to the COVID-19 pandemic.

The CARES Act includes a provision for GAO to conduct monitoring and oversight of the federal government’s response to the COVID-19 pandemic. In response, GAO has issued a series of government-wide reports from June 2020 through March 2021. GAO is continuing to monitor and report on these services.

This testimony summarizes GAO’s findings from these reports related to Medicare and Medicaid flexibilities during the COVID-19 pandemic, as well as preliminary observations from ongoing work related to telehealth waivers in both programs. Specifically, the statement focuses on what is known about the effects of these waivers and flexibilities on Medicare and Medicaid, and considerations regarding their ongoing use.

To conduct this work, GAO reviewed federal laws, CMS documents and guidance, and interviewed federal and state officials. GAO also interviewed six provider and beneficiary groups, selected based on their experience with telehealth services.

GAO obtained technical comments from CMS and incorporated them as appropriate.

For more information, contact Jessica Farb at (202) 512-7114 or farbj@gao.gov or Carolyn L. Yocom at (202) 512-7114 or yocomc@gao.gov.

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    The ambient air quality monitoring system is a national asset that provides standardized information for implementing the Clean Air Act and protecting public health. The Environmental Protection Agency (EPA) and state and local agencies cooperatively manage the system, with each playing different roles in design, operation, oversight, and funding. For example, EPA establishes minimum requirements for the system, and state and local agencies operate the monitors and report data to EPA. Officials from EPA and selected state and local agencies identified challenges related to sustaining the monitoring system. For example, they said that infrastructure is aging while annual EPA funding for state and local air quality management grants, which cover monitoring, has decreased by about 20 percent since 2004 after adjusting for inflation (see fig.). GAO found inconsistencies in how EPA regions have addressed these challenges. GAO's prior work has identified key characteristics of asset management, such as identifying needed resources and using quality data to manage infrastructure risks, which can help organizations optimize limited resources. By developing an asset management framework that includes such characteristics, EPA could better target limited resources toward the highest priorities for consistently sustaining the system. Annual Inflation-Adjusted EPA Funding for State and Local Air Quality Management Grants Air quality managers, researchers, and the public need additional information so they can better understand and address the health risks from air pollution, according to GAO's review of literature and interviews GAO conducted. These needs include additional information on (1) air toxics to understand health risks in key locations such as near industrial facilities; and (2) how to use low-cost sensors to provide real-time, local-scale air quality information. EPA and state and local agencies face persistent challenges meeting such air quality information needs, including challenges in understanding the performance of low-cost sensors. GAO illustrated this challenge by collecting air quality data from low-cost sensors and finding variability in their performance. EPA has strategies aimed at better meeting the additional air quality information needs of managers, researchers, and the public, but the strategies are outdated and incomplete. For example, they do not clearly define roles for meeting additional information needs. GAO's prior work on asset management suggests that a more strategic approach could help EPA modernize the system to better meet the additional information needs. By developing a modernization plan that aligns with leading practices for strategic planning and risk management, such as establishing modernization goals and roles, EPA could better ensure that the system meets the additional information needs of air quality managers, researchers, and the public and is positioned to protect public health. The national ambient air quality monitoring system shows that the United States has made progress in reducing air pollution but that risks to public health and the environment continue in certain locations. The system consists of sites that measure air pollution levels around fixed locations across the country using specific methods. Since the system began in the 1970s, air quality concerns have changed—such as increased concern about the health effects of air toxics. GAO was asked to evaluate the national air quality monitoring system. This report examines the role of the system and how it is managed, challenges in managing the system and actions to address them, and needs for additional air quality information and actions to address challenges in meeting those needs. GAO reviewed literature, laws, and agency documents; conducted a demonstration of low-cost sensors; and interviewed EPA officials, selected state and local officials, representatives from air quality associations, and stakeholders. GAO is making two recommendations for EPA to (1) establish an asset management framework for the monitoring system that includes key characteristics and (2) develop an air quality monitoring modernization plan that aligns with leading practices. In written comments on the report, EPA generally agreed with the recommendations. For more information, contact J. Alfredo Gómez at (202) 512-3841 or gomezj@gao.gov.
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  • The United States and Kuwait Launch Fourth Strategic Dialogue
    In Crime Control and Security News
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  • Statement on DOJ Office of Professional Responsibility Report on Jeffrey Epstein 2006-2008 Investigation
    In Crime News
    The executive summary of a report by the Department of Justice’s Office of Professional Responsibility (OPR) was released today to affected victims.  The summary, which is available on the Justice Department website, provides the essential details about the findings of OPR’s investigation into the U.S. Attorney’s Office for the Southern District of Florida’s resolution of its 2006–2008 federal criminal investigation of Jeffrey Epstein and its interactions with victims during the investigation. 
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  • How We ReImagined HHS
    In Human Health, Resources and Services
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  • Former Media Producer Indicted on Charges of Extortion and Obstruction of Justice
    In Crime News
    A federal grand jury in the District of Puerto Rico returned an indictment Tuesday charging a former media producer with extortion and obstruction of justice during a federal investigation in San Juan, Puerto Rico.
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  • United States Reaches Settlement with Federal Way Public Schools to Resolve Student Complaints of Harassment on the Basis of Religion and National Origin
    In Crime News
    Today the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Western District of Washington announced a settlement agreement with Federal Way Public Schools in Washington to resolve an investigation into allegations of peer-on-peer harassment on the basis of religion and national origin.
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    In Crime Control and Security News
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    In Travel
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  • Comparative Effectiveness Research: Patient-Centered Outcomes Research Institute and HHS Continue Activities and Plan New Efforts
    In U.S GAO News
    GAO found that the Patient-Centered Outcomes Research Institute (PCORI)—a federally funded, nonprofit corporation—and the Department of Health and Human Services (HHS) have continued to perform comparative clinical effectiveness research (CER) activities required by law since our prior report issued in 2015. CER evaluates and compares health outcomes, risks, and benefits of medical treatments, services, or items. The requirements direct PCORI and HHS to, among other things, fund CER and disseminate and facilitate the implementation of CER findings. GAO's analysis of PCORI and HHS documents show that they allocated a total of about $3.6 billion for CER activities and program support during fiscal years 2010 through 2019 from the Patient Centered Outcomes Research Trust Fund (Trust Fund). Specifically, PCORI allocated about $2 billion for research awards and another $542 million for other awards, to be paid over multiple years. HHS allocated about $598 million for activities such as the dissemination and implementation of CER findings. PCORI and HHS also allocated about $470 million for program support. PCORI and HHS Allocations for Comparative Clinical Effectiveness Research (CER) Activities, Fiscal Years 2010 through 2019 aTotals may not add up due to rounding. bPCORI and HHS allocated $457 million and $13 million for program support, respectively. PCORI assessed the effectiveness of its activities using performance measures and targets. Since fiscal year 2017, when early CER projects were completed, PCORI officials reported that the institute met its performance targets, such as an increased number of research citations of its CER findings in news and online sources. HHS described accomplishments or assessed the effectiveness of its dissemination and implementation activities. PCORI and HHS officials told GAO they are planning comprehensive evaluations of their CER dissemination and implementation activities as part of their strategic plans for the next 10 years. The 2010 Patient Protection and Affordable Care Act (PPACA) authorized establishment of PCORI to conduct CER and improve its quality and relevance. PPACA also established new requirements for HHS to, among other things, disseminate findings from federally funded CER and coordinate federal programs to build data capacity for this research. To fund CER activities, PPACA established the Trust Fund, which provided a total of about $3.6 billion to PCORI and HHS for CER activities during fiscal years 2010 through 2019. The Further Consolidated Appropriations Act, 2020, added new CER requirements and extended funding at similar levels through fiscal year 2029. PPACA and the Appropriations Act 2020 included provisions that GAO review PCORI and HHS's CER activities. This report describes (1) the CER activities PCORI and HHS carried out to meet legislative requirements, (2) how PCORI and HHS allocated funding to those CER activities, and (3) PCORI and HHS efforts to evaluate the effectiveness of their CER dissemination and implementation activities, such as changes in medical practice. GAO reviewed legislative requirements and PCORI and HHS documentation and data for fiscal years 2010-2019. GAO also interviewed PCORI and HHS officials and obtained information from nine selected stakeholder groups that were familiar with PCORI's or HHS's CER activities. These groups included payer, provider, and patient organizations. GAO incorporated technical comments from PCORI and HHS as appropriate. For more information, contact John Dicken at (202) 512-7114 or dickenj@gao.gov.
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  • Remarks by Attorney General William P. Barr on his Acceptance of the Christifideles Laici Award at the 2020 National Catholic Prayer Breakfast
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  • Secretary Pompeo’s Video Remarks at the Prague 5G Security Conference 2020
    In Crime Control and Security News
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  • Justice Department Sues to Shut Down Florida Tax Return Preparers
    In Crime News
    The United States has filed a complaint in the U.S. District Court for the Southern District of Florida seeking to bar three Miami Gardens-area tax return preparers and their businesses and franchises, from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today. The United States has simultaneously filed a request for a preliminary injunction that would immediately prohibit defendants from further preparing taxes during the pendency of the suit.
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  • Assistant Secretary Schenker’s Travel to Oman and Saudi Arabia
    In Crime Control and Security News
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  • United States Joins Christchurch Call to Action to Eliminate Terrorist and Violent Extremist Content Online
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  • Special Envoy Pham Participates in Ministerial Roundtable for the Central Sahel
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  • San Antonio Return Preparer Pleads Guilty in Tax Fraud Scheme
    In Crime News
    A San Antonio, Texas, tax return preparer pleaded guilty today to aiding and assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division and U.S. Attorney Gregg N. Sofer of the Western District of Texas.
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  • Financial Audit: IRS’s FY 2020 and FY 2019 Financial Statements
    In U.S GAO News
    In GAO's opinion, the Internal Revenue Service's (IRS) fiscal years 2020 and 2019 financial statements are fairly presented in all material respects, and although certain controls could be improved, IRS maintained, in all material respects, effective internal control over financial reporting as of September 30, 2020. GAO's tests of IRS's compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements detected no reportable instances of noncompliance in fiscal year 2020. Limitations in the financial systems IRS uses to account for federal taxes receivable and other unpaid assessment balances, as well as other control deficiencies that led to errors in taxpayer accounts, continued to exist during fiscal year 2020.These control deficiencies affect IRS's ability to produce reliable financial statements without using significant compensating procedures. In addition, unresolved information system control deficiencies from prior audits, along with application and general control deficiencies that GAO identified in IRS's information systems in fiscal year 2020, placed IRS systems and financial and taxpayer data at risk of inappropriate and undetected use, modification, or disclosure. IRS continues to take steps to improve internal controls in these areas. However, the remaining deficiencies are significant enough to merit the attention of those charged with governance of IRS and therefore represent continuing significant deficiencies in internal control over financial reporting related to (1) unpaid assessments and (2) financial reporting systems. Continued management attention is essential to fully addressing these significant deficiencies. The CARES Act, enacted in March 2020, and other COVID-19 pandemic relief laws contained a number of tax relief provisions to address financial stress caused by the COVID-19 pandemic. For example, the Economic Impact Payments provisions in the CARES Act provided for direct payments for eligible individuals to be implemented through the tax code. Implementing the provisions related to these Economic Impact Payment required extensive IRS work, and resulted in it issuing approximately $275 billion in payments as of September 30, 2020. IRS faced difficulties in issuing these payments as rapidly as possible, such as in identifying eligible recipients, preventing improper payments, and combating fraud based on identity theft. IRS discusses the challenges in carrying out its responsibilities under the CARES Act in its unaudited Management's Discussion and Analysis, which is included with the financial statements. As part of monitoring and oversight of the federal government's efforts to prepare for, respond to, and recover from the COVID-19 pandemic, GAO has issued a number of reports on federal agencies' implementation of the CARES Act and other COVID-19 pandemic relief laws, including reports providing information on, and recommendations to strengthen, IRS's implementation of the tax-related provisions. In accordance with the authority conferred by the Chief Financial Officers Act of 1990, as amended, GAO annually audits IRS's financial statements to determine whether (1) the financial statements are fairly presented and (2) IRS management maintained effective internal control over financial reporting. GAO also tests IRS's compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements. IRS's tax collection activities are significant to overall federal receipts, and the effectiveness of its financial management is of substantial interest to Congress and the nation's taxpayers. Based on prior financial statement audits, GAO made numerous recommendations to IRS to address internal control deficiencies. GAO will continue to monitor, and will report separately, on IRS's progress in implementing prior recommendations that remain open. Consistent with past practice, GAO will also be separately reporting on the new internal control deficiencies identified in this year's audit and providing IRS recommendations for corrective actions to address them. In commenting on a draft of this report, IRS stated that it continues its efforts to improve its financial systems controls. For more information, contact Cheryl E. Clark at (202) 512-3406 or clarkce@gao.gov.
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  • Private Equity CEO Enters into Non-prosecution Agreement on International Tax Fraud Scheme and Agrees to Pay $139 Million, to Abandon $182 Million in Charitable Contribution Deductions, and to Cooperate with Government Investigations
    In Crime News
    Robert F. Smith, the Chairman and Chief Executive Officer of a San Francisco based private equity company, entered into a Non-Prosecution Agreement (the agreement) with the Department of Justice, for his involvement from 2000 through 2015 in an illegal scheme to conceal income and evade millions in taxes by using an offshore trust structure and offshore bank accounts, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division, U.S. Attorney David L. Anderson for the Northern District of California, and Chief of Internal Revenue Service (IRS) Criminal Investigation Jim Lee. In that agreement, Smith admits his involvement in the illegal scheme and agrees to cooperate with ongoing investigations and to pay back taxes and penalties in full. 
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  • Counselor Brechbühl’s Travel to Nigeria
    In Crime Control and Security News
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  • U.S. Attorney Transition Begins
    In Crime News
    Continuing the practice of new administrations, President Biden and the Department of Justice have begun the transition process for the U.S. Attorneys.
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