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DEPARTMENTS OF LABOR, HEALTH AND HUMAN
^^^i SERVICES, EDUCATION, AND RELATED AGENCIES
■ < APPROPRIATIONS FOR 1996
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Departnents of Labor/ Health and Hu. . . eie a
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COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES
JOHN EDWARD PORTER, Illinois, Chairman
C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin
HENRY BONILLA, Texas LOUIS STOKES, Ohio
ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland
DAN MILLER, Florida NANCY PELOSI, CaUfornia
JAY DICKEY, Arkansas NITA M. LOWEY, New York
FRANK RIGGS, CaUfornia
ROGER F. WICKER, Mississippi
NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees.
S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers,
and Joanne L. Orndorff, Subcommittee Staff
PART 2
DEPARTMENT OF HEALTH AND HUMAN SERVICES
I Page
Technical Briefing 1
Secretary of Health and Human Services,
Departmental Management, and the Office for Civil
Rights 93
Health Care Financing Administration 295
Social Security Administration 555
Administration for Children and Families 791
Administration on Aging 1327
Office of Inspector General 1431
Special Tables 4Jik*^f<'tJ>.i4&;.. 1498
Printed for the use of the Commiti
WS tTT^'
DEPARTMENTS OF LABOR, HEALTH AND HUMAN
SERVICES, EDUCATION, AND RELATED AGENCIES
APPROPRIATIONS FOR 1996
HEAEINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES
JOHN EDWARD PORTER, Illinois, Chairman
C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin
HENRY BONILLA, Texas LOUIS STOKES, Ohio
ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland
DAN MILLER, Florida NANCY PELOSI, California
JAY DICKEY, Arkansas NITA M. LOWEY, New York
FRANK RIGGS, CaUfomia
ROGER F. WICKER, Mississippi
NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of al! Subcommittees.
S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers,
and Joanne L. Orndorff, Subcommittee Staff
PART 2
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Page
Technical Briefing 1
Secretary of Health and Human Services,
Departmental Management, and the Office for Civil
Rights 93
Health Care Financing Administration 295
Social Security Administration 555
Administration for Children and Families 791
Administration on Aging 1327
Office of Inspector General 1431
Special Tables 1498
Printed for the use of the Committee on Appropriations
U.S. GOVERNMENT PRINTING OFFICE
91-1780 WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Sujjerintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-047306-3
COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. McDADE, Pennsylvania
JOHN T. MYERS, Indiana
C. W. BILL YOUNG, Florida
RALPH REGULA, Ohio
JERRY LEWIS, California
JOHN EDWARD PORTER, Illinois
HAROLD ROGERS, Kentucky
JOE SKEEN, New Mexico
FRANK R. WOLF, Virginia
TOM Delay, Texas
JIM KOLBE, Arizona
BARBARA F. VUCANOVICH, Nevada
JIM LIGHTFOOT, Iowa
RON PACKARD, CaUfornia
SONNY CALLAHAN, Alabama
JAMES T. WALSH, New York
CHARLES H. TAYLOR, North CaroHna
DAVID L. HOBSON, Ohio
ERNEST J. ISTOOK, Jr., Oklahoma
HENRY BONILLA, Texas
JOE KNOLLENBERG, Michigan
DAN MILLER, Florida
JAY DICKEY, Arkansas
JACK KINGSTON, Georgia
FRANK RIGGS, CaUfornia
RODNEY P. FRELINGHUYSEN, New Jersey
ROGER F. WICKER, Mississippi
MICHAEL P. FORBES, New York
GEORGE R. NETHERCUTT, Jr., Washington
JIM BUNN, Oregon
MARK W. NEUMANN, Wisconsin
DAVID R. OBEY, Wisconsin
SIDNEY R. YATES, Illinois
LOUIS STOKES, Ohio
TOM BEVILL, Alabama
JOHN P. MURTHA, Pennsylvania
CHARLES WILSON, Texas
NORMAN D. DICKS, Washington
MARTIN OLAV SABO, Minnesota
JULL^J"! C. DKON, Cahfomia
VIC FAZIO, California
W. G. (BILL) HEFNER, North Carolina
STENY H. HOYER, Maryland
RICHARD J. DURBIN, lUinois
RONALD D. COLEMAN, Texas
ALAN B. MOLLOHAN, West Virginia
JIM CHAPMAN, Texas
MARCY KAPTUR, Ohio
DAVID E. SKAGGS. Colorado
NANCY PELOSI, CaUfornia
PETER J. VISCLOSKY, Indiana
THOMAS M. FOGLIETTA, Pennsylvania
ESTEBAN EDWARD TORRES, CaUfornia
NITA M. LOWEY, New York
RAY THORNTON, Arkansas
James W. Dyer, Clerk and Staff Director
DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RE-
LATED AGENCIES APPROPRIATIONS FOR
1996
Thursday, January 12, 1995.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
TECHNICAL BRIEFING
WITNESSES
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET
JUNE GIBBS BROWN, INSPECTOR GENERAL
CLAIRE V. BROOME, M.D., DEPUTY DIRECTOR, CENTERS FOR DISEASE
CONTROL AND PREVENTION
HOWARD ROLSTON, DIRECTOR, OFFICE OF POLICY AND EVALUATION,
ADMINISTRATION FOR CfflLDREN AND FAMILIES
Mr. Porter. I have just been informed that the Republican Con-
ference is still going for another 15 minutes. Since we have asked
you to come here not particularly to enlighten me but to enlighten
our new Members, I think we really have no choice but to wait for
them. So I apologize, but they said they would be over as soon as
the Conference breaks, and it looks like it will be — why don't we
simply say we are going to attempt to restart at 10:30 so everyone
can take a break.
[Recess.]
Mr. Porter. Since they got here earlier than we thought, we will
go ahead and proceed, Dennis.
The Subcommittee will come to order. We continue this morning
with the third of our technical or overview briefings by our Cabinet
Departments, and we are very happy to welcome Dennis Williams,
the Chief Budget Officer of the Department of Health and Human
Services here this morning.
If you would, Dennis, introduce the people who are with you and
then proceed.
Introductions
Mr. Williams. Thank you, Mr. Chairman. It is a pleasure to be
back before this committee.
I am accompanied today, on my right, by the Inspector General
from the Department of Health and Human Services, June Gibbs
Brown. On my left is Dr. Claire Broome; she is the Deputy Director
of the Centers for Disease Control and Prevention. And on my far
(1)
left is Howard Rolston, who is the Director of the Office of PoHcy
and Evaluation at the Administration for Children and Families.
We were asked to come here today to provide some budget infor-
mation and statistics, trends in health care and poverty and sum-
maries of some of our audit activities in the Department. We hope
that this information will help the Committee as it evaluates our
programs in the coming months. We are not here to present poli-
cies, but we do hope that the information we give you will help you
as you evaluate our programs.
With your permission, we would like to start with the Inspector
General, who will talk to you about some of the audit activities in
the Department.
OVERVIEW OF THE OFFICE OF INSPECTOR GENERAL
Ms. Brown. Good morning, Mr. Chairman. Thank you for the op-
portunity to appear before you today.
Members of the Committee, let me begin by a brief overview of
the Office of Inspector General. The OIG was created in 1976 to
protect the integrity of the Department's programs and promote
their economy, efficiency and effectiveness. We do that through a
comprehensive program of audits, evaluations and investigations.
We have a staff of about 1,250 people in our headquarters and
eight regional offices and 65 field offices.
In fiscal year 1994, we had 1,169 successful prosecutions, and
1,334 administrative sanctions against individuals and entities that
defrauded and abused our programs. We also generated $8 billion
in savings, fines, restitutions, penalties and recoveries. And that
represents $80 in savings for each dollar spent and $6.4 million, on
average, per OIG employee.
Based on our work, we believe that overall, the Department's
programs are operating substantially as intended. However, correc-
tive actions are needed in a number of areas to stop abusive prac-
tices, correct vulnerabilities and to make programs more effective.
HEALTH CARE FINANCING ADMINISTRATION
Let me summarize our major concerns within each of the Depart-
ment's Operating Divisions. The first is HCFA that administers the
Federal Medicare program and, with the States, the Medicaid pro-
gram, two of the largest and most dynamic programs in the De-
partment.
Over the years. Medicare has instituted many significant reforms
to improve the efficiency and reduce vulnerabilities. For example,
the prospective payment systems for inpatient hospital care, a fee
service schedule for physician services, regional consolidation of
claims processing for durable medical equipment and Medicare con-
tractor fraud units. We have testified many times about health care
fraud, noting that fraud usually takes one of the following forms:
billing for services not rendered, misrepresentation of services ren-
dered, or kickback and physician self-referrals. While these are
often complex types of fraud that permeate the entire health care
arena, we are particularly concerned about abuses and lack of over-
sight in two areas: nursing homes and home health agencies.
An ongoing study found that Medicare paid separately as much
as $70 million annually to skilled nursing facilities for enteral nu-
trition services, surgical dressings and incontinence care items that
should have already been covered under Medicare's global pay-
ments to the facilities. Inhome health agencies: We observed sev-
eral types of fraud in these agencies, including cost report fraud,
excessive nonrendered services, use of unlicensed or untrained
staff, falsified plans of care and forged physician signatures and
kickbacks.
We are also concerned that Medicare and Medicaid are well man-
aged with financial program integrity and high quality of care. We
have testified many times about the statutory improvements need-
ed to protect citizens and health care programs from unscrupulous
providers. For example, many exemptions and adjustments to hos-
pital payment methodologies are not justified by the higher hos-
pital costs. Medicare should also be a more prudent purchaser of
medical equipment and services, such as oxygen concentrators and
ambulance services, both of which we have testified on. To accom-
plish this goal, we recommend allowing competitive billing and
changing the inherent reasonableness test.
PUBLIC HEALTH SERVICE
Under the second operational area, the Public Health Service is
the focal point for identifying and preventing acute and chronic dis-
ease and disabilities and for promoting the health of the American
people. It includes the National Institutes of Health, Food and
Drug Administration, Centers for Disease Control and Prevention,
Indian Health Service, Health Resources and Services Administra-
tion, Substance Abuse and Mental Health Services Administration,
Agency for Toxic Substances and Disease Registry and Agency for
Health Care Policy and Research.
Our concerns in PHS concentrate on the needs for better man-
agement controls, improved program monitoring and sufficient data
and information systems. We have found problems with PHS agen-
cies' ability to monitor grantee compliance with requirements for
biomedical research funding. For example, NIH has limited its
oversight of grantees extramural research inventions. We are also
concerned about possible conflicts of interest in Federal-sponsored
biomedical research and with vulnerabilities in financial disclosure
requirements for the principal investigators. Recent NIH and FDA
activities to improve oversight in these areas are very encouraging.
Finally, we continue to conduct a number of PHS-wide oversight
activities in property management, travel, preaward and recipient
capability audits and evaluation of PHS's information resource
management.
ADMINISTRATION FOR CHILDREN AND FAMILIES
The third operating area is the Administration for Children and
Families. ACF provides funding for State, local and private human
service programs, and it includes Aid to Families with Dependent
Children, Child Support Enforcement, Head Start and Foster Care
and Adoption Assistance.
In many reviews of cost and program effectiveness in the ACF
programs, we have recommended such improvements as criteria
and procedures for appropriate foster care case referral to child
support agencies and also systems for tracking and monitoring sta-
tus and outcomes of the job opportunity and basic skills program.
We found some highly effective examples of cooperation among
Federal, State and local governments, such as using community re-
sources for educating and training jobs participants.
One area of continuing concern is the funding system for welfare
administrative costs. The current method for reimbursing States
for welfare administrative costs is unwieldy, inefficient and unpre-
dictable with much disparity among States. We are examining op-
tions for funding administrative costs with AFDC, Food Stamp and
Medicaid programs, and will have a final report available the end
of January.
SOCIAL SECURITY ADMINISTRATION
The fourth operational area is the Social Security Administra-
tion. Of course, SSA will become independent from HHS on March
31. By statute, it will have an OIG and the new office will be
drawn from the HHS OIG. We expect to transfer 263 people, in-
cluding three executive positions, to staff of the new office.
Overall, the SSA is an efficient agency issuing over $334 billion
in cash benefits to 43 million beneficiaries in the Old Age, Survi-
vors and Disability Insurance Trust Fund programs. SSA also over-
sees a general revenue, needs-based program called Supplemental
Security Income, or SSI, which provides monthly payments to over
six million aged, blind and disabled individuals and amounts to
about $25 billion annually.
Last year we testified before Congress on several issues. One was
SSA notices. We had previously recommended improvements in
SSA notices, but acknowledge the positive action SSA has taken in
improving its communication with beneficiaries. This is evidenced
by an overall customer satisfaction rate of 77 percent based on our
annual survey of SSA clients.
Under disabled children, as a result of a Supreme Court decision
known as the Zebley decision, the criteria for childhood disability
was expanded, resulting in an increase of the disabled children on
the rolls from 296,000 in 1989 to 847,000 in 1994. We found that
while SSA is complying with the law, clarification of Congressional
intent is needed. If Congress intended that the program help chil-
dren overcome their disabilities rather than merely paying them
cash assistance, then changes are needed.
Another SSI program is for drug addicts and alcoholics. The
number of drug addicts and alcoholics on the rolls rose from 24,000
in 1990 to over 80,000 last year. We noted that few were ever leav-
ing the rolls. Legislation passed last year places more emphasis on
monitoring whether these recipients are actively participating in
treatment programs, and it limits their benefits to three years.
Interpreter fraud is another area that we have drawn attention
to in Congress. SSA's reliance on community translators to assist
non-English-speaking claimants has been exploited in some cases
by translators that are conspiring with physicians to submit false
evidence. This has been concentrated mainly in southern Califor-
nia, and we are working with SSA to identify such cases and con-
tain the problem. SSA is making progress in arranging for more le-
gitimate, reliable translation services.
Another perennial problem is the disability claims backlog. We
have assisted SSA in its disability reengineering process and be-
lieve they are moving toward an improved claims processing sys-
tem. One disability area we have studied is the high level of deci-
sion reversals by administrative law judges. We found that dispar-
ity in the decision criteria used by State disability determination
services, which make the initial disability decisions, and the ALJ's.
We found unanimous support by both groups for uniform disability
standards in disability decision-making. We presented our findings
to SSA's disability process reengineering team.
In closing, I would like to acknowledge the cooperative relation-
ship I have had with the Department in my tenure as IG. Having
served in four major departments now as Inspector General, I note
that sometimes the IG's work can place them in an adversarial po-
sition with program managers. I am pleased that that has not been
the case at HHS.
The issues I have discussed are summarized in our semiannual
reports to Congress. In addition, we have two compendia of pend-
ing OIG recommendations which you might find useful. The Red
Book, or Cost-Saver Handbook as we call it, is a major monetary
recommendation — summary of major monetary recommendations;
and The Orange Book is a summary of significant nonmonetary
recommendations which have not yet been implemented. Our 1995
editions will be available soon.
Thank you for the opportunity to be here today, and I would be
happy to answer any questions you may have.
[The prepared statement and biography of June Gibbs Brown
follow:]
Department of Health and Human Services
OFFICE OF INSPECTOR GENERAL
Statement of
The Honorable June Gibbs Brown
Inspector General
before the
Subconunittee on Labor, HHS and Education
Committee on Appropriations
U.S. House of Representatives
January 12, 1995
Good morning. I welcome this opportunity to appear before you with the other
representatives of the Department to provide a summary of the Office of Inspector General's
audits, evaluations and investigations of the Department of Health and Human Services'
programs and operations.
OFFICE OF INSPECTOR GENERAL OVERVIEW
I would like to begin with a brief overview of the Office of Inspector General (OIG), since
our work may be new to some of you. Created in 1976, the OIG is statutorily charged with
protecting the integrity of departmental programs, as well as promoting their economy,
efficiency, and effectiveness. The OIG meets this challenge through a comprehensive
program of audits, program evaluations, and investigations which are designed to improve
the management of the Department and to protect its programs and beneficiaries from fraud,
waste, and abuse. Our role is to detect and prevent fraud and abuse and ensure that
beneficiaries receive high quality, necessary services, at appropriate payment levels.
Within the Department, the OIG is an independent organization, reporting to the Secretary
and communicating directly with the Congress on significant matters. We carry out our
mission through a field structure of 8 regions and 65 field offices and with a staff of over
1,200 auditors, evaluators, and investigators.
Jaouuy 12. 1995 Briefing for House ApproprialiooB SubcommJtlee oo Labor. HHS & Education
8
The OIG has accomplished much in the fight against fraud, abuse and waste in HHS
programs and operations. In Fiscal Year (FY) 1994, we had 1,169 successful prosecutions
and 1,334 administrative sanctions against individuals or entities that defrauded or abused the
Department's programs and/or beneficiaries. Last year, the OIG also generated savings,
fines, restitutions, penalties, and receivables of over $8 billion, which represents $80 in
savings for each Federal dollar invested in our office, or $6.4 million in savings per OIG
employee.
DEPARTMENTAL OVERVIEW
The general conclusion of our work is that while, overall, the programs of the Department
are operating largely as intended, corrective actions, or program modifications, are needed in
a number of areas to stop abusive practices, correct potential vulnerabilities, and/or make
programs more effective.
Before I discuss our specific concerns in each of the Department's major operating divisions,
I would like to point out that we have enjoyed a very cooperative relationship with the
Department. Having served as IG at four major agencies, I realize that the nature of OIG
work can place us in an adversarial position with those operating programs. This, I am
happy to report, has not been the case during my tenure as IG at HHS.
Bricrmg for House Appropn&tiooi Subcommittee on Labor. HHS & Education
Health Care Financing Administration
I will begin with one of our largest and most dynamic program areas. Medicare and
Medicaid are administered by the Health Care Financing Administration (HCFA). Medicare
Part A covers hospital and other institutional care for approximately 36 million persons age
65 or older and for certain disabled persons. Fiscal Year (FY) 1995 expenditures for Part A
are estimated at $112 billion. Medicare Part B, which covers most of the costs of medically
necessary physician and other non-institutional services, has estimated FY 1995 expenditures
of $66 billion.
The Medicaid program provides grants to States for medical care for approximately 35
million low-income people. Medicaid outlays have risen dramatically, making Medicaid the
fastest rising portion of both Federal and State budgets. Federal Medicaid spending is
expected to reach $92 billion in 1995.
Over the years. Medicare has instituted many significant reforms to improve program
efficiency and reduce vulnerabilities to fraud and abuse. Such reforms include (1)
implementation of a prospective payment system (PPS) for inpatient hospital services and a
fee schedule for physician services, (2) regional consolidation of claims processing for
durable medical equipment (DME), and (3) establishment of fraud units at Medicare
contractors. The HCFA's Medicare administrative costs have also been low as a proportion
of overall program costs: 1 percent of Part A claims and 3.5 percent of Part B claims.
About 4 percent of Medicaid funds are for administrative expenses. The HCFA continues to
Jinuuy 12, 1995 BrieTing for Houae Appropriatiom SubcommiBec on Labor, HHS & Education HHS/OIG-P>ge 3
10
make improvements, including implementation of the Medicare Transaction System (MTS)
which should further streamline claim processing fiinctions.
We have testified numerous times during each congressional session about the overall
problems of health care fraud and about specific areas that are most vulnerable to wasteful
practices or to health care providers that are intent on defrauding Medicare and Medicaid.
We have noted tiiat fraud in Uiese programs often takes one of the following forms:
• Billing For Services Not Rendered -- A significant proportion of our investigative
caseload involves billings for services not rendered. These cases are readily accepted
for prosecution by the United States Attorneys and are responsible for a large number
of the convictions obtained in the healtii care field.
• Misrepresentation of Services Rendered -- The Medicare program loses money when
providers submit claims that do not reflect the services actually performed or the
supplies actually delivered. Some providers try to "game" the program by unbundling
and upcoding charges. Unbundling involves separate billing for the subcomponent
parts of an item or service rather tiian billing for the complete item or service and can
result in inflated charges far above the appropriate level. For example, the
component parts of a $4 incontinence care kit can be separately billed to Medicare for
$20. Upcoding is the practice of billing for a more intensive service than the one
actually delivered.
Bricnng for Houae Appropriatiou Subcammittce on Labor. HHS & Education
11
• Kickbacks and Physician Self-referral ~ A widespread problem in the fee-for-service
area is the problem of kickbacks and physician self-referral. A kickback is the
payment or receipt of anything of value as an inducement for the referral of health
care business. Physician self-referral is an overlapping and similar problem in which
any item or service is referred by a physician who has a "financial relationship" with
that entity, and where the physician does not directly provide the item or service.
The overall concern with kickbacks is that fmancial, rather than medical, factors may
affect physician decisions about providing medical care to patients.
While these types of fraud permeate the entire health care field, fraud in three health care
sectors have become of particular concern to us:
• Inadequate Nursing Home Oversight - Recent OIG research has identified certain
abusive practices in nursing home administration. We are specifically concerned that
there may not be adequate oversight over nursing home patients because in many
cases there is no one looking out for the patient's best interest. An ongoing OIG
study indicates that current Medicare policy may inadvertently allow substantial
Medicare payments (as much as $70 million annually) to be made to skilled nursing
facilities for enteral nutrition services, surgical dressings, and incontinence care
items — items that should be part of the global (i.e., comprehensive) Medicare
payment to the facility. We also recently reported that information from nursing
hqyes indicates that durable medical equipment suppliers engage in questionable
Bnefing for Hoiue Appropriations Subcoaimitlfc on Labor. HHS & Education HHS/OlG-hfeS
12
marketing practices that result in beneficiaries receiving unnecessary or non-covered
supplies.
Poor Control over Home Health Agencies (HHAs) - Home health care allows people
with limited mobility to live independently while still receiving professional health
care services. Home health care is one of the fastest growing segments of health care
and Medicare payments will total about $16 billion this year. Medicare paid $7.1
billion in 1992. Because HHAs provide care in the patient's home, with limited
supervision, there is a vulnerability to fraud schemes. We have observed several
types of fraud in HHA operations including cost report fraud, excessive services or
services not rendered, use of unlicensed or untrained staff, falsified plans of care and
forged physician's signatures, and kickbacks. Ongoing audit work by our office has
found an alarming rate of Medicare claims for home health services in Florida did not
meet Medicare coverage guidelines. For these reasons, both the OIG and HCFA have
decided to devote significant resources to assess Medicare payments in this area.
Potential Vulnerabilities of Managed Care - Given the growth and evolution of the
Medicare and Medicaid managed care programs and the growing interest and support
for managed care programs as a means to control costs, we plan on devoting
significant resources to this area. I would note that the incentives for fraud and abuse
in a managed care environment are very different from those in a fee-for-service
environment. While a fee-for-service environment encourages over-utilization,
problems associated with managed care can actually encourage under-utilization or
2.1995 Briermg for House Appropmliona Subcotnmiaee on Labor. HHS & Educslion HHS/OIG-P>ec 6
13
disenroUing individuals that tend to be high users of health care services. We plan to
undertake a number of reviews to address issues involving program integrity, quality
and access to care, rate setting, accuracy of payments, and financial integrity.
In addition, certain statutory and regulatory changes could be made to make Medicare a more
prudent purchaser of medical equipment and services. When Medicare started, it paid most
health care providers their reasonable charges or costs. New rate-setting methods have been
established for a variety of providers and have represented significant improvements in
program management. Some payments, however, are still too high. I have recently testified
on items such as oxygen concentrators and ambulance services. As an illustration, our
reviews found that Medicare was paying over twice as much for oxygen concentrators as the
Department of Veterans Affairs and other prudent purchasers. We recommend that the
Congress consider allowing competitive bidding and changing provisions related to "inherent
reasonableness. "
Public Health Service
Next, I would like to address another major focus of OIG efforts. The activities conducted
and supported by the Public Health Service (PHS) represent this country's primary defense
against acute and chronic diseases and disabilities. PHS programs provide the foundation for
the Nation's efforts in promoting and enhancing the continued good health of the American
people. In Fiscal Year 1995, PHS expects to spend over $21 billion on about 200 programs
JwHiuy 12, 1995 Briefing for Hoimc Aiymprbliom Suboommittccoo Labor. HHS tt Eduotfiop
14
to promote the health of U.S. citizens. Most PHS activities are administered through grants
to colleges and universities, State and local governments, and non-profit organizations.
Our concerns in PHS focus broadly on the need for management controls to guard against
fraud, waste, abuse, and mismanagement. In many instances, the weaknesses include
inadequate program monitoring and insufficient data and information systems within the
agency.
For example, our work has indicated problems with PHS agencies' ability to monitor grantee
compliance with requirements governing biomedical research funding, substance abuse,
Indian health services, drug approval processes and community health center programs. In
one case, involving oversight of extramural research inventions, we found that: the National
Institutes of Health (NIH) have limited its oversight of grantees by not requiring
documentation for some Federal requirements; lacks a systematic process for ensuring that
grantees submit all required invention information; and does not fully utilize its invention
database to monitor grantee compliance. The Federal Government is entitled to royalty
income on patents developed from research funded wholly or in part with Federal dollars.
Our audit of an NIH grantee, Scripps Research Institute (SRI), found that NIH was unaware
of 45 SRI patents that resulted from Federally funded research. We are pleased, however,
with the strides made by NIH in addressing the myriad management problems identified in
our past OIG studies.
jMwuyU, I99S BncTcw for HouKAivnipriaiioaiSubcsavuattaa Labor, HHSAEducMaoa
15
In addition, we are concerned about possible conflict of interest in biomedical research
funded with Federal dollars, and with current requirements governing financial disclosure by
principal investigators conducting clinical studies of products submitted for Food and Drug
Administration (FDA) approval. As the Government's investment in Federal research dollars
continues to rise, it is important to safeguard American citizens against inappropriate
fmancial interests in commercial products under study in PHS-supported clinical trials.
Moreover, it is equally important to ensure that outcomes of clinical trials involving drugs
and medical devices are not compromised by the fmancial interests of clinical investigators.
One OIG investigation, for example, found that a medical device firm made investment
proposals to physicians who were also conducting clinical trials of the efficacy of new
medical device designs. The results of these tests would be critical for FDA approval. The
conflict of interest created by this situation could potentially compromise the investigators'
objectivity since FDA approval of the product could mean huge profits for the firm and its
investors. Recent NIH and FDA activities to improve their oversight of these critical areas
are encouraging and we support the agency efforts.
Finally, we continue to conduct a number of PHS-wide oversight activities involving property
management; travel, including employee abuses of government frequent flyer benefits;
preaward and recipient capability audits; and evaluation of PHS's information resources
management activities. Our oversight work has provided valuable recommendations to
program managers for strengthening the integrity of PHS policies and procedures.
iMMy 12. 1995 BiiefiPtfiirHoMieAfptoprilio—SuhrnniniillrBoaLjbor. HHSft EducUion
16
Administration for Cliildren and Families
The Administration for Children and Families (ACF) provides Federal direction and funding
for State, local and private organizations, and for State-administered programs to promote
stability, economic security, responsibility and self-support for families. It also oversees a
variety of programs that provide social services to children, youth and families, persons with
developmental disabilities and Native Americans.
Major types of family support payments to States encompass: Aid to Families with
Dependent Children (AFDC), a cooperative program among Federal, State and local
governments which reaches nearly 4.7 million families each month; and the Child Support
Enforcement (CSE) program, which provides grants to States to enforce obligations of absent
parents and establishing and enforcing child support orders. The Head Start program
provides comprehensive health, educational, nutritional, social and other services primarily to
preschool children and their families who are economically disadvantaged. The Foster Care
and Adoption Assistance program provides grants to States to assist with the cost of foster
care, special needs adoptions, administrative costs, and training for staff. Other programs
include Community Services, Job Opportunities and Basic Skills Training (JOBS), and
Refugee Resettlement.
We have reviewed the cost-effectiveness of the ACF social services and assistance programs,
including determining whether authorized services are provided to recipients at the lowest
cost. As the result of our work, we identified opportunities to improve the delivery of
Juuuy 12, 199S Bricfmf for Houk ApproprmlioM Subcommituc od Labor. HHS & Educatioo HHS/OIG-F>(e 10
17
program services, such as: require States to develop criteria and implement procedures for
assuring that appropriate foster care cases are referred to State child support enforcement
agencies; encourage States to track and monitor the status and outcomes of the various
aspects of the JOBS program; and encourage better Federal, State and local coordination of
program implementation.
We have found some highly effective examples of collaboration among Federal, State and
local governments, such as using community resources for educating and training JOBS
participants. We surveyed 27 States and 12 local communities and found three factors that
contributed to the successful use of community resources for JOBS programs: (1)
interagency cooperation among Federal, State and community agencies is vitally important
for successful JOBS programs; (2) private sector resources boosted the quality of training in
two selected communities; and (3) providing support services (i.e., child care, transportation,
etc.) allowed and encouraged participation in JOBS education and training.
Specifically, focusing on maximizing the dollar value of the social services and assistance
program dollar, we have recommended, for example, basing child support incentive
payments on the States' demonstrated ability to meet performance objectives and limiting
Foster Care administrative costs.
One area of continuing concern to us is how to improve the funding system for welfare
administrative costs. The Federal Government pays for half of the administrative costs for
most types of administrative activities in the AFDC, Food Stamp, and Medicaid programs. In
Juiuuy 13, 199S Briering for HouaeAppropriatioon Subcommittee on Labor, HHS & Educuioa HHS/OIG-Pacc 1 >
18
FY 1993, administrative costs were 5.8 percent of the total benefit payments of these three
programs. States have considerable latitude in defining their administrative costs, i.e.,
"reasonable and necessary" as outlined in 0MB Circular A-87, "Cost Principles for State and
Local Governments. " The current method for reimbursing States for welfare administrative
costs is unwieldy, inefficient, and unpredictable. Further, there is much unexplained
disparity in these costs among States and a significant risk of increase in administrative costs
overall.
We are now examining options for funding administrative costs in the AFDC, Food Stamp,
and Medicaid programs.
Social Security Administration
Although the Social Security Administration (SSA) will become independent from HHS on
March 31, I wanted to give you an overview of our recent findings and concerns about SSA.
By statute, SSA will have an Office of Inspector General, and the new office will be drawn
from the HHS OIG. We expect to transfer approximately 260 people, including 3 executive
positions to staff the new office.
Overall, the SSA is a reasonably efficient agency, which will issue in FY 1995 over $334
billion in cash benefits to more than 43 million beneficiaries. While most of the benefits
SSA oversees are from the Social Security Trust Funds, which are financed almost entirely
from payroll taxes, SSA also administers the needs-based Supplemental Security Income
Juuwy 12, 1995 Bficrmg for Houae AppropruliooB Subcofninince oo Ubor, HHS & Educslion HHS/OIG-Page 12
19
(SSI) program, which is financed from general revenues. The SSI program provides monthly
payments to over 6 million aged, blind and disabled individuals and amounts to about $25
billion annually.
We regularly review a number of areas within SSA's programs and operations, such as:
client satisfaction with SSA services, the quality of service provided in SSA field office, the
disability determination process, the Social Security number enumeration process, and
systems modernization. We also provide oversight of SSA's financial management by
auditing its fmancial statements, reviewing internal controls and reporting on the status of
debt management activities. Included are reviews of tax policy issues that affect Social
Security programs.
Recently, work has focused on assessing the SSI program, particularly regarding disabled
children, drug addicts and alcoholics, and interpreter fraud. We testified before Congress on
our concerns in these areas:
• SSA Notices - The concern regarding notices is whether SSA is able to communicate
complex eligibility information to beneficiaries in a clear and simple manner. It is
important that people understand the notices because they may need to provide
information or take certain actions which affect eligibility. Also, they need to
understand their appeal rights. The SSA has made positive strides in improving its
communication. This is a continuous process which must be monitored and
encouraged. We address this issue every year when we survey beneficiary
)uuuy 12. I99S Brierme for House Appropruliooa Subcommittee od Labor, HHS & Education HHS/OIGPage 13
20
satisfaction with how SSA administers its programs. In the 1994 report, we noted
that overall satisfaction had leveled off after a few years of decline. Over 77 percent
of respondents rated service as good or very good.
• Disabled Children - The concern regarding disabled children stems from a U.S.
Supreme Court decision, the Zebley decision, which expanded the criteria by which
SSA assessed childhood disability. This resulted in the number of children on the
rolls growing from about 296,000 in 1989 to more than 847,000 in mid-1994 at a
total annual cost of about $4.6 billion. We studied a sample of cases and found that
while SSA is complying with the law and the Zebley decision, clarification of
congressional intent is needed. If Congress intended that the SSI program provide
only cash assistance to children with mental impairments, then the program is
successful. However, if Congress intended that the SSI program should help children
overcome their disabilities, and grow into adults capable of engaging in substantial
gainful activity, changes are needed. As we recommended, the Social Security
Independence and Program Improvement Act of 1994 required the establishment of a
Commission to evaluate disability issues for children. The SSA will be working with
the Commission to address the issue of intended program outcomes.
• Drug Addicts and Alcoholics - The concern regarding drug addicts and alcoholics
(DA&As) also stemmed from substantial program growth. The number of DA&As
rose from about 24,000 in 1990 to over 80,000 last year. We studied the issue and
observed early on that whatever the reason for the growth in the DA&A populations,
January 12. I99S BrieTinf lot Houae Approprulioiu Subcoauniltcc oo Labor. HHS & Educatioo HHS/OIG-P>f e 14
•
21
it was abundantly clear that very few were leaving the rolls. Those who did leave the
rolls did so for reasons not related to rehabilitation or recovery. Some left because
they received a higher benefit from another source, and many died. Few were
rehabilitated. Legislation passed last year limits eligibility to 3 years and places more
emphasis on monitoring whether DA&As are actively participating in treatment
programs.
Interpreter Fraud - Regarding interpreter fraud, the issue there was SSA's reliance on
community translators to assist non-English speaking claimants to file claims and
applications for benefits. There were instances where the translators provided false
information to influence the disability decision in favor of their client. In some cases,
the translators conspired with physicians to submit false evidence. Physicians were
involved because in most States, SSI beneficiaries have automatic eligibility for
Medicaid. While we have found this kind of fraud to some extent throughout the
country, it was most concentrated in Southern California. We have been assisting
SSA to identify such cases and to prevent the spread of the problem. The best
solution seems to be in increasing SSA's ability to communicate directly with its non-
English speaking clients. The agency is making great progress in arranging for more
legitimate translation services.
Another perennial SSA issue is the backlog of disability claims, which in recent years has
also been a major concern for SSA and the Congress. We have been assisting in SSA's
disability reengineering process and believe they are moving toward an improved claims
Januuy 12, 199S Bnefing for Hoiuc Appropriatioiu Subcomminee on Labor, HHS & Education HHS/01G*Pige IS
22
processing system. One area we studied was the reason for high levels of decision reversals
by administrative law judges (AUs). We found that the Disability Determination Services
which make the initial decisions follow SSA's Program Operations Manual System, while
AUs directly interpret statutes and regulations and apply Federal court decisions. In Fiscal
Year 1993, the DDSs granted benefits at the initial level in 39 percent of cases while AUs
allowed benefits in 68 percent of cases appealed to them. In surveying 54 State DDSs and a
sample of 156 AUs, we found that there is almost unanimous support for the application of
uniform disability standards by AUs, and DDSs. Both groups supported creation of a Social
Security disability court, but they disagreed on the need for other structural changes to the
process. We presented our findings to SSA's disability process reengineering team to assist
in their redesign of the disability process.
Departmentwide Responsibilities
Finally, I should also mention that the OIG has responsibility for reviewing Departmentwide
management areas and performing mandated audit work. These responsibilities include
conducting financial statement audits under the Chief Financial Officers Act, reviewing and
assisting in the Department's implementation of the Financial Managers' Financial Integrity
Act, and, more recently, the Government Management Reform Act. We have worked
closely with the Department to assure that these responsibilities are carried out as intended by
Congress, while trying to streamline their implementation and reduce paperwork and labor-
intensive requirements.
Jaauaiy 12. I99S Briefiiig for Houac Appropriatiofu SubcMnmiOee on Ubor, HHS & Ediuatioa HHS/OIG-Page 16
23
CONCLUSION
The OIG audit, investigation and evaluation findings which form the basis for my remarks
are summarized in our semiannual reports to Congress. In addition, we annually publish two
compendia of our recommendations. The Cost-Saver Handbook, also known as "The Red
Book," summarizes all of our major dollar recommendations that have not been substantially
implemented. "The Orange Book," Program and Management Improvement
Recommendations, is a compendium of our significant, unimplemented nonmonetary
recommendations. The 1995 editions of these compendia will be available soon, and we will
provide both to the subcommittee.
Thank you for the opportunity to appear before you today. I look forward to a cooperative
relationship with the new subcommittee as the congressional session continues. I will be
happy to respond to any questions you may have.
jMuiyia. I99S BrierntforHoiMAiipraprMaaiSiibcoaimiaeeoaUbor. HHSAEducMioa HHS/OIO-[yf< 17
24
JUNE GIBBS BROWN
Inspector General
Department of Health and Human Services
June Qibbs Brown was sworn in as Inspector General, Depanment of Health and Human Services (DtHHS),
November 5, 1993.
As Inspector General, Ms. Brown has responsibility for audits, evaluations and both criminal and civil
investigations for DHHS as well as the imposition of sanctions, when necessary, against health care providers
under the Program Fraud Civil Remedies Act The DHI-IS is the largest civilian agency of the Federal
Government having the largest budget and more than 250 programs.
Before coming to IHHS, Ms. Brown sensed as Inspector General of the Navy's Pacific Fleet at Pearl Hartx>r,
Hawaii. She has sensed in a variety of other management and Inspector General positions in the Federal
Government since 1972. She was Inspector General of the interior Department from 1979-1981, Inspector
General of NASA from 1981-1985 and Inspector General of the Department of Defense from 1987-1989.
Ms. Brown has also held a vanety of positions in private industry.
Ms. Brown currently serves as the Vice Chair of the President's Council on Integrity and Efficiency (PCIE).
Ms, Brown has also been affiliated with other organizations, including the President's Management Council
(PMC), and she is a fellow In the National Academy of Public Administration. She was the national president
of the Association of Government Accountants, and has served on the Boards of Directors of the Federal Law
Enforcement Training Center, the Interagency Aud'itor Training Program at the Department of Agriculture
Graduate School, the National Contract Management Association and the Hawaii Society of CPAs. She was
also the national chairperson of the Interagency Committee on Information Resources Management.
Ms. Brown received her Bachelor's and Master's of Business Administration from Cleveland State University,
and her Juris Doctor from the University of Denver School of Law. She is a graduate of the Harvard
Advanced Management Program, and a Certified Public Accountant.
Throughout Ms. Brown's government career she has received many honors and awards, including: the 1994
Leadership Award from the Government Executive Magazine and the National Capitol Area Chapter of the
American Society of Public Administration, the Department of Defense Distinguished Service Medal, Women
in Aerospace's Outstanding Achievement in Aerospace Award, NASA Exceptional Service Medal, the Joint
Financial Management Improvement Program's (JFMIP) Financial Management Improvement Award, and the
Association of Government Accountants' Robert W. King Award.
January 1995
25
Mr. Williams. Mr. Chairman, I would now like to ask Dr.
Broome from the Centers for Disease Control to make a presen-
tation on health statistics.
Ms. Broome. Good morning, Mr. Chairman and Members of the
Subcommittee. I am Dr. Claire Broome, Deputy Director of the
Centers for Disease Control and Prevention; and with me today is
Mr. Jack Anderson, who is acting Deputy Director of CDC's Na-
tional Center for Health Statistics, NCHS. NCHS is the source of
much of the data I will present to you today.
We are pleased to be here on behalf of the Public Health Service,
and I am especially pleased to have the opportunity to talk with
you about the state of the Nation's health and how public health
works to improve it.
LEADING CAUSES OF DEATH
First, I would like to provide a broad overview of the leading
causes of death in the United States. And if I could have the first
chart, please, this shows what diseases and conditions are killing
Americans, looking at it in two different ways, by percentage of
death on the left and by years of life lost before age 65 on the right.
When we look at the overall deaths, chronic diseases, heart dis-
ease, cancer, stroke and lung disease claim the greatest number of
lives each year. Injuries are number five and HIV/AIDS has moved
up to number eight for the total population.
When we look at years of potential life loss before age 65, which
is an indicator of deaths to our Nation's youths and ones that are
largely preventable, unintentional injuries, half of which are motor
vehicle crashes, moves up to number one. Intentional injury, which
means homicide and suicide, becomes number three, and HIV/AIDS
moves up to number five. While these charts give a broad picture
of the Nation's most significant health problems, we also need to
look at the underlying causes of the Nation's most significant
health problems.
The next chart shows the work of Michael McGinnis and Bill
Foege, two public health leaders. They synthesize the vast lit-
erature on what is known about the underlying nongenetic causes
of death. They concluded that over half of the 2.1 million deaths
in the United States in 1990 could be attributed to nine factors. To-
bacco, diet, physical activity, alcohol, and infectious agents are all
lethal agents.
However, this chart also suggests some good news. Many of these
risks to good health can be modified. Recognizing this fact, the pub-
lic health community has focused a large portion of its attention on
reducing the harmful effects of these agents.
HEALTHY PEOPLE 2000 OBJECTIVES
One mechanism we use to track our progress in improving the
Nation's health is through the Healthy People 2000 National
Health Promotion and Disease Prevention Objectives, and I have
provided a copy of the report for all of the Members. These health
objectives were developed collaboratively by a consortium of about
300 national organizations and all State health departments in an
effort led by the Public Health Service. The objectives, which are
laid out in 22 priority areas — for example, physical activity and fit-
26
ness, cancer, mental health, and environmental health — are each
specific, measurable and believed to be attainable.
For instance, an objective of Healthy People 2000 for prevention
of heart disease and stroke is to increase to at least 30 percent the
proportion of people age six and older who engage regularly in light
to moderate physical activity. Another objective to accomplish this
goal is to decrease mean serum cholesterol levels to 200 milligrams
per deciliter. We are well over halfway to the cholesterol objective.
We have gone from a mean value of 213 to 205 in 1991, on our way
to the target of 200. But we need to make better progress with in-
creasing physical activity levels.
The National Center for Health Statistics, NCHS, measures
progress toward these objectives and publishes an annual sum-
mary. I have brought copies of that document for each of you. The
document shows that the Public Health Service is committed to
programs that will achieve the Nation's health objectives and is
committed to measuring progress toward those goals.
APPROACH TO PUBLIC HEALTH PROBLEMS
How do we actually solve public health problems? I thought it
might be useful to go through some examples of how we approach
the public health problems that face our Nation. First, we have a
chart which is a schematic of the four steps, and that is on the sec-
ond easel. These are the four steps that we use in approaching pub-
lic health problems.
First, we define the problem, identify the risk factors, develop
and test prevention strategies, and implement nationwide preven-
tion programs based on those prevention strategies that are effec-
tive.
I would like to give you some specific recent examples which will
show how public health experts do their job. Before I begin, I would
like to emphasize that everything in public health is done in col-
laboration. We work with our partners in State and local health de-
partments, national and community-based organizations, academia,
business and labor.
HANTAVIRUS
The first example I would like to present is that of hantavirus.
Public health has a key responsibility to be prepared to define new
disease threats to the American people and to develop preventive
measures. During the summer of 1993, physicians detected un-
usual, fatal cases of respiratory disease in previously healthy young
adults in the southwestern United States. Local and State health
agencies, the Indian Health Service and CDC jointly launched an
investigation of the outbreak, involving more than 20 investigators
in the field and dozens more working on the surveillance and lab-
oratory investigations in Atlanta.
Within 26 days of the outbreak detection, extensive testing of
clinical specimens using state-of-the-art techniques showed that
the disease was caused by a previously unknown hantavirus.
Ecologic studies showed that the deer mouse, a widely distributed
rodent in North America, is the major natural carrier of
hantavirus.
27
By late July, public health experts had developed guidelines for
preventing the disease. The diagnostic test which was developed for
hantavirus that summer, can now be used to test for the disease
across the United States.
Interestingly enough, as this chart shows, we have discovered
that hantavirus is a national problem, not a problem just of the
southwestern United States. I believe the scenario is an impressive
example of how public health responded rapidly to an unknown
threat. The speed and the state-of-the-art technology used to tackle
hantavirus are needed to address the continuing challenges of new
emerging diseases and antibiotic resistance.
VACCINE FOR HAEMOPHILUS INFLUENZAE VIRUS TYPE B
The second example is the development and evaluation of a new
vaccine for Haemophilus influenzae virus type B. On the next
chart, the purple line is the rate of Haemophilus meningitis in this
country back to 1980. It used to be the most common cause of bac-
terial meningitis in children in the United States.
About 20,000 cases of serious Haemophilus B disease occurred
each year. About 5 percent of children died, 20 percent of the survi-
vors of meningitis had residual neurologic problems, such as severe
mental retardation up to mild hearing loss.
The first-generation vaccine, which came into use in 1985, is
shown by the blue bars at the bottom of the chart. This was devel-
oped by the Public Health Service. However, cases of disease were
reported in vaccinated children. And as you can see, the disease did
not fall very much upon introduction of this first-generation vac-
cine. The Public Health Service, however, was prepared and con-
ducted rigorous studies. These showed that the vaccine was about
50 percent effective, less than hoped for, but still useful.
Shortly thereafter, the second generation of vaccines were li-
censed for routine use in U.S. children. As demonstrated in this
graph, the increased use of the Haemophilus B conjugate vaccine
shown in the red bars has reduced the rate of meningitis precipi-
tously. It has decreased by over 90 percent since 1988. This collabo-
rative effort by government, academia and industry is saving the
lives of 1,000 children each year in the U.S. and reducing serious
disability of many thousands more.
CHILDHOOD LEAD POISONING
What about environmental hazards? The third example I would
like to discuss with you is childhood lead poisoning. This has been
shown to cause mental impairment and decreased IQ in children.
Over the past two decades, the public health community has expe-
rienced tremendous success in reducing the blood lead level in the
general population. The unique samples available from NCHS's na-
tional health examination survey, together with state-of-the-art
laboratory testing at CDC, have provided an accurate assessment
of the extent of blood lead poisoning in this country.
From 1976 through 1991, the average blood lead level for persons
in the U.S. dropped 78 percent. This decline can be directly attrib-
uted to the elimination of lead from paint and from gasoline. From
1976 to 1990, 99.8 percent of lead was removed from gasoline.
However, these assessments also let us know that there is still a
28
problem; 1.7 million U.S. children under six years of age still have
blood lead levels that are a health concern. However, we are now
able to target where that problem is, and the final chart shows that
black children and low-income children who live in urban areas are
still at risk for lead exposure.
I know you won't be able to see the individual numbers, but the
chart shows that 37 percent of non-Hispanic black children living
in large urban areas have blood lead levels shown to be associated
with mental impairment. Consequently, the public health commu-
nity is developing strategies which focus on those populations most
vulnerable to this harmful disease.
I hope these examples have helped illustrate how we in public
health are working to improve the health of the Nation's people. I
will be glad to answer any scientific questions you may have.
[The prepared statement and biography of Dr. Claire Broome
follow:]
29
Summary of Testimony
by Dr. Claire Broome, Deputy Director
Centers for Disease Control and Prevention
Good morning. I am Dr. Claire Broome, D^uty Director of the Centers for Disease Control and
Prevention (CDC). With me today is Mr. Jack Anderson, Acting Deputy Director of CDC's
National Center for Health Statistics (NCHS).
I would like to provide a broad overview of the leading causes of death in the United States. This
chart shows what diseases and conditions are killing Americans in two ways: by percent of deaths
as well as by years of life lost. There is another way to look at the nation's most significant health
problems. Michael McGinnis and Bill Foege, two public health leaders, synthesized the vast
literature on what is known about the underlying, non-genetic causes of death.
One mechanism we use to track our progress in our fight against lethal agents is through the Healthy
People 2000 National Health Promotion and Disease Prevention Objectives. When you look at this
document, you wUl see that the Public Health Service takes very seriously its commitment to
measuring progress that results from its work in public health and to achieving the nationally
developed health objectives.
We solve public health problems by applying a series of four steps we have laid out on this chart:
Define the problem; identify risk factors, develop and test prevention strategies, and implement
nationwide prevention programs. I would like to give you some specific examples that will show
how public health experts do their jobs.
Hantavirus. Public health must be prepared to define new disease threats. An excellent example is
the detection of hantavirus. The diagnostic test for hantavirus that was developed that summer is
being used for detecting cases across the United States. As this chart shows, hantavirus is a national
problem, not a problem of the southwestern U.S. alone. The speed and state-of-the-art technology
we used to tackle hantavirus are needed to address the continuing challenges of emerging new
infections and antibacterial resistance.
Haemophilus influenzae type b. The Haemophilus influenzae type b (Hib) bacteria used to be the
most common cause of bacterial meningitis in children in the United States. As demonstrated in this
graph, increased use of the Hib conjugate vaccines has reduced the rate of meningitis caused by this
bacteria by over 90% since 1988.
Childhood lead poisoning. Over the past two decades, the public health community has witnessed
tremendous success in reducing the blood lead level in the general population. The unique samples
available from NCHS' national health surveys, together with state-of-the-art lab work at CDC, have
provided an accurate assessment of the extent of blood lead poisoning in this country. From 1976
through 1991, the average blood lead level for persons in the United States dropped 78%. This
decline can be directiy correlated with primary prevention efforts to eliminate lead hazards in paint
and remove lead from gasoline: from 1976 to 1990, 99.8% of lead was removed from gasoline.
I hope these examples have helped illustrate how we in public health are working to improve the
health of the nation's people.
30
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36
Claire V. Broome, BiUD.
Deputy Director, Centers for Disease Control and Prevention
Deputy Administrator, Agency for Toxic Substances and Disease Registry
Dr. Claire V. Broome was appointed deputy director of the Centers for Disease
Control and Prevention (CDC) and depu^ administrator of the Agency for Tosic
Substances and Disease Registry (ATSDR) on June 20, 1994.
As deputy director of CDC, Dr. Broome assists in leading the agency of the U.S.
Public Health Service responsible for promoting health and preventing disease, injury
and premature death. CDC's 10 Centers, Institute, and Program OfClces work
closely with local, state, and other federal agencies to protect the public health. As
deputy administrator of ATSDR, Dr. Broome assists in administering the PHS agency
created by the Superfund law to prevent or mitigate adverse hiunan health effects
and diminished quality of life resulting from exposure to hazardous substances in the
environment.
Dr. Broome served as CDC's associate director for Science from 1990-1994, and also
as acting director, National Center for Iiyury Prevention and Control, from
1992-1993. She was chief of the Special Pathogens Branch in the National Center
for Infectious Diseases from 1981-1990.
Dr. Broome began her career at CDC in 1977 as an Epidemic Intelligence Service
Officer.
Dr. Broome is a member of various professional societies and she has won vaany
professional awards including the PHS Meritorious Service Medal and the prestigious
Squibb Award for Excellence of Achievement in Infectious Diseases from the
Infectious Disease Society of America.
She graduated magna cum laude from Harvard University and received her M.D.
from Harvard Medical School. She trained in internal medicine at the University of
California, San Francisco, and in infectious diseases at Massachusetts Greneral
Hospital.
Dr. Broome was bom in Timbridge Wells, England. She resides in Atlanta with her
husband John Head and their two children.
June 23, 1994
37
Mr. Williams. Our third presenter will be Howard Rolston, who
will make a presentation on poverty statistics and trends.
POVERTY RATES
Mr. Rolston. Mr. Chairman, Members of the committee, I am
pleased to be here this morning. I understand you would like us
to update some of the data we presented two years ago. Because
it provides the background and context for many of our programs
and because it relates to other important trends, I will focus on the
child poverty rate, although I will deal with other rates, also.
The first chart that I put up tracks three different poverty rates.
The red line represents the poverty rate for the elderly. The blue
line represents the poverty rate for families with children. And the
green line represents the overall poverty rate, the poverty rate for
all persons.
If you look at the green line, you see a declining trend in poverty
throughout the 1960s, basically a flat trajectory in the 1970s and
then gradually rising poverty in the 1980s and beyond. There is
clearly in that later period a relationship to the business cycle with
it trending up and down. But if you look at the 1970s, compared
to the 1980s, early 1990s, the latter period is clearly higher.
One of the important aspects of this trend is that if you look at
the period from 1959 to 1973, the declining period, and then look
at the period from 1979 to 1993, 20 years later, the rate of growth
in the Gross Domestic Product was twice as great in the earlier pe-
riod. So most analysts attribute part of the changes in poverty
trends to the economy.
POVERTY RATE FOR ELDERLY
Looking at the elderly, one sees a pattern that goes in the direc-
tion that most people would like to see. Poverty declined sharply
in the 1960s and continues to trend down, with blips up and down,
in a reasonably steady rate up until the present. The poor actually
go from being the segment of society which by far was the poorest
segment of society to the segment of society which has the lowest
poverty rate.
Did I say the poor? The elderly, I meant to say.
And, of course, as has been remarked by very many people.
POVERTY RATE FOR CHILDREN
If you look at children, one sees the opposite happening. Families
with children go from having the lowest poverty rates, although
their poverty rates do come down sharply in the 1960s, to having
the highest poverty rates in 1993. And what one sees there is a
pattern that reaches the low point around 1970. I think it is 1969.
It trends upward somewhat in the 1970s and more sharply so
again with the business cycle built in.
If we go to the next chart, I think we begin to get a clearer un-
derstanding of what has contributed to the increase in child pov-
erty. Here, the lines for the overall population, the red line and the
green line, are the same. They are just a slightly different scale.
And what we have done here is take the poverty rate for families
with children and segmented it into two parts. The upper line,
38
which has the very high poverty rates, are female-headed house-
holds with children under 18. The line at the bottom that is sort
of purple, pink line, is the line for all other families, which are pri-
marily two-parent families, although not exclusively so. And what
one sees there, of course, is a dramatic difference in the well-being
from the perspective of official poverty of female-headed households
and other households.
What the blue line, of course, illustrates is that poverty rates
have been consistently higher for female-headed households, that
they came down in the 1960s, but essentially — with some blips up
and down, they have been essentially level from 1966 to the
present, with very little change.
If you look at the line at the bottom of the chart, the reddish,
pinkish, purplish line — whatever that is — one sees that families
with children, on the other hand, have consistently been the seg-
ment of the population that has the lowest rate, again made up pri-
marily of two-parent families. It tracks the general poverty rate
quite closely, but at a lower level.
If one now begins to think about the increase in poverty for chil-
dren that were shown on the previous chart, two things emerge
from looking at this table. On the one hand, we all know that there
are now more children than there were previously represented up
in the blue line in female-headed households. In 1960, 8 percent of
all children were in female-headed households. By 1990, it ap-
proached 22 percent. So we have seen kids shift from that lower
poverty rate group to the higher poverty rate group, and that has
clearly contributed to the increase in child poverty.
The other thing that, because the family differences there are so
stark, you have to look a little more closely at to see, is that al-
though the poverty rate for nonfemale-headed households for chil-
dren is much lower that it is on a generally upward trend — much
more subtly than say the downward trend for the elderly in the
1960s, but it is on an upward trend. If you look at the low point,
which occurred in 1973, and you look at the current point on that
chart, it is actually 70 percent higher in the most recent period
than it was in the period of 1973. I think that is probably more a
reflection of changes that have occurred in the economy and the
ability of parents, even in two-parent families, to raise their chil-
dren above the poverty level.
One way to think about this is that although approximately 14
percent of children over the period of time from 1960 to 1990 shift-
ed from the pink-purple line to the blue line, still most children,
over three-fourths of them, are down there in the pink-purple line.
So they still tend to dominate the statistics.
I think what this clearly shows is that two trends are really im-
portant ones that work in increasing child poverty — I should men-
tion that there are other ones that decrease child poverty; ones like
more maternal employment, for example, or higher education gen-
erally of the work force — the demographic kinds of changes that
have been going on, and the changes in the economy.
The next chart begins to illustrate what some of the latter
changes are. It is kind of a crude one. If I had a little more time,
I probably could have come up with a better fit than that shows.
But the red line is the child poverty rate for children — families
39
with children, and the green line represents the proportion of all
workers who work full-time, but earn less than the poverty level
for a family of four. And as you can see, that percentage over the
same period — this doesn't go quite as far back — but through the
1960s through to about 1973, the low point is 1974 — is on a down-
ward trend. It levels off in the 1970s and begins to increase toward
the end of the 1970s. And I think what this reflects is the ability
of individuals to garner higher wages which have the potential to
bring their families above the poverty line.
I think one way to think about this and the previous chart is in
the notion that parents can bring income to bear and earnings to
bear to raise their children above the poverty level, and what has
happened over time are two things. One is the ability of fathers,
particularly, to earn money to do that in intact families, and of
course, the increasing absence of fathers from the household.
COMPOSITION OF POOR CHILDREN
I now want to turn to the composition of poor children. We so far
have looked at trends and the proportion of the population of chil-
dren who are poor. This chart illustrates who the poor children are.
There are 15.7 million of them, according to official poverty num-
bers. In fact, what the first bar shows is that the majority of them,
about 54 percent, are in female-headed households, although there
are a substantial minority in married couple families.
Again, there is a substantial minority that are nonwhite, but
about 62 percent of poor children are white. Many of them do live
in central cities, about 45 percent, but the majority live in either
suburbs or rural areas. And finally, if we look at the work behavior
of other household members, fully one-fourth of those poor children
live in households where at least one person works full-time. Some-
what over one-third, 36 percent, live in a household — where there
is no adult working at all and actually the largest percentage
among this group has somebody who is working part of the time.
So there is work in about two-thirds of poor families with children.
The next chart looks not at children at a point in time and their
poverty status, but at the notion of what poverty looks like over the
course of a child's childhood. A child, we think, who spends one
year out of their childhood in poverty probably has a quite different
history than a child who spends all 18 years of their childhood in
poverty.
This chart comes from a study that looked at children in their
first 15 years of life. And what we see is about two-thirds of chil-
dren experience no poverty in those 15 years. Of the one-third that
do experience poverty, about two-thirds of them, the largest group,
experience poverty for a relatively brief period of time. So if we pic-
ture poor children as kids who are poor from year 1 to year 18, that
is not really what the typical poor child looks like. The t3rpical poor
child is likely to spend several years in poverty, but not their whole
childhood.
It is really only at the tail of the distribution, approximately one-
eighth of children who experience substantial poverty — more than
five of their first 15 years of life that they spend poor.
40
FAMILY STRUCTURE AND PERSISTENT POVERTY
And finally, I would like to present information on family struc-
ture and persistent poverty. What this chart does is to look at
length of poverty for three different categories of children. The
green bar represents children who spent — and this covers the first
10 years of children's life — who spent all 10 years in a two-parent
family. The blue bar represents children who spent some of those
years in a two-parent family and some of the years in a single-par-
ent family, and the purple bar represents those children who spent
their entire first 10 years in a single-parent family. The patterns
I think are really very clear and startling.
If you were, a child in a two-parent family for all 10 years, you
only had about a one-fifth probability of it being poor at all. And
if you did experience poverty, the one in seven children who are —
it is likely that it was transient poverty, not persistent poverty.
About one in seven children experience one to three years of pov-
erty. Extended poverty is relatively rare in a two-parent family.
If you begin then to look at the blue line which illustrates chil-
dren who were sometimes in a two-parent family and sometimes in
a single-parent family, you see that the most typical form of pov-
erty is brief poverty, transient poverty. Approximately two-fifths of
such children spend one to three years in poverty. One-third escape
it altogether. Only a quarter are in lengthy poverty.
It is clearly very different for children who spent their entire
first 10 years in a single-parent family. Fully three-fifths of them
will be persistently poor for seven to ten years, and four to six
years of poverty will be the case for another one-fifth. So fully four
out of five such children will experience extended poverty, and cer-
tainly that is something which studies suggest is likely to be det-
rimental to their well-being. Clearly this is something we need to
be concerned about.
The latest statistics suggest that 30 percent of children are bom
out of wedlock and are thus more likely to be in that area, and I
think that is one of the things that is relevant to looking at persist-
ent poverty.
So I think, in summary, what the data suggests is that there are
both substantial economic and demographic changes that are af-
fecting the proportion of children in poverty. I will be glad to an-
swer any questions that you may have.
[The prepared statement and biography of Howard Roslton
follow:]
41
POVERTY STATISTICS
Howard Rolston
Director, Office of Policy and Evaluation
Administration for Children and Families
After decreasing through the sixties and early seventies, poverty
rates began to increase after 1973, and rose more sharply in the
eighties. This trend was particularly pronounced for children,
whose poverty rates declined from 27.3% in 1959 to 14.4% in 1973,
and then rose from 16.4% in 1979 to 22.7% in 1993. Underlying this
trend is a combination of economic and demographic factors. As
measured by a number of different economic indicators, economic
growth in the United States slowed in the 1970's, relative to the
fairly rapid growth of the 1950 's and 1960's. For example, real
per capita Gross Domestic Product from 1979 to 1993 increased at
only about half the rate of the period from 1959 to 1973. At the
same time, changes in family structure were also influencing child
poverty rates. In 1959, among families with children, married-
couple families outnumbered female-headed families nearly ten to
one. By 1993, this ratio had fallen to only three to one. This
change has had a significant effect on the overall child poverty
rate because the poverty rate for female-headed families is more
than five times as great as that for married-couple families.
Furthermore, children in single-parent families not only experience
higher rates of poverty, they also do so for longer periods of
time. This is particularly true for children who are never in a
two-parent family.
In 1993, the most recent year for which poverty statistics exist,
there were about 15.7 million poor children in the United States;
about two out of every nine children are poor. This is the
greatest number, and the highest rate, of poor children since 1964.
Who are these children? First of all, about 62 percent of poor
children are white. Also, while most live in female-headed
families, a substantial minority — 37 percent — live in married-
couple families. Fewer than half live in central cities of
metropolitan areas, about one third live in metropolitan suburbs,
and about one fourth live outside metropolitan areas. In more than
60 percent of poor families with children, at least one person is
employed; about 20 percent have a year-round, full-time worker.
42
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48
HOWARD L. ROLSTON
DIRECTOR OF POLICY AND EVALUATION
ADMINISTRATION FOR CHILDREN AND FAMILIES
DEPARTMENT OF HEALTH AND HUNAN SERVICES
Howard Rolston is currently the Director of Policy and
Evaluation in the Administration for Children and Families.
He has been a career civil servant at the U.S. Department of Health
and Human Services for the past 19 years. Since 1978 Howard has
had responsibilities in policy and research areas related to
welfare, child support enforcement, and other children and family
issues.
Prior to joining the Department in 1975, Howard was Assistant
Professor of philosophy at Georgetown University. He was awarded
a doctorate in philosophy at Harvard University in 1971.
49
Mr. Williams. Finally, Mr. Chairman, I would like to move to
the easel and give you a brief overview of the budget for the
Department.
OVERVIEW OF DEPARTMENT BUDGET
In 1995, the Department of Health and Human Services will
spend about $682 billion, an increase of about 7 percent over 1994.
Altogether, the Health and Human Services budget represents
about 45 percent of the total Federal budget, which in 1995 will be
approximately $1.5 trillion.
SOCIAL SECURITY ADMINISTRATION
The biggest part of our budget is accounted for by the Social Se-
curity Administration — including the old-age survivors insurance
program, disability insurance program, SSA represents about — just
about half of the budget. That is this part of the pie here.
Congress enacted legislation last summer, making Social Secu-
rity an independent agency. We are in a period of transition now,
and by the end of March, Social Security will be leaving the De-
partment and ofT on its own. The size of the HHS budget that re-
mains will be significantly smaller. All of this will go to Social Se-
curity and there are also some social security programs up in this
other entitlement piece.
HEALTH CARE FINANCING ADMINISTRATION
The next two major programs in the Department are managed by
the Health Care Financing Administration; the Medicare program
and Medicaid represent about 37 percent of our budget. The other
entitlement slice includes the Supplemental Security Income pro-
gram, which is also managed by the Social Security Administration
and will go with it. The Black Lung program is also part of Social
Security.
Staying with us will be the Aid to Families with Dependent Chil-
dren program, the JOBS program, the Foster Care program; and
the Social Services Block Grant program — some of our other major
entitlement programs.
DISCRETIONARY PROGRAMS
Lastly, but not insignificantly, about 5 percent of our budget is
what is known as discretionary programs. I will be spending a fair
amount of time talking with you about this. The Public Health
Service budget, some of which you heard about a little earlier, is
included in there, along with programs in the Administration for
Children and Families, like Head Start.
Another way to look at our budget is to see how much of our
budget is appropriated on an annual basis, and how much of our
budget is permanently appropriated — not requiring annual action
by the Congress. Most of our Social Security programs — ^the Old-
age and Survivors Insurance, Disability Insurance represented in
blue — have permanent appropriations. They do not require annual
action by the Congress unless the Congress wishes to change the
nature of the program. In the yellow is the Medicare program
50
which also does not require annual appropriations. These two to-
gether account for about $495 billion.
The appropriated entitlements we talked about earlier, which are
shown in red, do require annusd appropriations and come before
this committee every year. Medicaid and AFDC are the major pro-
grams there; they account for about 22 cents of every dollar we
spend.
Finally, the discretionary part of our budget, 5 cents on the dol-
lar, also comes before this committee, with two exceptions: The In-
dian Health Service — which is part of the Public Health Service
that goes before the Interior Subcommittee and the Food and Drug
Administration, also managed by the Public Health Service, which
goes before the Agriculture Subcommittee.
Let's turn to that 5 percent discretionary slice that comes before
this committee. It is about $33 billion in 1995, a 3.5 percent in-
crease over 1994. With over $18 billion the Public Health Service
is the major part of this discretionary spending, starting with the
Health Resources and Services Administration, all the way down to
the Agency for Health Care Policy and Research and the Office of
the Assistant Secretary for Health, which is here. All of this is
managed by the Public Health Service.
The Health Resources and Services Administration is about $3.1
billion and includes the Community and Migrant Health Centers
Program, the Maternal and Child Health Block Grants, and the
Ryan White program.
The next and biggest slice is the National Institutes of Health,
which represents $11.3 billion. The Substance Abuse and Mental
Health Services Administration, where most of our mental health
programs are managed, is here, also with the Agency for Health
Care Policy and Research and the Office of the Assistant Secretary
for Health.
The Health Care Financing Administration discretionary slice in-
cludes the dollars to manage and administer the Medicare and
Medicaid programs. It is about $2.2 billion, or 7 percent of our total
discretionary budget.
The administrative money to manage the Social Security pro-
grams is about $3.1 billion, roughly 10 percent of our budget. The
Administration for Children and Families is $7.6 billion, including
Head Start, the largest program there, the Child Care Develop-
ment Block Grant, the Low Income Home Energy Assistance Pro-
gram, Community Services programs, the Refugee Resettlement
progfram.
The Administration on Aging, at just under a billion, provides
services to the elderly including home-delivered meals.
Finally, this thin red slice at the top represents Departmental
Management, the Office of the Inspector Greneral and the Office for
Civil Rights, which sire the primary agencies administering the
Department.
If you look at our budget, our discretionary budget, in the context
of the total discretionary spending in the government, defense/mili-
tary is clearly the largest slice of discretionary spending in the gov-
ernment. We are about third in size, somewhat smaller than the
Department of Transportation and bigger than Housing and Urban
51
Development. Our $35 billion in outlays represents about 6 percent
of the total discretionary spending in the government.
TRENDS IN DISCRETIONARY BUDGET
We would like to give you a sense of the trends of our discre-
tionary budget over the last 10 years. This chart plots year-to-year
rates of growth in discretionary spending. The green line rep-
resents total discretionary spending in the government; the blue
line at the top tracks the HHS discretionary spending over this pe-
riod of time.
We have, in general, grown somewhat faster than the overall dis-
cretionary budget. This high peak towards the end of the period
represents the beginning of the Budget Enforcement Act, which has
constrained total discretionary spending since it was enacted. Total
discretionary spending in the last three or four years has actually
been negative. Our budget has also become more constrained as a
result of the Budget Enforcement Act, but growth has remained
positive.
In 1995, growing limitations on discretionary dollars that
brought -us closer to the average, as well. If you look at the overall
statistics, the total discretionary spending over this period of time
grew at an average annual rate of 1.2 percent, with a fair amount
of variations in there. Defense spending, which is included in here,
grew at a negative rate, at minus 1.2 percent on an average annual
basis. Domestic discretionary spending grew about 5.6 percent per
year; and HHS grew just underneath that rate at 5.4 percent per
year.
If you look at the last five years, in terms of discretionary spend-
ing, the Department has grown by about $12 billion. This chart
tries to illustrate where most of that $12 billion has gone.
The biggest increase, starting from the bottom of this chart, has
gone to Head Start and other children's programs, which have had
significant increases in spending since 1990. The next biggest slice
is the National Institutes of Health, which has maintained steady
growth throughout the last five or six years. NIH has grown from
about an $8 billion program to about $11 billion over this period
of time.
The Social Security Administration, after being relatively stag-
nant for most of the 1980s, has grown quite a bit in the last five
years, largely in response to the rising number of disability claims
and the need to try to keep up with that work load. Other areas
of growth include CDC prevention programs, including tuberculosis
control, AIDS and immunization, health services, including the Ma-
ternal and Child Health Block Grant, which grew by about $250
million over this period.
The Ryan White program increased by $548 million and
SAMHSA programs grew by over $500 million during this period.
This chart illustrates our personnel levels and displays what will
happen on March 31. This represents not all department personnel
but the personnel for programs that come before this committee, so
we have left out personnel that manage the Indian Health Service
and the Food and Drug Administration.
We have been relatively static although there was a dip in the
late 1980s and early 1990s than a slight rise. On March 31,
52
though, a significant part of the Department will become independ-
ent, leaving us significantly smaller. And as we go out to 1999, we
are scheduled also to drop about 7 percent more, leaving us by
1999, just a little over 35,000 people.
SPENDING MECHANISMS
Finally, we waited to talk to you a little bit about how we spend
our money. Where does our money go? And what are the mecha-
nisms we use to get the money out the door?
If you look at our mandatory programs, about $500 billion goes
largely as direct payments to individuals. Through the Social Secu-
rity program, and the Medicare program, we are really providing
funding to individuals for health care services, or directly in the
case of Social Security checks.
In many of our other entitlement programs, we are actually pro-
viding grants to States which provide that assistance to individ-
uals. We are not providing that assistance directly, but help fi-
nance State programs, as well.
For our discretionary dollars, the $34 billion that we spent in
1994, about $9 billion of that went out in grants to States. Some
of the major programs include: the Low Income Home Energy As-
sistEince Program, the Child Care Block Grant, Aging grants, the
Maternal and Child Health Block Grant, Refugee programs — ^these
are examples of money we actually send out to States.
We also pay money to community organizations — the Head Start
program, for example, is probably the biggest example there. In ad-
dition, we provide assistance both in the form of grants and con-
tracts to universities and other research institutions, primarily
through the National Institutes of Health, but also through HRSA.
Finally, we provide money to contractors who help manage our
programs instead of Federal employees. The Medicare program, for
example, is largely administered by insurance companies. We pro-
vide a little over $2 billion to insurance companies to help manage
the Medicare program. We also rely on State agencies to help us
process claims for the Disability Insurance program. We also rely
on States to survey health care providers to see whether they meet
standards of participation for both Medicare and Medicaid.
We also spend money directly ourselves like the $4 billion we
spend to manage the Social Security Administration. For intra-
mural research at the National Institutes of Health, as well as at
CDC, we spend about $2 billion. And then for the remaining part
of the Department and its employees, we spend about $3 billion.
That completes our presentation, Mr. Chairman. We would be
glad to answer any questions you might have.
[The prepared statement and biography of Dennis Williams
follow:]
53
INTRODUCTORY STATEMENT OF DENNIS P. WILLIAMS
BEFORE THE LABOR, HHS APPROPRIATIONS SUBCOMMITTEB
JANUARY 12, 1995
Thank you for inviting me to talk with you this morning
about the structure, history and trends of the HHS budget.
I'd 1 ike to attempt a broad overview of what our budget
looks like today, what it looked like yesterday, and a glimpse of
what we will look like tomorrow — all of which will hopefully help
with your work as you oversee implementation of the 1995
appropriation and begin preparing for arrival of the 1996 budget.
I want to start by presenting our larger $682 billion budget
picture, which includes mandatory programs, to give you a sense
of the scope of programs encompassed within our entire budget,
and its place within the overall federal budget.
I will then focus on the more narrow, but equally important
$33 billion discretionary portion of our budget, which consumes
the bulk of this Subcommittee ' s time and then close by trying to
give a sense of our past and future staffing levels.
54
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62
DB1IVI8 P. WILLIAMS
DEPUTY ASSISTAMT SECRETARY
FOR B0D6BT
DBPARTMEHT OF HEALTH AMD HDNAM SERVICES
Dennis Wlllieuns has served as Deputy Assistant Secretary for Budget
since 1984.
Dennis provides advice and assistance to the Assistant Secretary for
Management and Budget, and the Secretary, on program policy and
management issues dealing with the Department's budget. He is
responsible for the formulation of the budget for HHS and its
presentation to the Office of Management and Budget and to Congress.
From 1982 until 1984 he served as the Director, Division of Welfare
Budget Analysis in HHS. Before that, starting in 1980 until 1982 he
served as Chief, Health Care Financing Branch, Division of Health
Budget Analysis.
From 1977 iintil 1980 Dennis was a Program Analyst in the Division of
Health Budget Analysis.
Prior to his appointment at HHS, Dennis served from 1968 until 1971
as a Program Specialist with the Office of Economic Opportunity and
from 1965 to 1967 with the Peace Corps in Turkey. He was awarded a
doctorate in International Relations at the Johns Hopkins School of
Advanced International Studies in 1976.
63
Mr. Porter. Dennis, thank you very much.
You all have done an excellent job, I might say. You are always
great with charts, Dennis. It is really very helpful to us, particu-
larly our newer Members, to see the breakout of what the Depart-
ment does.
You are going to be mighty lonely over there with 65,000 people
being out from under your control; and Social Security will go from
being part of HHS to one of our independent agencies, larger than
all the other departments of government in terms of the funding
it handles.
HEAD START
I would like to focus for a minute with Ms. Brown on Head Start.
It is a program that has increased — it has more than doubled over
the last five years from about $1.5 billion in 1990 to about $3.5 bil-
lion in fiscal year 1995. I wonder if you have been tracking this
growth and what problems you have seen in the program during
the last five years or so.
Ms. Brown. If I may ask my Deputy, Mike Mangano, who does
those studies, or did in his former position, I think he would be in
a better position to tell you.
Mr. Porter Fine.
Mr. Mangano. We have undertaken a number of studies in the
Head Start program over the last couple of years, and some of
them requested by the Secretary himself under Dr. Sullivan and
followed through by Secretary Shalala. We did find a number of
growing pains with the programs.
We found that with such a dramatic growth, as might be the
kind of growth you would expect in a private sector company that
had such an expansive growth over these years, that they were
having some troubles. They were having problems with transpor-
tation of kids. They were having trouble finding new facilities.
With such an expansive growth, a number of new kids had to be
accommodated into the program. With that came problems in find-
ing new space.
There were problems with the social services networks in the
local communities with such growth in the number of kids in the
programs. Social services — Head Start works very hard to get kids
in the necessary social services — had to be expanded in local
communities.
A number of these problems all came to light with a couple of
our reports, about two years ago, pointing to some of these
problems.
We also had problems in the health care field with children — par-
ticularly in the area of immunizations. There were disagreements
as to what level of immunization rate there should be for Head
Start children in comparison to the rest of the community.
The Secretary, at that point, took all of those problems together,
along with the Administration for Children and Families, and cre-
ated a commission to study those management problems that we
had found. We came up with — and that commission also came up
with — a number of recommendations that the Administration for
Children and Families and the Head Start program heve been
addressing.
64
So, we think the short answer to your question is that we found
a number of management problems with the rapid growth of the
Head Start program. But we do beheve that the approach that the
Head Start program has taken to address those issues has been a
satisfactory one.
Mr. Porter. Could you give us an idea of the magnitude of the
problems you found?
Mr. Mangano. Well, in the area of health care statistics for chil-
dren, in the Head Start program, they had been using the stand-
ards that have been developed by the American Pediatric Associa-
tion. When we then looked at the local community programs of
Head Start, they had been adopting, in many cases, local or State
standards or standards that were of a lesser level. We were finding
that the accurate rate of immunization, for example, was much
lower than what it should have been for that particular program.
One could question whether the lower level, though, was an appro-
priate level for those children. In those States, they felt it was; we
didn't feel it was in comparison to national statistics.
Mr. Porter. What about problems other than management?
Were there problems of fraud or waste or other — well, waste is
probably management. But what about fraud? Were there any dif-
ficulties there?
Mr. Mangano. We have not identified a significant amount of
fraud in the Head Start program. That is not to say that it doesn't
exist. But we haven't come across very much of it.
We would also like to add though that we have been devoting
most of our resources to the areas that have the largest dollar val-
ues in our program, and that would be in the Medicare, Medicaid,
and Social Security areas. Head Start is still a small portion of our
budget, so we haven't been out there looking for a great deal of it,
and we haven't found very much.
EFFECT OF CHILD SUPPORT ENFORCEMENT ON CHILD POVERTY RATES
Mr. Porter. A question for Mr. Rolston.
Looking at the child poverty statistics that you presented, has
there been any study as to the effect of vigorous child support en-
forcement on those rates? In other words, in the last five or six
years, we have really made a much greater effort to help the Fed-
eral Government to help States enforce child support orders and to
find individuals who were not supporting their families; and I won-
der how much of a difference that has made in the statistics, if you
have tracked that.
Mr. Rolston. I am not personally aware of it, but I will look into
that and find out. As you said, from a theoretical point of view, it
should; and we certainly are collecting more money all the time,
and it should be making that kind of difference. Whether that has
actually been studied directly, I don't know. I will find out.
Mr. Porter. I would like to see what effect that has had.
[The information follows:]
Child Support Enforcement and Child Poverty
I checked with a number of knowledgeable individuals both inside and outside the
Department and was unable to identify any study that addresses the question of
what effect child support enforcement has had on child poverty. The Bureau of the
Census collects data biennially on child support collections, and tabulates amounts
65
of child support collected by poverty status of the mother. These tabulations include
any child support collected in the calculation of poverty status. To date, nobody ap-
parently has tabulated the data in such a way tnat it shows the poverty rate with-
out counting the child support, so that the impact of child support on poverty could
be estimated.
Mr. Porter. Ms. Pelosi.
Ms. Pelosi. Mr. Chairman, thank you. You know what? I think
I will pass on the first round.
Mr. Porter. Thank you.
Ms. Pelosi. And hear the other line of questions. Thank you.
Mr. Porter. Mr. Istook.
CHANGE IN DEFINITION OF POVERTY LEVEL
Mr. Istook. Thank you, Mr. Chairman. Let me follow up.
The Chairman mentioned some things on poverty levels. I guess
this will probably go to you, Mr. Rolston. You have a chart, of
course, graphing percentages of children or families considered to
be in the poverty level.
Do you have any similar chart that has been prepared that
shows the changes in the definition over the years of what con-
stitutes "poverty level'?
Mr. Rolston. Well, I think one of the virtues of the poverty level
is that the definition of it has been relatively stable over time.
Almost everybody, in one way or other, finds fault with the pov-
erty level. It is either too high or too low; and there are certainly
a lot of arguments that you can make, ways in which it is higher
or lower, but the definition is relatively steady.
There are a number of other experimental — t5rpically what Cen-
sus has done, when issues come up, is start a new experimental se-
ries, and we certainly could provide some of those to you. But in
the interest of having something that is stable over time, the defi-
nition has been relatively stable.
[The information follows:]
Changes in the Definition of Poverty
The poverty statistics 1 used in my presentation are based on a definition devel-
oped by the Social Security Administration (SSA) in 1964 and revised in 1969 and
1981 by interagency committees. The original poverty index provided a range of in-
come cutoffs adjusted by such factors as family size, sex of the family head, number
of children under 18 years old, and farm-nonfarm residence.
As a result of deliberations of a Federal Interagency Committee in 1969, the fol-
lowing two modifications to the original SSA definition of poverty were rec-
ommended: (1) that the SSA thresholds for nonfarm families be retained for the
base year 1963, but that annual adjustments in the levels be based on changes in
the Consumer Price Index (CPI) rather than on changes in the cost of food included
in the economy food plan; and (2) that the farm thresholds be raised relative to the
nonfarm levels. The combined impact of these two modifications resulted in an in-
crease of 360,000 poor families in 1967
In 1980, another interagency committee recommended three additional modifica-
tions, which were implemented beginning with the 1981 poverty statistics: (1) elimi-
nation of separate thresholds for farm families, (2) averaging of thresholds for fe-
male-householder and "all other" families, and (3) extension of the poverty matrix
to families with nine or more members.
Mr. Istook. Well, of course, "relative" is all in the eye of the be-
holder, but that is why I ask if you do have something that shows
changes. And sometimes, of course, one definition incorporates
other definitions, and maybe this definition may not change, but
some of those that are incorporated might. But I would be very in-
66
terested in receiving something that charts definitional changes in
what constitutes poverty levels, because I think that is important,
to understand the graphs over a period of years.
Also, in relation to that, are there — do you track also — and use
whatever definition you will. Of course, a frequent criticism of pov-
erty level definitions is that it fails to incorporate the benefits that
are received from different government programs and services.
Do you have similar statistics that when you incorporate public
benefits — whether it be Medicaid, whether it be SSI, whether it be
food stamps, housing subsidies, you name it? Do you have a similar
chart that showshe relative number of people that are living — who
are actually living at certain levels of — I mean, I would consider
that — of course, myself a necessary part of the definition. But do
you track that?
Can you provide us similar information that breaks down the
people who, if you did not consider government benefits, would still
be in poverty, as opposed to those when you do count those
benefits?
[The information follows:]
Poverty Rates Using Various Definitions of Income
Table N from the 1993 poverty statistics released by the Bureau of the Census
last October is attached. It shows poverty rates for the population as a whole, as
well as various subgroups, using a variety of definitions of income. Looking at the
overall population, for example, the official poverty rate (Definition 1) is 15.1 per-
cent. Taking out government transfers (Definition 2) raises the poverty rate to 23.4
percent. Using Definition 8, which adds capital gains and employer-paid health in-
surance and takes out FICA and Federal and state income taxes gives a poverty
rate of 23.2 percent. Adding in non-means-tested government cash benefits (Defini-
tion 9) lowers it to 16.1 percent. Non-means-tested non-cash benefits (Definition 11)
lower it further to 15.6 percent, and means-tested cash and non-cash benefits (Defi-
nition 14) bring the poverty rate down to 12.1 percent.
67
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75
Mr. ROLSTON. One thing I would — a couple things I would clarify.
One is in terms of my tracking. I am a user of these data, as oth-
ers are; it is Census who actually generates them. But they do gen-
erate that kind of information. Actually what Census and the offi-
cial poverty level does count is cash income. So SSI, for example,
would be counted in the calculation of official poverty. Things like
food stamps would not be, because they are in-kind benefits. But
for a long period of time
Mr. ISTOOK. AFDC is not counted?
Mr. RoLSTON. It is counted.
Mr. ISTOOK. It is counted?
Mr. RoLSTON. It is counted in the poverty level. But food stamps
or housing subsidy which do not come as cash are not. For many
years, over a decade. Census has published what the poverty rate
would be like doing, if you included those elements in it. Aiid, of
course, including those would lower the poverty rate. There are
things on the other side which are also not counted.
Census looks at gross income. It doesn't net out taxes, for exam-
ple. And they produce a series. It shows what would happen if you
included taxes, which, of course, moves it in the other direction.
So their publication presents a number of these differently cal-
culated rates, and we will be glad to provide them to you.
Mr. ISTOOK. But I gather from the fact that it was not included
in the presentation that for purposes within HHS, maybe nobody
pays attention to the actual living level of people, as opposed to
just incorporating that definition that does not include these
noncash benefits.
Mr. ROLSTON. Well
Mr. ISTOOK. I am troubled by that fact that there has been noth-
ing of that in the presentation.
Mr. ROLSTON. The reason that I only include the official poverty
level is, I was trying to show trends over time and relationships of
different categories of individuals. And the relationships are pretty
much the same, whether you include these things or not.
The levels may be different and for different purposes — that, of
course, can be a very important fact — ^but I was simply trying to
show what some of the relationships were; and I don't think using
definitions — different definitions will change those relationships
very much, although they would change the levels.
Mr. ISTOOK. Sure. And certainly showing noncash benefits would
certainly change the relationship between someone that you might
consider as living in poverty when compared to the standard of liv-
ing of other Americans. I think that would be a very important
relationship.
Is there — I notice, of course — the dramatic linkage, of course,
with poverty statistics and the presence or absence of both parents
in a family situation. There was a very significant distinction in
the chart on that. Is there anything that anyone here is aware of
within HHS and its programs that makes a distinction between
States that have laws that make divorce simpler, as opposed to
those that may seek to make it more difficult, whether it be with
counseling requirements, waiting periods or other legal restric-
tions? Are there any programs that distinguish between the State
76
policy on trying to hold marriages together? I am not aware of any
myself, and I gather it has not
Mr. Williams. I don't think we can think of any of those.
Mr. ISTOOK. And the — well, I think I have taken my five minutes
there, so I will pass for now.
Mr. Porter. Mr. Miller.
Mr. Miller. Thank you all for coming. For those of us who are
new, we have a large learning curve on this topic. I have a series
of questions, but I will ask what I can in the time I have.
fraud and abuse
We are going through the balanced budget debate now, and a lot
of American people think there are three ways to balance the budg-
et— the most prevalent suggestion is to get rid of the waste and
fraud in the Federal Grovemment. Waste and fraud is an issue I
have to approach since I have a larger number of seniors than any
other congressional district, in Sarasota, Florida. I have people con-
stantly say, just get rid of this.
People are very upset. What are the independent estimates of
fraud and waste in programs such as Medicare? The big dollars are
usually bigger organizations. A single doctor can't really cause that
much fraud, as opposed to a medical equipment company; that is
large dollars.
Ms. Brown. Of course, we have no reliable estimates because we
don't know what all the fraud is, but GAO has made an estimate
of 10 percent. And I have no reason to doubt that figure, although
I don't think they could
Mr. Miller. You hear numbers of 40 percent. I know people are
grabbing numbers out of the air; then they repeat them, and it be-
comes fact.
Ms. Brown. I don't think it is anywhere close to that. Although
we have found institutions, individual institutions that we have
prosecuted where it has been that high or higher, where a major
part of their billing was fraudulent. So I suppose people who might
come in contact with one of these places might be very
Mr. Miller. You feel 10 percent is accurate? Do other people ac-
cept the 10 percent number?
Ms. Brown. You know, people usually categorize fraud, waste
and abuse in one category.
Mr. Miller. Right.
Ms. Brown. And there are, of course, significant differences in
the three. A lot of the things that would be considered wasteful, I
think have been tightened up considerably by putting, for instance,
set dollar amounts on a given type of care when somebody enters
the hospital. The hospitals have found ways to
Mr. Miller. Have DRGs reduced fraud?. Is that an illustration
of an impact on the fraud — going to a DRG-type reimbursement
system rather than the fee-for-service?
Ms. Brown. Well, the fee for service, of course you have one set
of conditions. If you have managed care facilities, then it is the flip
of that. You are not concerned about people generating services
that aren't needed and getting paid for them. You are more con-
cerned about them denying services that the people might be enti-
tled to.
77
Mr. Miller. But historically going away from the fee-for-service
medicine has that made any major changes in the waste and fraud
that has been measured?
Ms. Brown. No.
Mr. Miller. You would think it would.
Mr. Mangano. We believe it does. Because by establishing the
prospective payment system the way the hospitals are paid, there
is a set fee for a particular ailment that someone gets. So there is
no reason for the hospital to add on additional charges for other
kinds of services because they are only going to get one set fee. And
as long as their patient load has an average cost level at that level,
it is helpful.
It also drives hospitals to become more efficient because to make
a profit or to even make ends meet, they have got to be able to
service their beneficiaries, the people who come into the hospitals,
at that particular set level.
The Congress has also expanded beyond hospitals into things
like fee schedules for laboratory services, fee schedules for other
kinds of things. And I think that is good, but it is sort of like a
big bubble. If you push in at one end, sometimes the other side
comes out.
When we went to the prospective payment system for hospitals,
that pretty much took care of the in-hospital care side of it, and
we think that is pretty safe. But then outpatient services all of a
sudden started to grow dramatically. The outpatient services are
not paid on a prospective basis, but they are paid on a fee-for-serv-
ice basis.
USE OF "red book"
Mr. Miller. These red and orange books you talked about, what
happens to those books? Does Congress look at them? I know you
are going to give us a copy, but does anyone ever have hearings on
these things?
Ms. Brown. Yes. Traditionally they have looked at them.
Mr. Miller. Like whom? The Energy and Commerce Committee,
the Health Committee? Is that who addresses it, or this committee?
Mr. Mangano. Basically two things happen with our Red Book.
The Red Book is the Cost-Saver Handbook, which is an anthology
of all the different cost-saving recommendations that we have made
that have not been implemented at the current time. Those go to
the administration. So they go to the Department.
When Mr. McCann was the Assistant Secretary of Management
and Budget, every year when he had to put together cost-saving
proposals, he would go down that book and take a look at which
ones made sense.
The books also come over to the Congress, and we invite you to
take a look at those proposals and see which ones seem to make
sense from your perspective and implement those that do.
Mr. Miller. Does Congress ever look at them?
Mr. Mangano. We believe they do, yes. In some of the Omnibus
Budget Reconciliation Acts, most of the cost-saving items were in-
cluded from our Red Book proposals.
Mr. Miller. A couple more quick questions.
78
When SSA moves over, is that still going to be under this
Committee?
Mr. Porter. Yes.
Mr. Mangano. Yes.
CONSUMER PRICE INDEX
Mr. Miller. I saw on the news last night, and I haven't read to-
day's papers yet, that the CPI increased — 2.7 percent, I think it
was — but health care increased 4.9 percent. Is that a correct num-
ber? I know it is going down to single digits, but that is a big drop,
isn't it?
Maybe you all were expecting it; however, I was expecting a little
higher than that.
But is that right? Are you aware of that number? It will affect
the whole budget, especially Medicaid and Medicare.
Mr. Williams. It has a potentially dramatic effect on spending.
Health care spending over the last number of years has always run
significantly higher, than inflation. But as inflation itself has come
down, health care costs have come down £ind that has slowed the
rate of growth in Medicare — and Medicaid. Although, for other rea-
sons, Medicaid has grown. But at least on the cost side, this has
had a dramatic effect on spending.
MANAGED CARE
Mr. Miller. There is an article in The New York Times yester-
day about managed care under Medicare and about how it really
isn't saving us much money. Did you see that article — a front-page
article?
Mr. Williams. I am aware of the article. I haven't read it.
Mr. Miller. You reimburse Medicare people 5 percent less than
the average, under Medicare?
Mr. Williams. That is right.
Mr. Miller. And yet the people that are going into the program
are the healthier, younger Medicare people. So we are actually re-
imbursing them and the older, sicker ones are staying under the
fee-for-service. In effect we are not really gaining anything finan-
cially, at least right now? But I guess, of course, that is part of the
learning process working on managed care.
I have a question. I want to go back on this issue of doubling re-
scission on Medicare. I am confused, but I will pass.
AIDS SPENDING
Mr. Dickey. Mr. Williams, how much does your department
spend on AIDS?
Mr. Williams. We spend, in the Centers for Disease Control, we
spend about, just under $600 million a year for various AIDS and
HIV-related activities; and in the National Institutes of Health, we
spend — I don't have a precise figure with me, but we spend over
a billion a year for research at the National Institutes of Health
related to AIDS.
I can provide you some more precise figures for the record.
[The information follows:]
79
Estimated FY 1995 AIDS Spending
In fiscal year 1995, the Department estimates it will spend approximately $6 bil-
lion for AIDS in its mandatory and discretionary programs. The Public Health Serv-
ice portion of this spending will amount to about $2.7 billion.
Mr. Dickey. What is the justification for the increasing expendi-
tures as compared to heart disease and cancer and things like
that?
Mr. Williams. I think in the last few years, the rate of growth
for expenditures in this area has leveled off and has not grown as
rapidly. It grew much more rapidly in the early years of the disease
as we became aware of its significance and the cost associated with
its treatment.
The Department and other agencies of government have spent a
lot of time trying to understand the disease and trjdng to find ways
to prevent it and to prevent the costs that society is incurring with
it. I think it is the dramatic growth in this disease and the fact
that we have no way to prevent it at the moment that has led to
the decision to draw these kind of resources to this purpose.
NUMBER OF AIDS CASES
Mr. Dickey. Do we know how many people have AIDS right now
in the United States?
Mr. Williams. Yes, we do.
Ms. Broome. CDC has undertaken a number of approaches to
try to get accurate information on this. The cumulative number of
AIDS cases since the beginning of the epidemic is now about
400,000. We estimate that about a million persons currently alive
are infected with the virus and the vast majority of those will even-
tually develop AIDS.
Mr. Dickey. That is all.
Mr. Porter. Mr. Wicker.
spending on aids vs. cancer vs. heart disease
Mr. Wicker. Thank you, Mr. Chairman. Let me just continue
with that line.
How much are we spending on AIDS and HIV as compared to
heart and cancer? While they are conferring is this being charged
to my time?
Mr. Williams. Why don't we try to provide you
Mr. Porter. Afraid so.
Mr. Williams. We can provide you a more precise estimate for
the record.
As I said before, we are spending approximately $2 billion a year
in the Public Health Service on AIDS-related programs something
of that magnitude. Cancer actually is also one of our largest; the
National Institutes of Health is spending over two billion dollars a
year on cancer. And for heart disease, somewhat less. But we can
provide a more specific answer for the record.
[The information follows:]
Estimated Spending on AIDS vs. Cancer vs. Heart Disease
In fiscal year 1993, the latest year for which we have these comparisons, the Pub-
lic Health Service estimates that it spent $2,076 billion on AIDS research, preven-
80
tion, education and treatment. This compares with an estimated $2,140 billion for
cancer and $759 miUion for heart disease, excluding stroke-related expenditures.
Mr. Wicker. So, proportionately of course, we are spending a lot
more on HIV in proportion to the number of Americans who are in-
fected with this disease; is that correct?
Ms. Broome. I think I would like to return to the chart that I
showed you initially. We obviously feel that heart disease and can-
cer are major health problems for the American people. But when
you look particularly at the number of years of potential life lost
before age 65, HIV/AIDS has now become the number five cause
of years of potential life loss. It does affect predominantly children
and adults in the 15-44 year-old age range. And it also clearly is
an area where we need to know a lot more about what works.
The investment that NIH is making in basic research is crucial
in terms of developing an effective vaccine and improving our pre-
vention methods. We at CDC need to know how to get the preven-
tion methods we know about adopted more widely. With something
like AIDS, which is almost invariably fatal in young persons, and
relatively poorly understood, we feel that it does warrant substan-
tial investment.
Mr. Williams. Let me see if I can be more precise since I have
a table.
For the National Cancer Institute, NIH in 1995 will spend about
$1.9 billion. For the National Heart, Lung, and Blood Institute,
which would be one of the Institutes primarily responsible for
doing research on heart disease, we are going to be spending just
under $1.3 billion in 1995.
And in NIH, for AIDS, across all the Institutes, we will be spend-
ing roughly $3 billion for AIDS in addition to approximately $600
million in CDC for various AIDS-related activities. These numbers
are for dollars targeted specifically at those diseases, but all of the
Institutes engage in basic research which will affect these diseases
in one way or another. But I think those probably understate how
much research we are really doing with respect to cancer because
the National Genome Institute and research in other Institutes
could very well affect our understanding of the nature of cancer
and its progression.
Mr. Porter. I would say to the gentleman from Mississippi and
the gentleman from Arkansas, these are very good questions to
bring up with NIH personnel when we visit on Tuesday. They will
have some additional information to share with you.
Mr. Wicker. Do I have a minute or two more?
Mr. Porter. Yes. Sure.
Mr. Wicker. All right.
treatment costs of aids vs. cancer vs. heart disease
Now, you mentioned, though, Mr. Williams, the cost to society.
Are you saying that in terms of dollar amounts, AIDS is a much
more costly disease at this point to treat? Are you saying that you
could quantify it in terms of dollars as compared to heart and can-
cer?
Mr. Williams. I am not sure I can at this moment. I think we
have some understanding of what it costs to treat an AIDS patient
and what it costs to treat an average cancer patient. AIDS is a dis-
81
ease which has a very long progression. Without any way to cure
it, hospitalization and other medical costs can be quite high simply
because towards the end of the disease, there is a lot of interaction
between the patient and the health care system.
Mr. Wicker. Well, are you saying that it is a lot more costly than
heart disease?
Mr. Williams. I am not sure I am qualified to make that state-
ment. I can again provide you for the record a comparison of the
cost.
Mr. Wicker. Can you do that?
Mr. Williams. It is costly. Whether it is a lot more costly and
what the proportion is for treating heart disease, on average, I
don't know. But I think we could provide you that information.
[The information follows:]
Estimated Treatment Costs of AIDS vs. Cancer vs. Heart Disease
The Department has not conducted the longitudinal studies that would allow for
a true comparison of treatment costs across these diseases. However, separate re-
search studies showed the following:
Cancer: $25,000-$84,000 depending on stage diagnosed (early vs. late).
Source: Swartz, R.M., and Rollins, P. Business and Health, 1985, 85, 24-26.
Medstate, Ann Arbor, Michigan.
HlV/AIDS: $119,000 lifetime medical cost after diagnosis.
Source: Journal of the American Medical Association, July 28, 1993.
Heart: $51,211 for five years of care after initial heart attack (or death, whichever
comes first).
Source: American Journal of Cardiology, 1990.
TRENDS IN HIV/AIDS CASES
Mr. Wicker. One other quick question about HIV. If the present
trend continues, where will we be five years from now? HIV is now
eighth on your list. If the present trends continue, where will it be?
Ms. Broome. We have some tentative good news in that the rate
of increase of new cases seems to be slowing down so that whereas
previously we had an increase of 5 percent per year, we are down
to about 3 percent per year. We continue to try to refine our projec-
tions and make as accurate estimates as we can. We do think that
we have had some successes in preventing further spread of the
virus in certain subpopulations.
There are other areas, particularly among some high-risk popu-
lations of intravenous drug users and their sex partners, and the
children of those sex partners, where we are still seeing increases.
We need to target high-risk populations to try to do an improved
job of preventing transmission.
Mr. Wicker. Are you able, though, to answer the specific ques-
tion about the current trend of 3 percent continuing?
Ms. Broome. Three percent continues. Again, you have to dif-
ferentiate between the reservoir of infected people who have not de-
veloped the disease, and those are the hardest for us to get a han-
dle on.
Actually, we had a workshop last year which was charged with
revising our estimates of the number of infected persons. At this
point, I don't have the precise number, but we will get it for you.
But as I have said, the rate of increase does seem to be slowing
down.
[The information follows:]
82
Number of Persons Infected With HIV
CDC's most recent estimate of the number of U.S. residents infected with HIV (in-
cluding those who have already developed AIDS) was 1,000,000 persons, with a
plausible range of 800,000 to 1,200,000. That estimate was made in 1990. CDC is
cvurently revising the estimate and we expect to have the new number in the
spring.
Mr. Wicker. Thank you.
Thank you, Mr. Chairman.
Mr. Porter. Ms. Pelosi.
Ms. Pelosi. Thank you.
Mr. Porter. Who has been very patient. We will give you some
extra time.
Ms. Pelosi. Thank you, Mr. Chairman. I appreciate that.
Mr. Dickey I wish you wouldn't leave, because I want to follow
up on some of your questions regarding AIDS. I appreciate the in-
terest that my colleagues have shown in this issue and their very
good questions. I would like to comment and ask questions, as well.
I think it is important for us to stipulate that AIDS is a public
health crisis; would you not say?
Ms. Broome. Right.
Ms. Pelosi. Because of the nature of the manner in which HIV
is transmitted, that is that HIV is an infectious disease.
Would you also agree with Dr. Varmus who says that when you
are allocating research dollars, two factors to consider are urgency
and scientific opportunity? I think we have to keep these two issues
in mind when we see how dollars are spent on research.
Would you agree that urgency and scientific opportunity are
there in the case of HIV?
Ms. Broome. Absolutely. There are opportunities, but also if we
don't prevent transmission, we are going to have a much larger
problem.
hiv/aids prevention
Ms. Pelosi. I would like to pick up on that word, because I think
"prevention" is very important; and I hope my colleagues will look
landly on legislation that I have introduced in the last Congress,
and initiatives that we brought to this committee in a bipartisan
fashion last year for increased funding for prevention. Because
when I say "prevention," we certainly would like to have a vaccine
that will prevent people from getting HIV, and we certainly want
to cure, to save those who are already infected.
But prevention in terms of behavioral change and getting the
message out about change of behavior, et cetera, that is appro-
priate for different regions of the country and different at-risk pop-
ulations is, in my view, one of the best dollars that we can spend.
Because, Mr. Wicker, when you say "cost to society," we cannot
only just refer to cost in terms of what it costs to treat people, and
income support and the rest that goes with it, but also cost to soci-
ety. And I think that is what was referenced in your remarks when
you said "cost to society" by sa3dng that many of these people will
die — teenagers, 20s, 30s, even in their 40s. And that is a cost to
society because we are deprived of those other years of productive
contributions to our society in addition to the financial cost.
83
Was that cost to society referenced? Wasn't that the cost that you
were also addressing in your remarks?
Ms. Broome. It certainly is included, and that is why having the
measures of years of life lost before age 65, in some ways, is a very
useful picture of the impact of these diseases.
Ms. Pelosi. And I agree with you completely in terms of what
you said about the budget. If we don't prevent and do these things,
our costs are going to be so much more. So whatever our philo-
sophical reaching for agreement may be on this issue — and I know
this will be pursued when we have the scientists before us in the
near future — that we all agree that separate from the personal as-
pects of it or the compassionate aspects of it, but just looking at
it from a budgetary stand, from a fiscal standpoint, it is absolutely
essential that we invest in prevention so that fewer people are in-
fected and, therefore, contract the disease.
It is absolutely essential that we do the research to find the cure
and the vaccine, et cetera, to prevent it from spreading in terms
of what it — the impact on the Federal budget. And I think it is ab-
solutely essential that we do so also. Because once someone is in-
fected or diagnosed with HIV — having full-blown AIDS, then there
is also a cost in terms of care and income support, et cetera.
So I — of course, I am a strong advocate for prevention. I hope you
will join me in that. But the dollars spent on HIV, I think you will
find as we pursue this, are a good investment and they are a fis-
cally responsible way to go.
Mr. Dickey, I hope you are interested in my next question. But
if you are not — oh, yes, sir.
Mr. Dickey. May I be excused?
Ms. Pelosi. Thank you, Mr. Dickey. I appreciate you taking the
time.
Mr. Dickey. You did a good job.
Ms. Pelosi. Thank you.
I had one other question, Mr. Chairman, if I may.
Mr. Porter. Yes.
APPROPRIATED ENTITLEMENTS VS. DISCRETIONARY SPENDING
Ms. Pelosi. It was more of a process question. I testified the
other day in Ways and Means as a Member of the Appropriations
Committee about the Contract With America and what I thought
the problems were about moving the entitlements to discretionary
appropriations.
In other words, in your chart, you have, as you know, these dif-
ferent categories; and one of them, I believe by the Contract — cor-
rect me if I'm wrong, Mr. Chairman — would move entitlements
over to discretionary appropriations, for SSI and AFDC in particu-
lar. I view that pessimistically because, with the budget cap as a
consideration. We like to describe our work here as "lamb eats
lamb" because everything is so good in our jurisdiction. However,
this would be, I think, devastating to the programs that we are
talking about. And I was wondering if you would be able to com-
ment on this proposal contained in the Contract With America.
Mr. Williams. I think there has been some discussion — if this is
the proposal you are referring to, there has been some discussion
in the context of welfare reform of moving some programs, which
84
are appropriated entitlements, like AFDC, and providing them as
grants to States, sort of like block grants.
Ms. Pelosi. Right.
Mr. Williams. That would be described as discretionary. The
main characteristic of the current programs and the way they oper-
ate is, in many cases we are basically matching — in the case of
Medicaid, for example, we match State expenditures. There are cer-
tain program requirements, the minimum standard requirements
to participate in the program. The States decide how much they
are willing to spend in that program, and then the Federal dollar
matches that. But it is basically open ended to the extent the State
is prepared to spend money.
Ms. Pelosi. If I may, just for a moment; my colleagues, the chart
I was fumbling for is number two on the — in 1995, HHS pie chart,
then the next one here. And the question I had related to the cat-
egory, annually appropriated entitlement. That would be AFDC
and SSI moving over to annually appropriated discretionary, and
my concern related to the cap, and one of the welfare reform pro-
posals was referenced.
The Contract calls for block grants. I just wanted to have my col-
leagues understand which chart I was referring to, since I was
groping for the terminology earlier. But please continue.
Mr. Williams. I would say the main distinction here is that in
many instances the decision on how much is spent on these pro-
grams is largely a State decision. The States will decide how much
they will spend. The Federal dollar will match within certain rules.
If they are — if these programs are converted to discretionary pro-
grams, then the amount of money the Federal Government would
decide to spend presumably would be related to decisions that
would be made here and would be subject to annual decisions as
part of the Federal budget, how much money would be available
and how much money would be made available through these
grants to the States. That is one aspect of this that would be in-
cluded in this change.
Ms. Pelosi. Would all the States have to tell us a year in ad-
vance how much they intended to spend the next fiscal year so that
we could match it in appropriations?
Mr. Williams. I suppose that depends on how the legislation is
drafted. But if you take a block grant as it is today, we would not
necessarily ask the States how much they intend to spend, but the
Federal Government would decide how much it is prepared to
spend and make that money available to the States.
How much the States would like to have, what their require-
ments are, what their needs are, presumably would be a factor in
the decision on how much would be appropriated, but the decision
would really lie here, as opposed to in the State.
Ms. Pelosi. What about in terms of the caps, the budget cap?
Would that present a difficulty?
Mr. Williams. To the extent that these programs were also sub-
ject to discretionary spending caps as exist today, then those grants
would have to compete with all other programs in that discre-
tionary category for a fixed dollar amount.
Ms. Pelosi. And from your perspective, do you see that as a
problem?
85
Mr. Williams. That depends on how the caps were adjusted to
bring in these programs. Obviously, as I showed you in the discre-
tionary spending chart that demonstrated changes over time, the
Budget Enforcement Act, which went into effect in 1991, has clear-
ly restrained discretionary spending. The rates of growth have
dropped significantly since that time. So the caps were designed to
constrain spending, and they have in fact done that.
Ms. Pelosi. Mr. Chairman, may I ask you a question? Do you
think that they would increase? Would the Contract intend to in-
crease the caps significantly to accommodate this new discretionary
designation or would this be more competition for the same dollar?
Mr. Porter. Well, I am not really prepared to answer that ex-
cept to say that there may be room made in the budget by cuts in
other areas of discretionary spending that will allow these tjqjes of
block grants.
Ms. Pelosi. But not in our committee?
Mr. Porter. Perhaps.
Ms. Pelosi. Perhaps?
Mr. Porter. Perhaps.
Ms. Pelosi. Thank you, Mr. Chairman.
Thank you all very much for your very fine testimony. It was
very helpful.
Mr. Porter. Does anyone on my left side have any further
questions?
Mr. ISTOOK. I did have a little bit of follow-up, if I may.
Mr. Porter. Please proceed.
Mr. ISTOOK. I want to clarify, and I appreciate it.
I think we left it, Mr. Rolston, that there are some things that
you can get to me regarding the noncash benefits and some break-
downs that show — I don't know if you call it "income levels" or "liv-
ing standards." I am not quite sure what is the correct terminology.
But I would appreciate that.
COMPARISON OF POOR AND NON-POOR LIVING STANDARDS
I would like to ask also, in that I have seen different portrayals
taking people who are defined as living in poverty compared to
those who are not defined as living in poverty and comparing it on
the basis of other factors. It may be square foot — square feet of liv-
ing space per resident of the household. It may be nutrition levels.
It may be in calories per day intake. It may be number of medical
visits per year. If you have any of that type of information, I would
appreciate receiving that, also.
[The information follows:]
Comparisons of Poor and Non-Poor on Factors Other Than Income
The draft report "Measuring Income, Emplojonent, and the Support of Children,"
by Susan E. Mayer, was presented recently at a DHHS-sponsored conference. Tables
6 and 9 in particular seem to address the issue you have raised, although they
present the comparison in terms of children in various income quintiles and deciles,
rather than poor versus non-poor children.
86
Table 6
Percent of Children at Different Incone Levels Living in Bones
with Selected ProhlesB: 1970 to 1990
Maasure
Inoane
EilBt
decile
Seccrvd
Income eiuintil«
e
Second
niird
Pcjurth
Fifth
Meai
DESIOI IRADEQIIACIE8
Tnnrnf)l«fta plunfaing^
1970
20.5
15.5
6.6
2.4
1.9
.6
1980
5.5
4.1
1.9
.9
.5
.1
1990
3.2'
i.3
.9
.5
.4
.3
Changs
-17.3
-14.2
-5.7
-1.9
-1.5
-.3
Inrrmplete bathiocn?
1973-75
11.4
7.5
3.2
.9
.4
.3
2.9
1977-79
7.4
4.6
2.5
1.1
.4
.2
2.1
1981-83
6.1
4.1
2.2
1.0
.4
.2
1.8
1985-89
2.5
2.2
.8
.7
.6
.6
1.1
Change
-8.9
-5.3
-2.4
-.2
.2
.3
-1.8
No seMBT or
aeptic syston
1973-75
8.1
. 5.1
2.1
.6
.3
.1
2.0
1977-79
4.9
3.0
1.5
.6
.2
.1
1.2
1981-83
2.7
1.9
.9
.3
.1
0
.7
1985-89
1.7
.9
.2
.1
0
0
.3
Change
-6.4
-4.2
-1.9
-.5
-.3
-.1
-1.7
No central heat
1973-75
46.2
42.9
30.3
18.7
12.3
6.8
22.5
1977-79
39.3
40.2
28.6
18.8.
12.3
6.1
21.1
1981-83
35.7
38.1
31.9
22.2
14.7
9.1
22.9
1985-89
32.3
34.7
28.1
21.4
14.9
9.6
21.5
Change
-13.9
-8.2
-2.2
2.7
2.6
2.8
- 1.0
No elwTtrir outlets
in cne or mace rccoB
1973-75
12.1
10.0
5.9
3.5
2.6
1.9
5.0
1977-79
8.4
6.7
5.0
2.8
1.6
1.4
3.4
1981-83
9.3
6.S
4.7
3.1
2.2
1.6
3.9
1985-89
6.0
6.0
3.8
2.4
2.0
1.1
3.1
Change
-6.1
-4.0
-2.1
-1.1
-.6
-.8
-1.9
MHIHTAmafCE PROBLBMS
Boles in floor
1973-75
8.2
5.6
2.9
1.8
.8
.6
2.6
1977-79
8.2
5.5
3.7
1.5
1.0
.6
3.4
1981-83
8.9
7.3
4.2
1.6
.8
.6
3.9
1985-89
7.0
5.8
2.6
1.4
.8
.6
3.1
Change
-1.2
.2
-.3
-.4
0
0
.5
Open cradGS in
vail or oeninq
'
1973-75
17.9
14.3
8.9
5.6"
3.8
2.8
7.5
1977-79
18.5
14.4
9.4
5.0
3.5
2.5
7.4
1981-83
19.2
16.2
10.5
5.4
3.7
2.6
8.0
1985-89
19.9
15.9
10.6
6.3
4.2
3.2
8.4
Change
2.0
1.6
1.7
.7
.4
.4
.9
c:\kids\irpkid. \ll/l/94 (WEIGHTED ZY KIDS;
SOURCE: Knutson, Newtb55.1dd, 9-17-5-!; Veenstza, Kidwtqnt.lst, 9-29-94
87
T^ble 6 oontiiBied
Maasure
IncxoB
Fixst
decile
Secxnd
Inocne pmni-il^
and vear
Second
TMrd
Ftaurth
Fifth
Iteai
Laal^ roof
1973-75
16.5
14.2
9.9
7.2
5.7
5.3
8.6
1977-79
14.5
13.5
10.3
7.1
5.6
4.9
8.3
1981-83
14.9
12.8
9.9
7.0
6.0
4.9
8.3
1985-89
11.9
12.5
10.1
8.5
7.7
7.3
9.1
Change
-4.6
-1.7
.2
1.3
2.0
2.0
.5
HEIOHBORS
nei^ibarfaood
1973-75
18.9
IS.l
17.1
16.5
16.4
16.6
17.1
1977-79
18.9
16.0
15.4
14.4
13.3
13.5
14.8
1981-83
19.1
18.7
15.8
14.4
14.4
14.5
15.6
19853
26.3
19.6
17.0
14.1
13.3
U.8
16.0
Change
7.4
.5
-.1
-2.4
-3.1
-4.8
-1.1
CROHDIHO
Mace than ons pecBOD
N
per xocm (ABS)
1973-75
31.6
34.7
26.5
19.0
15.6
11.6
21.2
1977-79
26.1
28.5
22.1
14.9
U.l
8.5
16.8
1981-83
22.7
26.7
21.0
13.5
8.0
5.9
14.6
1985-895
19.2
23.4
17.6
10.9
7.3
5.3
12.5
Change
-12.4
-11.3
-8.9
-8.1
-8.3
-6.3
-8.7
ONSERSHZP .•
.
'Tenant (ABS)
1973-75
62.5
54.5
38.3
23.9
15.2
9.1
29.1
1977-79
67.0
58.8
39.6
21.6
12.7
7.2
28.8
1981-83
67.8
62.2
44.6
24.8
14.6
7.6
31.4
1985-89
78.2
68.9
50.0
31.0
18.0
8.1
36.2
Change
13.7
14.4
11.7
7.1
2.8
-1.0
7.1
SOURGBS: Maasuxes shown for 1970.. 1980, and 1990 aze Li.ua the dwnpnninl
Census (tabulations by David Knutscr.) , while those shown far 1973 thzou^
1989 eu?e frcm the ABS (tabulations by Tim Veenstra) . In the Census, the
unwei^ited sanple sizes for the bottcrr. dacile aze between 2,700 and
3,500. In the ABS they are 7,653 ir. 1973-75, 5,033 in 1977-79, 4,424 in
1981-83, and 4,027 in 1985-89. "Riz AHS inocne data are for fanriliBB
rather than hcauseholds.
1. Hot and oold water, sink, toilet, arid shoMsr or tub for the exclusive
use of household luaiLeiB. Plunising facilities need not be inside
respondent's apartment in 1970, but cirst be in the building.
2. Ccnplete plunfaing located ir. a sir.gle roccn within, the unit.
3. Respondent's jtxignent. Data not available after l985.
4. RocDi count increased sli^itly in 1985 du3 to questionnaire change.
c:\kids\irpkid.\ll/l/94 {VEKSTTZD ZY KIDS)
SOURCE: Knutson, NeMtb55.kid, S-2T-?1; Veenstra, Kidwtqnt.lst,
9-29-94
88
Tabla 9
PBXcent of Childnn at Diffannt Inocna Lb««1s %dth Salactad
rr^mmmr Duzafale* and Ttelgphona Secvics: 1970 to 1990
Mfwunre
and year
Motor vehicle {PBS)
1973-75 62.6
1977-79 61.5
1981-83 63.9
1985-89 56.8
Change -5.8
Motor v<ducle
1970
1980
1990
Change
(Census)
59.8
58.6
57.3
-2.5
tuo or scire vehicles
(Census)
1970 13.2
1980 14.2
1990 17.3
Change 4.1
Air oanditioning (ABS)
1973-75 27.5
1977-79 30.9
1981-83 36.6
1985-89 41.5
Change 14.0
Clothes vaabex
1972-73
1984-89
Change
(CEX)
62.8
57.8
-5.0
80.5
80.2
76.6
77.5
-3.0
76.4
78.1
82.1
5.7
20.0
21.0
34.3
14.3
31.8
33.6
39.6
47.4
15.6
72.8
61.4
-11.4
Inecne ouintile
91.6
92.2
91.9
92.7
-.9
90.4
89.7
91.7
.7
32.3
35.3
56.4
24.1
41.1
45.2
49.1
57.9
16.8
84.2
78.6
-5.6
97.3
98.1
97.9
97.8
.5
95.6
95.7
97.0
1.4
44.4
50.7
75.3
30.9
48.9
53.1
57.3
64.9
16.0
91.5
84.4
-7.1
98.5
99.3
99.2
99.0
.5
97.6
97.7
98.0
.4
57.6
64.7
86.6
29.0
55.2
58.3
63.7
69.7
14.5
95.3
92.8
-2.5
Dishuasher
1972-73
1984-89
Change:
1972-90
(CEX)
9.1
16.5
7.4
10.1
16.0
5.9
18.0
25.8
7.8
31.0
41.6
10.6
45.5
58.2
12.7
jmb
99.2
99.7
99.5
99.3
.1
98.8
98.4
99.0
.2
74.8
76.6
92.9
18.1
62.2
65.1
69.2
72.8
10.6
96.3
97.1
.8
Clothes dryer (CEX)
1972-73 , 23.3 38.3 59.6 73.9 83.1 91.0
1984-89 37.5 38.0 62.0 75.2 88.9 94.6
Change 14.2 -.3 2.4 1.3 5.8 3.6
68.7
79.7
11.0
Mean
(to
continued next page
89
Tlable 9 oontixBiad
Maasuxv
First Seoond_
Jjf;rt^ ^liTl^il•
Seooni
Fifth
Tslephcne (Census)
1970
60.8
66.9
83.0
91.7
95.0
98.5
1980
72.1
80.2
88.7
95.8
98.3
99.0
1990
68.7
79.7
90.8
96.5
98.3
99.5
Qiange
7.9'
12.8
7.8
4.8
3.3
1.1
SOURCES: For Census and ABS data see Ttable 6. Data en clothes washers,
clothes dryers, and dishuBshers are fron the OiwrnwRr Bxiwmditure Survey
(tabulations fay Jtidlth Levins and Soott Hinship using tapes prepared fay
John Sabelhaus). Ihe uzMci^ited sanple sizes foo: the bottcm dwcile in
the CEX are rou^ily 800 in 1972-73 and 640 in 1984-89. TbtB CEX inoonB
data are far the rvw\taimanr unit.
c: \)cLds\irpkid. \ll/l/94
SOURCE; CEX (ffei^its far total eanpLe times N of Kids) .
Levine-Winship, 70n3ffil£9, TAEDLE 9.
90
ZEBLEY DECISION
Mr. ISTOOK. And I did want to ask from the Inspector General,
I know in your report you mentioned, of course, the Zebley decision,
the explosion of SSI and that. I did want to ask regarding the cost
figures of SSI, does that include the cost of the Medicare for SSI
recipients? Would that be totally separate?
Ms. Brown, No. That is separate, and they are entitled to Medic-
aid.
Mr. ISTOOK. I am sorry. I said Medicare. Medicaid.
Ms. Brown. Medicaid.
Mr. ISTOOK. Is there anyone who has the cost of Medicaid recipi-
ents for SSI and then, in particular, those who are on SSI because
of the Zebley decision? I would like to have some figures that show
not only the cost SSI expends pursuant to Zebley but also the cost
of the Medicaid expense that goes with that. I am not quite sure
to whom I should address that request.
Mr. Williams. I will be glad to take that request. I don't think
I have that information with me at the moment. But we know that
and we can provide that to you.
[The information follows:]
SSI/Medicaid Costs for Zebley
SSA does not specifically track the payment for children receiving benefits fi"om
the Zebley court case. However, as of January 1995, there have been approximately
123,500 allowances from the Zebley class members, although some of these Zebley
allowances involve children who are now over age 18 and no longer meet the defini-
tion of "child". However, based on the FY 1994 average SSI monthly blind/disabled
pajonent of $358, estimated costs for these 123,500 would be about $530 annually.
The Federal share of Medicaid costs for those 123,500 Zebley cases are estimated
at about $525 million for FY 1995. The total Federal share of Medicaid costs for
FY 1995 for all SSI cash recipients is estimated to be $24.2 billion. Within that
total, disabled adults will have Medicaid costs of $19.2 billion, and disabled children
about $2.5 billion.
Mr. ISTOOK. Very good. Thank you. I appreciate that.
Thank you, Mr. Chairman.
Mr PriRTITR Mr Millor
inanK you, Mr. unairm
Mr. Porter. Mr. Miller
PROGRAM ADDITIONS AND ELIMINATIONS
Mr. Miller. One question is, yesterday we had the people from
the Department of Education here asking questions. I remember
one of the interesting points brought out was the Administration
requested the elimination of 33 programs in the Department of
Education. Congress eliminated 13, but added 17.
What happened in your Department as far as how many pro-
grams the Administration requested elimination of, and how many
did the Congress react to, eliminate, how many did they add? Or
maybe you don't have the same type of — they have small programs;
you may not have the same type of programs.
Mr. Williams. Well, we have many programs. I don't recall off
the top of my head in 1995 how many programs we actually asked
for elimination. We certainly asked for reductions in spending in a
large number, some of which were followed by this committee; oth-
ers weren't. I don't think we requested that many for actual elimi-
nation. We have generally asked for — in more recent years, asked
91
for reductions in spending, rather than total eHmination of any
given program.
Mr. Porter. Mr. Wicker.
ZEBLEY DECISION
Mr. Wicker. Yes. Ms. Brown, when was the Zebley decision?
Ms. Brown. I believe it was 1989, or about that time.
Mr. Wicker. And was it based on an interpretation of the statute
or was there some constitutional problem with it?
Ms. Brown. Well, SSA had a different definition of disability for
adults and children. And so to correct that, it was a Supreme Court
ruling that the child that had this condition, that did not meet a
medical listing — that then SSA should determine whether or not
the condition was of comparable severity to that that an adult
would have.
Then the court defined that as being age-appropriate behavior.
So the result of it was that if a child, for example, had a learning
deficit disorder or an attention deficit disorder, why they may be
defined as disabled under this decision.
Mr. Wicker. Okay. Well, I want to discuss that.
Ms. Brown. They get not only their Medicaid, but they also get
this income, which is meant to replace earnings income. That is
what SSI is. It is really an earning income replacement.
Mr. Wicker. Are you saying in your testimony that the cash pay-
ments we make under SSI oftentimes have no relationship with the
cost to the family of having the child with that particular condi-
tion?
Ms. Brown. They aren't based on that relationship.
Mr. Wicker. And are you able to say how much of a possibility
of savings we have here?
Ms. Brown. Well, of course, it is up to the Congress to determine
whether or not those are the people they want to offer this to. But
we could certainly come up with a figure that would show the
growth in the number of eligible children after the Zebley decision
and show what that cost would be. In 1989, it was 296,000 chil-
dren, where in 1994, it went up to 847,000 children.
Mr. Wicker. Do you think there is still much coaching going on?
Do you think you catch most?
Ms. Brown. We have done several studies. We have not been
able to prove or find any significant evidence of coaching. However,
there certainly are obvious incentives that would keep the child
from improving because they lose their income when they improve
and get over this disorder that they have. So it appears the incen-
tives might be in the wrong place.
Mr. Wicker. Does your office keep track of how much coaching
you find? You say, not much. But do you find many cases per year?
Can you give me that figure?
Mr. Mangano. I would like to interject something. The way the
program operates is that the State disability determination agen-
cies actually do the assessment of the children. They are an exten-
sion of the Social Security Administration. Social Security funds
those State disability determination offices. They are the offices
that actually go out and identify, meet with the family, the chil-
92
dren and determine whether the child is disabled. That is really
where the interface is with the government.
Our office really would not get involved in a case like that except
if there is an allegation of fraud, and we have not seen very signifi-
cant activity at all. In fact, over the last six months, with the
shows on TV that have exposed some children that were suspected
of coaching, the Social Security Administration had the disability
determination service go down and check every one of the children
that were identified in those stories and even they found very, very
few incidences of coaching.
So I am not saying that there isn't coaching going on. The dis-
ability determination office would be the place where they would
find it, and they have not found much.
Mr. Wicker. Thank you.
Mr. Porter. Mr. Williams and members of the panel, we very
much appreciate your coming this morning to shed some light on
the subject of your Department and appreciate each one of your
presentations. And we look forward to having you back again when
we have the 1996 budget before us.
Thank you all very much.
Mr. Williams. Thank you.
Mr. Porter. We will stand in recess until 2:00 p.m.
Wednesday, March 8, 1995.
SECRETARY OF HEALTH AND HUMAN SERVICES
WITNESS
HON. DONNA E. SHALALA, SECRETARY
Mr. Porter. The subcommittee will come to order. We begin
hearings today on the fiscal year 1996 budget of the Department
of Health and Human Services, and we are delighted to welcome
the Secretary, Donna Shalala, who has been doing such a fine job
for the Administration.
I want to apologize in advance. Madam Secretary. At about 10
minutes of 11:00 it will be necessary for me to leave and to go to
the Floor of the House Chamber to welcome Rabbi Rachel Mikva,
the daughter of Abner Mikva, the Counsel to the President, who
held the seat that I now hold, against whom I ran in 1978. He won
by 650 votes, just to prove that every vote counts in our system.
And Rachel will be giving the opening prayer to the House of
Representatives. So I want to go and welcome her. I ask your for-
giveness for being absent for that time.
Madam Secretary, why don't you proceed in any way you wish
with your opening statement, and then we will follow with
questions.
Opening Statement
Secretary Shalala. Thank you very much, Mr. Chairman, Mem-
bers of the committee. I have a lengthy statement, and I have cut
it down for purposes of my oral presentation, but I have submitted
my lengthy statement for the record.
Thank you for the opportunity to discuss the President's 1996
budget for the Department of Health and Human Services. Our
budget for fiscal year 1996 actually achieves reductions in spending
by first slowing the projected growth of Medicare and Medicaid, by
consolidating discretionary activities, by cutting programs and by
streamlining the administrative structure of the Department. At
the same time, we believe that this budget wisely and selectively
invests in the future health and well-being of all Americans.
Our 1996 budget requests a total of $231 billion in spending for
programs that fall under the jurisdiction of this subcommittee. Our
request for discretionary spending totals $34 billion.
Mr. Chairman, to be responsive to the demands of American citi-
zens for a government that is smaller and more efficient, we are
changing the way we are doing business. Let's start with Medicare
and Medicaid.
Under the Clinton Administration estimates for projected five-
year spending on these programs, indicate that the spending will
drop $212 billion for the periods 1994 to 1998. This change marks
(93)
94
a significant contribution to lowering the deficit. This extraordinary
drop is due in large part to the President's historic deficit reduction
measures. I will give you a sense of this, because it is significant
in terms of our ability to control spending.
This is an extraordinary drop. The reason for it is, first, a strong
economy with low inflation; second, the 1991 bipartisan legislation
limiting the use of Medicaid taxes and donations. We have also im-
proved program efficiency and choice for Medicaid and Medicare
beneficiaries.
One way we have done this is by working with the governors for
Medicaid State waivers. With these waivers, more and more States
are taking advantage of opportunities to offer managed care pro-
grams under Medicaid. Last year, Medicaid had a 63 percent in-
crease in the number of people enrolled in managed care, from 4.8
million in 1993 to 7.8 million in 1994. The number of older Ameri-
cans choosing managed care through the Medicare programs also
grew by 16 percent, from 2.7 million people in 1993 to more than
3.1 million in 1994. And we expect the current rate of growth in
the number of elderly moving to managed care will continue rap-
idly this year.
On the discretionary side of the budget, we plan to do more with
less by consolidating certain activities into performance partner-
ships. Most notably, in the Public Health Services, we are propos-
ing combining 107 activities.
You will remember, Mr. Chairman, in my last hearing I made
reference to the fact that we would be consolidating and combining
a number of our activities. We are estimating a savings of $218
million in administrative costs alone, and more than 700 FTE over
the next five years.
In other efforts to hold the line on spending, we have proposed
reductions in funding for 69 programs, taking them below the lev-
els approved by Congress in last year's appropriation; and we plan
to freeze an additional 57 activities at 1995 levels.
We are also reexamining the administrative structure of the De-
partment in the field, eliminating some of our regional overhead
functions and returning administrative responsibilities to our
agencies.
Mr. Chairman, while Americans want a leaner, more efficient
government, they will continue to expect us to promote economic
opportunity and security and to help protect their health and the
health of their children. That is why the President's budget targets
increases in a few key investment areas that have shown signifi-
cant payoffs.
One of these is Head Start. In 1996, we are requesting an addi-
tional $400 million to improve the program quality and increase
the number of children served, as recommended by the bipartisan
Head Start Advisory Committee and required by the Head Start
Reauthorization Act of 1994. With these resources, we will create
nearly 7,000 slots to serve a total of more than 25,000 children
under the age of three in the early Head Start initiative.
We will also create more than 25,000 new slots for current part-
day programs; and to respond fully to the needs of working fami-
lies, we intend to expand 22,000 current part-day slots into full-
95
day, full-year services. We are continuing to make strides in im-
proving the quality of local Head Start programs.
And this budget reflects the President's commitment to children
and families in other ways as well. In 1996, we are requesting an
additional $100 million to help States provide safe, affordable and
higher quality childcare for even more working families, which are
goals that we all share.
And we are making sure that our children are immunized. In
1996, we are requesting $843 million for our childhood immuniza-
tion initiative, which has taken dramatic strides in building public-
private partnerships. Now, thousands of private doctors in this
country enrolled to make certain that no child fails to be immu-
nized in this country because of cost or lack of access to health care
providers.
The 1996 budget also continues this Administration's commit-
ment to the elderly and disabled. Investments in the Social Secu-
rity Administration and the Health Care Financing Administration
will allow these agencies to do their work better and faster. SSA
will be able to greatly improve the time it takes to process disabil-
ity claims, and additional funds will move us one step closer to
having the technology we need to handle the workload increases
projected for the turn of the century.
For those who receive assistance from Medicaid or Medicare, we
are reissuing the Medicare Handbook, and we are beginning to de-
velop a new communications tool known as HCFA On-line to help
them make informed choices about their health care.
New resources directed to the Administration on Aging will go to
States to enhance home- and community-based long-term services.
And of course one of the most important ways we fulfill our mission
to promote the health of all Americans is by committing an addi-
tional $468 million, a 4 percent increase, to biomedical research at
the National Institutes of Health. Our NIH budget balances spe-
cific, targeted research with investments in basic biomedical and
behavioral research. We have witnessed many impressive gains be-
cause of our bipartisan commitment to excellence in research.
Our firm commitment to women's health has resulted in major
breakthroughs in breast cancer research, including the discovery of
BRCA-1 gene. We recently announced the NIH funded discovery of
the first drug treatments for severe cases of sickle cell anemia, and
last year an NIH-sponsored clinical trial demonstrated that when
administered during pregnancy, AZT can reduce by 67 percent the
risk of HIV transmission from mother to infant.
HIV research involving the blood/brain barrier has led to a better
understanding of the mechanism by which infectious agents spread
into the nervous system. These discoveries go beyond HIV, though.
These discoveries offer important insights into other disease such
as Alzheimer's, multiple sclerosis and meningitis.
Mr. Chairman, we believe that biomedical research is ultimately
the key to winning the war against AIDS, and that is why the
President's budget includes $1.4 billion for AIDS research at the
National Institutes of Health. But until we find an AIDS vaccine
and a cure, we must also make strong investments in the Ryan
White program, which provides vital services for people living with
AIDS.
96
In 1996, we are proposing an increase of $91 million. This is a
critical national investment. Roughly 40 percent of the more than
440,000 AIDS cases reported since 1981 were reported in 1993 and
1994, and AIDS is now the number one cause of death for all
Americans between the ages of 25 and 44. The funds we are re-
questing for Ryan White will assure that all eligible communities
receive vital resources to help them treat people living with AIDS
and HIV infection.
Mr. Chairman, we believe these are smart investments. They are
crucial to the future of this country, and they will achieve demon-
strable results. That is why we are very concerned with some of the
1995 rescission proposals. They threaten some of our most impor-
tant efforts.
For example, over 35 percent of the proposed 1995 rescission for
the Department, $135 million, will come from programs that offer
children the chance to grow up healthy and safe, programs such as
foster care and community schools.
Then there is the $60 million rescission in rural health programs
like the National Health Service Corps and rural health research,
which takes us backward in our efforts to bring quality health care
to rural areas.
I am also deeply concerned about the proposed welfare legislation
that undermines values to which we are all committed — work, pa-
rental responsibility, the protection of children and State flexibility.
We won't emphasize work without practical and effective work re-
quirements. We won't move people into jobs if families don't have
access to child care. We won't have real change unless we hold both
parents responsible for supporting their children. And we can't re-
form welfare in this country by punishing poor children for their
parents' mistakes.
We need a bold plan to end the welfare status quo and to make
sure that everybody who can work does so. We look forward to
working with Congress to end welfare as we know it, as the Presi-
dent wishes.
What I have, obviously, just described is more than a budget. It
is a new way of honoring our commitment to work for the public
good. We have made tough choices, and we believe our choices will
produce measurable results. We look forward to working with the
committee. And I greatly appreciate the opportunity to testify be-
fore you this morning. I would be happy to answer any questions
you may have.
[The prepared statements and biographies of Secretary Donna E,
Shalala and other Department officials follow:]
97
TESTIMONY
OF
DONNA E. SHALAIiA
SECRETARY OF HEALTH AND HUMAN SERVICES
AT
HOUSE APPROPRIATIONS COMMITTEE
LABOR-HHS-EDUCATION SUBCOMMITTEE
MARCH 8, 1995
98
Good morning, Mr. Chairman and Members of the Committee.
Thank you for the opportunity to discuss President Clinton's
1996 Budget for the Department of Health and Human Services.
Our budget for Fiscal Year 1996 achieves reductions in spending
by slowing the projected growth of Medicare, consolidating
discretionary activities, cutting programs, and streamlining the
administrative structure of the Department. At the same time, this
budget wisely invests in the future health and well-being of all
Americans.
Our 1996 budget requests a total of $231 billion dollars in
spending for programs that fall under the jurisdiction of this
subcommittee. Our request for discretionary spending totals
$34 billion dollars.
Mr. Chairman, to be responsive to the demands of American
citizens for a government that is smaller and more efficient, we're
changing the way we do business — all of our business, from Medicare
and Medicaid to public health programs to the administration of the
Department .
Let's start with Medicare and Medicaid.
Under the Clinton Administration, estimates for projected five-
year spending on these programs have dropped $212 billion for the
period 1994-1998. This change marks a significant contribution to
lowering the deficit.
This extraordinary drop is due in large part to the President's
historic deficit reduction measures, a strong economy with low
inflation, and the 1991 bipartisan legislation limiting the use of
Medicaid taxes and donations.
We have also improved progrcun efficiency and choice for
Medicaid and Medicare beneficiaries. One way we've done this is
through Medicaid State waivers.
We know that States are attempting to develop effective health
care solutions that meet their local needs. That's why this
Administration has approved more health care waivers than any other
Administration in history.
With these waivers, more and more States are taking advantage
of opportunities to offer managed care programs under Medicaid.
Last year, Medicaid had a 63 percent increase in the number of
people enrolled in managed care — from 4.8 million
in 1993 to 7.8 million in 1994.
The number of older Americans choosing managed care through the
Medicare progrcuns also grew — by 16 percent — from 2.7 million
people in 1993 to more than 3.1 million in 1994.
And we expect that the current rate of growth in the number of
elderly moving to managed care will continue this year.
On the discretionary side, we plan to do more with less by
consolidating certain activities into Performance Partnerships.
Most notably, in the Public Health Service, we've proposed
combining 107 activities, saving an estimated $218 million in
administrative costs and more than 700 FTE over the next five years.
99
Program consolidations not only save money — if done wisely,
they allow States and grantees to have greater control, flexibility,
and accountability in managing critical services.
In other efforts to hold the line on spending, we've proposed
reducing the funding for 69 programs, taking them below the levels
approved by Congress in last year's appropriation. And we plan to
freeze an additional 57 activities at 1995 levels.
We are also re-examining the administrative structure of the
Department in the field.
Some of our regional overhead functions actually will be
eliminated. And some administrative responsibilities will be
returned to our agencies, reducing our FTE and generating $24 million
in administrative savings over 5 years.
Mr. Chairman, while Americans want a leaner, more efficient
government, they will continue to expect us to promote economic
opportunity and security, and to help protect their health and the
health of their children.
That's why I am proud to say that this budget reaffiinns the
Clinton Administration's core value of putting people first. It
targets increases in a few key investment areas that have shown
significant payoffs — one of these is Head Start.
In 1996, we are requesting an additional $400 million to
improve program quality and increase the number of children served —
as recommended by the Head Start Advisory Committee and required by
the Head Start Reauthorization Act of 1994.
With these resources, we'll create nearly 7,000 slots to serve
a total of more than 25,000 children under the age of 3 in the Early
Head Start initiative.
We'll also create more than 25,000 new slots for current part-
day programs.
And to respond fully to the needs of working families, we'll
expand 22,000 current part-day slots into full-day, full-year
services.
We are continuing to make strides in improving the quality of
local Head Start programs.
We've learned a very important lesson in the last 30 years:
the sooner we make the benefits of Head Start available to children
and the earlier we help parents to become capable partners in the
education of their children, the stronger our families and our
country will be.
This budget reflects the President's commitment to children and
families in other ways as well.
In 1993, over 700,000 children were served through our Child
Care and Development Block Grant.
In 1996, we're requesting an additional $100 million to help
States provide safe, affordable and higher quality child care for
even more working families — goals we all share.
And we're making sure that our children are immunized. In
1996, we are requesting $843 million for our Childhood Immunization
Initiative — which has taken dramatia strides in building public-
private partnerships with thousands of private doctors to make sure
that no child fails to be immunized because of cost.
100
In 1993, 67 percent of our two-year-olds were immunized with
the most important vaccinations — the highest percentage in our
history. But we won't stop there.
1996 goal
With our request, we will make further progress towards our
roal of immunizing 90 percent of children under age 2 with the
.mportant vaccinations.
x^^o goax or unmunxzi-ng rtu p
most important vaccinations.
The 1996 budget also continues this Administration's commitment
to the elderly and disabled — a commitment to provide high quality
services.
Our budget request includes an additional $648 million for the
Social Security Administration.
Forty percent of this will continue SSA's $1.1 billion 5-year
investment in automation. This critical investment will improve the
effectiveness, efficiency and economy of SSA's operations, while
dealing with major workload increases projected for the turn of the
century.
Most of the balance of the increase would support SSA's efforts
to address the rapid 4-year growth in the number of disability cases
— cutting by one-third the number of days people will have to wait
for initial claims to be processed.
Additional funds will also be used to more than double SSA's
1994 level of effort for processing continuing disability reviews.
For those who receive assistance from Medicaid or Medicare, we
are reissuing the Medicare Handbook and beginning to develop a new
communications tool known as HCFA on-line to help them make more
informed choices so they can avoid unnecessary and often costly
treatments.
New resources directed to the Administration on Aging will go
to States to enhance home and community-based long-term-care
services.
One of the most important ways we fulfill our mission to
promote the health of all Americans is by committing an additional
$468 million — a 4 percent increase — to biomedical research at the
National Institutes of Health.
Our NIH budget balances specific targeted research with
investments in basic biomedical and behavioral research.
We have witnessed many impressive gains because of our
bipartisan commitment to excellence in research.
Major breakthroughs in breast cancer research include the
discovery of the BRCA-1 gene.
We recently announced the NIH-funded discovery of the first
drug treatment for severe cases of sickle cell anemia.
And I am particularly proud of our research accomplishments
over the past two years in the area of HIV/AIDS.
Just last week, we announced that researchers at NIH have
discovered that a minute level of naturally occurring substances
known as cytokines can boost the number of infection-fighting cells
in patients infected with the AIDS virus. This discovery has the
potential to greatly enhance AIDS treatment.
101
Last year, an NIH-sponsored clinical trial demonstrated that
when administered during pregnancy, AZT can reduce by 67 percent the
risk of HIV transmission from mother to infant.
This is a remarkable development in retroviral research,
marking the first time that we have been able to use a therapeutic
agent to block transmission of the AIDS virus — or any virus — from
mother to child.
And HIV research involving the blood/brain barrier has led to a
better understanding of the mechanism by which infectious agents
spread into the nervous system. These discoveries offer important
insights into other diseases such as Alzheimer's, Multiple Sclerosis,
and meningitis.
Mr. Chairman, I believe that biomedical research is ultimately
the key to winning the war against AIDS. That is why the President's
budget includes $1.4 billion for AIDS research at the NIH.
But until we find an AIDS vaccine and a cure, we must also make
strong investments in the Ryan White program which provides vital
services for people living with AIDS. In 1996, we're proposing an
increase of $91 million.
We've only recently seen signs of the extent to which the AIDS
epidemic has penetrated our society. Roughly 40 percent of the more
than 440,000 AIDS cases reported since 1981 were reported in 1993 and
1994.
Last year, nearly 81,000 Americans were diagnosed with AIDS and
more than 40,000 lost their lives. AIDS is now the number one cause
of death for all Americans between the ages of 25 and 44.
AIDS is spreading rapidly in women and adolescents. Last year,
14,000 women in the U.S. were diagnosed with AIDS. And of the
estimated 40,000 Americans who were infected with HIV last year, one-
quarter were under the age of 20.
The funds we are requesting for Ryan White will assure that all
eligible communities receive vital resources to help them treat
people living with AIDS and HIV infection.
Mr. Chairman, we believe these are all smart investments. They
are crucial to the future of this country and they will achieve
demonstrable results.
That's why we are very concerned with some of the 1995
rescission proposals — they threaten some of our important efforts.
For example, over 35 percent of the proposed 1995 rescission
for the Department — $135 million — will come from programs that
offer children the chance to grow up healthy and safe — programs
such as foster care and community schools.
And then there is the $60 million rescission in rural health
programs — which takes us backward in our efforts to bring quality
health care to rural areas.
For the past 20 years, the National Health Service Corps has
been vital to our efforts to recruit primary care givers to practice
in isolated communities. The proposed rescission would cut this
program by 10 percent — far below its 1994 level — which means that
at least 300,000 people in isolated communities will not receive
care.
Rescinding funds for rural health, especially research, will
hurt our efforts to develop and evaluate innovative technology —
102
which would assure that all Americans have access to the most current
information availcUsle and to the highest equality of care.
I am also deeply concerned about proposed welfare legislation
that undermines these American values to which we are all committed.
We do not emphasize work if we do not have practical and
effective work rec[uirements. We cannot end welfare by punishing poor
children for their parents' mistakes. We cannot hope to move people
from welfare to work if families do not have access to adequate and
appropriate child care.
And we cannot reform welfare if we do not hold both parents
responsible for support of their children.
I want to emphasize that the President looks forward to working
with Congress to overhaul our broken welfare system. We need a bold
plan to end the welfare status (juo and to make sure that everybody
who can work does so.
The Administration shares the commitment of the Congress and
the American people to real welfare reform that emphasizes work,
parental responsibility. State flexibility and the protection of
children.
***
What I have just described is more than a budget. It is a new
way of honoring our commitment to work for the "public good." It
makes tough choices. And it will produce measurable results.
We look forward to working with this Committee, and I greatly
appreciate the opportunity to testify before you this morning. I'd
be happy to answer any questions.
Thank you.
103
DONNA E. SHALALA
Sacratiiy c/ H«aMi and Himan Sarvicas
It is no coincidence the Washington Post chose a sports metaphor when it wrote that HHS Secretary
Donna E. Shalala has asseml)led the t>est team since the 1927 Yankees.'
Shalala is t>oth a fine athlete and energetic competitor who, as the first woman to lead a Big 10 University, took
a losing football team at the University of Wisconsin at Madison and turned it into a Rose Bowl champion.
At HHS, the 'people's department,' she has adhered to the same rrtanagement philosophy.
1 pick the t>est people, give them the support they need and hoM them accountable for results,* she says.
The future Secretary entered pubic ife in 1075 as treasurer of the Municipal Assistance Corp.. which rescued
New York City from the brink of bankruptcy.
She was an assistant HUD secretary in the Carter Administration and, in 1980, became the youngest wonoan
to lead a major U.S. college as presMent of Hunter Collage in New York. In 1988, she became ChanceVor of the
University of Wisconsin-Madison, the natkm's largest put>lc research university.
An acknowledged scholar of state and k>cal government and finance. Shalala eamed her Ph.D. from the
Maxwell School of Citizenship and Pubic Affairs at Syracuse University in 1 970. She has also served as a Peace
Corps volunteer in Iran and taught poitical science at Syracuse, Columbia, Hunter and Wisconsin.
Shalala succeeded Hillary Rodham Cfnton as ctiair of the Chiklren's Defense Fund in 1992.
Like her mother. Edna, the national 80-year-okl women's tennis cttampion, Shalala plays a competitive game
of tennis. In her spare time, she also reads, golfs, Nkes and cfimbs mountains, among them the Himalayas.
Undoubtedly, however, the biggest mountain she's cSmt)ed is HHS, the Cabinet department responsible for 250
health, welfare, food, drug safety and income-assistance programs.
There. Shalala has won plaudits for her leadership on health care and welfare reform, and for refocusing and
re-energizing such programs as Head Start, women's health, chiMhood immunization, biomedical research and AIDS
prevention.
April 1994/S
104
STATEMENT OF ELIZABETH M. JAMES
Mr. Chairman and Members of the Subcommittee;
I am ElizeUseth M. James, Acting Assistant Secretary for
Management and Budget. I am pleased to be here today presenting to
you the fiscal year (FY) 1996 budget request for the General
Departmental Management (GDM) appropriation.
General Departmental Management
Let me briefly discuss the important role that activities
funded under the GDM appropriation perform in the Department. The
GDM appropriation is the principal source of funding to support the
Secretary in her role as chief policy officer and general manager of
the Department. This account also provides funding for the
operations of eight of the eleven Staff Divisions (STAFFDIVs) in the
Office of the Secretary, which carry out essential policy and support
functions in such areas as legal services, public affairs,
legislative liaison, intergovernmental affairs, planning and
evaluation, personnel administration, and management and budget. The
OS Working Capital Fund is a revolving fund under which the GDM
STAFFDIVs provide various administrative services to the Department's
five Operating Divisions (OPDIVs).
The Department's Continuous Improvement Program — designed to
meet the priorities of Vice President Gore's National Performance
Review (NPR) — is an important example of the kind of agency-wide
initiatives that can be coordinated at the Department level only
through organizations funded under the GDM account. Cross-functional
teams are now in place, implementing NPR management recommendations
and identifying other means to improve HHS management. Streamlining
efforts are underway in the STAFFDIVs and OPDIVs to reduce full-time
equivalent (FTE) employment by twelve percent by FY 1999 through
organizational delayering, organizational and program consolidations,
re-engineering, and delegations of authority. The results of this
effort will have far-reaching consequences both for the Department
and for the activities funded under this account.
Rationale for the GDM Reduction
The FY 1996 budget request for GDM proposes total funding of
$119,704,000 and 1,265 FTE positions — decreases of $698,000 (or 0.6
percent) and 78 FTE (or 5.8 percent) below comparable FY 1995 levels.
This request reflects the impact of the FTE reductions mandated by
Executive Order 12839 — GDM staffing levels decrease by a total of 167
FTE (or 11.7 percent) between FY 1993 and FY 1996. In FY 1995, FTE
usage in GDM is currently estimated at 1,325 FTE, or 18 FTE below the
FY 1995 target.
This budget request also includes resources which are to be
transferred to the Social Security Administration (SSA) on April 1,
1995, as required by P.L. 103-296, the Social Security Independence
and Program Improvement Act of 1994. These resources are primarily
FTE and Old-Age, Survivors and Disability Insurance (OASDI) trust
funds.
In FY 1995, organizational changes carried out within the
framework of the Department's Continuous Improvement Program have had
an important impact on the activities funded under this
appropriation :
105
• Continued Personnel Streamlining — Reinvention efforts,
streeunlining reductions, and functional transfers will result
in GDM staffing levels being decreased by 167 FTE (or 11.7
percent) from FY 1993 to FY 1996, exceeding the FY 1993-1999
reductions mandated by Executive Order 12839.
• Regional Office Restructuring and Transfer of Functions — The
National Performance Review recommended that HHS conduct a
comprehensive review of its organizational structure and
management systems, to determine the appropriate balance
between centralized and decentralized functions. In an initial
effort, the Department proposes to divest regional
administrative support and overhead functions to the OPDIVs and
STAFFDIVs. The purpose of this change is to reduce
duplication, align support functions more closely with customer
agencies, and increase the use of cross-servicing arrangements
instead of maintaining large administrative support structures
in OS. In FY 1996, these changes will result in the transfer
of 203 FTE in the Working Capital Fund to the OPDIVs and
STAFFDIVs, with resulting savings of 54 FTE and $24 million
over the next five years.
• Process Reenoineerino — All STAFFDIVs are exeunining their work
processes to increase efficiency without sacrificing quality.
• Next Steps — The second phase of HHS reinvention — to be
completed over the next 90-120 days — will focus on the
appropriate field and headquarters structure for the STAFFDIVs
and OPDIVs following SSA independence.
Working Capital Fund
The Working Capital Fund (WCF) is a revolving fund that
provides various administrative services to the Department's five
OPDIVs on a centralized basis. Use of the Fund results in the costs
of such services as payroll, personnel, accounting, and reprographics
being borne by the actual recipients, while also allowing the OPDIVs
to have a voice in the selection and quality of the services they
receive. The Fund is under the stewardship of a Board of Governors,
which is composed of representatives from both the OPDIVs and the
three GDM STAFFDIVs which provide services. The WCF operates on a
fully-funded, business-like basis and recovers the full cost of Fund
services in billings to the Department's OPDIVs. One hundred percent
of Fund activities are on a fee-for-service basis, so that the
charges to the client organizations are based on their actual usage
levels, rather than on an allocation formula.
The staffing reductions associated with the regional office
restructuring I mentioned before are reflected in the Fund's FY 1996
budget estimates. Of 257 FTE reductions associated with these
changes, 54 represent positions that have been eUaolished; the
remaining 203 are FTE which have been transferred to the STAFFDIVs
and OPDIVs in relation to the transferred functions, and those
positions are included in the OPDIVs' budget submissions.
In summary, I believe that the FY 1996 budget request for the
General Departmental Management appropriation will provide sufficient
resources to operate effectively and efficiently. I will be happy to
answer any questions you may have about this appropriation request.
106
ELIZABETH M. JAMES. Ph.D.
PRINCIPAL DEPUTY ASSISTANT SECRETARY
FOR MANAGEMENT AND BUDGET
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Dr. Elizabeth M. (Betty) James was named Principal Deputy Assistant
Secretary for Management and Budget in 1987. In this capacity.
Betty acts as a focal point for the integration of the numerous
functions for which the Assistant Secretary for Management and
Budget (ASMB) is responsible. She provides the ASMB with advice
and assistance on administrative and financial management issues,
and aids with the development of the Department's budget. Betty
is also responsible for policy development guidance in areas such as
information resources management, contracts and grants.
Before joining HHS, Betty served as the Chief, Policy and Systems
Division, at the Office of Personnel Management. From April 1984
to February 1985 she was the Deputy Assistant Director for
Strategic Program Design in the Office of Training and Development.
Between November 1979 and April 1984, she was the Director,
Governmental Affairs Institute, in the Office of Executive and
Management Development.
In addition to her public service career, Betty has served as a
Lecturer with Georgetown University from 1981 to present. Between
1968 and the present, she has served as a professor of political
science at Trinity College.
107
STATEMENT OF DAVID T. ELLWOOD
Mr. Chairman and Members of the Subcommittee:
I am pleased to present the fiscal year (FY) 1996 budget
request for the Office of the Assistant Secretary for Planning and
Evaluation (ASPE) and for the Policy Research program we manage.
This is a time of change — in many cases dramatic change — in the
administration and delivery of health care and human services in
America. The role of government, particularly the Federal
government, is undergoing deep review.
The impetus and direction of change is increasingly toward
decentralization, with the private sector and State and local
governments often leading the charge. Welfare reform efforts are
already undeirway in many States. The Administration has granted
waivers to nearly half the States, and all welfare reform bills call
for granting States far more control and flexibility over their
welfare systems. The nature of health systems in both private and
public programs is shifting rapidly toward managed care and
competitive strategies.
In such a rapidly shifting environment, the need for
coordinated, objective, and high quality evaluation, policy research
and data collection and analysis is more critical than ever — both to
inform choices and to understand the overall impacts of those
choices. Information is essential for helping individuals, private
firms, communities. State and local governments, the Administration
and the Congress understand the choices they must make.
Just as important, the lessons of one community's decisions
should be available when another faces similar questions. We need to
identify the most cost-effective and customer-responsive practices so
that others can learn from them.
Evaluation, research, and data are also critical in determining
what effect policies have had, both locally and in the nation. When
dramatic changes occur in the structure and delivery of health and
human services, it is especially critical to learn — in detail — what
the impact of these changes have been on the people and institutions
they touch. We also need to assess the impact of the myriad of
decentralized decisions on the families and individuals served, on
the providers and managers of services, and on the efficiency of the
American economy and government.
FY 1996 Funding and Goals
The Policy Research program, and the $12.4 million requested in
funding for it, is key to the goal of obtaining objective and high
quality information for national. State, local and private decision-
making. We are aggressively pursuing ways to use the program most
effectively and to make the information from it the most useful to
our public and private sector partners. To accomplish this, we are
first substantially strengthening our data collection and analysis,
modelling, evaluation, and performance measurement capabilities.
Secretary Shalala is committed to expanding and improving the
planning for and use of these tools.
For example, at Secretary Shalala 's direction, my principal
deputy, Judith Feder, is leading an HHS-wide group to identify
priority health data needs and to refocus resources to better and
more efficiently meet those needs. This effort starts from the
premise that we should not reproduce or supplant private data
gathering efforts; rather, we should work in partnership to better
gain the information everyone needs to understand the changing
quality, coverage, and delivery of services. We are also making our
108
models better predictors of the effects and costs of alternative
policies, and we are developing mechanisms to track the impact of
adopted policies — from the earliest stages of implementation — with
rapid feedback.
Second, we will work closely with the Congress and our partners
in State and local governments and the private sector to design the
analyses and provide the information needed to improve health care
and human services. Supporting our partners at the State and local
level is more critical than ever as they assume greater
responsibility for administering health and human service progreuns.
All of the plans I eun about to describe will be developed in
partnership with them.
Major Areas of Focus
Children and Families
We are, and will continue to be, deeply concerned with the
welfare of our nation's children. We will continue our efforts to
provide objective analyses of various welfare reform proposals, and
— working closely with the States — will assess the impact both of
welfare reforms enacted by the Congress and reform demonstrations
implemented by the States. There are potentially dramatic changes
being considered for the welfare system. Almost everyone believes
that welfare does not work well; the key questions are how to prevent
welfare dependency and move people to work so they can take care of
their families.
We are examining a variety of issues concerning welfare
dependency. We will assist States to develop the capacity for data
matching across tax and transfer systems, and to undertake more in-
depth analyses of welfare dynamics. We must ensure that lessons
learned from welfare demonstrations are captured, to determine how
best to move people into jobs and self-sufficiency and to prevent
welfare dependency. To do this, we will provide support for the
evaluation of selected demonstrations, continue to evaluate State
welfare-to-work programs, and make available for public use data
tapes from past evaluations. Finally, with guidance provided by a
national advisory board jointly appointed by the Administration and
the Congress, we will complete the required report to the Congress on
how welfare dependency should be measured.
We will also develop information in partnership with the States
to help ensure that children receive the child support payments to
which they are entitled. Currently, only one third of single parents
receive child support. With the mobility that people have, data on
child support must be shared across State lines. We are designing
evaluation strategies to identify the effectiveness of child support
policies that are enacted by the Congress. We will fund evaluations
of programs that rec[uire work and training for men who owe child
support and fail to pay. We will assess other ways to encourage non-
custodial parents to take more responsibility for their children,
including parenting and access demonstrations.
We will continue important research to identify ways to help
prevent teen pregnancy. In particular, we are assessing the long-
teirm effectiveness of programs which target education, training, and
case management services to teens. We will assess the role of
positive youth development, exploring: the effects of education and
employment opportunities and relationships with adults; the influence
of peers and family, including siblings; and the role of self-esteem
in preventing adolescent pregnancy. And we will examine the
opportunity-cost hypothesis and other factors related to the decision
to marry.
109
We will also address issues concerning vulnerable children and
youth. Many children and youth need developmental, protective and
support services because their families are poor, are headed by a
single parent, or are at risk for other reasons. He will help
identify effective ways in which States can improve their child
welfare systems. We will continue working closely with States on the
multi-year impact evaluation of family preservation and support
programs, to identify the effects of various prevention services
aimed at reducing foster care placement and helping children remain
with their parents, and of reunification services aimed at gaining
permanent feunily placements for children already in foster care.
Jointly with the Administration for Children and Families {ACF) , we
will design and launch evaluation studies concerning the quality of
Head Start.
Health Care
One of the important lessons we learned from last year's health
care reform debate was the need for accurate and timely information
about health insurance, service delivery systems, and access to
health care. The Congress is considering health insurance reform,
and a number of States are experimenting with changes in the
financing of health care, assisted by waivers from HHS.
Therefore, we plan to focus on two principal areas of change.
First, we will attempt to further understand the dynamics of health
insurance — both coverage and the market. There are changing patterns
of coverage by employers, by some States, and by consumers who
directly buy health insurance.
Second, we will track changes in the delivery of health care
services and share information with our partners. Here, the Congress
and the Administration are considering a number of program changes.
The use of managed care is increasing in the public and private
sector, health insurers are increasingly more cost conscious, and
States are experimenting with innovative mechanisms to deliver
services more efficiently.
We will address the impact of changes on consumers and
patients, on insurance coverage and access to health care, on the
doctors and hospitals providing the services, on the general public,
on employers (especially small businesses) and on costs. The changes
that will occur will likely not be identical everywhere, further
complicating and adding to the cost of the effort. But it is vital
to answer such questions as: who gets more or less coverage and
services, and at what cost; what is the impact on underserved areas;
what happens to hospital occupancy rates; etc.
People with Disabilities
There are hundreds of thousands of American children, working-
age adults, and older people with chronic disabilities which
interfere with their ability to carry out everyday activities without
the help of others. These people face a number of challenges. A
high proportion are very poor, get little preventative care, have
only limited access to providers who are knowledgeable about their
disability and long term supports, and face ruinous out-of-pocket
costs in trying to pay for needed care.
The public costs of providing services to people with chronic
care needs are high. States are struggling to bring these costs down
while providing humane and appropriate services. One potential
solution which States are opting for is managed care; yet there is
virtually no systematic information to inform their decisions. At
the same time, there is a growing movement to give the consumers of
disability-related services more choice about what they need to live
productively and independently.
110
We are addressing these issues. First, we will work with
selected States to develop information on the impact of managed care
plans on people with significant disedsilities. We will look at the
changes in their service use as they move from fee-for-service to
managed care, their satisfaction with services, and the costs of
care. We will also analyze plans that work for disabled populations,
and document and disseminate particularly effective practices.
Second, we will continue to place a special emphasis on
disability policy for children. Our research will address how the
myriad of Federal and State programs (education, health care and cash
assistance) serving disabled children and their families actually
works to fill needs in an effective and efficient manner. We will
examine how these programs are targeted, how they interact with one
another, where they appear to overlap, and where they leave gaps. In
doing this, we are using the substantial Supplemental Security Income
(SSI) and Medicaid data bases that HHS has.
Third, we will launch a major demonstration with the Health
Care Financing Administration (HCFA) to evaluate strategies for
providing people with disabilities with control over their services,
in return for accepting a capitated budget. We will evaluate the
impact of a voucher system and direct cash payments to determine if
they save money over a service benefit approach, achieve reasonable
accountability, and satisfy consumers.
Fourth, we will work with the Administration on Aging (AoA) to
support the development of the infrastructure necessary to operate
efficient and effective long-term care systems. The growth and
diversity of the disabled population, constrained resources, and
massive changes in the health care system itself will place demands
on States to reform their approach for delivering chronic care
services. Working in partnership with selected States, we will
develop and test methods for tracking the performance of
administering agencies, regulators, and providers in implementing
long-term care systems reforms, measuring the outcomes of reform, and
responding to changing needs.
Poverty Institute
Last year, this Committee directed that we competitively fund
one or more poverty research centers. We are proceeding to do that,
with a major focus on tracking the impact of changes in the delivery
of services and income assistance on the people living in poverty.
We plan to have a non-partisan panel of technical experts review the
proposals resulting from the competition, and advise on the agenda
for the research.
Conclusion
In conclusion, Mr. Chairman, the Policy Research program and
the analytic work of the ASPE staff are critical both for providing
information to help guide potential new initiatives and for assessing
progress as these initiatives are implemented. I am strongly
committed to providing the most objective, useful, and high-c[uality
information possible, on a non-partisan basis, for use at the
national level and by our partners in State and local governments and
the private sector. I believe that the program and staff will
continue to contribute significantly to helping improve the lives of
millions of Americans.
Ill
^tuwej.
DAVID T. ELLWOOD
AMittint Secretary for Planning and Evaluation
Department Of Health And Human Services
David T. Ellwood was sworn in as assistant socretary for planning and evaluation in the Department of
Health and Human Services May 28, 1993. He was nominated t>y President Clinton Feb. 23, 1993, and
confirmed t>y the Senate May 28, 1993.
As assistant secretary for planning and evaluation, Ellwood is the HHS secretary's principal advisor for
the formulation and analysis of poicy. His responsit)ifties include the developn>ent of legislative proposals,
oversight of economic and policy analysis, and evaluation of department prograrps. Ellwood is a co-chair
of President Clinton's Woridng Group on Welfare Reform, Family Support and Independence.
EHwood came to HHS from the John F. Kennedy School of Government at Harvard University where
since 1992 he had served as academic dean, co-director of the Malcolm Wiener Center for Social Policy
and Malcolm Wiener Professor of Pubic Polcy.
Ellwood was bom Sept. 16, 1953, in Minneapois, Minn. He received his bachelor's degree in economics,
in 1975, and a doctorate in economics in 1981, both from Harvard University.
A latwr economist who spedaizes in the problems of the poor and disadvantaged and in poHctes
designed to help them, Ellwood has written several books and numerous articles on welfare, teen-age
unemployment and family poverty. His 1988 book, Poor Support: Poverty and the American Family.
expk>res the causes of poverty and the prospects of designing a support system to replace welfare. It was
selected by the New York Times Book Review as one of the most notable books of 1988. The Policy
Studies Organization selected it the outstanding book of 1988. He also coedited the tx>ok. Welfare Policies
for the 90s and recently published Welfare Realities: From Rhetoric to Reform, coauthored with Mary Jo
Bane. Ellwood's work has been credited with significantly influencing the Family Support Act of 1988, the
report of the National Commission on ChiMren and state welfare legislation.
His many outside activities have included serving on several National Academy of Sciences panels,
including the Forum on the Future of ChiMren. He previously served as a panel memt>er for the Committee
on the Status of Black Americans.
June 1994
112
STATEMENT OF DENNIS HAYASHI
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to present the fiscal year (FY)
1996 budget request for the Office for Civil Rights (OCR) .
OCR is charged with carrying out the Department's civil rights-
related responsibilities. To carry out these responsibilities, OCR
is requesting $21,330,000 for FY 1996, a 3.5 percent reduction from
FY 1995. The request includes $17,979,000 in appropriated funds and
$3,351,000 in trust fund transfers.
Compliance Responsibility
The mission of OCR is to ensure that no person is discriminated
against under any program or activity receiving Federal financial
assistance from the Department of Health and Human Services. In
carrying out this mission, OCR is responsible for enforcing:
• laws and regulations that prohibit discrimination on the basis
of race, color, national origin, disability, age, and sex;
• the nondiscrimination provisions of the health care and other
block grant programs;
• the community service assurance of the Hill-Burton Act, under
which health care facilities must provide services without
discrimination to all persons residing or working in the
service area; and
• delegated authority under the Americans with Disabilities Act.
In addition, OCR is responsible for coordinating implementation
of the Age Discrimination Act government -wide, and for coordinating
implementation of the Department's Section 504 regulation prohibiting
discrimination against persons with disabilities in programs and
activities conducted by the Department.
Secretary Shalala, the leadership of the Department's Operating
Divisions, and I are all committed to full and effective enforcement
of civil rights laws. To assure that when individuals and families
take responsibility for improving their lives, they each have an
equal opportunity to succeed, OCR will work both within the
Department and with service providers, program beneficiaries and
representative organizations to strengthen civil rights awareness and
compliance.
Compliance Activities
OCR uses a range of techniques to prevent and resolve problems
of discrimination. Specifically, OCR processes complaints of
discrimination, conducts reviews, initiates investigations, monitors
corrective action plans, and carries out voluntary compliance and
outreach activities.
The proposed budget would support approximately 276 FTE, a
reduction of 21 from the authorized level for FY 1995. OCR's policy
is to allocate sufficient resources to complaint processing to assure
that discrimination complaints are dealt with in a reasonably timely
manner. Strecunlining our case handling processes and focusing on key
issues will enable OCR to achieve more balance among its complaint
processing, review, and voluntary compliance activities.
113
Complaint Proceaaino
Under the regulationa implementing the civil righta atatutea,
OCR is required to addreaa all complainta alleging discrimination in
HHS programa. Based on standard forecaating techniquea, OCR
anticipatea a a lowing in the rate of increase for new complainta from
the 7 percent per year average experienced from FY 1990 through
FY 1994. OCR estimates that approximately 2,312 new discrimination
complaints will be filed in FY 1996.
In implementing its atrategic plan during FY 1995, OCR will
experiment with uaing alternative dispute resolution techniques,
limiting the scope of inG[uiries in some investigations, and focusing
on key iaauea. Each action will increaae responsiveness to citizens
filing complaints.
OCR plans to allocate 130 FTE to complaint processing in
FY 1996, a decrease of 13 FTE (or 9 percent) from FY 1995 estimates.
Through implementation of more efficient case handling processes, OCR
expects to reduce the ending inventory of open complaints to its
lowest level in five years.
Reviews and Investigations
Changes in OCR's approach to compliance reviews has increased
flexibility and enabled OCR to reach a substantially higher number of
program recipients. OCR plans to conduct a total of 350 reviews to
assess the compliance status of program recipients in FY 1996. This
represents a more than 60 percent increase from the 213 reviews
anticipated during FY 1995.
If a review, complaint case, or other infoirmation indicates
aerioua problema of poasible discrimination, OCR will initiate an
investigation. OCR expects to conduct a total of 121 civil rights
investigations in FY 1996, up from 88 in FY 1995.
In addition, OCR will continue to conduct pre-grant reviews
when notified that a health care facility has applied to participate
in the Medicare program and must receive civil rights clearance. OCR
anticipates conducting approximately 4,870 pre-grant reviews in
FY 1996.
OCR will allocate 78 FTE to conduct reviews and investigations
in FY 1996. This is the aame level aa estimated for FY 1995.
Monitoring
If a review or investigation reveals or substantiatea a
compliance problem, OCR requirea the program recipient to adopt and
implement corrective meaaurea. In addition, by meana of written
agreementa, facilitiea aubject to pre-grant reviewa may be recpaired
to aubmit compliance information. Corrective action plana and
agreementa are monitored by OCR to aaaure full compliance. OCR will
continue monitoring plana aa necessary in FY 1996, and will allocate
approximately 7 FTE to this activity.
Voluntary Compliance and Outreach
The goal of OCR's voluntary compliance activity ia to help
recipienta comply voluntarily with civil righta lawa and to inform
minoritiea, peraons with disabilities, senior citizens, and others of
their rights under the statutes and regulationa that OCR enforces.
OCR provides technical assistance directly to program recipients and
to State and local agencies. In FY 1996, OCR will also work jointly
114
with the HHS Operating Divisions and in partnership with
organizations outside the Federal government, including State and
local governments, to prevent or correct civil rights problems in
Departmental programs.
The 19 FTE allocated for this activity in FY 1996 is six more
than the FY 1995 level. Assigning more staff time to voluntary
compliance and outreach and partnership activities represents a
commitment by OCR to work collaboratively with both our internal and
external partners. Listening to our customers will best focus our
resources and efforts to address acute and chronic civil rights
problems. OCR will:
• work cooperatively with recipient State agencies to plan and
initiate pilot projects to encourage sub-recipient compliance
with nondiscrimination standards;
• work with HHS program staff and their program providers,
provider groups, advocacy groups. State agencies and other
experts to develop and monitor remedial plans; and
• work with partners to prepare and distribute "methods of
compliance" for recipient State agencies to self-monitor, and
help State and local partners monitor local efforts to achieve
and maintain sub-recipient compliance.
Successful voluntary compliance and outreach initiatives, plus
the ready availability of OCR compliance standards and policies to
serve as guides to service providers, will result in a growing number
of indicators of State, local, and program provider solutions that
provide quality local-level resolution of civil rights problems.
Legal Services
OCR's budget request includes 21 FTE to staff the Civil Rights
Division of the Department's Office of the General Counsel. OCR
anticipates that the staff attorneys in the Civil Rights Division
will be able to provide OCR with all necessary legal assistance and
guidance, including: (1) reviewing the legal sufficiency of case
findings and potential enforcement cases; (2) interpreting and
applying statutes, regulations, and court decisions; and (3) when
appropriate, conducting enforcement proceedings.
Program Management
In FY 1996, OCR will allocate 21 FTE to progreun management, a
reduction of 4 FTE (or 16 percent) from FY 1994. Management staff
determine program objectives and priorities, formulate and execute
the OCR budget, develop compliance plans, monitor and evaluate
compliance efforts, and make final decisions about OCR's compliance
standards and procedures. In addition, management is responsible for
quality assurance and management controls, staff training, and the
acquisition and application of ADP systems to improve efficiency and
productivity. Finally, management staff provide administrative
support in such areas as personnel management, travel, procurement,
property, and supply systems.
Conclusion
In conclusion, Mr. Chairman, OCR's FY 1996 budget request would
provide $21,330,000 to carry out the Department's civil rights
program. OCR is determined to carry out its important
responsibilities by using its resources effectively and efficiently,
and in a manner consistent with the customer service, streamlining
and staffing allocation goals recommended in the National Performance
Review and reflected in the HHS Civil Rights Strategic Plan. Thank
you.
115
DENNIS HAYASHI
Director
Office for Civil Rights
Department of Health and Human Services
Dennis Hayashi was appointed director of the Office for Civil
Rights (OCR) by HHS Secretary Donna E. Shalala on June 27, 1993,
The significance and importance the Clinton administration places
on this position was underscored by President Clinton's personal
announcement of Hayashi 's selection on May 5, 1993.
As director of OCR, Mr. Hayashi is responsible for ensuring
that prograuns and activities receiving funds from the Department of
Health and Human Services are in compliance with all civil rights
laws, including Title VI of the Civil Rights Act of 1964, which
prohibits discrimination based on race, color, and national origin;
Section 504 of the Rehabilitation Act of 1973 and the Americans
with Disabilities Act which forbids discrimination against disabled
persons; and the Age Discrimination Act of 1975. In addition to
the headquarters operation, Mr. Hayashi oversees the activities of
the 10 regional Civil Rights Offices. He is dedicated to law and
civil rights and determined to revitalize the Office for Civil
Rights, making it a proactive office accessible to its
constituency.
Mr. Hayashi is a distinguished attorney, whose career has been
devoted to fighting for civil rights and equality. From 1979 to
1991, Mr. Hayashi was an attorney for the Asian Law Caucus, Inc.,
litigating major impact precedent -setting cases and advocating the
passage and enforcement of various civil rights laws. He has
worked against hate crimes and anti-Asian violence, co- founding the
National Network Against Anti-Asian Violence and personally serving
as counsel for the faimily of Jim Loo, who was killed in a racially
motivated attack in 1989.
As an attorney, Mr. Hayashi has also represented Fred
Korematsu in his effort to overturn his World War II conviction for
opposing interment of Japanese Americans; Vietncunese fisherman who
suffered discrimination by the U.S. Coast Guard; and minority
firefighters with the San Francisco Fire Department.
Prior to accepting this position in the current
administration, Mr. Hayashi was national director of the Japanese
American Citizens League, the oldest and largest Asian Pacific
American civil rights organization in the United States. As
national director, he helped the organization achieve prominence
throughout the country and oversaw the national headquarters and
seven regional offices.
116
Mr. Hayashl's commitment extends to community activism.
He has served on the Asian Pacific American Democratic Council,
as director for the National Asian Pacific American Association;
the Board of Directors of the San Francisco Coro Foundation, the
San Francisco Legal Assistance Foundation, Child Care Law Center
and the Coalition of Asian Pacific Americans. Also, he was a
member of the California Commission on the Prevention of Hate
Violence and served on the Clinton/Gore civil rights transition
cluster.
Mr. Hayashi has published numerous articles in periodicals and
journals such as the Los Angeles Times, the Washington Post, San
Francisco Chronicle, Yale Law School Journal and the Kennedy School
of Government Asian American Policy Review. He has also been an
instructor at the New College of California Law School in San
Francisco.
Mr. Hayashi attended Occidental College, graduation ciun laude
in 1974 with a bachelor's degree in philosophy. He then attended
Hastings College of the Law, earning his J.D. in 1978. Mr. Hayashi
was law clerk to the honoralsle Robert Takasugi of the U.S. District
Court in 1977.
Mr. Hayashi 's grandparents were immigrants and his parents
were victims of internment during World War II. He was bom in Los
Angeles on May 31, 1952, and currently resides in the Washington,
D.C. area.
117
MANAGED CARE
Mr. Porter. Madam Secretary, thank you very much for your ex-
cellent statement.
I would like to start by asking — I think you said 63 percent of
newly eligible Medicare beneficiaries are signing up for managed
care programs. Can you describe for the subcommittee the dif-
ference now in incentives for managed care, as opposed to tradi-
tional care, and why you are getting 63 percent signing up for man-
aged care?
Secretary Shalala. There are a couple of things that are going
on, Mr. Chairman. One of them is that we have greatly expanded
the number of managed care options available to medicare recipi-
ents so that fully 75 percent of the people on medicare in the Unit-
ed States have access to an HMO, a managed care option.
By expanding the number of options available, obviously people
have more choice. Those that don't tend to be in places that don't
have managed care available, rural areas where you would not nec-
essarily— although in my own State of Wisconsin there is extensive
managed care in rural areas.
Second, managed care itself has grown in this country. The pat-
tern of senior citizens moving into managed care follows the pat-
tern of the expansion of managed care. In those places in the coun-
try where there is deep penetration of managed care, the elderly
are more likely to choose managed care. They are more comfortable
with it. People in their families have been in it, they might have
been in it themselves, so they have experience.
It is not necessarily the incentives being offered. Managed care
companies are in fact offering incentives — often, a full drug benefit,
for example; sometimes a sports fitness center that people who
have signed up for managed care would have available to them;
and sometimes by eliminating copayments. And so they are trying
to make packages and they are marketing different kinds of
packages.
I would suggest to you, though, that senior citizens have strong
opinions based on their own experience. If we went to Miami, Flor-
ida, for example, where managed care is marketed aggressively and
where total benefits are offered, including full drug benefits, there
are very few takers. Whereas, if we went to Portland, Oregon,
where very few additional benefits are offered, people are moving
into managed care. The difference is that Portland has had experi-
ence with managed care and more people are involved in managed
care.
I believe that we are probably a generation away from full par-
ticipation in managed care. While I believe that there will be a
more rapid movement in managed care, it will very much parallel
the kinds of experience that people have had.
The point I was making, Mr. Chairman, is we in the Department
are committed to moving people into managed care, but with Medi-
care, we are at the same time committed to giving people choice.
Mr. Porter. Sixty-three percent of newly eligible individuals are
choosing HMOs or managed care. What is the overall percentage
of people under Medicare that are in managed care?
118
Secretary Shalala. There has been a 16 percent increase from
1993 to 1994. I think we are at 9 percent of the total Medicare pop-
ulation. It is now moving so rapidly, that it is well over 1 percent
a month. So by the end of the year we may be over 10 percent of
the totla Medicare population.
Mr. Porter. My mother, who died last year, was in an HMO
from the very time it became fundable by Medicare, and found it
very good. However, there has been some anecdotal evidence of
quality control problems.
What is the Department doing to oversee that patients in HMOs
really get quality care?
Secretary Shalala. That really is the issue, Mr. Chairman. In
fact HCFA is in the process of transforming itself from simply a re-
imbursement agency to an agency that must oversee quality, and
that parallels the movement into managed care.
There are a number of things that are going on in the Depart-
ment, including: developing the required expertise at HCFA and
working closely with industry. We can then develop the manage-
ment expertise so you can hold us accountable and we can come
back and describe to you a series of things we are doing to try to
measure quality. This also includes the movement of industry to-
ward different kinds of quality measurements; to more information
about people's experiences; and to our own ability to oversee man-
aged care.
In saying that we are developing the capacity, I don't in any way
want to suggest that there is any doubt in our mind about the
availability of very good managed care agencies.
I think my biggest personal concern is, we will be pushed by
Congress to move people too fast into managed care, and the capac-
ity of the industry to handle what is, after all, a high-risk popu-
lation, the elderly £uid the disabled, will exceed our ability to pro-
vide careful oversight and to help the industry to develop capacity
to deal with the population.
Right now we probably are overpaying — and we have admitted
that a little bit — ^for managed care. We are paying 95 percent of
whatever the fee-for-service numbers are in a region; we probably
should be paying a little over 90 percent. But that is because the
industry itself is probably doing some creaming and taking the
healthier part of the Medicare population.
My concern is, if we tighten up too much, too fast, and the indus-
try doesn't move as capacity develops and gets more and more con-
fidence and experience in dealing with this population, that we will
go back to the 1970s, and in some cases the 1980s, where we had
Medicaid mills and Medicare fraud. So that we have to be very
careful as we move in.
Congressman Obey and I come from a State that has had a lot
of experience with managed care. My own hometown of Madison,
Wisconsin, is almost 94 percent in managed care, and has a lot of
quality information available.
Mr. Porter. Does HCFA or the Department have authority to
provide outcomes information to prospective consumers?
Secretary Shalala. We do, and one of the changes that Assistant
Secretary Lee has made — and I believe that Cliff Gaus is going to
come and testify — the Agency for Health Care Policy and Reserach
119
does outcome research, and they are changing their capacity again,
working with the industry.
The industry itself is very interested in research and quality
measures. We are setting all sorts of standards and conducting out-
come research in the Department, as well as working with the in-
dustry in this area. But that is the brave new world of health serv-
ices research that we need to move very quickly into, and I think
that when you hear Cliff Gaus testify and Phil Lee testify, you will
see how the Department is moving into this area.
IMMUNIZATION
Mr. Porter. A year or so ago, we had a bit of a go-around on
the vaccine program and the Federal Government's role in
warehousing vaccines. Can you tell us how vaccines are being ob-
tained and delivered, and how that is working?
Secretary Shalala. I think that we backed off the warehouse
concept, and States have gone ahead on their own to work out dis-
tribution systems. Two-thirds of the States now have their own dis-
tribution system.
You will remember, Mr. Chairman, the principle here was to in-
volve private doctors. What our research showed was that we could
not get every child in this country vaccinated by simply pouring
money into the public system. We needed to expand the infrastruc-
ture in the public system. What we wanted to do is enroll private
doctors. There are thousands of private doctors.
This country now has the highest immunization rates for pre-
school kids in its history. I believe in another year or so we will
reach the level of immunization rates, well over 90 percent, that we
wanted to reach. But the key to this has been private doctors.
Mr. Porter. Where are we now?
Secretary Shalala. We are at about 67 percent now.
Mr. Porter. And you think, in a year, we can make it to 90?
Secretary Shalala. In a year or two we can make it to 90. But
the important thing is to put a tracking system in place. I believe
having children immunized by their own physician has made a dif-
ference. My deal with the private doctors in this country is that we
make it a simple application.
GAO may come here and say we need to track every little shot.
I will resist that, because I think that keeping private doctors in-
volved is absolutely critical to getting this public health issue taken
care of.
Mr. Porter. Thank you. Madam Secretary.
Mr. Obey.
RESCISSIONS
Mr. Obey. Thank you, Mr. Chairman.
Madam Secretary, let me ask about the rescission last week as
it relates to the cap on foster care administrative costs. My under-
standing is that the administrative costs under the foster care enti-
tlement go far beyond the traditional set of activities which we nor-
mally think of as "administration."
Will that cut significantly impact services for those kids?
Secretary SHALALA. It will. In particular. Congressman Obey, it
will penalize the States who are implementing the statewide auto-
120
mated child welfare systems. As you know, the foster care system
in this country is quite fragile and it needs additional resources.
Some States have moved quite aggressively to put in place auto-
mated systems, provide training, trying to upgrade their foster care
systems. Not only would the rescission limit the Federal payment
for child placement services, but also limit these administrative
costs. We are very worried about that impact.
DRUG ABUSE EDUCATION
Mr. Obey. One of the largest cuts in the rescission package was
$482 million to eliminate the Safe and Drug Free Schools program
at DOE. My understanding is the National Institute of Drug Abuse
is responsible for tracking drug use in this country, including drug
use by high school kids.
Can you tell the committee what data from that survey tells us
about the direction that drug use has taken?
Secretary Shalala. It is tragic information, and that is that drug
use is going up in this country among young people. The young
people experimenting with drugs are getting younger and younger.
The tragedy is that everything we know is that we need to start
community school-based programs earlier and earlier; and this is
the wrong time, when the increase in drug use by young people is
so dramatic, for us to be terminating our efforts in schools.
Mr. Obey. Isn't it true that after a significant number of years
during which drug usage among high school kids had been
trending downward, that it has turned around and has been going
up again in the past few years?
Secretary Shalala. It has been. One of the reasons it has been
going up is a startling change in young people's attitudes towards
drugs and whether they believe that drugs will hurt them. Not only
is drug use going up, but the number of young people that believe
they are taking no risk is also going up, and that clearly is an edu-
cation issue.
MEDICAID RATES
Mr. Obey. I would like to talk to you about the biggest welfare
recipients in this country, States. If you take a look at the Medicaid
match formula, you see that the rate that States are reimbursed
at by the Feds varies widely from State to State.
You have rates going from a minimum of 50 percent up to, as
I understand it, 79 percent, the high, in Mississippi. Variation of
those rates means a State like Wisconsin gets $2,800 per recipient
from the Feds while a State like Louisiana receives $3,800. How
can we continue justifying such a large differential in those Federal
matching rates? And why shouldn't people from States like mine
insist that they be changed?
Secretary Shalala. Well, I think that a number of States — New
York, Wisconsin — have reasons to be concerned about the formula.
The difficulty, of course, is if we change the formula, we will
change the mix of winners and losers. There have been serious
questions about this.
The per capita standard doesn't take into account, for example,
a State's poverty rate or if there are abnormal income distributions.
121
■ Mr. Obey. But my point is there are some Members of this Con-
gress who are the loudest in insisting that individuals get off the
dole, who at the same time have their hands out on behalf of their
States, who are setting an all-time record for being on the dole.
How much money would we save if those Medicaid rates were
capped at a level of, say, 65 or 70 percent as an interim step while
we reviewed the whole issue of matching?
Secretary Shalala. I would have to provide that for the record.
Your point is well taken. I recently had a conversation with the
Governor, who has favored block-granting Medicaid. In his waiver
request to us, our discussions have been about whether his State
will be allowed to use a growth rate significantly higher than the
program that he favors.
He was very clear about what he was trying to do and that was
to lock in a higher growth rate for his State before Congress moved
to lock in a percentage for all the States. There is significant talk-
ing out of both sides of our mouth. There are, in fact, differences
in the impact of the matching formula.
We would be happy to provide you with what the impact of your
proposal would show.
[The information follows:]
Medicaid Rates
The amount of Medicaid expenditures paid by the Federal government in each
State — the Federal Medical Assistance Percentage (FMAP) — is statutorily deter-
mined by a formula which uses the per capita income in the State relative to the
nation. The match rates have a floor of 50 percent and a ceiling of 83 percent. In
FY 1995, 14 States have a 50 percent FMAP and Mississippi, as you noted, has the
highest FMAP at 79 percent.
As you requested, we determined what the savings would be under your proposal.
Using the FY 1996 FMAP rates and projected outlays as an example, a 65 percent
cap would save approximately $1 billion, or one percent of Federal Medicaid outlays
for that year. A cap of 70 percent would result in less than $400 million in savings,
or less than one percent of total projected Federal Medicaid outlays. These are one
year only savings and, of course, the savings would grow as outlays grow in the out-
years.
Of course, a proposed that lowers the FMAP ceiling creates savings from States
with the highest FMAP rates — States that have the lowest per capita incomes rel-
ative to the rest of the nation, for example Mississippi. Questions about equity in
the current formula persist for reasons beyond just the ceiling. Therefore, if you are
considering altering the current matching rates, you may want to begin by taking
into account the kinds of considerations raised by the General Accounting Office and
the Urban Institute in their more comprehesnive review of the FMAP. Taking only
this interim step could exacerbate any inequities in the current formula.
REFUGEE ASSISTANCE
Mr. Obey. Since my time is up, I would like to work with your
agency and several others to try to find an answer to the dilemma
that States like Wisconsin and Minnesota are increasingly facing
with the refugee program. We seem to have a mood in the Con-
gress which indicates that we need to get far tougher with respect
to the Federal financing of services for immigrants, illegal and
legal.
I think there is a different issue facing us on the issue of refu-
gees. Refugees are allowed into this country for essentially foreign
policy reasons. They then become very quickly a very heavy burden
on local governments because of the costs of educating them, the
cost of supporting them financially, and in many other ways.
122
Why shouldn't the Federal Government be fully responsible for
meeting the education and social costs associated with absorbing
legal refugees into the society, since the Feds, through the years,
have been anxious to zdlow refugees in but not so anxious to pay
for the costs afterwards?
Secretary Shalala. Well, as you know, it is a policy decision.
There is a refugee resettlement program which is inadequate, given
the number of refugees that are admitted to this country. There
has been a straight policy decision by the Administration and the
Congress as to how many resources will be provided to a commu-
nity to help in the resettlement process.
Under tne new Welfare Reform bills, even refugees are hit in
terms of the availability of existing social service programs that
will cause extreme hardship to some communities with large pro-
portions of refugees.
Mr. Obey. I guess it would be my position that if the Federal
Government is not willing to fully support the cost of absorbing
those refugees into our society for a significant length of time, say
five years, then the Federal Grovemment shouldn't let them in at
all, because I think localities should not get stuck with the respon-
sibility of financing what in essence are the national government's
foreign policy decisions.
I would like to work with your people and see if we can't figure
out some way to try to resolve that issue.
Secretary Shalala. We will be happy to work with you,
Congressman.
Mr. Obey. Thank you, Mr. Chairman.
Mr. Porter. Thank you Mr. Obey.
Mr. Bonilla.
Mr. Bonilla. Thank you, Mr. Chairman.
Madam Secretary, you state that this budget is a new way of
honoring our commitment to serve the public good, and it makes
tough choices. First of all, I welcome the Administration's proposal
to help us do our job. HHS has made some tough choices and this
subcommittee will have to make some equally tough choices. We
may disagree, but I want to point out something to my colleagues
about Secretary Shalala.
I applaud her effort not to lower herself to name calling. I wish
I had a nickel for every time I heard the word "mean-spirited" in
the last 90 days; we could pay off the projected debt for this year.
If we don't completely agree on the Department's priorities, but
agree on the need to work for the public good, does that make us
mean-spirited simply because we have some disagreements?
Secretary Shalala. No, it doesn't.
MEDICAL research
Mr. Bonilla. It reminds me of the old spousal dispute where one
says about the other that their definition of a negative person is
one who disagrees with them. I wish that others were more com-
passionate to those of us trying to do the right thing for this coun-
try and be compassionate as well.
I would like to ask you something about medical research. That
is one area where we have strong bipartisan support on this com-
mittee. I happen to be on the National Security Appropriations
123
Subcommittee, as well as my colleague, Mr. Young, who chairs
that. There are programs in the Defense Department's budget for
osteoporosis research, leukemia, AIDS and breast cancer.
Do you feel it is appropriate for this area to be absorbed by the
Defense Department instead of being totally in this committee?
Secretary Shalala. Well, there is a long history of scientific re-
search in other parts of the government. For example, the Depart-
ment of Agriculture has a huge investment in agricultural re-
search, which has an aspect of it related to the National Institutes
of Health. We have not totally centralized the scientific research in
this country. While it is not totally scattered, it is located in three
or four different departments — in the National Science Foundation,
in the Department of Agriculture, and in the Defense Department
as well as the Department of Health and Human Services are the
departments that come to mind in terms of major commitment.
The Defense Department has, over the years, built up a capacity
to do some of this research. They have a captive clientele in terms
of their ability to do certain kinds of research. But, I don't see any-
thing that is inappropriate.
Whether that research should be under the jurisdiction of this
committee, I am not sure I want to get into — that is for the Appro-
priations Chair, who has his hands full with jurisdictional issues
already.
Where we have a capacity, as we do in the Defense Department,
to conduct research, we are enthusiastic about the fact that they
add to the research, and have very close cooperation with the Na-
tional Institutes of Health and with the Public Health Service.
HEAD START
Mr. BONILLA. I ask that because those programs are being re-
viewed by the other subcommittee closely; we question whether
they are defense-related functions at the Pentagon.
I would like to move now to Head Start, if I could. That is an-
other area where we have had agreement on both sides of the aisle
about trying to work to improve this program.
Since 1991, Congress has increased funding for Head Start 46
percent from $1.9 billion to $3.5 billion. I understand that we are
expanding the program to serve more children from the ages of
zero to three, and if the Congress adopts the President's request,
the increase will be 51 percent since 1991.
Mr. Hoyer talks about this program a lot, and I am in agreement
with him, that he is trying to do the right thing to improve the pro-
gram. What is the Department going to do to weed out the bad
Head Start programs? Isn't it correct that the Department has
never kicked any grantee out of Head Start in over 30 years? And
if so, why have actions not been taken to kick some of the bad pro-
grams out or whip them into shape?
Secretary Shalala. Let me say a couple of things about that.
First of all, I came before this committee two years ago and made
it very clear that quality improvement was very much a part of our
expansion in our request to this committee for expanded resources
for the Head Start program. We appointed a bipartisan commission
which told us to set our standards higher and to identify the poor
124
performers and to work with them if they continue to be poor per-
formers, we were told to start to terminate some programs.
We have done that. We currently have 90 percent of our grantees
over or at our new standards. Of the 125 grantees who were identi-
fied as poor performers, 68 have improved to a satisfactory level.
We actually have terminated seven of the programs, and our re-
gional office staff is continuing to work with 50 grantees. If those
50 grantees don't meet our performance standards, you can be as-
sured that we intend to make as hard a decision as we need to
make in those programs.
But under this Administration, we have kept our commitment to
invest in quality and to raise the standards for our Head Start
centers.
INVESTMENT IN PEOPLE
Mr. BONILLA. That is good to hear. I would only encourage that
continue, because we need that kind of help on this committee to
be able to justify the actions that we have taken, again, in a very
strong, bipartisan manner.
Your fiscal year 1996 budget states that it concentrates resources
in those areas that have high potential for returns. Could you pro-
vide an overview as to how the Department determines these po-
ten^'als, like those diseases at NIH, the programs for the elderly
and the disabled. Head Start and SSA?
For the record, I would appreciate it if you would provide the De-
partment's detailed analytical data for the budget justification for
each of those programs in the Department, and tell us how the De-
partment thinks it will yield high potential for all of us.
So I would appreciate if you would do that.
[The information follows:]
125
Investment in People
While complete justifications for our major investment
increases are included in the detailed estimates we sent to the
Committee with our budget, I wanted to give some sense of the type of
returns we are looking at in choosing and enhancing our key
investment areas .
First, our budget requests an increase of $468 million for the
National Institutes of Health (NIH), an agency with a proven track
record of scientific accomplishment and progress against disease.
For example, a $20 million investment in hemophilus influenza B
vaccine has resulted in savings of over $400 million each year by
preventing cases of childhood meningitis and consecjuent mental
retardation. As a result of NIH-supported clinical trials, the use
of AZT to prevent maternal-fetal transmission of HIV is expected to
save over $172 million annually. And, just last month, we announced
the NIH-funded discovery of the first drug treatment for severe cases
of sickle cell anemia, a major breakthrough that will give hope to
more than 70,000 Americans who suffer from this disease.
In 1996, we also propose to invest $400 million more in Head
Start to create about 32,000 new opportunities for children and
families in part-day programs and expand 22,000 current peurt-day
slots to full-day, full-year services. Studies of Head Start have
indicated the program's positive effects on cognitive skills, self-
esteem, achievement, motivation and social behavior. Head Start has
also been shown to have a positive impact on parent-child
relationships, child health and community services. Longitudinal
studies on other quality child development programs, including Head
Start, show similar short- and long-term benefits (Lazar, et al.,
1978; Schweinhart, Barnes & Heikart, 1993).
For Immunizations we are proposing $843 million in FY 1996 to
support the purchases of more vaccine and continued improvements in
systems to immunize children. The Administration has made
substantial progress towards the goal of providing the most critical
immunizations for 90 percent of children up to the age two by 1996.
Failure to immunize can lead to new outbreaks of disease. In
1989-91, a measles epidemic resulted in more than 55,000 reported
cases, 11,000 hospitalizations, and more than 130 deaths. Half of
the deaths were infants. Moreover, we know that vaccines are
cost-effective. More than $21 can be saved for every $1 spent on
measles/mumps/rubella vaccine; more than $30 can be saved for every
$1 spent on diphtheria/tetanus/pertussis vaccine; and more than
$6 can be saved for every $1 spent on polio vaccine.
In SSA, we have included an additional $891 million for
automation and disability investments. The automation investment
funding will enable SSA to provide high-quality service for
disability applicants, reduce claims processing times, and improve
productivity. Studies have shown a 5 percent increase in
productivity in SSA pilot sites where intelligent workstations and
networks have been implemented. For Phase One of SSA's automation
project, cumulative workyear savings are valued at $1.2 billion.
With the increase in disability investment funding, processing times
in for initial claims will be cut by more than a third — from 97 days
in FY 1994 to 62 days in FY 1996. A portion of our disability
investment will also be used to make progress on a reengineered
process — which, when fully implemented, is expected to drop average
processing times for initial disaUsility claims even further.
These are just a handful of the examples of hpw HHS investments
are yielding real returns for the American taxpayer!
126
PROGRAM CONSOLIDATION
Mr. BONILLA. Last year you were responsible for 250 health, wel-
fare, food, drug safety and income assistance programs. Under the
President's budget proposal, what would that number of programs
be reduced to? I see in your testimony a proposal to combine 107
activities. Would that number actually be 143 under your proposal,
or would it actually go down?
Secretary Shalala. Actually, the number of programs will go
down because we are consolidating 50 programs into nine programs
under the Health Resources and Services Administration alone. So
I will have to give you the total numbers we are down to. We are
in fact taking those programs and reducing them to a handful of
program grants. So we will have many less programs.
The other thing, of course, is the Social Security Administration
becomes an independent agency on April 1, 1995.
Mr. BONILLA. That would sound like a huge decrease, to go from
over a hundred to a handful — ^you say a "handful;" that is quite a
reduction.
Secretary Shalala. Just to give you a feel for that, in the health
professions, for example, we will reduce most of the major parts of
those programs to one application. So an academic institution like
my own, the University of Wisconsin, would not have to prepare 10
different proposals for different programs; they may just prepare
one.
If you go with me to a community health center in this country,
we have reduced the applications for the eight major programs
down to one application. So in some cases, we merge programs, in
some cases we have consolidated, in other cases we have gotten
ourselves down to a single application.
We will do more of this, and in fact, in Reinventing Government
II, which we will report to this Committee sometime, after the 1st
of June, or maybe a little before; you will see the second round of
this kind of movement by the Department.
Mr. BONILLA. Thank you. Madam Secretary.
Thank you, Mr. Chairman.
Mr. Porter. Thank you, Mr. Bonilla.
Mr. Stokes.
HEALTHY PEOPLE 2000
Mr. Stokes. Thank you, Mr. Chairman.
Madam Secretary, it is nice to have you back before our sub-
committee again. Let me start with a question about Healthy Peo-
ple 2000. To what extent are we meeting the objectives of Healthy
People 2000 with respect to the population in general, and also
with respect to at-risk populations in particular? And, if you could,
give us some idea of how you are measuring progress.
Secretary Shalala. Let me get back to you on that. Let me pro-
vide the details for the record.
But we are generally moving towards each of the goals that we
outlined, and we have different strategies for different goals, par-
ticularly for, for instance, reducing the number of deaths from
breast cancer. We showed the first progress this year in the statis-
tics. They didn't show up as high for minority women, which has
127
been retargeted by us as one of our goals that we have to work
harder on. But for each of the goals that we laid out, there is a spe-
cific strategy, and we can show progress generally for each of those
goals.
[The information follows:]
128
PHS - Healthy People 2000
As Healthy People 2000 approaches the midpoint of the decade,
progress has been made on nearly half of the objectives, 15 percent
are moving away from their targets, and 4 percent show no change.
The remaining objectives need additional data for evaluating
progress. Additional information follows:
► Healthy People 2000 is defined by 3 broad goals —
• To increase the span of healthy life for Americans;
• To reduce health disparities among Americans; and
• To achieve access to preventive services for all
Americans.
► In 1994, the National Center for Health Statistics (NCHS) began
an annual publication the Healthy People 2000 Review. This new
publication will provide a comparison of U.S. health status
with the goals established for the yeeu: 2000.
• The first "Review" published in June 1994 provided 1992
data.
• The next publication with 1993 data will be published in
June 199S.
► To date, the following goals already have been exceeded:
• increasing physical activity /fitness — low income persons
• reducing use of cocaine by teens and young adults
• reducing foodborne illness from salmonila
• reducing Hepatitis B and C infections
► The following need additional attention:
• overweight adults in the U.S.
• weapon-related deaths
• occupational injuries for full time workers
• children under S not receiving annual dental visits
• adults without access to primary care
► Healthy People 2000 includes 22 priority areas which each
include a multiple set of goals for the Year 2000. A table
follows which portrays our progress in achieving selected goals
within these priority areas.
129
HEALTHY PEOPLE 2000 GOALS AND PROGRESS
Priority Areas
1991
or
1992*»
Year 2000
Taiset
Difference
Goal Met/or
Exceeded
1 . Phytical Activity/ntoeu
(Percent Increaie)
Penoni 18-74 yean
Low Income 18-74 Yean.,
2. Nutrition
(Percent Decrease)
Overweight adulu
3. Tobacco (per 100,000)
(Death rate for lung cancer)
All penoni
4. Alcohol/Other Dnigi
(Reduce uie w/in paM month)
Alcohol
12-17 yean
18-20 yean
Marijuana
12-17 yean
18-25 yean
Cocaine
12-17 yean
18-25 yean
Family Planning
(Adoleicent abstinence 15-17
yean)
Ever Kxually active girl*
Ever aexually active boys
6. Mental Health (per 100,000)
(Suicide Death Rates)
All persons ,
7. Violent & Abusive Behavior
(Weapon-related death rates)
All weapons
8. Community-Based Programs
(Yean of healthy life)
All persons
9. Unintentional Injuries
(Rate per 100,000)
All persons
10. Occupational Safety/Heahh
Non-fttal injuries (per 100)
Full time worken
12%
7%
26%
38.5
25.2%
57.9%
6.4%
15.5%
1.1%
4.5%
24%
33%
11.7
64.0
34.7
7.7
14%
13%
34%
39.6
15.7%
50.3%
4.0%
11.0%
0.3%
1.8%
25%
36%
10.9
29.2
8.3
20%
12%
20%
42.0
40%
40%
10.5
12.6
75.4
29.3
-6%
+ 1%
-2.4
12.6%
+3.1%
29.0%
+21.3%
3.2%
+0.8%
7.8%
+3.2%
0.6%
-0.3%
2.3%
-0.5%
-15%
-4%
+0.4
-11.4
-0.1
Progress
Exceeded
Lost Ground
Progress
Progress
Progress
Progress
Progress
Exceeded
Exceeded
Progress
Progress
Progress
Lost Ground
Baseline year is 1985 in most yean.
Latest Dau Available.
130
HEALTHY PEOPLE 2000 GOALS AND PROGRESS
Priority Aicm
1985*
1991
or
I992»«
Year 2000
Taixet
Difference
Goal Mel/or
Exceeded
1 1 . Eovirofunenlal Health
(Percent Increaie of People
living in countries with
clean air)
Any PoUutant
49.7»
78.4%
85.0%
+6.6%
12. Food and Drug Safety
(Caaei per 100,000)
18
66.0%
14
63.0%
16
90.0%
-2
-27.0
Exceeded
Lost Ground
13. Oral Health (Percent)
Children under S who viiited
the dentist w/in past year
14. Maternal and Infant Health
(Percent of live biiths w/
mothers receiving prenatal
care in first trimester)
All races
76.0«
30.4%
76.2%
26.1%
90.0%
20.0%
-13.8%
+6.1%
Progress
Progress
15. Heart Disease/Stroke
(Death rate per 100,000)
All persons
16. Cancer
(Death rate per 100,000)
Female Breast Cancer
23.0
22.7
20.7
20.6
Progress
17. Diabetes & Chronic
Conditions
(Death rates per lOO.OOC))
38
49
38
87
34
98
+4
-11
No Change
Incon-
clusive
18. HIV Infection
(Cases in thousands)
19. Sexually-Transmitted Diseases
(Cases per 100.000)
Syphilis/ All persons
18.1
13.7
10.0
+ 3.7
Progress
20. Immunization/Infectious
Disease (Cases per 100,000)
Hepatitis B
Hepatitis A
Hepatitis C
63.5
33.0
18.3
37.7
27.2
5.6
40.0
23.0
13.7
-2.3
+4.2
-8.1
Exceeded
Progress
Exceeded
21 . Clinical Preventive Services
(Percent of Adulu)
82%
79%
95%
-16%
Lost Ground
22. Surveillance & DaU Systems
(Percent of States)
Complete Year 2000 plans....
77%
99%
100%
-1%
Progress
* Baseline year is 1985 in most years.
** Latest Data Available.
131
HEALTH CARE REFORM
Mr. Stokes. Let me move to another area.
There appears to be a significant move towards health care re-
form in some State and local jurisdictions around the country. Just
recently you have granted a waiver in terms of the utilization of
Medicaid funds to the State of Ohio, a plan called OhioCare.
To what degree are we finding now that this type of health care
reform is taking place at local levels? To what degree are Medicaid
waivers being granted?
Secretary Shalala, About a quarter of the States have started
conversations or concluded conversations with us regarding waiv-
ers. What most of them are trying to do is either move their Medic-
aid populations into managed care, or take the resources they are
currently getting for Medicaid or resources they are using for
match or additional resources and trying to cover a larger popu-
lation, particularly the working poor, in a more flexible manner, or
trying to just cover children of working poor parents.
In Tennessee, for example, it was the goal of the State to actu-
ally cover the population that was working that had no health in-
surance. They moved into the 90 percent, in terms of total coverage
for people in the State, and they did this by moving people into
managed care.
The huge increase in managed care, in the movement of Medic-
aid recipients into managed care, is in fact as a result of waivers.
As you know, one of the first waivers we agreed to was in Oregon,
and the goal there was to enroll more people and to cover more
people with health insurance using the Federal resources in more
imaginative ways.
I think that basically it is fair to say what the governors are try-
ing to do is a combination of getting more cost containment, but at
the same time, some of them are actually trying to use their re-
sources more effectively to cover low-income workers, particularly
as it fits with their programs for welfare reform.
Mr. Stokes. Is the Department monitoring these programs very
closely in order to assure that the population can be served. These
are the poorest of the poor, are they being adequately served?
Secretary Shalala. Yes. As part of our arguments or negotia-
tions with the States, we have insisted on building in very careful
monitoring and evaluations. These waivers are to demonstrate that
we can do something better, and to test new ideas; and therefore,
in each one of these waivers, we have built in evaluations and mon-
itoring so that we can come back and report to you, for example,
the impact in Cuyahoga County or the OhioCare approach.
So that is built in so that we can report back to Congress on the
effect of the waivers.
welfare reform
Mr. Stokes. Let me ask you about welfare reform, if you have
had a chance to see whatever proposal is being proposed through
the Contract With America, as opposed to an approach supported
by the Administration. What should we be concerned about here
with reference to what you have seen?
132
Secretary Shalala. With reference to what I have seen, as you
know, the Ways and Means Committee has gone through a number
of drafts, and they have moved from the original Contract proposal.
From what I have seen, what is being proposed is not welfare re-
form; it is budget cutting. It is weak on work.
The President insisted that there be strong work requirements.
The work requirements in the bill that Ways and Means passed in
fact allow you to count towards a 17 percent work requirement for
the States people that have simply been thrown off the system, not
people that have been helped to get work.
Second, there are no education and training resources available.
Third, child care is cut. It is unrealistic to expect young mothers
to get into the work force unless child care is there in place.
Finally, the proposals are very tough on children. Large numbers
of children are excluded from cash assistance in the program. Chil-
dren born to mothers who are under 18 are excluded until the
mother reaches 18. Without child care, we are talking about chil-
dren of people who are expected to go to work being left perhaps
in unsafe situations.
So on the President's two major goals — a goal of making sure
that people actually have an opportunity to move from welfare to
work, and that there are real work standards and accountability;
and on how the program affects children — it meets neither of our
tests.
Finally, on child support enforcement, to be fair, I think we are
close to having something with bipartisan support. Although we
are deeply concerned with one of the major recommendations. We
strengthen the States' hand by going after deadbeat parents, allow-
ing them to get rid of drivers' and professional licenses. That piece
has been left out of the bill.
You know the cuts in Food Stamps. When you actually look at
the bill, it is a bill to take $60 billion out of the safety net in this
country, and by moving to block grants. It is not a bill that anyone
with any kind of expertise in the field would describe as welfare
reform.
There would be no accountability to the Secretary of HHS. If that
bill passes a taxpayer could not call me up and ask me about what
is going on in Ohio, because it restricts the Secretary of HHS from
providing an oversight function. This means my mother, a taxpayer
in Cleveland, will not be able to ask me how her money is being
spent in Wisconsin for welfare reform because we won't be respon-
sible for conducting the kind of oversight that taxpayers would
expect.
Mr. Stokes. Thank you. Madam Secretary.
Thank you, Mr. Chairman.
Mr, BONILLA [presiding]. Thank you, Mr. Stokes. Mr. Istook.
hiv/aids cases
Mr. ISTOOK. Thank you, Mr. Chairman.
Secretary Shalala, I wanted to ask, in your testimony, you have
the statement, roughly 40 percent of the more than 440,000 AIDS
cases reported since 1981 were reported in 1993 and 1994. And cer-
tainly we all know that AIDS is a serious, debilitating disease, and
we want to halt the spread of that.
133
From your testimony, saying that about 40 percent of the
440,000 cases, you are saying approximately 176,000 cases of AIDS
were reported in 1993 and 1994. As you state in your testimony,
you are trying to stress that AIDS is spreading rapidly.
However, a publication from your Department, which is from the
Public Health Service Centers for Disease Control and Prevention,
part of HHS — and this is the February 3rd, 1995, Morbidity and
Mortality Weekly Report — indicates that of the increase which you
speak of, most of those were due to a change in the definition, not
to a change in the incidence of AIDS.
I cite from this report, "During 1994, there were reported to CDC
80,000 cases of acquired immunodeficiency syndrome, AIDS, among
persons in the United States, which followed the 106,618 cases re-
ported in 1993. The number of cases reported in each of these years
was greater than that reported in 1992, which was 47,572, and fol-
lowed the expansion of the AIDS surveillance case definition."
Now, Secretary, you are telling this committee that roughly 40
percent of the AIDS cases were reported in 1993 and 1994, which
is an increase, according to your testimony, of 176,000 cases, but
102,000 of those, according to the Centers for Disease Control, were
reported due to a change in the definition. I am disturbed by the
use of that change in definition to try to change public perception
about AIDS as the leading cause of death among this group or that
group, or the incidence of it.
I would be interested and would ask to see all the news releases
that have been put out by your office regarding the incidence of
AIDS to see if you are correctly reporting in your public statements
that most of this is due to a change in definition, not to an increase
in the incidence. In fact, as it states in this report, the incidence
of reported AIDS cases declined in 1994 by some 20,000, down from
106,618 to 80,691.
Can you tell me, Secretary Shalala, why you were not more care-
ful not to be misleading in your statements regarding the incidence
of AIDS?
Secretary Shalala. I think we have, since the redefinition, been
careful in our statements about AIDS.
Mr. ISTOOK. You were not in your testimony today.
Secretary Shalala. I would be happy to provide you with any
press releases from the CDC, which is where the press releases
come from on this subject.
Mr. ISTOOK. I am interested in those from your office, Ms.
Shalala. I would like to see what you are saying and whether you
were accurately reporting to the public that this is a change in
definition.
Secretary Shalala. I would be happy to provide you with that
information.
[The information referred to was supplied and has been retained
in committee files.]
Mr. ISTOOK. I would appreciate that.
But I still don't understand why you were telling this committee
about an increase in AIDS and trying to dramatize increases when
actually the reports from CDC show fewer cases and that the in-
crease you talk about is due to a change in the definition.
134
Secretary Shalala. Mr. Istook — I have my chart on the cost of
AIDS, let me talk about it in a slightly different way.
Mr. Istook. Could you tell me why your testimony doesn't tell
us the true facts?
Secretary Shalala. First of all, I deny that my testimony is inac-
curate. Second, since I don't have the CDC report
Mr. Istook. It may be accurate, but it is misleading.
Secretary Shalala. Let me make sure I see what you are read-
ing from and that we take a look at it. There is no intent to mis-
lead you about the importance of our investment in AIDS and what
is happening in this country in terms of the impact of AIDS on the
Federal budget, its health costs to this country, or the fact that it
still is a growing infectious disease.
Mr. Istook. I presume you want to shift the emphasis to your
spending rather than addressing my question, which is why you
present misleading statistics to us.
Secretary Shalala. Mr. Istook, it is difficult for me to address
something when you are just presenting me with the statistics. I
would be happy to provide that after we take a careful look at it
for the record.
Mr. Istook. I am reading from a publication issued by your
Department.
Secretary Shalala. I understand that. Let me make the point
that the growth in the discretionary budget of the Department, and
that is our commitment to AIDS services as well as to AIDS re-
search, is about $2.9 billion, while the growth in expenditures of
entitlements related to AIDS continues to grow because of the ill-
ness and our need to spend money on people who are g-^nuinely
sick from the illness. The point I think we want to make is that
we have a significant health risk out there and a significant infec-
tious disease. We are just beginning to learn about it, and we must
continue to provide investment both in the research as well as in
the services. And that was the point we are trying to make as part
of this testimony.
But I would be happy to look at the points you have made, and
to review them, and if I need to make any corrections, I would be
happy to do that.
[The following information was provided subsequent to the
hearing:]
135
THE SECRETARY OF HEALTH AND HUMAN SERVICES
WASHINGTON, DC ?0201
MAR 2 8 IS95
The Honorable John E. Porter
Chairman
Subcommittee on Labor, Health and Human Services
and Education
Committee on Appropriations
House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
During my appearance before your Subcommittee on March 8, 1 995, I offered to
provide the Subcommittee with additional information regarding the status of the AIDS
epidemic. I ask that this response be included in the record of the Subcommittee's
hearing.
Since the AIDS epidemic began in 1981, we have seen strong bipartisan support for an
aggressive national response that includes research,, prevention, and services for people
living with AIDS. Because of its impact on American society, AIDS remains one of our
highest public health priorities.
During my testimony before the Subcommittee, I said that there have been more than
187,000 cases of AIDS reported in the United States in the last two years, representing
more than 40 percent of the total cases reported since 1981. Congressman Istook noted
that the number of cases reported in 1994 was lower than the total reported in 1993 and
questioned whether the AIDS epidemic is accelerating or receding. Let me explain.
From 1981 to 1993, the Centers for Disease Control and Prevention (CDC) defined AfDS
cases by a list of 23 conditions, including the presence of one or more opportunistic
diseases such as Kaposi's sarcoma or Pneumocystis carinii pneumonia. These illnesses
are very severe, requiring hospitalization and often resulting in death.
The problem was that this definition captured only the people who were most severely
ill. Many people who were not as sick but still in need of care were not being
identified. These people also need drugs and other forms of treatment to prevent the
severe illnesses that require hospitalization. In 1992, CDC began consulting with
epidemiologists and other medical experts, and subsequently changed its definition on
January 1, 1993 to include two additional infections, one malignancy, and the presence
of fewer than 200 CD4 cells per cubic milliliter of blood (a measurement indicating a
highly compromised immune system).
136
Page 2 - The Honorable John E. Porter
The expansion in CDC's case definition caused an expected, one-time surge in the
number of cases reported in 1993. This occurred when the backlog of people who were
already infected but had not been previously classified as having AIDS were added to the
total. More than 106,000 AIDS cases were reported in 1993, and about 81,000 were
reported in 1994. Both the 1993 and 1994 totals exceeded the approximately 47,000
cases reported in 1992 (under the pre-1993 definition).
Because of the change in the case definition, trends in the epidemic cannot be
determined by comparing numbers of reported cases by year. Rather, AIDS trends are
best examined by comparing the time when cases are diagnosed. Progression of disease
from a low CD4+ count {new definition) can occur within a year. Therefore, CDC
researchers have conducted analyses of new AIDS diagnoses applying a consistent case
definition over time. Using the consistent case definition, the number of people
diagnosed with AIDS increased at a rate of about three percent per year from 1992
through 1994. AIDS is clearly not receding.
AIDS-related deaths also continue to grow, with an estimated 40,000 Americans
succumbing in 1994. Recently, the CDC reported that AIDS is now the leading cause of
death among Americans between the ages of 25 and 44. Many of these young people
were likely infected in their teens and early 20s, before our research and prevention
efforts were offering the hope they do now. Our national investment in research,
prevention, and services has helped to stem the tide of AIDS.
Prevention efforts - by the government and by community organizations - are working,
but it is now clear that the United States faces not one, but several AIDS epidemics.
Today, the epidemic among older homosexual and bisexual men has leveled, reflecting
in part, the effect of sustained, targeted prevention efforts. But researchers at the
National Cancer Institute estimate that one-quarter of all new infections occur among
young people under the age of 22, and fully one-half of new infections occur among
people under 25. National Cancer Institute researchers also have shown that the time
from infection to AIDS in these younger persons is longer than in older persons. Thus,
the size of the "HIV iceberg" is growing and these are AIDS cases that have yet to be
diagnosed. The proportion of cases among heterosexual men, women, racial and ethnic
minorities, and children continues to increase. Stemming the epidemic in these groups
requires continued, intensified and targeted prevention efforts.
A decade ago, our understanding of HIV and its effect on the human body was relatively
limited. Today, we not only know a great deal about the AIDS virus, we have
developed several drugs that treat and prevent AIDS-related conditions. This has helped
to extend and improve the lives of thousands of Americans living with this disease. In
the past year alone, researchers have discovered the first evidence that drug therapy can
actually block HIV transmission. NIH is also at work on a new class of protease
inhibitor drugs that are more effective at preventing viral replication than are such drugs
as AZT, DDI, and DDC.
137
Page 3 - The Honorable John E. Porter
A decade ago, AIDS was threatening to overwhelm our public health infrastructure and
AIDS-related costs averaged $150,000 to $180,000 per patient. Today, thanks to
advances in management of HIV infection and to the Ryan White CARE Act, we have a
comprehensive continuum of care that keeps AIDS patients out of hospitals and in better
health, driving costs down.
All of this we have achieved together. The President's Fiscal Year 1996 budget proposes
to sustain this progress by increasing the public health investment in AIDS-related
programs by seven percent. I look forward to working with members of your
Subcommittee to secure the necessary funding to continue our fight against this
epidemic.
Sincerely,
'Donna^. Shalala
138
Mr. ISTOOK. And again, as I state, the publication from your De-
partment shows that the reported cases decHned by over 20,000,
down from 106,000 to 80,000, in 1993 to 1994.
[The following information was provided subsequent to the
hearing:]
139
Hi^EH
Surveillance Report
U.S. HIV and AIDS cases reported through December 1994
Year-end Edition Vol. 6, No. 2
AIDS incidence, and estimated AIDS-opportunistic illness incidence,
adjusted for delays in reporting, by quarter-year of diagnosis,
January 1986 through June 1994, United States^
2^.000-
20,000-
2 15,000-
3 10.000-
5.000-
/
-M
AIDS incidence (top curve) Is
distorted due to the expanded
AIDS surveillance case definition.
1993 definition
Implementation
Estimated AIDS-opportunistic illness Incidence
(bottom curve) more accurately depicts trends In
severe clinical AIDS incidence.
1986 I 1987 I 1988 ' 1989 ' 1990 ' 1991 ' 1992 ' 1993' ' 1994
Quarter-year of diagnosis
'See Technical Notes.
Acquired Immunodeficiency syndrome (AIDS) Is a specific group of diseases or conditions which are
indicative of severe Immunosuppression related to infection with the human Immunodeficiency virus (HIV).
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Public Health Service
Centers for Disease Control and Prevention
Natibnal Center for Prevention Services
Division of HIV/AIDS Prevention
Atlanta, Georgia 30333
CENTERS FOn DISEASE
140
Summary of findings
Trends in AIDS surveillance
Implementation of the expanded AIDS surveil-
lance case definition on January 1, 1993, continued
to influence diagnosis and reporting of AIDS in 1994,
but to a lesser degree thian in 1993. Thie number of
AIDS cases reported in 1994 (80,691) declined from
the number reported in 1993 (106,618), but
remained substantially higher than the number
reported in 1992 (47,572; see MMWR 1995;44:64-
67). The expanded case definition includes condi-
tions that occur earlier in HIV disease and therefore
includes severely immunosuppressed persons more
recently infected with HIV. Persons diagnosed with
these conditions before January 1 993 were reported
to CDC during 1 993 and 1 994, and accounted for the
substantial increase in the numbers of reported
cases. Because temporal trends in AIDS incidence
for 1993 and 1994 were distorted by these large
proportionate increases, methods were needed to
adjust for the change in the case definition. This
issue of the HIV/AIDS Surveillance Report presents
hese adjustments (Tables 18, 19, and 20, and the
cover graph), as well as data on HIV and AIDS cases
reported in 1993, 1994, and cumulatively
In 1994, as in previous years, the AIDS epidemic
continued to affect primarily men who have sex with
men. Men represented 82 percent of AIDS cases
reported among adults/adolescents (13 years old or
older); men who have sex with men continued to
account for the largest proportion (44 percent) of all
cases reported among adults/adolescents. The esti-
mated incidence of AIDS-opportunistic illnesses
(AIDS-Ols) increased 13 percent from 1990 to 1993
among men who have sex with men (Table 20).
In 1994, young men represented a population at
high risk for HIV. Among men 20 to 24 years old
reported with AIDS, 60 percent reported sex with
men. This percentage is higher than the percentage
of men who have sex with men among all men
reported with AIDS (53 percent). Heterosexual
injecting drug users and injecting drug users who
have sex with other men accounted for 24 percent
and 6 percent of cases among men, respectively.
The proportion of cases among women has
increased steadily during the past decade (MMWR
'995;44;81-84 and erratum MMWR 1995;44;135).
AIDS among women represented 18 percent of
adults/adolescents with AIDS reported in 1994.
Among women reported with AIDS in 1994, most
were infected with HIV through injecting drug use (41
percent) or heterosexual contact with a man who was
at risk for or had HIV infection or AIDS (38 percent).
Nineteen percent of women with AIDS were reported
without risk for HIV exposure. These cases will be
investigated by state and local health departments.
Most women initially reported without a risk are found
to have become infected through heterosexual con-
tact (66 percent) or injecting drug use (27 percent;
see Figure 7). However, some of the cases reported
without risk of HIV exposure are likely to represent
unrecognized heterosexual transmission. Among
women, estimated AIDS-OI incidence is increasing
most rapidly among those infected heterosexuatly
(Table 20).
The epidemic in children (less than 13 years old)
is closely associated with the epidemic in women. In
1994, 1,017 pediatric AIDS cases were reported, an
8 percent increase from the number reported in
1993. Of these, 92 percent were acquired perina-
tally; the mothers of these children were exposed to
HIV through injecting drug use (30 percent) and
heterosexual contact with an infected man (36 per-
cent). For 34 percent of mothers, their risk of expo-
sure was not reported. Future trends in AIDS
incidence among children will be affected by current
Public Health Service recommendations for routine
counseling and voluntary prenatal HIV testing for
women, and the use of zidovudine to prevent perin-
atal transmission (MMWR 1 994;43[no. RR-1 1 ]:1 -20).
Estimated AIDS-OI incidence increased more rap-
idly during 1990-1993 among blacks and Hispanics
than among whites (Table 19). Among reported
cases, 1994 was the first year when blacks and
Hispanics together accounted for the majority (53
percent) of all cases reported among men. As in past
years, most women reported with AIDS were black
or Hispanic (57 percent and 20 percent, respec-
tively). Although AIDS surveillance case reports do
not record measures of socioeconomic status, or
other social/cultural factors that may predict risk of
exposure to HIV, the disproportionate impact of the
epidemic on minority communities is reflected in
AIDS incidence rates which are 6 times and 3 times
higher, respectively, among blacks and Hispanics
than among whites.
Vol.6, No. 2
HIV/AIDS Sun/eillance Report
141
From 1990 to 1993, the estimated incidence of
AIDS-Ols increased in tine Northeast and South,
whereas it leveled in the Midwest and West (Table
18). The majority of reported cases (58 percent) in
1994, as in previous years, were residents of five
states: New York, California, Florida, Texas, and New
Jersey In both 1993 and 1994, 84 percent of
reported cases were among residents of large met-
ropolitan areas (500,000 or more population).
HIV infection (not AIDS)
As of December 31, 1994, 25 states required
confidential reporting by name of all persons with
confirmed HIV infection, in addition to reporting of
persons with AIDS. Two states, Connecticut and
Texas, required reporting by name of children with
HIV infection. Consistent with the temporal changes
in the characteristics of persons reported with AIDS,
persons reported with HIV infection (not AIDS) from
states that require confidential reporting are dispro-
portionately racial/ethnic minorities, younger, and
female. Although HIV reporting does not measure
HIV incidence or prevalence, these reports represent
persons who are more recently Infected and more
likely to be alive than persons reported with AIDS;
thus HIV reporting may be particularly useful in
directing and evaluating HIV prevention activities
within stales and local communities. In these states,
reports of children perinatally exposed to HIV (with
subsequent follow-up to determine infection status)
will be useful in evaluating implementation of guide-
lines to prevent perinatal transmission.
This issue of the HIV/AIDS Surveillance Report
includes a new table (Table 24) that displays pediatric
HIV infection (not AIDS) cases by exposure category
and race/ethnicity In addition. Table 27 has been
revised to tabulate persons living with HIV infection
(not AIDS) and living with AIDS by adult and pediatric
age group, as well as by state.
Summary
Data presented in this report show that men who
have sex with men continue to be most severely
affected by the AIDS epidemic. However, compari-
sons between AIDS cases reported in 1994 and in
earlier years, and temporal trends in estimated AIDS-
Ol incidence, indicate that women, blacks and His-
panics, and persons with heterosexually acquired
HIV infections account for dynamic growth in the
epidemic. Injecting drug use and sex with at-risk
partners, especially among heterosexuals and
young homosexual/bisexual men, continue to chal-
lenge HIV prevention programs. As the epidemic
evolves, HIV/AIDS surveillance data continue to
reflect past transniission patterns, and to assist in
directing HIV prevention efforts.
HIV/AIDS Surveillance Report
Vol.6, No. 2
142
SSI PAYMENTS
Mr. ISTOOK. I would like to ask you, certainly you touched upon
the Social Security and SSI programs. There is a lot of controversy,
of course, over the SSI program when it comes to school-age chil-
dren. Many, of course, receive SSI checks for what amounts to be-
havioral disorders or what is categorized as a disability.
There has been a lot of publicity of late talking about how some
people in the public who receive those checks refer to them as
"crazy checks" that they receive because of the misbehavior of their
children. I would like to ask your viewpoint regarding whether we
should discontinue disability checks to adolescents whose reason
for receiving those SSI checks is a behavioral disorder.
Secretary Shalala. That is too sweeping of a generalization.
What we need to do is to review what our definition is of "disabil-
ity" and who is eligible. What we have done as a result of both in-
quiries, on our own as well as congressional inquiries, is two
things: number one, to put the disability programs under an agen-
cy, an intergovernmental agency review; and two, to appoint a com-
mission requested by Congress in the Social Security Independence
Act to take a look at the issue of disability and disability defini-
tions and the relationship to children.
I have asked former Congressman Jim Slattery to chair that re-
view. So rather than answering the question about whether behav-
ioral disabilities should be eliminated or what should the defini-
tions be, I would prefer to wait until the Slattery Commission has
reported.
Mr. ISTOOK. What is your time frame on that?
Secretary Shalala. He was going to report by the end of the
year. We obviously don't have time until the end of the year, and
Congressman Slattery and his bipartisan commission is doing it as
quickly as they can. I expect to have an interim recommendation.
By the way, the recommendation will come directly to Congress, be-
cause that is the way the legislation was set up. He should have
some things to say in the next two or three months.
Mr. ISTOOK. But you are withholding your personal judgment at
this time?
Secretary Shalala. I am withholding my position, although we
have worked with Congress for some limitations in relationship to
nonadolescents, to drug and substance abuse. We have recognized
that there is serious concern, and we have some concerns about the
program. We would like is a careful look.
HEAD START
Mr. ISTOOK. Finally, regarding Head Start, I have certainly seen
reports that tend to indicate that the differentiation between a
child who has participated in Head Start and one who has not
tends to fade — I think the ones I have seen seem to indicate that
that fade, of the difference, may be around the third grade.
I would be interested in receiving reports, pro and con, because
I am sure you have them on both sides, as to how long the benefits
of Head Start may actually endure. I would appreciate receiving
that; and of course, I would like to hear your comments about the
reports indicating a fading effect.
143
Secretary Shalala. There has been considerable research on this
issue. There is evidence of a fading effect, but that says more about
the school system than it does about the Head Start program. The
research seems to show that after enriching the early childhood
years of children, particularly of disadvantaged children, if they
then go into a weak school system, the effects of those early invest-
ments begin to lose their impact. What it says to all of us is that
the Head Start program and elementary school programs have to
be seamless in the sense that they all have to be stronger if we are
going to continue the positive effects of the Head Start program.
We would be happy to provide you with the citations and with
the research on this subject.
[The information follows:]
144
Benefits of Head Start
Prior to the 1994 reauthorization of Head Start, we formed a
bipartisan Advisory Committee to provide a comprehensive review of
the program and make recommendations for improvements and expansion.
The 47-merober Advisory Committee included a number of research
experts in the fields of child development, education, and health.
Their report entitled Creating a 2 let Century Head Start reviews the
adequacy of the research base on Head Start and summarizes the
evidence for short- and long-term impacts of Head start and other
early childhood programs. We are providing the Committee with the
report which includes an extensive set of research citations.
The Advisory Committee found that evidence from two somewhat
different sources has been brought to bear on questions of Head
start's effectiveness: studies on Head Start and large scale studies
of experimental early childhood demonstration programs. Both kinds
of studies help give us an understanding of Head Start's
effectiveness .
Head Start has a positive impact on school readiness. Studies
of Head Start programs indicate positive effects on children's
cognitive skills, self-esteem, achievement motivation and social
behavior. Head Start has also been shown to have a positive impact
on parent-child relationships, child health, and community services.
Finally, Head Start has had a strong impact on the training and
employment of parents. More than one-third of Head Start staff are
current or former Head Start parents.
Longitudinal studies on children who have participated in
experimental programs indicate that high quality child development
programs show less grade retention, less placement in special
education classes and other long term benefits. Although these
studies are not necessarily conducted on Head Start programs, they do
appear to indicate that high quality Head Start programs can have
similar long term results.
Effective schools also play a critical role in promoting the
developmental success of children from all economic backgrounds.
Children from economically disadvantaged backgrounds are less likely
to have the opportunity to attend effective schools. There is an
extensive literature on the effects of economic disadvantage and the
quality of children's school experiences on students' achievement.
Key references include:
• Comer, J.P (1988). Educating Poor Minority Children.
Scientific American. 259(5), 42-48.
• Entwisle, D.R. & K.L. Alexander (1993). Entry Into
Schools: The Beginning School Transition and Educational
Stratification in the United States. Annu. Rev. Sociol.
19, 401-423.
• Slavin, R.E., N.L. Karweit, and B.A. Wasik (1992/1993).
Preventing Early School Failure: What Works? Educational
Leadership. 50, 10-18.
• Weikart, D.P, (1989). Quality Preschool Programs: A Long-
term Social Investment. New York, New York: Ford
Foundation.
145
Mr. ISTOOK. Thank you, Secretary.
Thank you, Mr. Chairman.
Mr. BONILLA. Thank you, Mr. Istook.
Mr. Hoyer.
Mr. HOYER. Think how much easier it will be to have a seamless
system if we were jointly located.
Secretary Shalala. I was waiting for you to say that.
Mr. Hoyer. I was going to mention that at the end, but when
Secretary Riley was here, we talked about the language included
in the bill last year, before the study of how the three departments
that are most involved — ^yours, Secretary Riley's, and Secretary
Reich's — could coordinate services in a family and child center. Can
you address that, as to how you believe that is proceeding?
I know that the Department of Education, of course, has taken
the lead on that, but you are participating along with Secretary
Reich. Can you comment on that?
Secretary Shalala. Yes. Last year, in the reauthorization, there
were significant provisions in linking Head Start and the schools.
All Head Start programs are required now to help facilitate the
transition of children from Head Start to elementary school. I think
Secretary Riley has given you a letter — at least I have seen the
draft of the letter on behalf of all of us — that shows you all of the
things that we are doing.
For example, we have Head Start transition programs in 32 com-
munities in partnership with Title I now. We are linking those
early childhood programs, the special ed programs, the bilingual
education programs. We expect this demonstration to end in 1996,
and we should have some clear findings for it. We have doubled the
Head Start transition activities to support our local Head Start of-
fices' ability to do the transition.
We are monitoring those programs. We have more cooperative
agreements. There is a lot of activity going on out there to try to
make sure that the Head Start agencies, which have been tradi-
tionally more isolated from the mainstream of the school system.
We want to make it very clear to them that if we are going to
eliminate some of that phasing-out of impacts, what we are going
to have to do is make sure there is a better fit and better coordina-
tion between the programs.
There are a lot more Head Start programs locating close to, or
in, or as part of a school system as a result of this.
Mr. Hover. Madam Secretary, do you have a point person? I
know Dr. Payzant indicated they have a point person who, I guess,
is coordinating it for DOE's purposes.
Secretary Shalala. I am sure I do. I will be happy to provide you
with that.
[The information follows:]
Integrating Head Start Children
Helen Taylor, Associate Commissioner of the Head Start Bureau is our point per-
son for linking Head Start Services with schools and coordinating with Education
and Labor programs.
Mr. HOYER. Mr. Bonilla anticipated a question I was going to
ask.
146
How many Head Start grantees do we have now? Do you have
that figure with you?
Secretary Shalala. I do.
Mr. HOYER. It is about 1,100, I guess. One hundred and twenty-
five is the troubled programs, and that is about 10 percent.
Secretary Shalala. The number of grantees in 1995 will be over
1,425. The number of children will be approximately 752,000.
Mr. HOYER. That is 752,000 out of a projected eligible population
of
Secretary Shalala. 1.2 million.
Mr. HOYER. So about 50 percent at this point in time, a little
more?
Secretary Shalala. That is about right.
Mr. HOYER. You indicated there were 125 troubled programs that
have been identified; is that correct?
Secretary Shalala. Yes.
Mr. HOYER. And of that, you mentioned a figure, 68, but I didn't
get what the 68 was. Seven grantees canceled; I got that.
Secretary Shalala. Sixty-eight Head Start programs have im-
proved to a satisfactory level through our technical assistance;
seven have been terminated. Our regional office staff is continuing
to work with 50 programs to help them improve their programs.
We did a lot of technical assistance to bring up the quality of the
programs.
Our view now is that 90 percent of the Head Start grantees are
at or above the standards that we set. We went after every sub-
standard grantee.
Mr. HoYER. The seven are the first grantees that have ever been
canceled?
Secretary Shalala. As far as I know. And the word is out there.
Congressman Hoyer.
Mr. Hoyer. My objective, of course, is not to cancel grantees. It
is to get the word out there so that grantees will start performing.
Let me ask you about the zero-to-three initiative. I want to com-
mend you for convening the zero-to-three advisory group and devel-
oping clear performance standards. The reauthorization required
you to issue an RFP by December 1994, December 30th. I under-
stand that has not been done.
Secretary Shalala. Congress required we develop the program
guidelines by September 30th, and we did develop the guidelines,
and the program announcement has been completed. We will pub-
lish in the Federal Register this month, and we will fund the pro-
grams this summer.
Mr. Hoyer. Last question
Secretary Shalala. Let me say that we went a little bit more
slowly than we would have liked, but we wanted to use the work
of the advisory committee on infants and toddlers. We have had the
world's greatest experts working with us. It was not simply a bu-
reaucratic process, because we wanted to get started right.
Mr. Hoyer. And a lot of mothers participating, the world's great-
est experts.
Secretary Shalala. Yes.
Ms. Pelosl Yes.
Secretary Shalala. Daddies, too.
147
Mr. HOYER. Only recently are daddies involved.
Secretary Shalala. We have also built in a research and evalua-
tion component.
WASTE, FRAUD AND ABUSE
Mr. HoYER. Good. Let me go to my last question, Mr. Chairman.
Last time you were here you mentioned that HHS would be giv-
ing us a proposal to more adequately fund Medicare and Medicaid
activities to prevent waste, fraud and abuse. I frankly think waste,
fraud and abuse is a very important item. My own perspective is,
not because of the size of the waste, fraud and abuse, which some
project it as being the nexus around which we would balance the
budget — I think Mr. Kasich and others will find that is not the
case; I think that is actually not the case — but because it is such
a concern, and we need to get rid of waste, fraud and abuse.
Are you at liberty to discuss at this time the proposal that you
are making?
Secretary Shalala. We put in a general description of the pro-
posal in our budget submission. I am not at liberty to discuss the
details because that will be announced as part of the Reinventing
Government IL I am at liberty, though, to report to you that we
had last year the largest waste, fraud and abuse settlements in our
history, $8 billion, which is the largest year the Department has
ever had, including the largest individual settlement of over $300
million with a health care provider.
Do we have the chart?
This gives you a sense of how successful we have been in the De-
partment. We have an excellent Inspector General, and she has
really reorganized; and we have tried desperately to protect the re-
sources for our Inspector General. We would like to do something,
as I indicated the last time I was here, far more imaginative and
effective; and that will be part of our proposal.
This will give you a sense of what we have done already simply
through efforts in the Department.
Mr. HOYER. Thank you.
Thank you, Mr. Chairman.
Mr. BONILLA. Thank you, Mr. Hoyer.
Mr. Wicker.
FOOD STAMP PROGRAM
Mr. Wicker. Thank you, Mr. Chairman and Madam Secretary,
thank you for your testimony today.
You commented earlier in answer to a question about welfare re-
form, that the Food Stamp program was being cut. Didn't you real-
ly mean to say that the rate of growth of the Food Stamp program
was proposed to be cut, rather than that actual funds were being
cut?
Secretary Shalala. Let me explain what I meant, and that is
that food stamps and a variety of other social SEifety net — in this
case, the hunger safety net programs have always enjoyed entitle-
ment status. The importance of the entitlement has been for work-
ing families.
In fact, the programs have worked in a way so that if there is
an economic downturn in a State, people who live from paycheck
148
to paycheck, who are laid off, will be able to come in and get food
stamps to feed their families.
The various drafts that we have been going through are actually
eliminating the economic stabilizing effect, in the hunger safety
net, so if there is an economic downturn in the State, working fam-
ilies would be cut off,
A percentage of food stamps are now being used for working fam-
ilies, to subsidize low-income workers. As part of welfare reform,
that is absolutely critical. It is also critical for the States to protect
them from economic downturns. And the danger of capping pro-
grams is that when a State in the middle of a recession may have
a deeper and broader impact, and the people who use these pro-
grams as transitional programs, and temporary programs will be
cut off.
Mr. Wicker. I understand then that you quarrel with those who
would remove the entitlement status.
Secretary Shalala. And, any kind of capping, and slowing down
the growth from what is projected as a way of restricting working
families from using the program on a temporary basis.
Mr. Wicker. But you do concede what we are talking about is
slowing down the growth of the program; is that correct?
Secretary Shalala. Slowing down the growth, in fact, that is re-
ducing the growth from what we projected as the need, will be a
cut for an individual family that doesn't have an opportunity to get
food stamps. We can talk about whether it is slowing down the
growth or flat-lining it to last year's level, but for the individual
who loses their job and needs the Food Stamp program, they are
being cut off if the money is not available,
Mr, Wicker. It just seems to me that only in Washington would
spending more money next year than this year be called a cut. But
that is, in fact, what both the Agriculture Committee proposal and
the Ways and Means proposal suggests, spending more money next
year on food stamps.
Secretary Shalala, What they are doing is no longer funding it
fully for inflation. In fact, in the last draft of the Agriculture Com-
mittee that we saw, they kept the entitlement status but didn't
fully adjust it for inflation, and that may well mean less money for
food as prices go up. So for an individual family, that could well
be a cut in the food that is available to them.
So, you know, we can use the words in a variety of ways. The
question is, what impact does it have on people? Are they going to
get less food? Is there going to be less availability of food for that
family? No matter what you call it, when there is less food for that
family, they will see and the rest of us ought to see, funds are
being cut,
Mr, Wicker. I understand that you may think the program is a
bad idea, I was just trying to clarify the point that no one is sug-
gesting that less money be spent on the program next year, I think
we at least agree on that in terms of raw numbers, whether it is
a good idea or not is something we can debate.
Now, let me switch to the Medicaid program, because Mr, Obey
certainly caught my attention. He may have been attempting to
tweak the nose of the Chairman of the full committee in mention-
ing Louisiana,
149
Mr. Obey. And others.
MEDICAID
Mr. Wicker. When I was in the State legislature, I was Chair-
man of the Public Health and Welfare Committee in the State Sen-
ate. We do receive a 79 percent Federal match in the Medicaid pro-
gram. Even so, with our general fund at approximately $2.5 billion
per year, a very, very small general fund with a very small tax
base, we had a devil of a time paying our little 21 percent of
Medicaid.
So it certainly would be a tremendous disadvantage for people in
poor States like Mississippi to, as Mr. Obey suggested, have a 70
percent cap, for example.
But I think he caught you in mid-sentence during his question,
and you were about to say that there were other factors which are
not being taken into consideration. Do you recall what you were
about to say?
Secretary Shalala. I don't. As you know, the GAO has laid out
some options in dealing with the formula.
The formula does put certain States at a disadvantage who have
a small number of people at a high income than a large percentage
of people that have low incomes. The amount of money that you get
depends on the number of services you decide to cover.
So Mississippi which may have the basic program, may indeed
get less money than some other places, but it has a very high per-
centage of poor people, so it becomes a very significant program, as
food stamps does.
In fact, if I were from Mississippi, I wouM be very concerned
about the discussion from Members of your party about block-
granting Medicaid, because what that will dr is make it much more
difficult for places like Mississippi to get their fair share under any
kind of a formula, because it will slow down significantly the
growth of the Medicaid program.
I am actually not prepared today to get into a long discussion of
how the formula works. A number of States have raised the issue.
GAO has provided Congress with some options in terms of what to
do with the formula. We will get into the formula issue again if
there is more dis^'ussion about the possibility of moving Medicaid
from an entitlement to a block grant, and then we will have to do
runs that show what the impact is.
immunization
Mr. Wicker. All right.
Thank you very much.
Let me ask one more question concerning childhood vaccinations.
You mentioned this in your testimony. The folks from our health
department tell me that we had a good system where the 317 pro-
gram has allowed children to have vaccinations in each county at
the health office. And the Federal Government has now moved to
a different program called Vaccines for Children, and the children
have to go to community health centers instead. There are only 23
community health centers in the State, as opposed to 82 county
health offices. I wondered if you could comment on that.
150
Secretary Shalala. We actually left in place what we added
through the Vaccines for Children program, a new program that
would allow us to enroll private doctors to provide the vaccines for
children so children didn't have to leave their health home. The
States can continue to use the resources we give them to expand
their public health infrastructure. Much of the new money is to
provide the opportunity to add private doctors and take some of the
burden from public health clinics that were just overwhelmed.
I would be happy to look into the Mississippi's concerns.
Mr. Wicker. I would appreciate that, because the information
that I have came from the director of our State health department.
Secretary Shalala. Mississippi has 150 public sites and 140 pri-
vate sites enrolled. We are going to immunize more children. For
example, the South depends heavily on public health centers for
immunizing kids because so many of the kids are poor. We will
make sure the private doctors are involved, by not telling private
doctors that they have to refer their kids to public health clinics
to get their immunizations. We will be letting them provide the im-
munizations for the low-income kids that they serve by giving them
the vaccines to give in their own offices.
I would be happy to take a look at the Mississippi situation and
get back to you.
[The information follows:]
Childhood Immunization
The Vaccines For Children (VFC) program will reach more children with free vac-
cines than ever before and allow more parents to obtain free vaccines for their chil-
dren from their private provider. For example, Mississippi has contracted with a
commercial distributor to distribute VFC vaccines to about 140 enrolled private pro-
vider sites (about 300 physicians) in the State.
VFC eligible children include those who:
— do not have health insurance;
— are enrolled in Medicaid;
— are American Indian or Alaskan Native.
Also, children who have health insurance that does not include vaccine as a cov-
ered benefit (underinsured children) may receive free VFC vaccines from a Federally
Qualified Health Center (FQHC) or Rural Health Clinic (RHC).
VFC eligible children can also obtain free VFC vaccine at county health depart-
ments, since all such public clinics in Mississippi are enrolled as VFC providers.
Furthermore, the historical "317 vaccine program" still provides vaccines to Mis-
sissippi's State health department so children who may not be eligible for VFC vac-
cine can continue to obtain free vaccines at county health departments. Thus,
underinsiired children who do not go to FQHCs/RHCs, and are thus not eligible for
VFC vaccine, can continue to obtain free "317 vaccine" at county health
departments.
VACCINE PURCHASE
Mr. Wicker. Mr. Chairman, I know I am intruding on the time,
but I have one other quick question about vaccinations.
I am also told that States have been allowed in the past to pur-
chase the vaccines from the Federal Government, and there is a
rumble about the fact that that program may be eliminated, which
would be more costly?
Secretary Shalala. Right. We intend to continue the program. I
think there may be some drug companies in the United States that
would like to deal directly with the States at their prices as op-
posed to allowing the Federal Grovemment to have a discounted
rate for State public health departments.
151
Mr. Wicker. Thank you.
Thank you, Mr. Chairman.
Mr. BONILLA. Thank you, Mr. Wicker.
Ms. Pelosi.
BLOCK GRANT VS. ENTITLEMENT
Ms. Pelosi. Thank you very much, Mr. Chairman.
Mr. Chairman, I think Mr. Wicker's questions pointed out very
clearly why some of these programs need to be entitlements rather
than block grants. Because hearing you, Mr. Wicker, ask your
questions of the Secretary, tells me that we cannot just talk about
taking an entitlement away from a poor child, and then say, but
we have to compensate for poor States. If the entitlement goes to
the individual, then your rights, if you represent a State with a
large percentage of poor people, are fully protected.
Madam Secretary, I was so pleased to hear your answer to that
question that argues against the block grants. You can't say don't
give it to poor people as an entitlement but make sure the formula
is right for poor States. Could you elaborate on that?
Secretary Shalala. We have to make sure that the States are
protected at the same time that we are protecting individuals. The
President and I are concerned about moving from entitlements to
block grants. The entitlements are for two purposes; number one,
to make sure that everyone who is eligible for the program auto-
matically can enroll in the program; and number two, to make sure
we protect the States if there is an economic downturn.
That economic stabilizing role of the national government has
been critical in the South where there have been places in the
South where there have been economic downturns. It allows work-
ing folks who get laid off to be able to feed their families. It has
been critical to help States move out of recessions.
If a State does not have access to some Federal dollars for food
stamps or for cash assistance for their low-income workers, the re-
cession goes deeper and broader, and there is no way the busi-
nesses in that State can be taxed to help bring the State out of the
recession.
So the economic stabilizing role of the State has been absolutely
critical as a national role.
Finally, my point was that it is working folks that get hurt when
you go to block grants. They are the ones that use these programs
as transitional programs, as temporary programs.
The tragedy of this discussion is everybody has been focusing on
a stereotype of a welfare recipient, when it is working people for
whom it is a tragedy if you eliminate the entitlements, because
they are the folks that come onto these programs for very short pe-
riods of time to take care of their families while they attempt to
find another job.
I think that is an appropriate national role and critical that we
understand that as we go through this debate about block grants
versus entitlements.
Mr. Wicker. Will the gentlelady yield on that?
Ms. Pelosi. Just for a few seconds, because I don't have much
time.
Mr. Bonilla. We have latitude with the time.
152
Ms. Pelosi. Thank you, Mr. Chairman.
Mr. Wicker. Madam Secretary, you brag about the Child Care
and Development Block Grant. That is not an entitlement. Some-
where there is a child care entitlement. There is also a child care
block grant. So they are both in the child care area. And the enti-
tlement has been critical for very low-income folks.
There is also an entitlement, frankly, depending on how you
want to use the language, for middle- and upper-income people
called a tax credit, in which every middle- and upper-income per-
son gets access to child care subsidies in this country, which is
automatic, that they can claim on their income tax.
I realize that, again, this is how we use language in this town,
but when it comes to giving money, what we are talking about is
making sure in child care that we have a seamless program so that
working folks can get child care support so that they can go out
and work and not worry about their children.
I thank the gentielady.
FOOD STAMP PROGRAM
Ms. Pelosi. Reclaiming my time.
Thank you.
Mr. Wicker, I also wanted to make a point about your comment
earlier about food stamps. Would you agree it is a cut? It is a cut
in that many fewer people will have the opportunity to be served,
and it does represent $16 billion that will not be spent on food
stamps. So when you talk about number of people served and
amount of money that can be used for another purpose, then it is
a cut. Whether it is used for deficit reduction or tax relief for
wealthy Americans, nonetheless, we may have to define it as a
"cut."
In my view, if you are serving fewer people, you are making a
cut. If you are saving — so-called saving $16 billion moving it from
an investment, that is — I think represents a cut as well.
hiv/aids
Madam Secretary, I want to thank you for your leadership on the
AIDS issue. I know you were pleased to hear the good news that
we were able to restore AIDS funding in a bipartisan fashion on
the full Appropriations Committee. I really want to also commend
you for the progress that is being made in AIDS research. As you
know, there were no rescissions for AIDS research.
But I did want to address some of the concerns that were ex-
pressed by my colleague in regard to AIDS earlier. In your testi-
mony, all that you stated was that roughly 40 percent of the more
than 440,000 AIDS cases reported since 1981 were reported in
1993 and 1994. You did not make comparisons about what went be-
fore.
In voting the other day, I was very proud that Mr. Istook joined
with us in voting in recognition that we must stop the spread of
AIDS. Therefore, we seem to agree that HIV prevention money is
necessary. We have a commitment to those who are people with
AIDS, and we restored funding for the Ryan White Care program.
So regardless of whatever the calculations are, the sad news is
that in 10 short years, AIDS has become the leading cause of death
153
in America for persons aged 25 to 44, as you point out in your
testimony.
And the fact that there has been a redefinition of AIDS doesn't
mean that there are more cases now than before, and we are just
redefining it. It means there were populations which were under-
served before.
I have a copy of this chart. It is hard to read from the Xerox,
but the dark line, my colleagues, is the one that indicates what has
happened in the last 10 years in terms of AIDS becoming the lead-
ing cause of death for young adults in this country.
The changes in case reporting only point to the fact that there
were many people that we were not identifying as AIDS cases ear-
lier. It is not a question of sajdng that AIDS is not spreading. But
I will say that what I think is a major concern to my colleagues
and why we were successful the other day, is because the spread
of AIDS now is more into the heterosexual community. Children
are at risk, and the prevention money that we were talking about
as well as the Ryan White, Titles II, III, and IV funds, helped to
finance initiatives from your Department to stop the spread of
AIDS from mother to child, to block HIV transmission. Our col-
league supported that, and I thank you for that.
Madam Secretary, we had the benefit of wonderful testimony,
thanks to our Chairman, from some Nobel laureates, and among
them Dr. Phillip Sharp testified very eloquently about how the re-
search in AIDS was helpful to us in other areas of concern, espe-
cially relating to diseases affecting the immune system.
And so I think that our committee is making progress in appre-
ciating what the AIDS research can do, we recognize that we can-
not afford the spread of HIV fiscally as well as personally. And we
agree that we must have a responsibility to care for those with
HIV, particularly focusing on the new initiatives, like the Women's
HIV Initiative affecting women and newborn babies; so, I commend
you for what is being done in AIDS research, prevention and care.
Thank you for that, and I invite any comments you might have.
Secretary Shalala. Thank you.
First, Congresswoman, let me thank you for your leadership on
this issue. We were very pleased with the restoration of the re-
sources for AIDS. A year ago when I testified, I tried to be as sober
as the researchers were on the possibility of having breakthroughs
in AIDS very quickly. This year, I think there will be at least a
slight smile on my colleagues. Dr. Paul and Dr. Varmus faces be-
cause we have had break-throughs this year.
The one you referred to in pediatric AIDS, and our ability to sig-
nificantly reduce HFV infection in newborns through AZT treat-
ments, is a significant break througn. The development of those
tests are important.
We are beginning to see some basic research opportunities. A na-
tional industry has come together with each other as well as with
government and private scientists to develop strategies. We do not
have a vaccine yet, but we are beginning to see the results of the
significant Federal investment in AIDS.
I also want to add, I think Dr. Paul's leadership has helped sig-
nificantly, because there is more of a focus to our efforts, and I
think there is more discipline in the way we are approaching this.
154
And we don't see ourselves as isolated from industry or from the
rest of the research community, or from the activists and the advo-
cates. There is a remarkable team effort in this country.
AIDS AND BREAST CANCER RESEARCH
Ms. Pelosi. I want to thank you also for the breakthrough as far
as breast cancer research is concerned. It is so important to every-
one in America, every family in America is affected by breast
cancer.
Mr. Chairman, my time has expired.
I just want to say that the previous chart that the Secretary had
up here indicated what the costs of AIDS were in terms of entitle-
ment programs, in addition to discretionary spending. And I think
it makes the point very eloquently that unless we succeed with our
research and prevention, the entitlement costs will continue to in-
crease. So from a fiscal standpoint, the investments made on HIV
will represent a deficit reduction in the long run, and in the short
run, for our committee and for our country.
Once again, I want to commend the Secretary for her leadership
on all of these issues, AIDS, breast cancer, and taking care of the
children of our country.
Thank you, Mr. Chairman.
Mr. Porter [presiding]. Thank you, Ms. Pelosi.
Mr. Riggs.
welfare reform
Mr. Riggs. Thank you, Mr. Chairman.
Madam Secretary, I apologize for having to leave and come back.
I committed to Chairman Myers on Energy and Water that I would
sit in for him this morning, and return upon the conclusion of that
hearing.
My first question goes to the heart of the coming welfare debate,
and that is the profound philosophical and ideological differences
between our parties. I have to tell you. Madam Secretary, that I
can't see based on the hard evidence, how or why a Washington-
based welfare bureaucracy is essential to the American people. Five
trillion dollars later, we have 5 million American families, 9 million
American children on AFDC.
At any given point of time, over half of those families are on
AFDC for over 10 years; 66 percent illegitimacy rate within the
black population; 20 percent illegitimacy rate within the white pop-
ulation. Are you telling the subcommittee today that, in fact, a
Washington-based welfare bureaucracy has been a success?
Secretary Shalala. No, in fact, I am sajdng just the opposite.
The President ran on this issue and made it very clear. He put a
proposal before Congress. That proposal was very close to the origi-
nal Republican proposal that was put before Congress and voted on
positively and supported by most of the Republican Members of
Congress last year.
The President has said very clearly that he wants welfare re-
form, that he believes in flexibility. Half the States in this country
now have welfare waivers.
We have approved more welfare waivers than all of the previous
administrations combined. We have demonstrated our commitment
155
to State flexibility. The President has laid out goals for welfare re-
form that are not being met by the bill that is being drafted. Those
goals are very clear — moving people from welfare to work. That is
real welfare reform that holds the States accountable.
What the President has said is, we need some national standards
so that you can go back and tell the taxpayers in your district that
you know that their dollars aren't being poorly spent. And that is
the point that the President has been malung all along.
I have simply made the point that having weak work require-
ments and very harsh penalties for children, is not welfare reform.
Mr. RiGGS. Would you classify Governor Weld's work require-
ment as weak?
Secretary Shalala. I haven't seen it yet because he hasn't trans-
mitted his welfare waiver to us yet. What CJovernor Weld, as I un-
derstand from press reports, intends to do is to move huge numbers
of people into work in a relatively short period of time, in 60 days.
Under the President's proposal. Governor Weld would have got-
ten education and training money and some child care money to
help — and the flexibility to design his own program.
Let me also take issue with your description of the large welfare
bureaucracy in Washington. There are less than 200 people who
run the AFDC program in my Department. It is, in fact, a small
bureaucracy. It is a bureaucracy that would be happy to be out of
the waiver business.
It would be happy to see a program which has strong work re-
quirements, protects children, but changes the culture of the State
bureaucracy so that the State bureaucracy moves people from wel-
fare to work much more quickly than they have been able to do
under existing legislation.
Mr. RiGGS. If we were to turn the responsibility for administer-
ing welfare largely back to the States, would we be able to dramati-
cally downsize your Department?
Secretary Shalala. Well, we have 200 people that are currently
running the system. It would depend on what kind of evaluation
and accountability you wanted and what kind of reporting require-
ments you would put on us. Could we reduce the number of people,
I would have to see what the proposal is.
We certainly wouldn't increase the number of people. But the bu-
reaucracy, the administration of welfare programs in this country,
is in the hands of the States. What they need is less directive and
more flexibility to be able to design what are, in fact, employment
support programs to move people from welfare to work, and high
standards, high expectations from us about programs that, in fact,
move people to work and keep them off" the welfare rolls.
What we are disagreeing about is how we get there. We do not
believe, for example, that young mothers are going to be able to
stay in the work force if there is not child care for them, particu-
larly if we expect them to take very low-paying jobs. We do not be-
lieve that it is possible for teenagers to move quickly into the work
force until they finish high school. We believe they ought to stay
at home, finish high school, get some education and training, and
get into the work force as quickly as possible.
I believe that the President's proposal, that he laid out in great
detail, allows the States the kind of flexibility to design the deliv-
156
ery system. What it does not do is hand the States a blank check
and have no accountability to Federsd taxpayers. What it does do
is set up national standards, expectations on work, on parental re-
sponsibility, and allows the States to design the delivery system.
HIV/AIDS
Mr. RiGGS. Let me shift the subject before my allotted time is
gone.
As we went through the subcommittee and full committee mark-
up, in going over your Department's budget in detail, particularly
the whole discussion and debate regarding AIDS funding, I came
to realize that there are a myriad of Federal programs in the area
of AIDS education, prevention, treatment and care.
Do you know how many programs?
Secretary Shalala. I probably have them listed, because we are
in fact pulling them together into a consolidated grant program so
that States have a more streamlined system. Let me get that for
you.
[The information follows:]
157
AIDS Funding
I know there are many Federal programs supporting HIV/AIDS
including programs in other Departments. I can provide information
on the programs in my Department. The majority of HIV/ AIDS programs
are funded through the Public Health Service. The programs in the
Department are listed below:
PUBLIC HEALTH SERVICE
Aoencv for Health Care Policy and Research fAHCPR)
tt Funds 12 research grants for AIDS related topics.
« Funds 8 additional projects including information dissemination
grants, and educational projects such as the development and
dissemination of clinical practice guidelines for the evaluation
and management of sarly HIV infection and a consumer guide for
HIV-infected pregnant women.
Centers for Disease Control and Prevention (CDC)
o Funds 45 AIDS prevention programs. In 1994 CDC funded 395
grantees through these programs.
Food and Drug Administration
o Funds AIDS Task Forces in ten States to monitor and address
fraudulent activities which target persons affected by the HIV/
AIDS virus.
« Funds the National Task Force on AIDS Drug Development.
Health Resources and Services Administration (HRSA)
HRSA's major funding for HIV/AIDS is through the Ryzui White
CARE Act. Title I of the CARE Act funds 42 eligible metropolitan
areas; Title II funds 54 programs; Title I I IB has 134 grtmtees and
Title IV funds 42 grantees. In addition to the Ryan White CARE Act
grantees, HRSA funds the following:
a 17 AIDS Education and Training Centers;
a Reimburses over 100 Dental Schools for treating patients with
HIV/AIDS;
« 56 Special programs of national significance.
Indian Health Service
Funds prevention programs for 560 tribes and 32 urban Indian
programs. This program reaches 1.2 million of the 1.9 Native
Americans living in the U.S.
National Institutes of Health
The NIH funds research and does not fund any programs under the
categories in the question.
Substance Abuse and Mental Health Services Administration fSAMHSAt
SAMHSA has the following HIV/AIDS specific programs in addition
to a $50.8 million set-aside of substance abuse block grant monies
for HIV/AIDS:
« AIDS Outreach Programs;
« Substance Abuse/Primary Care Linkage Programs;
» Center for Mental Health Services (CMHS) AIDS Training Programs;
« CMHS Mental Health Demonstration Programs
« Center for Substance Abuse Prevention - Supplemental Program for
High-risk Youth
158
ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF)
There are no progreuns in ACF -whose primary purpose is AIDS
education, prevention, treatment, or care. However, many, if not all
ACF programs could serve children and families that include members
with HIV/AIDS. Programs might include:
o Foster Care and Adoption Assistance
o Adoption Opportunities
<t Temporary child Care for Children with DiseUsilities and Crisis
Nurseries
a Abandoned Infants Assistance Progreun
o Runaway and Homeless Youth Programs
II
159
PROGRAM CONSOLIDATION
Mr. RiGGS. When could we anticipate that reform?
Secretary Shalala. That is in this year's budget. What we have
tried to do in this budget, in the PubUc Health Service, is take
more than a hundred different programs and consolidate them into
performance grants and try to reduce the number of individual cat-
egorical programs, particularly the small ones, so that areas only
have to make one application. That way they get out of different
budget cycles for different programs. I think you will be pleased
with what you see.
Mr. RiGGS. Will that generate administrative cost savings?
Secretary Shalala. It will, and I have reported on those cost sav-
ings at the same time. We are doing a single grant for 20 HIV/
AIDS programs and there will be a single formula grant for those
programs. That involves $500 million worth of grants. It includes
our prevention, public information, our women and infants prenatal
AIDS reporting process. We are consolidating those programs,
doing exactly what you are talking about.
hiv/aids
Mr. RiGGS. Two other quick questions in this same area.
Mr. Istook pointed out to me that on one of the handouts that
you just distributed, or that Ms. Pelosi just distributed, in the box
that says the magnitude, second bullet point, in 1992 there were
47,000 cases reported. Following the case definition expansion, re-
ported cases jumped to 106,000 in 1993. The next sentence says,
even if reporting had stabilized, over 80,000 Americans were re-
ported with AIDS in 1994.
That sounds like a decrease to me or to those of us on this side
of the aisle.
Secretary Shalala. It is a decrease because people have died.
Mr. HOYER. Will the gentleman yield?
Mr. RiGGS. I thought I understood someone to say or you to tes-
tify that there has been a dramatic increase in the number of re-
ported AIDS cases.
Mr. HoYER. Will the gentleman yield?
Mr. RiGGS. Not at the moment.
Secretary Shalala. I think the point is no matter which defini-
tion you use, there has been an increase in the number of AIDS
cases. I will be happy to detail that in my answer to Mr. Istook's
questions, which I will provide for the record.
Mr. RiGGS. I yield to Mr. Istook.
Mr. Istook. Madam Secretary, I cannot believe you just said no
matter what definition you use, there has been an increase in the
number of cases, when the Center for Disease Control and the re-
port I cited to you previously, the Morbidity and Mortality Report
of February 3rd, showed that the reported cases of AIDS in 1994
were down to 80,691, where in 1993, it was 106,618.
A decrease in 26,000 cases is not a stabilization. It is a decrease.
It is over 20 percent decrease. And it is not because of people
dying, because this is simply a matter of number of cases reported.
If that were the case, they would be replaced by other persons
with it. The Centers for Disease Control specifically reported in
160
writing, published and distributed around the country, that the
number of cases were down by some 26,000, down by over 20 per-
cent. That is not an increase.
Mr. HOYER. Will the gentleman from Oklahoma yield?
Mr. RiGGS. I believe I control the time.
Mr. ISTOOK. I don't have the time.
Mr. HoYER. The answer is no, I take it.
Mr. ISTOOK. I 3deld back the time to Mr. Riggs.
Mr. HoYER. If the gentleman from California will yield, I have
a suggestion as to how this occurred.
Secretary Shalala. I think we are going to have to respond for
the record on the number of reported cases and the characteristics
of the people in those cases. I just can't go any further unless I go
back to the record and take a look at the CDC reports that we are
referring to and report.
The point I did make was about AIDS spending for people that
are sick and the fact that the disease is still spreading. It certainly
is spreading around the world with increases in cases around the
world. And I was simply trying to justify the need for our increased
spending, because we are spending more and more money for treat-
ment of those who do have AIDS.
What I need to do is to lay out for you the number of reported
cases, and I am happy to do that.
Mr. RiGGS. That brings me to my other point.
I do w£mt to yield to the gentleman in just a moment. I didn't
get a chance to do this in the full committee markup.
Until the 1992 redistricting plan, I represented, outside San
Francisco City and County, the second largest HIV-infected popu-
lation in the United States. I have a tremendous concern about the
problem and compassion for people who are infected with HIV or
AIDS.
I strongly disagree, I expressed this to the subcommittee Chair-
man, with the process that allowed us to go outside the subcommit-
tee to find an offset. But that is over and done with.
But I am also very interested and very concerned about bringing
to light hard data to help direct us in our policy decisions. I would
like to make sure I express this personally and on the record. This
is not meant as a criticism of life-style, sexual orientation or sexual
preference, but my view is that AIDS and HIV is a largely prevent-
able disease, and I think the appropriate role for the Federal Gov-
ernment is in attempting to educate and prevent the occurrence of
that disease.
I am interested in making sure that we target resources on that
side of the equation, understanding that because of escalating med-
ical costs, the costs of treatment and care have increased over time.
If it is permissible to the subcommittee Chairman, I will yield to
the gentleman from Maryland.
Mr. Hover. I thank the gentleman for yielding.
I don't know if this is correct, but it occurs to me, the reason for
the redefinition in 1993, as I understand it, the symptoms dis-
played by women and children are different from the symptoms
displayed by males, so that prior to 1993, there were some folks
who were not identified as AIDS patients in the statistics.
161
As a result, in 1993 there was a bump in the numbers, because
you identified people, and therefore you brought people into the
system in a larger number than you otherwise would have done.
I don't have the CDC report that the gentleman from Oklahoma
mentioned, it may be that the real comparison would be, if you
used — compared apples to apples, that is, the same definition with
1993, without the children and women having been added, in which
bumped you up, which may reflect a lower number in 1993 than
1994, if you are comparing the same people. That was my only
point.
There may well have been an increase if you used the same defi-
nition. But you had a bump in the year where you changed the def-
inition because you brought people in that may have been added
in previous years, except for the fact that they weren't defined as
such and therefore they were all added in one year.
Secretary Shalala. Mr. Chairman, if I might read just for the
record, I will provide the entire report, the February 3rd, 1995 re-
port of the CDC, based on analysis using consistent definitions, the
rate of AIDS-related illnesses increased 3 percent in 1993 com-
pared with 1992, a similar increase is expected for 1994 compared
with 1993.
Mr. ISTOOK. Did you read, a similar increase is expected, it says.
Secretary Shalala. It says a similar increase is expected for
1994 compared with 1993.
Mr. ISTOOK. Which the report shows does not —
Mr. Porter. I would ask the gentleman to address his questions
to the Chair.
Secretary Shalala. We have got to get it straight. I, obviously,
don't want to come here and give misinformation to the Committee.
What I need to do is lay out the data, including the definitions.
I will provide it for the record and make sure that it comes di-
rectly from the CDC reports and the CDC baseline. It was not in-
appropriate for anyone to ask me these questions, and I need to lay
out the data very carefully, and I appreciate Mr. Istook and Mr.
Riggs raising the issue with me.
Mr. Porter. Then will you provide it for the record, Madam
Secretary?
Secretary Shalala. I will.
[The information follows:]
162
HIV/AIDS
Thank you for tha opportunity to clarify for the Coomittee the
CDC data on the annual totals of reported AIDS cases. As you know,
in January 1993 a revised definition for AIDS was implemented by the
CDC. The new definition resulted from an extensive review period
conducted by the CDC under the Bush Administration, which recommended
4 additional clinical findings be added as sentinel events triggering
the AIDS diagnosis. The practical effect of the definition change
was to diagnose AIDS earlier in the course of the HIV illness for a
limited range of conditions, and to use a laboratory test as one
indicator of an AIDS diagnosis.
The effect of the definition change was a sharp rise in the
number of AIDS cases reported in 1993, as HIV positive persons with
any one of the new diagnostic criteria were now classified as an AIDS
case. The surge of cases to a high of 106,618 in 1993 %rauld be
expected to reflect this expanded reporting. However, the rise in
case numbers reflects both new AIDS cases that would have occurred
under the older, narrower definition, as well as persons living with
HIV disease who have a medical history of any of the four clinical
findings previously excluded from an AIDS diagnosis. Total AIDS
cases reported in 1994, 80,691, includes the continuing increase of
AIDS cases under both the old and new case definitions. As expected,
it is a lower number than the 1993 total given the backlog of cases
newly qualifying in 1993.
Separately identifying those cases that would occur under the
old and new case definitions is not a simple process. These cases
are not mutually exclusive, as some cases would be identified under
both definitions. First, the number of AIDS cases expected under the
old definition must be projected, based on studies of disease
progression including the development of opportunistic infections.
Second, this number would be subtracted from actual reported AIDS
cases for a given time period to identify new cases projected to be
reported solely due to the expanded definition. Using this
methodology, it is estimated that AIDS cases using the narrower, old
definition alone increased 3% each year from 1992 - 1994.
As you have correctly identified, it is important to look at
the factual underpinnings and clinical factors impacting on the
reporting of AIDS cases. The fact that roughly 40% of all AIDS cases
were reported in the last 2 calendar years remains, yet this is best
understood in the light of the new AIDS case definition. Likewise,
the relative dip in 1994 does not reflect a true decrease in reported
AIDS cases as much as completed processing of the backlog of newly
eligible cases in 1993. I regret if my remarks during the hearing
appeared to be misleading, and intend this answer to clarify these
issues.
163
Mr. ISTOOK. Mr. Chairman.
Mr. Porter. Mr. Istook.
Mr. Istook. I might just read one point from that report to clar-
ify for the people here. The CDC report to which the Secretary re-
fers states that in 1992, the number of cases reported, this is before
the change in definition, in 1992, the number of cases reported was
47,572. Also, then, in 1994, under the new definition, the total re-
ported cases were 80,691.
And it states, in the last sentence that begins on this page, that
of all the cases reported among adolescents and adults, so it is all
cases, during 1994, a total of 43,226, 54 percent, was reported
based on the reporting criteria added to the definition in 1993.
So of the 1994 cases, 80,691 cases, 43,000 of them were due to
the expanded definition, which by simple subtraction shows that
those under the old definition that were reported in 1994 were
some 37,400 compared to what has been the number in 1992 under
the old definition of 47,572, which shows a decline of 10,000 re-
ported cases under the original definition from 1992 to 1994.
Ms. Pelosi. Will the gentleman yield?
Secretary Shalala. We are going to just argue about the
numbers.
Mr. Porter. Let me yield to Mrs. Lowey because she hasn't had
a chance to ask questions. If people want to ask her for the time,
they may do so.
WELFARE reform
Mrs. Lowey. Thank you, Mr. Chairman. It is nice to be here.
Let me welcome you, Madam Secretary. I just want to thank you
personally on International Women's Day for the leadership you
have shown in a whole range of issues. Whether it is health care,
child care, or Head Start, you have been a role model for the
women of the United States and to the world. We just want to
thank you.
I wanted to take this time to thank the Administration for its
continued focus on reducing the deficit, wisely consolidating pro-
grams, and continuing to invest in programs for men and women
that lift people up. We are not interested in handouts. We are in-
terested in programs that lift people up.
With regard to that, although this is an Appropriations Commit-
tee hearing, I think we are all aware that recent actions in the
Ways and Means Committee and Economic and Educational Oppor-
tunities Committee may eliminate some of the programs over
which we have oversight.
And I am particularly concerned that the Republican welfare re-
form proposal, by reducing support for child care programs and
child nutrition programs, will actually make it harder for families
to move from welfare to work. I know we share the focus on work
and getting people to work.
So at this time, I would like you to address what the Republican
proposals to reduce funding for child care programs will do to a
woman's ability to move from welfare to work. Could you address
that for us?
Secretary Shalala. Thank you, Congresswoman.
164
We have sat down and talked to welfare recipients, particularly
women who have young children, and have reviewed the research
literature in terms of what progress we have made in our ability
to move people from welfare to work. It is just common sense;
mothers are going to need some kind of a child care arrangement.
One of the problems is we have wanted to focus the child care
very much on low-income workers, and cutting back on the avail-
ability of that just makes no sense.
As we sat down and talked to welfare mothers who had been in
and out of the work force, there are two things that struck me
about what they said. The first was that one of the reasons they
had to get out of the job is they couldn't get their child care
straight. Groing back on welfare where they could get child care
that was their only option. Their child care kept falling apart on
them. Since they had the kind of jobs where they couldn't take off
to go straighten out their care for their children.
Second, health care was a problem for many of those young
mothers, particularly health care for their children. So it is simply
common sense, as far as I am concerned, that if we are going to
move large numbers of people immediately into the work force in
relatively short periods of time, that we are going to have to have
child care in place. Cutting back on child care makes absolutely no
sense if we are seriously committed to welfare reform.
Mrs. LowEY. I am also very concerned about the programs that
address the nutrition for children in child care.
Secretary Shalala. Nutrition is a particular problem because the
National Nutrition Standards, the Food Stamp program, the nutri-
tion programs, the WIC program, really have had an effect on rais-
ing the quality of life and saving children's lives and making sure
they get decent food. In no way do we want to condone waste, fraud
and abuse in the programs. But having those programs in place
with national standards, we believe is very important as part of
this whole strategy.
BREAST AND CERVICAL CANCER
Mrs. LowEY. I thank you, I am going to move to another area,
because my time is limited. But I look forward to the reauthoriza-
tion of the child care bill. I worked on the first one, and I hope we
can keep our commitment to child care. It is vital if we are really
going to make people independent.
On other areas, you know I have been deeply committed to in-
vestments in breast cancer research as well as all other kinds of
cancer research and other health research. In fact, breast cancer is
a disease that affects too many women and their families in our so-
ciety. So I am very pleased, and I want to thank you for the Ad-
ministration's continued focus on investments in breast cancer
research.
As we all know, the interaction between the National Institutes
of Health's research, the Centers for Disease Control's prevention
efforts and the Office of Women's Health's coordinating activities is
crucial to the national infrastructure for fighting this disease.
Could you spend a few minutes discussing the way these three
programs work together to help the Nation move forward in the
165
fight against breast cancer? I think the coordination is so very criti-
cal to the effort.
Secretary Shalala. We convened last year a breast cancer group,
as you know, and put together a National Breast Cancer Action
Plan. The purpose of the action plan was to bring together re-
search, treatment, educational outreach prevention information,
and to do it in a coordinated way.
In addition to that, the FDA had a role in raising our standards
and our oversight on mammogram holography in this country.
They have, in fact, had a major impact on that. The point was to
make sure that these efforts are synchronized so that we weren't
shortchanging the prevention activities while we were making in-
vestments in research.
We have made investments in research so that findings could be
translated into treatment as well as prevention activities. The
President has outlined that he wants to continue to invest in,
breast cancer research and education, as well as our investments
in making sure that the mammography machines around the coun-
try and the reading of those screenings is done accurately and the
follow-up is done accurately. We have got some evidence of some
reductions in the number of deaths for white women, although not
yet for minority women.
All of these things will have a major impact on the quality of life
for American women.
Mrs. LowEY. Following up on that, we all understand that — and
I know our Chairman believes strongly that continued investments
in research in the National Institutes of Health are critical — we
have budgetary constraints.
I do have a couple of questions concerning the Administration's
proposal to block grant the breast and cervical cancer screening
program to the States. How could we block grant a program to the
States, when all States don't have programs, number one?
Likewise, there are certain program standards States now have
to meet in order to receive Federal funding. These standards are
vital to the quality of the programs. We worked very hard to be
sure those standards would be put in place last year.
How do you see the CDC clusters working, particularly the clus-
ter that includes breast and cervical cancer screening?
Secretary Shalala. One should not assume that where we are
combining programs, that they are necessarily programs, all of
them, that are going directly to States as opposed to nonprofits or
other kinds of institutions. So what we may be doing is combining
some programs and simply streamlining the approach. We are not
lowering our standards, but we are making it easier for an appro-
priate health center to apply for the resources.
I can provide you with more detailed information on how specifi-
cally we are going to handle breast cancer issues. But the attempt
here is to streamline it for those that apply for the grant programs.
[The information follows:]
166
Breast and Cervical Cancer
In fiscal year 1995, CDC received $100.0 million In
appropriations to support the National Breast and Cervical Cancer
Early Detection Program. Following the direction as authorized In
P.L. 101-354, these resources are providing support to: 35 States
(approximately $66 million) for the dellveiry of comprehensive early
detection programs; and 15 States, 3 territories, and the District of
Columbia (approximately $23 million) for capacity building programs
to prepare them for the delivery of comprehensive programs. Other
Breast and Cervical program activities are funded at approximately
$11 million.
The Administration's State partnership grant for fiscal year
1996 would place the breast and cervical cancer early detection
program Into the Chronic Disease and DlScUallltles Prevention
Performance Partnership Grant. The specific formula that would
determine the distribution of these resources to the 50 States and
territories Is currently under development; however, the formula will
attempt to establish a core program In chronic disease and
disabilities prevention and control In each State and take Into
account the total population at poverty level to support clinical
preventive services and to enhance prevention progreuns and services
provided by local health departments. In order to minimize
disruption on currently funded programs, we will require a three year
transition period during which States will be held harmless at their
current level of support. The ultimate Intent of the proposed
partnership grant Is to provide States with Increased flexibility
over how they utilize these resources within the chronic disease and
dlsoiblllty grant stream. Although there are not specific set asides
In the Administration's proposal for breast and cervical cancer early
detection programs, we feel comfortable assuming that States will
desire to maintain or possibly expand their annual level of support
for this Important activity because the need Is so great. The
flexibility provided In the proposals could result In Increased
funding In the area.
Through our new partnerships, we are committed to Insure that
the National Breast and Cervical Cancer Early Detection Program
provides quality services to those women at greatest risk,
particularly racial and ethnic minorities, low-Income, and older
women. As we work with States to set their performance objectives,
delivery of screening, proper follow-up services and appropriate
diagnostic and treatment services will remain Important as measures
of State achievement.
This will continue to be a matter of great Importance to the
Administration. As Initial Chair of the National Strategic Plan for
the Early Detection and Control of Breast and Cervical Cancers, I
remain committed to working with State and local governments,
national organizations, the private sector and the general public to
develop and Implement strategies to address this killer of women.
167
MANAGED CARE — GRADUATE MEDICAL EDUCATION
Mrs. LOWEY. I hope to continue to work with you on this. I ap-
preciate that.
Do I have time for a final question?
Thank you, Mr. Chairman.
At the beginning of the hearing, we talked about managed care,
and I certainly have been a proponent of managed care because I
think it is a very cost-effective way to deliver services. My only con-
cern is that in the transition to managed care, we are draining our
resources on support for teaching hospitals.
This particularly affects the New York region. And if we are not
careful, I am very concerned that we could dry up support for the
teaching hospitals, which, as we all know, train the doctors that
every region relies on.
I am sure that you have given a great deal of thought to this,
and perhaps you could address it for us. I know this is an ongoing
issue that is so serious that we want to work with you on it. If
there are some responses to that, I would appreciate it.
Secretary Shalala. We have given some thought to it. As you
know, the health care industry itself is changing dramatically in a
way that it is not simply the government portion of this, that are
affecting the great teaching hospitals in this country, but in fact
that the health care industry is sorting itself out.
As business and industry have put pressure on their health care
providers to slow down their increases, teaching hospitals, in some
case, have become less competitive for the business, because the at-
tempt there is to contain cost.
They have become more dependent on Medicare and the fee-for-
service Medicare program and the Medicare clients as a result of
this. There is no question that our investment in teaching hos-
pitals, some of it through the National Institutes of Health, some
of it through our reimbursement policies £ind the way in which they
participate in government programs, as well as the private sector,
is one of the most important investments. They have no peers any-
where in the world.
It does cost more to run a teaching hospital because we are train-
ing health care providers. It takes more time to do a procedure if
you have a student standing next to you. Teaching hospitals tend
to deal with tertiary care, which means it is the most high-risk,
most expensive kinds of patients.
They are also on the cutting edge of research, which means they
are never fully reimbursed for the kinds of patients they are
treating.
We must in the process of making changes and keeping the kind
of cost-containment discipline that we want, expect the teaching
hospitals to respect the kind of containment efforts we have to
make, but it will cost more money.
I know of no solution to keeping our great investment in teaching
hospitals in this country, except for spending some more on those
teaching hospitals. But at the same time, we will expect them to
make some changes.
Unfortunately, the government is not necessarily driving these
changes. In some ways, we are tripping along behind the move-
168
ment to mginaged care as we expand the number of options, and
people become more comfortable with managed care. Medicare re-
cipients will move into managed care because they have done it
when they were in the work force.
But government does have a role in this extraordinary research
and clinical infrastructure that government itself has helped to cre-
ate. I think that it is going to take this committee in particular,
Mr. Chairman, and your Members with this Administration, to
think through how we maintain what is an extraordinary, impor-
tant enterprise from a health point of view, and and economic point
of view, in this country, because the great American health centers
play a very important economic role, both in this country's present
as well as in its future.
Mrs. LowEY. Thank you, Madam Secretary. And again, thank
you for sharing your views with us today.
Thank you, Mr. Chairman.
FOLLOWUP HEARING
Mr. Porter. Thank you, Ms. Pelosi.
Secretary Shalala, two points I want to make before we conclude
the hearing. The first is that we have had, because we are on such
a tight hearing schedule and we were very anxious to complete our
hearings by April 7th, it may be that after we return in early May,
we may ask you or others of your staff to come back and share
more timely thoughts with us at that point in time before we will
go into the markup. And I hope that that will be possible for you
and our other Secretaries and their staffs to accommodate us in
that regard, if it proves necessary to have additional hearings.
Secretary Shalala. We would be happy to do that, Mr. Chair-
man. We find these exchanges very useful.
Mr. Porter. Obviously, we do also. We are ending up with a
number of questions. I am going to have to ask Members to put
them in the record at this time.
One final point is that the staff tells me that we have been hav-
ing a very unusual degree of difficulty in getting HHS budget docu-
ments in a timely fashion. Some of the justifications have been
three to four weeks late, they tell me. One justification is still not
here. And we did not receive an accurate all-purpose table until the
day before yesterday. Testimony for today's hearings arrived last
night, and we still don't have the testimony for tomorrow. So we
would very much appreciate it if you could look into this and we
hope that the remainder of the HHS cycle of budget hearings can
proceed smoothly.
Secretary Shalala. Thank you, Mr. Chairman.
There is no excuse for not providing timely information. As you
know, this is a very changed budget, because we have done some
things in terms of reorganization. But I offer no excuses and will
offer no excuses. We will try to do substantially better.
Mr. Porter. Madam Secretary, thank you very much for coming
here and testifying today.
We will adjourn, recess the subcommittee until 2:00 this
afternoon.
[The following questions were submitted to be answered for the
record:]
169
Head Start
Mr. Porter: Madam Secretary, as you know, the Head Start
program has grown enormously in the past 5 years, from $1.5 billion
in 1990 to $3.5 billion in 1995. And you're requesting another $400
million increase for 1996. Can you tell us approximately how many
kids are being served in the program today versus 5 years ago?
Secretary Shalala: The Head Start program served 541,000
children in FY 1990. In 1995, we estimate that we will serve 752,000
children, and increase of 211,000 children or almost 40%.
Mr. Porter: Can you also tell us what portion of the $2
billion increase in that period of time has gone towards increasing
teacher salaries, as opposed to increasing the number of kids being
served?
Secretary Shalala: Since 1989 $626 million has gone toward
increasing staff salaries through cost of living adjustments and
targeted quality increases. During the same period, over $1.6
billion has gone toward increasing the number of children served and
improving program quality including the hiring of additional staff.
Mr. Porter: Are you able to tell us by how much the average
Head Start teacher's salary has increased over the past 5 years?
Secretary Shalala: The average salary of a Head Start teacher
today is $16,700 as compared to $13,900 in 1991. This represents an
increase of approximately 17% over 4 years. During this period,
local programs have also been able to increase the number of teachers
and lower their child to teacher ratio. Therefore, comparisons of
average salary levels understate actual increases received by
teachers who have been with Head Start for more than 4 years. We
estimate that teachers who have been with Head Start since 1991 are
actually earning 30% more today than they were in 1991. These
increases are critical to attracting and retaining quality staff.
LI HEAP
Mr. Porter: Madam Secretary, I have long been a critic of the
LIHEAP program. It is a program that was created to temporarily
serve individuals affected by a national emergency. The emergency
has long since passed, but the program endures at over $1.3 billion
per year. If there is a continuing need for energy assistance for
low income individuals, then the program ought to be reauthorized to
address that need which is very different from the need it was
written to address.
Real energy prices are well below what they were in 1980, and
the price of electricity, according to the Department's own
information, is less today than it was in 1974. In addition, LIHEAP
assistance is very poorly targeted. It amounts to an income
supplement that is distributed on the basis of a formula which does
not have the predictive capability to target assistance to
individuals with real energy emergencies.
As only one excunple, I understand that many individuals in
public or assisted housing who do no pay energy bills or who pay for
energy at a fixed rate and therefore don't face increased bills
during extreme weather receive assistance under LIHEAP. I would like
to know how many people in these circumstance receive LIHEAP
assistance and how much they receive.
170
Secretary Shalala: The 1994 Current Population Survey
conducted by the Census Bureau shows that 27 percent of the
households that received LIHEAP heating assistance, or approximately
1,647,000 households in 1994, lived in rent subsidized or public
housing. Some of these households have their heating costs included
in the rent, while others pay for their utilities out of pocket.
Many that pay for utilities out of pocket receive some assistance
from utility allowances paid by the public housing authority. Others
that have their heating costs included in their rent pay for heat and
utility costs that exceed a certain amount each month. We do not
have any data on the number of LIHEAP recipient in each of these
categories, or how much they receive in LIHEAP assistance.
Reinventing Government
Mr. Porter: Dr. Shalala, we understand your Department has
been very busy the past few weeks developing recommendations for the
second phase of Vice President Gore's reinventing government
initiative. While I realize that your recommendations are not yet
final, could you share some of your thinking with us? Are you
reevaluating your Department's involvement in some policy areas and
programs, or are you focusing mostly on downsizing personnel without
significant changes to the Department's mission?
Secretary Shalala: HHS's review activity under the second
phase of reinventing government (REGO II) is not completed, but the
changes that will occur as a result of REGO II will be significant.
HHS is considering options which will terminate programs which are no
longer needed and consolidate others to improve efficiency. Other
options call for privatizing program functions and activities which
the private sector can perform better than government. Options seek
wherever possible to foster partnerships with State governments and
other Federal agencies to improve customer service to our
beneficiaries and the public as a whole. Finally, HHS options seek
to improve program management to achieve maximum efficiency in
resource utilization and to take our fight against fraud and abuse to
new levels.
The options affect and involve all parts of the Department and
both program and staff functions. Although the fundamental missions
of the Department as a whole will remain, HHS is likely to propose
significant changes to the missions of components within the
Department. With the departure of the Social Security
Administration, HHS has focused particular attention under REGO II on
the role and structure of HHS's headquarters operations. Proposals
in this regard will center on streamlining headquarters activities
and emphasizing the policy role of the office. The proposals will
apply to both the Office of the Secretary and the Office of the
Assistant Secretary for Health. As already reflected in the
President's Budget, HHS's program consolidation proposals include the
combining of 107 programs into 6 "performance partnerships" and 10
consolidated grants. However, other significant consolidations and
terminations are being considered. Proposals for management
improvement will focus on achieving greater savings for the Medicare
program through fundamental changes in operations and improved
progrcun integrity efforts.
SSA Independence
Mr. Porter: With the departure of SSA, can you give us some
indication of the structural changes we might see in the Office of
the Secretary?
Secretary Shalala: HHS has made use of its efforts under the
Vice President's second phase of reinventing government (REGO II) to
initiate thinking about the structure of HHS headquarters operations
after SSA's departure. The proposals for REGO II are not final, but
171
HHS has focused its attention on principles which will define the
directions of the headquarters structure.
HHS headquarters will be streamlined significantly beyond what
has already been proposed in the Department's Streamlining Plan and
the FY 1996 President's Budget. The Department is committed to the
establishment of a lean operation which focuses on the core functions
necessary to support the development of HHS policy and the
coordination of Governmentwide policy in the Department. HHS
believes that operational functions and those which support program
operations should be located in operational units in the Department,
and it will pursue organizational changes consistent with that view
under REGO I I .
HHS actions to alter its headquarters structure will be well
planned and executed in an organized manner. The very smooth and
successful transition to an independent SSA has taught HHS that there
is no replacement for early and thoughtful involvement of all
stakeholders, including employee unions, in developing and planning
for the implementation of major changes such as will occur after SSA
departs and the Department's REGO II decisions are made.
Crime Bill
Mr. Porter: Your budget proposed $144 million for various
crime bill programs, a $117 million increase over 1995. Have any of
these authorizations survived in the new crime bill passed by the
House?
Secretary Shalala: The provisions authorized in the section on
"Violence Against Women" of the Violent Crime Control and Law
Enforcement Act of 1994 were not deleted in the recent House-passed
amendments. These provisions include the Domestic Violence Hotline,
the Domestic Violence Shelter Grants, the Rape Prevention and
Education program, the Runaway and Homeless Youth Sex abuse
prevention program, the Community Programs on Domestic Violence, the
Youth Domestic Violence Education Demonstration grants, and the Study
on Injuries.
Consolidation of ACF Programs
Mr. Porter: As you know, there are a significant number of
relatively small categorical grant programs in the Administration for
Children and Families. A number of these appear to serve similar
populations and have similar purposes. The number of these programs
has grown significantly over the past 10 years or so. have you given
any serious consideration to consolidating and/or eliminating many of
these progreuns? Couldn't many of these be carried out by the States
under the title XX social service block grant? Couldn't we save
significant eunounts of administrative funds by consolidating and
simplifying these programs? Wouldn't it also be easier for people at
the local level to apply for funds if there weren't so many separate
categorical progreuns, each having a separate set of regulations and
grant applications?
Secretary Shalala: The ACF Budget for FY 1996 incudes a number
of consolidations and program eliminations that will reduce the
number of small categorical programs and provide grantees with
greater flexibility. Although some of the discretionary programs
administered by ACF could be carried out by States under the Social
Services Block Grant, it is not clear that such a move would generate
substantial administrative savings. We continue to endorse, and to
propose reducing the number of small, categorical grant programs in
order to promote flexibility and simplify access for potential
grantees.
172
DHHS Employment
Mr. Porter: Provide the total employment levels for the Office
of the Secretary for fiscal years 1993-1996, broken down by major
staff division. Please include the Working Capital Fund in the
numbers .
Secretary Shalala: The FY 1993-1996 full-time equivalent (FTE)
employment levels for the Staff Divisions (STAFFDIVs) within the
Office of the Secretary (OS) are as follows:
1993 1994 1995 1996
Immediate Office of the Secretary . 85 88 91 81
Public Affairs 38 39 40 35
Legislation 28 28 29 28
Planning and Evaluation 97 109 109 108
Management and Budget 279 267 249 254
Personnel Administration . . . 191 161 152 159
Intergovernmental Affairs .... 39 35 36 36
General Counsel 674 608 580 564
Subtotal, General Departmental
Management 1,431 1,335 1,286 1,265
Working Capital Fund 1.215 1.125 1.025 842
Subtotal 2,646 2,460 2,311 2,107
Office of Inspector General . . . 1,321 1,257 1,207 1,260
Office for Civil Rights 309 284 276 276
Policy Research 16 25 25 26
Total, OS 4,292 4,026 3,819 3,669
NOTES :
• FY 1993 and FY 1994 FTE are actuals; FY 1995 are projected, as
of February 1995; FY 1996 are the President's Budget targets.
• OS total includes all FTE to be transferred to the Social
Security Administration on April 1, 1995.
• OS total does not include FTE for the U.S. Office of Consumer
Affairs, which is funded under the VA, HUD, and Independent
Agencies appropriation.
Mr. Porter: What are the employment projections for the OS for
1997 and beyond?
Secretary Shalala: The current FY 1997-1999 projected FTE
targets for the STAFFDIVs within OS are as follows:
173
1997
Immediate Office of the Secretary . 81
Public Affairs 35
Legislation 28
Planning and Evaluation 108
Management and Budget 254
Personnel Administration 159
Intergovernmental Affairs 21
General Counsel 563
Subtotal, General Departmental
Management 1,249
Working Capital Fund 832
Subtotal 2,081
Office of Inspector General .... 1,241
Office for Civil Rights 272
Policy Research 26
Total, OS 3,620
1998
1999
80
78
34
34
28
27
106
103
250
243
157
153
6
6
555
539
1,216
820
2,036
1,212
266
26
3,539
1,182
800
1,983
1,179
258
25
3,445
NOTES :
• OS total includes all FTE to be transferred to the Social
Security Administration on April 1, 1995.
• OS total does not include FTE for the U.S. Office of Consumer
Affairs, which is funded under the VA, HUD, and Independent
Agencies appropriation.
Mr. Porter: Your projected employment level for 1996 is
decreasing to 2,107 from 2,254 in 1995. Will these personnel be
transferred elsewhere in the Department, or will they simply not be
replaced? If there are any transfers of functions, please describe
them.
Secretary Shalala: The employment levels you refer to are the
total FTE for the General Departmental Management appropriation and
the Working Capital Fund (WCF) . The decrease between FY 1995 and
FY 1996 reflects both personnel reductions (actual elimination of
positions) resulting from the Department's streamlining initiatives,
and functional transfers to the HHS Operating Divisions resulting
from the delayering and restructuring of the regional administrative
support functions. In FY 1996, these functional transfers total
203 FTE, all from the WCF: 139 FTE in Regional Finance and
Administration and 64 FTE in Payroll and Personnel. These activities
and their corresponding resources are included in the FY 1996 budget
requests of the respective Operating Divisions.
Mr. Porter: What are the employment levels for the Office of
Budget for fiscal 1993-1996? If you are cutting back here, please
tell us why and by how much.
174
Secretary Shalala: The employment levels for the Office of
Budget for FY 1993-1996 are as follows:
1993
Actual
1994
Actual
1995
Estimate
1996
Target
FTE U
63
62
48
52
1 1
Staffing reductions in the Office of Budget during this period
reflect streamlining and restructuring activities associated with the
National Performance Review (NPR) . The NPR identified "control
positions" in headquarters components as a principal target for staff
reductions and workforce restructuring in HHS. The Office of Budget
is staffed with budget and program analysts who occupy control
positions as defined by NPR and is being streamlined. Budget Office
FTE levels also reflect staffing reductions required by the Federal
Workforce Restructuring Act of 1994.
1./ Does not include the OS EEO OfBce which administiatively reports to the Deputy Assistant Secretary for Budget.
FY 1995 and 1996 levels do not include seven FTE transferred to SSA.
Mr. Porter: Please tell the Committee how many people
throughout the Department are assigned to Congressional Affairs
offices of various kinds. Please provide the numbers for fiscal
years 1993-1996; also provide the amount of money being spent on this
activity by year.
Secretary Shalala: At the Department level. Congressional
Affairs activities are administered by the Office of the Assistant
Secretary for Legislation. In addition, each major operating
component has a Legislative/Congressional Liaison function reporting
to top management. Then number of people assigned to perform
substantive work of this function throughout the Department, together
with costs, by year, are shown in the following table:
Legislation/Congressional Affairs
Years
FY 1993
FY1994
FY 1995
FY1996
FY2000
Employees
127
128
130
134
119
Average Salary
$45,991
$57,104
$60,932
$62,394
N/A
Total Salary
$5,830,697
$7,309,312
$7,921,160
$8,360,845
N/A
1 1
Mr. Porter: Also provide a list of all Congressional Affairs
offices throughout the Department? Have you carefully examined
congressional affairs as an area where personnel savings could be
made with respect to reinventing government?
Secretary Shalala: Congressional Affairs offices currently
exist within the following organizations:
Office of the Secretory:
Health Care Rnancing Administration:
Deputy Assistant Secretary for Legislation
(Congressional Liaison)
Office of Legislative and Intergovernmental
Affairs
Administration for Children and Families:
Public Health Service:
Division of Policy and Legislation
Office of Health Legislation
175
Mr. Porter: Please provide the Seune information for personnel
offices, public affairs offices, intergovernmental affairs offices
and planning and evaluation offices throughout the Department.
Secretary Shalala: At the Department level, personnel, public
affairs and planning and evaluation programs are each administered at
the Assistant Secretary level. The Intergovernmental Affairs
function reports directly to the Deputy Secretary. In addition, each
major operating component has these key program activities reporting
to top management. The number of people assigned to perform
substantive work of each function throughout the Department, together
with costs, by year, are shown in the following table:
Years
FY 1993
Pf 1994
Pf 1995
FY 1996
FY
2000
Personnel
Employees
2,118
2,064
2,002
1,947
1,505
Average Salary
$43,024
$43,678
$44,880
$45,947
N/A
Total Salary
$91,124,832
$90,151,392
$89,849,760
$89,478,513
N/A
Public Affairs
Employees
222
216
211
203
179
Average Salary
$54,351
$55,220
$55,698
$57,035
N/A
Total Salary
$12,065,992
$11,927,520
$22,752,278
$11,578,055
N/A
Planning and Evaluation
Employees
495
490
485
483
400
Average Salary
$58,641
$57,387
$55,896
$57,238
N/A
Total Salary
$29,027,295
$28,119,630
$27,109,560
$27,645,714
N/A
Intergovernmental Affairs
Employees
73
71
71
70
35
Average Salary
$56,373
$54,624
$60,945
$62,408
N/A
Total Salary
$4,115,229
$3,878,304
$4,327,095
$4,368,538
N/A
Mr. Porter: Again, are these areas where you have made some
significant reductions? And if you haven't, could you tell us why
not?
Secretary Shalala: These progreun areas have been the targets
of considerable study and analysis since the start of the current
administration. In order to fully achieve the streamlining and
reinvention goals outlined in REGO and soon REGO II, the Department
has carefully planned for the reduction of employment levels and
operating costs in these as well as other control and headc[uarters
functions. Our overall streamlining plans are on a timetable which
runs through fiscal year 1999. While it may appear that significant
reductions have not yet occurred, the numbers of employees and
overall employment costs for these activities will begin fiscal year
2000 at significantly reduced levels, as reflected in the above
tables.
176
Working Capital Fund
Mr. Porter: With the eliminating of the Regional accounting
system and the dissolution of the RASCs many of the current functions
funded under the HHS Working Capital Fund will, presumably no longer
be funded by that mechanism, what are your plans for the WCF7
Secretary Shalala: While the regional-based services of the
Working Capital Fund (WCF) will no longer be funded through the WCF
after FY 1995, current plans are for the WCF to remain as a provider
of headquarters-based administrative services. However, this plan
for the WCF may be impacted by any Departmental restructuring that
may result from the departure of the Social Security Administration
and/or the current REGO II analysis.
Payment Management System
Mr. Porter; Madam Secretary, could you or Dr. James explain
the functioning of the Payment Management System. I understand that
we no longer send checks to grantees. Rather, they draw down on
their awards only as they need money, thus reducing the need for the
Federal Government to borrow money that sits idle in grantee
accounts. How does this work and what precautions are being taken
that this electronic system is secure?
Secretary Shalala: The Payment Management System (PMS) is
operated by the Division of Payment Management (DPM) . DPM is
organizationally located within the DHHS Public Health Service,
Office of the Assistant Secretary for Health, Office of Resource
Management. It is located in Rockville, Maryland.
The mission of PMS is as follows:
• Provide a central point for grants and program payments
for DHHS.
• Provide efficient cash management.
• Provide recipients with a secure, user friendly, on-line
capability to request funds.
• Provide Executive Information in an on-line mode to
customer agencies
• Obtain operating efficiencies through economies of scale.
PMS also has two government wide missions. They are as
follows:
• Function as the government's central point of collection
for interest earned on the deposit of Federal funds by
grant and program recipients. Reference 0MB Circular
A-110, Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education,
Hospitals, and Other Nonprofit Organizations,
• Provide cross-servicing capaibility to other government
agencies.
PMS is a highly automated system that uses the latest advances
and approaches in computer and communications technology to support a
grant payment network of nine (9) Federal agencies and more than
14,000 nationwide grant recipients.
Ninety-eight percent (98%) of the grant funds are paid by two
highly efficient EFT payment systems ~ SMARTLINK II and CASHLINE.
These two systems use Electronic Funds Transfer (EFT) to deliver
funds to recipients. The remaining 2% continue to be paid by
Treasury Check, and for the most part, consist of small recipient
organizations that do not expect to receive future Federal funding.
SMARTLINK II is a computer to computer system that allows recipients
177
that have a personal computer and modem not only to draw funds
against their grant but also inquiry" information about their
account. CASHLINE, on the other hand, only provides the capability
for recipients to draw funds through the use of a touch-tone phone.
Both SMARTLINK II and CASHLINE are on-line systems that provide
recipient organizations with the capcibility to draw grant funds
concurrently with their actual cash requirements. The funds are then
direct deposited to their bank account on a next business day basis.
As a result, recipient organizations using these EFT fund delivery
systems do not need to request Federal funds in excess of their
actual cash needs and do not need to maintain any sizable balances of
Federal funds in their bank accounts at anytime. In turn, this helps
to minimize the impact of cash withdrawals on the public debt level
and the related borrowing (financing) costs to the U.S. Treasury.
In order to understand the impact of security for PMS it is
imperative to understand that in many respects PMS operates somewhat
like a bank. The Federal agency issuing a grant sets up an account
for the recipient in PMS (bank) . However, there are significant
differences when comparing PMS to a bank. Recipients cannot, under
any circumstances, draw funds in excess of their grant authority and
DPM staff exercise their cash management responsibilities by
monitoring cash draws and cash balances of the recipients. After the
account is established, the Federal agency, deposits the amount of
the grant (fund authority) in the recipient's account in PMS. Once
the funds are deposited (recorded) in the recipient's account, the
recipient can then request funds through the PMS SMARTLINK or
CASHLINE payment systems. Approved requests are directly deposited
to the recipients commercial bank account through the Federal Reserve
Automated Clearing House (ACH) facilities, the next business day.
Security of PMS is a top priority and is continuously, reviewed
internally, as well as, by outside organizations. For example, PMS
has had a Treasury System Risk Assessment and the security has been
deemed adequate to protect the government's interest. The assessment
included security features from the recipient level to the granting
agency level and also included system and physical security as
verified by the assessment. The PMS features include system,
operational, and physical security. The system security includes
data encryption, passwords, user accounts, user initials, terminal
security, and user restrictions. All computer programs are secured
by limiting their access to certain users and protecting them through
the IBM's "RACE" password process. PMS operational security consists
of an elaborate scheme of internal control between customer agencies,
recipients, and internal Division of Payment Management (DPM)
components. PMS facility's security includes an entry card system,
security guards, motion detectors, and restricted access to various
areas. Overall, the organizational and system internal control
scheme incorporates a security net that requires multiple actions by
multiple organizations to posture a recipient to request and receive
Federal funds. NO ONE organization, to include DPM itself, has the
system access to initiate a payment.
178
Alcohol, Drug and Tobacco Abuse
Mr. Dickey; A recent newspaper article stated that "abuse of
tobacco, drugs and alcohol will eat up nearly one-fifth of the $430
billion" allocated to federal health care programs. Is the addiction
to tobacco, drugs and alcohol considered a priority of the Department
of Health and Human Services?
Secretary Shalala: Taking action to address addiction to
tobacco, drugs and alcohol is considered a top priority of the
Department of Health and Human Services, as well as the Substance
Abuse and Mental Health Services Administration (SAMHSA). In 1990,
the Department issued a report entitled "Healthy People 2000"
establishing a national strategy and a set of objectives for
improving the health of the nation in the last decade of this
century. A total of 19 objectives were established in relation to
preventing or reducing use of alcohol and drugs, with data sources
that would monitor the Nation's progress toward fulfilling these
objectives. Similarly, an additional 16 objectives were established
in relation to preventing or reducing the use of tobacco. Fulfilling
these objectives is a major priority for the Department.
Mr. Dickey: What is your department doing to prevent the abuse
of tobacco, drugs and alcohol?
Secretary Shalala: The Center for Substance TUsuse Prevention
(CASP), within the Public Health Service, leads the Federal
government's efforts to prevent substance cibuse problems in the
Nation. CASP supports a comprehensive and multifaceted set of
prevention strategies through its demonstration grant programs and
dedication of 20% of the SAMHSA state block grants. These strategies
range from those that focus on reducing risk and enhancing protective
factors in individual, families, peer groups and schools to those
that embrace entire communities which involve multiple service
systems in the public and private sectors. In total, this is a
substantial effort which we believe has helped to reduce substance
abuse throughout the Nation.
HIV/AIDS
Mr. Dickey: Although there is not yet a vaccine to prevent HIV
infection, it seems we have discovered specific behaviors that
contribute to the spread of HIV, specifically unprotected sexual
relations and intravenous drug abuse. If a man or woman is
responsible enough to not become a member of one of these groups,
what are his or her chances of becoming infected with HIV? What
percentage of your HIV/AIDS resources are used to promote behaviors
that seem to virtually eliminate the spread of HIV?
Secretary Shalala: Several studies have looked at the
efficiency of sexual transmission of HIV. The probability that any
single episode of sexual intercourse will result in transmission of
HIV may be determined by multiple biologic factors of the infectious
person, the virus itself, and the exposed susceptible person. These
factors include late or early HIV infection, viral infectiousness,
and the presence of genital ulcers. All of these factors are known
or suspected to influence transmission and may explain the observed
differences in sexual transmission of HIV in different parts of the
world. Other risk factors in women, including estrogen use and
menstrual bleeding, have been suggested but not confirmed. Sexually
active persons should be cautioned that to our knowledge there are no
nonsusceptible persons. Engaging in certain risk behaviors,
including unprotected sexual relations or injection drug use, may
make a person more susceptible. Any single unprotected sexual
encounter may lead to HIV transmission.
179
Virtually all of CDC's prevention programs stress the primary
prevention message that abstaining from sexual intercourse and drug
injection are the most effective prevention strategies. However, CDC
recognizes that not all persons will choose to abstain. Therefore,
for those who are sexually active, CDC recommends other prevention
strategies that include engaging in sexual activities that do not
involve vaginal, anal, or oral intercourse; having intercourse only
with one uninfected partner; or using latex condoms correctly from
start to finish with each act of intercourse. For those who cannot
or will not stop injecting drugs, CDC recommends using a clean,
never-used needle and syringe each time they inject or disinfecting
"works" with bleach to help reduce the risk of HIV transmission when
no other safer options are available.
Determining Funding Levels
Mr. Dickey: How does the Department of Health and Human
Services determine different funding levels for the treatment and
research of different diseases, including AIDS? In prioritizing
funds for different diseases, do you weigh more heavily diseases that
strike indiscriminately, such as arthritis, as opposed to diseases
that are generally a result of specific human behavior, such as lung
cancer or AIDS?
Secretary Shalala: Decisions on what research to fund reflect
a combination of judgments about scientific opportunity and national
priorities. On the broadest level, NIH receives direction from
Congress during the appropriation process and in periodic
reauthorization legislation. In addition, it obtains guidance from
various NIH advisory committees that inform the decision making of
the agency and its constituent Institutes/Centers/Divisions (ICDs)
throughout the year. Through those channels of advice flow the many
diverse viewpoints of the American people and of concerned groups
about what research should receive priority for funding.
Because of the nature of basic research supported and conducted
by NIH, tangible results of scientific inquiry cannot always be
defined or planned in advance. For example, researchers recently
discovered that the molecular basis of Lou Gehrig's disease (ALS or
amyotrophic lateral sclerosis) results from a defect in a gene
involved in destroying oxygen-derived free radicals. This important
discovery may lead to improved diagnosis, genetic counseling, and
drug development, as well as possible gene therapy. The discovery
was predicated on four decades of seemingly unrelated work involving
research on electron transport, free radicals, the structure and
function of enzymes that destroy free radicals, Down syndrome, and
gene mapping.
Thus, while society may desire that a specific goal, for
example, "a cure for arthritis" be attained within a certain time
frame, a lack of knowledge regarding underlying physiological
processes can inhibit the development and evaluation of diagnostic
and therapeutic technologies for that condition. Conversely, a
recent research advance in another area may create unexpected new
scientific opportunities for R&D in that disease area. To ensure
that scientists take full advantage of these scientific
opportunities, NIH supports a substantial number of investigator-
initiated proposals through grants to the extramural research
community.
Finally, as a public health agency, NIH regularly considers the
critical public health threats, such as AIDS and tuberculosis, in its
research decisions and mobilizes resources appropriately to address
these concerns.
180
DHHS Budget
Mr. Dickey: I was interested to see your proposal to increase
the HHS budget, as a whole, by about $50 billion over FY 1995 funding
levels. With a looming budget deficit, it seems to me that
Department Secretaries should be finding ways to decrease, not
increase, funding. Would you be willing to work with members of this
subcommittee to find areas in the Department of Health and Human
Services to reduce overall funding by 7%, instead of increasing
funding by 7%, as proposed in your FY 1996 budget?
Secretary Shalala: The 7 percent increase you speak of is
mostly driven by mandatory programs, which consume 95 percent of our
budget. While entitlement growth within HHS is substantial, we
anticipate that, under this Administration, spending for Medicare and
Medicaid — the primary drivers this growth — will drop $212 billion
from earlier projections. These enormous savings are due not only to
the success of the President's economic program but to program
efficiencies and the elimination of inappropriate financing schemes.
In the discretionary portion of our budget (the remaining 5
percent), we held growth for all of HHS to 4 percent for 1996. Our
budget proposals cut 69 program activities and freeze 57 others. In
addition, our budget includes proposals to consolidate more than
100 program a,;tivities in the Public Health Service and the
Administration on Children and Families, saving $218 million and
700 FTE over the next five years.
Still, we appreciate the constraints that this Subcommittee
will face in limiting spending for 1996. As we have during the past
two years, we would be happy to work with you in setting additional
priorities and make further choices in prioritizing our spending for
the year ahead.
181
Healthy People 2000
Mr. Stokes: With respect to Healthy People 2000 having been
designed to function as a partnership plan with the States, to what
extent have the States joined in partnership with the Department?
PHS - Healthy People 2000
Secretary Shalala: As Healthy People 2000 approaches the
midpoint of the decade, progress has been made on nearly half of the
objectives, 15 percent are moving away from their targets, and 4
percent show no change. The remaining objectives need additional
data for evaluating progress. Additional information follows:
► Healthy People 2000 is defined by 3 broad goals —
• To increase the span of healthy life for Americans;
• To reduce health disparities among Americans; and
• To achieve access to preventive services for all
Americans.
In 1994, the National Center for Health Statistics (NCHS) began
an annual publication the Healthy People 2000 Review. This new
publication will provide a comparison of U.S. health status
with the goals established for the year 2000.
The first
data.
"Review" published in June 1994 provided 1992
The next publication with 1993 data will be published in
June 1995.
To date, the following goals already have been exceeded:
• increasing physical activity/fitness — low income persons
• reducing use of cocaine by teens and young adults
• reducing foodborne illness from saliionella
• reducing Hepatitis B and C infections
The following need additional attention:
overweight adults in the U.S.
weapon-related deaths
occupational injuries for full time workers
children under 5 not receiving annual dental visits
adults without access to primary care
Healthy People 2000 includes 22 priority areas which each
include a multiple set of goals for the Year 2000. A table
follows which portrays our progress in achieving selected goals
within these priority areas.
182
HEALTHY PEOPLE 2000 GOALS AND PROGRESS
Priority Areas
1992*
Year 2000
Taigel
DifFereoce
Goal Met/or
Exceeded
1 . Phyiical Activity /Fitoeu
(Percent Increase)
Persons 18-74 years
Low Income 18-74 Years..
2. Nutrition
(Percent Decrease)
Overweight adults
3. Tobacco (per 100,000)
(Death rate for luiig cancer)
All persons
4. Alcohol/Other Drugs
(Reduce use w/in past month)
Alcohol
12-17 yearn
18-20 years
Marijuana
12-17 years
18-25 years
Cocaine
12-17year8
18-25 years
5. Family Planning
(Adolescent abstinence 15-17
years)
Ever sexually active giris
Ever sexually active boys
6. Mental Health (per 100.000)
(Suicide Death Rates)
All persons
7. Violent & Abusive Behavior
(Weapon-related death rates)
All weapons
8. Community-Based Programs
(Years of healthy life)
All persons
9. Unintentional Injuries
(Rate per 100,000)
All persons
10. Occupational Safety/Health
Non-fatal injuries (per 100)
Full time workers
12%
7%
26%
38.5
25.2%
57.9%
6.4%
15.5%
1.1%
4.5%
24%
33%
64.0
7.7
14%
13%
34%
15.7%
50.3%
4.0%
U.0%
0.3%
1.8%
25%
36%
29.2
8.3
20%
12%
20%
40%
40%
-6%
+ 1%
-14%
12.6%
+3.1%
29.0%
+ 21.3%
3.2%
+0.8%
7.8%
+3.2%
0.6%
-0.3%
2.3%
-0.5%
-15%
-4%
Progress
Exceeded
Lost Ground
Progress
Progress
Progress
Progress
Progress
Exceeded
Exceeded
Progress
Progress
Progress
Baseline year is 1985 in most years.
Latest Data Available.
183
HEALTHY PEOPLE 2000 GOALS AND PROGRESS
Priority Areas
1991
or
1992**
Year 2000
Taiget
Goal Met/or
Exceeded
1 1 . Environmental Health
(Percent Increase of People
living in countries with
clean air)
Any Pollutant ,
12. Food and Drag Safety
(Cases per 100,000)
Salmonella Infections....
13. Oral Health (Pereenl)
Children under 5 who visited
the dentist w/in past year
14. Maternal and Infant Health
(Percent of live births w/
mothers receiving prenatal
care in first trimester)
All races
IS. Heart Disease/Stroke
(Death rate per 100,000)
All persons
16. Cancer
(Death rate per 100,000)
Female Breast Cancer
17. Diabetes & Chronic
Conditions
(Death rates per 100,000)
Diabetes-related
18. HIVInfecUon
(Cases in thousands)
All persons
19. Sexually-Transmitted Diseases
(Cases per 100,000)
Syphilis/ All persons
20. Immunization/Infectious
Disease (Cases per 100,000)
Hepatitis B
Hepatitis A
Hepatitis C
21 . Clinical Preventive Services
(Percent of Adults)
Access to primary care
22. Surveillance & Data Systems
(Percent of States)
Complete Year 2000 plans....
66.0%
76.0%
30.4%
38
63.5
33.0
18.3
77%
63.0%
76.2%
38
37.7
27.2
5.6
99%
85.0%
90.0%
90.0%
34
10.0
40.0
23.0
13.7
95%
100%
* Baseline year is 1985 in most yean.
** Latest DaU Avaikble.
+6.6%
-27.0
20.6
-2.3
+4.2
-8.1
-1%
Progress
Lost Ground
Progress
Progress
Progress
No Change
Incon-
clusive
Progress
Exceeded
Progress
Exceeded
Progress
184
Medicaid Waiver
Mr. Stokes: What warning mechanisms and controls are built-in
the waiver review, evaluation, and monitoring process to preserve and
to ensure the continued delivery of quality and accessible health
care services?
Secretary Shalala: Quality and access are of high priority to
my Department in our review of States' demonstration applications.
We concentrate on protecting all enrollees within demonstration
programs in terms of access to quality health care. We carefully
evaluate each proposal to determine whether the State has developed a
performance-based quality improvement program and can guarantee
access to critical health services. We work particularly closely with
States to develop agreements on monitoring, quality assurance
activities, and access standards.
Mr. Stokes: I would think that direct community participation
in the implementation and monitoring of these newly created health
care systems is key to effectiveness and success. To what extent is
community participation included as a component of the terms and
conditions of the Medicaid waiver?
Secretary Shalala: In our review of States' demonstration
applications, we ensure that States solicit and consider public input
at the front end — when they are designing their demonstration
programs. Because we believe that program beneficiaries should play a
central role in a demonstration program's development and
implementation, we recently published public notice guidelines in the
Federal Register.
We also consider community participation an important and
valuable contribution to our own monitoring of the implementation of
State demonstrations. State advocacy groups provide an essential
perspective to effective and quality implementation. Terms and
conditions for demonstrations require States to develop a monitoring
plan within broad Federal guidelines. We encourage States to include
community participation in implementation and oversight.
Welfare Reform
Mr. Stokes: As you are keenly aware, welfare reform is one of
the primary issue ideas contained in the "Contract with America."
What basic criteria must any enacted welfare reform measure meet to
be effective?
Secretary Shalala: The Administration supports real and
effective welfare reform. Real welfare reform should: (move people
from welfare to work; (2) provide adequate education, training and
child care to enable welfare recipients to become self-supporting;
(3) encourage parental responsibility; (4) protect the health and
nutrition of children; and, (5) enhance State flexibility.
Last year, the President proposed a sweeping welfare reform
plan to the Congress. Last month, the President issued an executive
order to crack down on Federal employees and members of the military
who owe delinquent child support. In the past two years, the
Administration has granted waivers from Federal welfare rules to 25
States — giving States the flexibility to try new ideas. In all its
welfare reform efforts, the Administration has emphasized the basic
values of work, education, parental responsibility, the protection of
children, and State flexibility.
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Breast Cancer
Mr. Stokes: The results of this research is hard evidence that
more can and needs to be done to address breast cancer in general,
and in African American and other minority females in particular.
With this evidence in hand, what is the Department doing to address
the problem of breast cancer in minority females?
Secretary Shalala: Mr. Chairman, the Department has mounted a
multifaceted effort to understand racial differences in breast and
other cancers, and to help reduce survival discrepancies through
improved access to early detection for African-Americans and other
minority populations. The death rate for breast cancer declined 4.7
percent between 1989 and 1992. This represented a 5.5 percent
decline in rates for Caucasian women, but a 2.6 percent increase for
African-American women. In my response, I will review some of the
activities and programs underway in the agencies of the U.S. Public
Health Service to address the issue of breast cancer in minority
females. These activities focus on increasing research on breast
cancer in minority women, improving access to screening, diagnosis,
and treatment services, and improving public and health care
professional education. The PHS Office on Women's Health (OWH)
coordinates the implementation of the National Action Plan on Breast
Cancer, a major public/private partnership that should make
significant progress in eradicating breast cancer as a threat to the
lives of American women. This Plan addresses issues related to
research, service delivery, and education with an emphasis on
minority populations. Additionally, the OWH has joined HCFA and the
White House in implementing an educational campaign to inform women
over 65 of all ethnic backgrounds to use the mammography screening
benefit provided in Medicare, a benefit that can decrease mortality
rates by 30%.
The National Cancer Institute Black/White Cancer Survival Study
is designed to investigate the significance of social, behavioral,
lifestyle, biological, treatment, and health care factors in the
observed differences in cancer survival eimong African-Americans and
white Americans. Data have been collected on more than 3,400
patients with cancers of the breast, colon, uterus, and bladder.
This group will be followed until 1996 to characterize survival
differences.
There is an NCI-supported study seeking to identify barriers to
timely follow-up of abnormal mammography results among African-
American women. The study will examine the role of socioeconomic,
psychosocial, and health care system factors in the lower rates of
African-American women's use of appropriate follow-up diagnostic
services.
The Project Awareness program launched in 1992 to expand and
enhance current community-based efforts to increase breast cancer
screening and follow-up among underserved African-American women has
been completed in ten cities.
Additionally, there has been extensive community outreach
programs within the NCI's Cancer Information Service (CIS) targeted
to African-Americans and other underserved populations. A priority
for outreach coordinators in the 19 CIS regional offices is to
support activities of the National Black Leadership Initiative on
Cancer. The objectives of the National Black Leadership Initiative
on Cancer, implemented in 1939 to stimulate the participation of
African-American Community leaders in cancer prevention and control
activities, are to reduce cancer incidence and mortality rates, to
improve cancer survival rates, and to address the barriers that limit
or prevent African-Americans from gaining access to quality cancer
control services. Outreach coordinators have also worked with
national and local affiliates of African-American organizations.
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A media placement activity has been developed and focuses on
African-American and Hispanic print and broadcast media outlets. The
initiative should increase the number of women who receive screening
mammograms as well as the number of physicians who regularly refer
patients for mammograms.
The NCI and the District of Columbia Cancer Consortium are
collaborating together to raise awareness of breast cancer and the
importance of early detection, and to improve access to breast cancer
detection and treatment services. Accomplishments to date under this
collaboration include market research to help identify barriers to
women's learning about mammography, and technical assistance in the
development of culturally sensitive cancer control messages.
Research studies underway are addressing the issue of breast
cancer in minority women. The Cancer Institute's Dietary
Modification Feasibility Study in Minority Women, which began
recruitment in 1992, targets minority and underserved populations in
addressing the possibility of achieving lasting dietary modification,
specifically dietary fat restriction, to lower the risk of developing
breast, colon, and possibly other cancers, as well as cardiovascular
diseases, in postmenopausal women. Twenty eight percent of the
participants are African-American women recruited at Emory University
and the University of Alabama at Birmingham. Elements of the study
design and the results will contribute to and be coordinated with the
projected 10-year, trans-NIH, multidisciplinary Women's Health
Initiative, especially those portions that focus on community-based
interventions and diet/micronutrient studies.
Another study is investigating the reasons for the increased
aggressiveness of breast cancer in African-American women. This
study aims to evaluate known prognostic markers (including the NM23,
p53, HER2/neu, and type IV collagenase genes) as possible predictors
of African-American/white survival differences. A recent report by
NCI-supported researchers in The Lancet, May 14, 1994, suggests that
breast tumors from African-American women exhibit a pattern of
mutations in the p53 tumor suppressor gene significantly different
from that observed in tumors from white women. While no specific
explanation for this difference is presently available, the study
suggests that the biochemical mechanisms of tumor growth may differ
between the races. Because the p53 gene is believed to control a key
step in breast carcinogenesis, this difference in mutational patterns
opens a potentially fruitful avenue for future investigations, one
which the Department intends to pursue.
The NCI's Breast Cancer Prevention Trial is underway in the
Community Clinical Oncology Program clinical trials network. This
trial is testing the ability of tamoxifen, an anti-estrogen
medication currently used in post-surgical treatment of early stage
breast cancer, to prevent the development of breast cancer in women
at increased risk for developing the disease. African-American women
will be an important part of this study and efforts will be
undertaken to increase their participation.
Implementation of the Mcimmography Quality Standards Act (MQSA) ,
the responsibility for which was delegated to the Food and Drug
Administration (FDA) in June of 1993, will play a major role in
assuring the availability of and access to quality mammograms for all
women. The FDA, in cooperation with AHCPR, published Implementation
of MQSA; Consumer Brochure on Mammography. Things to Know About
Quality Mammography, to help women become more educated participants
in their own breast health management.
The FDA Qffice of Consumer Affairs (OCA) has engaged in serious
outreach efforts to a number of minority and other underserved
communities where the incidence of breast cancer is high and/or there
may be cultural resistance to certain medical procedures or
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interventions. OCA interacts with a wide variety of women's groups,
including Women of Color (eg. National Black Women's Health Project).
The FDA has also supported a project to make information about
breast cancer related clinical trials available to the public most
effectively, thereby optimizing access to treatment and prevention of
breast cancer.
Innovative policies of the FDA are being designed with an eye
toward improving the Department's responsiveness to special
populations, including women of all demographic subgroups with or at
risk of getting breast cancer.
There are collaborations between many public and private
organizations such as the Public Health Service's Office on Women's
Health, NCI, the Centers for Disease Control and Prevention, the Food
and Drug Administration, the American Cancer Society, the Association
of State and Territorial Health Officers, and other organizations to
develop a national strategic plan for breast and cervical cancer
screening. Development and implementation of the plan will maximize
the coordination and impact of public education efforts directed
toward special populations, including African-American women.
The Center for Disease Control and Prevention (CDC) National
Breast and Cervical Cancer Early Detection Program provides a
foundation for supporting effective screening and early detection of
breast cancer at the State and community level. Screening data
submitted by comprehensive state programs through September 1994
demonstrates significant impact in providing mammography screening
services to minority women. In fact, over 50% of the women who
received mammograms through the Early Detection Program were minority
women. The Program benefits all women but specifically targets those
most likely to be underserved, including minority women. Through
this program, grantees develop and implement community-based programs
tailored to the cultural, educational, and psychosocial
characteristics of women most likely to be underserved.
CDC collaborates with the YWCA in implementing the Encore and
Encore-Plus programs to conduct outreach to educate women about
breast health and provide support for women, especially African-
American women, with breast cancer.
CDC has appointed a coordinator for Indian Health Service (IHS)
activities to work in collaboration with the IHS Headquarters West
Cancer Prevention and Control Program. They have helped State health
departments target and provide early detection and cancer screening
services to Native American women. In 1993, CDC co-sponsored a
regional conference in Minnesota, "Challenges in Health Care for
Underserved Groups: Cancer Screening in American Indian Women."
The Indian Health Service (IHS) funds mammography for Native
American women who attend the Women in Wellness conferences and has
been purchasing mammography equipment in a number of rural sites
where screening was previously unavailable. IHS is collaborating
with the Office of Minority Health to develop a clearinghouse for
health education materials that are specifically aimed at Native
Americans. This will include breast cancer informational pamphlets,
posters and videos. IHS is working with the Southwest Oncology Group
on a mechanism for increasing the participation of Native Americans
in clinical trials.
The Office of Minority Health (OMH) will be announcing shortly
the availability of Fiscal Year 1995 funds to support one competitive
demonstration cooperative agreement to establish a cancer prevention
project in Philadelphia, an area cited by Congress to have
particularly high rates of cancer for its non-White population.
Among the project objectives are to document cancer rates for various
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tyi>es of cancer, including breast, in the target area, and design and
implement a model for minorities that is an integrated, culturally
appropriate community-based cancer outreach program that will also
provide appropriate screening.
The Health Resources and Services Administration (HRSA) is the
lead Agency in a collaborative effort to esteiblish a breast cancer
outreach and screening demonstration that promotes education and
prevention by providing screening, early detection, and treatment of
breast cancer among low-income and disadvantaged women residing in
public/assisted housing and rural areas. The Bureau of Primary
Health Care's Community Health Centers provide screening or make
referrals to appropriate screening sites to reduce the risk of breast
cancer to under served disadvantaged women.
The Agency for Health Care Policy and Research (AHCPR) funds
several grants that target breast cancer in minority women.
Researchers at the UCSF MEDTEP Center on Minority Populations
developed a model program that spans across breast cancer screening
through treatment to better understand the factors which may
contribute to racial/ethnic differences in breast cancer mortality
rates. The research team is particularly interested in different
perspectives related to patient race/ethnicity, specifically whether
and how cultural differences affect individual attitudes and
willingness to accept screening, provider communication and the
health care professional's role in facilitating patient screening,
and systematic discrimination of certain race/ethnic groups. They
are also examining how patient preferences for information and for
participation in decision-making can and should be elicited and
integrated into the workup of an abnormal mammogram. Other AHCPR
projects include the UNM MEDTEP Center on Minority Populations, which
targets Hispanic and Native American women with or at risk for breast
cancer, a Cancer Screening of Low Income and Minority Women project
at Baylor College of Medicine, in which the aim is to design more
effective materials for low income and minority women, and a
Georgetown University grant on Low Income Minority Women: Barriers
to Cancer Screening, which examines access barriers to cervical and
breast cancer screening for low income, uninsured women.
The Substance Abuse and Mental Health Services Administration
(SAMHSA) considers emotional support for women with breast cancer and
other medical conditions to be a critical element in treatment
outcome. In addition, SAMHSA places an emphasis upon training
medical providers to become sensitized to the psychological needs
women may have regarding breast cancer or other life-threatening
medical conditions.
The programs described reflect some of the activities underway
to address the important public problem of breast cancer in minority
women .
Mr. Stokes: To what extent does the Department's recently
released "National Breast Cancer Plan" zero-in on breast cancer in
African American females? Explain.
Secretary Shalala: The death rate for breast cancer declined
4.7 percent between 1989 and 1992. This represented a 5.5 percent
decline in rates for Caucasian women, but a 2.6 percent increase for
African-American women. The National Action Plan on Breast Cancer
(NAPBC) is a public/private partnership involving all agencies of the
government, consumers, health care professionals, scientists, private
industry. Congress and the media. The Public Health Service's Office
on Women's Health coordinates the implementation of the Plan.
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The NAPBC has identified 89 action items aimed at achieving
three goals of effective health care delivery, dynamic research on
causes and cures, and progressive policy actions to improve the
health status of women with regard to breast cancer. Sixteen of the
action items either directly or indirectly target breast cancer in
African Americans and other minority females.
Working Groups have been established to address six high
priority areas of the NAPBC. Each Working Group includes
organizations and individuals that have direct access to and a unique
understanding of underrepresented and high-risk population groups.
The Working Groups are reviewing previous and ongoing breast cancer
research projects to identify gaps and make recommendations for NAPBC
funding.
The Clinical Trials Working Group will develop recommendations
on how to make clinical trials more widely available to women with
breast cancer and women who are at risk for breast cancer, and to
develop strategies to decrease barriers to participation in research
studies. The group will address recruitment and retention of
African-American and other minority participants in breast cancer
clinical trials, education to foster understanding by African-
Ttoierican women of the importance of clinical trials, the decision-
making styles and information needs of minority and underserved
populations, and the reduction of economic, physician, and access
barriers that have limited participation of minority women in these
studies in the past.
The Etiology Working Group is concerned with expanding the
scope of research related to the etiology of breast cancer, with
priorities including the effects of radiation and electromagnetic
fields, chemicals and hormones, personal risk factors, and viruses.
The differential effects of specific risk factors for African-
American women will be examined, including occupational and home
environmental exposures; consumption and availability of foods
thought to be protective of breast cancer, such as fruits and
vegetables, high fiber foods, etc.; and the effects of exercise and
obesity. Special funding consideration will be given to projects
that target minority women.
The Consumer Involvement Working Group is concerned with
ensuring consumer involvement at all levels in the development of
public health and service delivery programs, research studies, and
educational efforts. Hearings are being considered for different
areas of the country where African-American women's health advocacy
groups could testify on the needs of their constituencies from the
NAPBC. African-American and other minority women will also be
included in the design of videos to teach consumers how to review
grant applications. The recruitment of African-American women into
breast cancer studies and the inclusion of these consumers in the
design of studies is a high priority for this working group.
The Information Dissemination Working Group will identify
strategies to disseminate information about breast cancer and breast
health to consumers, scientists, and practitioners using state-of-
the-art technologies available on the information superhighway. The
group will identify approaches needed to assure dissemination to
underserved populations, shape methods of delivery to meet the needs
of targeted groups, and increase accessibility of a range of
technologies to low-literacy populations.
The National Biological Resources Bank Working Group will
establish tissue banks to ensure a national resource for breast
cancer research. One of the most important characteristics of a
national database is the extent to which it represents the diversity
of the national patient population. Efforts will be made to ensure
adequate representation of various ethnic and racial groups.
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The Breast Cancer Susceptibility Gene Working Group is
developing a comprehensive plan to address the legal and ethical
issues and the short- and long-term needs of individuals carrying
breast cancer susceptibility genes, particularly issues related to
possible discrimination. African-American women in particular have
concerns eibout discrimination and are therefore more reluctant to be
involved in genetic research studies. Priority areas of the
Susceptibility Gene Working Group include the recommendation of
legislation prohibiting discrimination against women based on genetic
testing for mutations in breast cancer genes, the development of
policy recommendations for researchers in order to protect women who
enter genetic testing clinical trials, and the establishment of
education programs for African-American women regarding genetic
research studies and existing policies in this area.
As other priorities in the Plan are addressed, issues related
to minority women will be a focus of working group activities.
Consolidation and Clustering
Mr. Stokes: As the Department proposes to consolidate and to
cluster a significant number of its programs, to what extent will
programs for the disadvantaged maintain a visible presence, or have
we achieved the level of success that indicates that the visible
presence of these programs should be abandoned?
Secretary Shalala: One need only look at the disparity in
health status indicators in the Healthy People 2000 Report to know
that we have not achieved a level of success to justify abandonment
of service programs aimed at the disadvantaged, underserved and
vulnerable populations in this country.
Our efforts to consolidate and streamline service programs,
will create a new relationship with States, to empower them to use
federal dollars to achieve success in serving their most needy
populations. We believe through these Performance Partnerships,
States will have more flexibility to address their critical health
needs and, in exchange, we would expect improvement in the health
status of those needy, disadvantaged populations.
In PHS, we propose to maintain programs aimed at increasing the
representation of minorities in health professions education and
training programs. Historically, our minority populations have been
both economically and educationally disadvantaged when trying to move
into health profession careers. We believe the continued
underrepresentation of disadvantaged populations in health
professions is justification for continuance of these programs on a
consolidated, streamlined basis.
Within the new Performance Partnership Grants, we will
establish performance objectives that measure how well the State is
doing in serving vulnerable populations. We believe this is the most
effective means to ensure that the needs of low-income and minority
communities are addressed.
Mr. Stokes: In testimony before the subcommittee, the Heritage
Foundation recommended the elimination of a number of programs and
offices within your Department. In particular, the Heritage
Foundation, emphasized the elimination of the Office of Minority
Health, the Office of Women's Health, and the National Health Service
Corps. Secretary Shalala, are these offices and their mission no
longer viable? Explain.
191
Secretary Shalala: These offices perform an important role.
With respect to the role of the Office of Minority Health (OMH), the
health status of minority populations in the United States continues
to lag behind the health status of the American population as a
whole. The overall mission of the OMH is to improve the health
status and quality of life for racial and ethnic minority populations
in the U.S. by building local capacity for addressing health and
human service problems.
The primary and unique focus of OMH is policy development and
program coordination across the PHS and the Department. No other
organization can perform this critical function. OMH is the only
office with responsibility for identifying the health disparity gaps
among minority populations and working with the PHS agencies to
assure a coordinated minority health focus.
The OMH sets the tone for PHS agencies to follow as they
implement minority health activities. For example, in FY 1995, OMH is
developing cooperative agreement mechanisms with seven national
minority organizations under which activities within PHS can be
conducted in a coordinated and collaborative fashion. Thus, OMH
ensures collaboration of effort and reduces duplication across the
PHS and the Department.
As we move closer to the 21st century, the vision of the future
with respect to minority health is that we move closer to our goal of
improved minority health. Therefore, it is imperative that the
Office of Minority Health continue its' efforts in reducing health
disparities in racial and ethnic minority populations to achieve
better health outcomes. The work of OMH and its mandate will not be
complete until health disparities no longer exist between minority
and white populations.
The PHS Office on Women's Health (OWH) serves a vital national
leadership role function in redressing the inequities in health
research, services, education, and policy that have put the health of
American women at risk. The mission of the OWH— to direct, stimulate,
coordinate, and advance women' s health research, services, education
and training across the PHS agencies and offices, and to collaborate
with public and private sector organizations, foundations, private
industry, consumer and health care professional groups to improve
women's health is as critical today as it was when the OWH was
established in 1991 by the Bush Administration.
The OWH's function is unmatched and unduplicated elsewhere in
the Department. It is uniquely able to objectively synthesize the
state-of-the-art of women's health in its broadest perspectives,
spanning research, services, education and training, and women's
health policy. This capacity defines the OWH as the Federal leader
in and for women's health, a focal point to which the Federal
agencies, policymakers, health care professionals and the public
alike at the national, state and local levels turn to be informed.
By administering crosscutting initiatives across the Public Health
Service, the OWH, as the focal point for women's health in the
Federal government, is able to address gaps in knowledge, and to
initiate and synthesize program activities and develop new
partnerships to improve women's health in ways that no other single
PHS agency or office could accomplish alone, given their separate
circumscribed missions.
The OWH leverages limited resources to their optimal use in the
conduct of national and regional activities and initiatives to
advance women's health nationwide. In just the past year, both
independently and through the development of exciting public-private
partnerships, the OWH has initiated a wide array of cost-effective,
public health-driven activities to improve the health of American
women, including: (a) the National Action Plan on Breast Cancer, a
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major public-private partnership to eradicate breast cancer as a
threat from the lives of American women; (b) support of regional
women's health initiatives and the designation of regional women's
health coordinators in each PHS region to foster women's health
activities at the State and local levels; and (c) a partnership with
DoD, CIA, NASA and private sector industries to explore how imaging
technologies from defense, space, intelligence, and computer graphics
might be applied to develop more accurate methods for the early
detection of breast cancer. The work of the OWH and its mandate will
not be superfluous or redundant until the day women no longer
experience worse health and greater disability than do men.
The National Health Service Corps has and continues to be one
of the Federal government's true success stories. At the present
time, because of NHSC clinicians, over 3.8 million people have access
to primary care that would not otherwise be availeible. Over the 20
plus years of NHSC placements, 20,000 clinicians have spent part or
all of their professional careers serving those most in need.
The nation's experience in the 1980 's disproved the "diffusion
theory" which assumed that increasing numbers of health professionals
would result in traditionally underserved areas having care.
Historically, most health care providers have not located their
practices in isolated rural areas or urban neighborhoods with
overwhelming social problems. At the present time, there are over
2,700 primary care HPSAs across the country which would require over
12,000 primary care clinicians to achieve a population to clinician
ratio of 2000; 1.
The communities served through the NHSC are areas where others
have chosen not to go and are in rural, frontier, and urban America.
Primary care clinicians, who are currently in limited supply and
great demand, have a myriad of opportunities to practice their
profession. The NHSC is of tremendous assistance in assuring that
the neediest communities receive their "fair share" of the primary
care clinician supply.
The NHSC is often the only source of providers to care for
people in communities with high rates of infant mortality, poverty,
substance abuse, and other problems. Over the years, the programs
served by the NHSC have been successful in improving health status
and reducing costs for these patients through comprehensive, case-
managed care. In addition to reduced mortality and morbidity rates,
the individuals served have lower hospital admission rates, shorter
lengths of stay, and make less inappropriate use of hospital
emergency rooms.
By providing the preventive and primary health care to
individuals who do not have access to such care is a highly cost
effective strategy for addressing the health needs of the Nation's
underserved populations.
Rescissions
Mr. Stokes: The recently reported house bill includes
approximately $1.7 Billion in cuts and program terminations within
the Department of Health and Human Services. The funding for Healthy
Start is cut $12.5 Million; funding for Low Income Home Energy
Assistance is eliminated; funding for crime prevention is eliminated;
funding for the National Health Service Corps is cut $12.5 Million;
and funding for infectious disease control and prevention is also
reduced.
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I think that it is absolutely essential that we realize that in
the rescission process, we are not just cutting dollars. In fact, in
many instances, we reducing the quality of life for America's most
vulnereQ}le citizens: the children, the elderly, and the veterans.
Would you provide a detailed response for the Committee on the
"people impact" of the rescission line items that I just outlined?
Secretary Shalala: I want to emphasize first that this
Administration remains committed to controlling spending and reducing
the deficit. The President's Budget proposed a number of rescissions
for 1995, cutting back on low-priority programs in HHS and elsewhere.
For HHS, $51 million in cuts were put on the table. We are in
complete support of the House's move to follow the President's lead
and adopt these type of sensible proposals.
However, the House rescission package goes much further — often
cutting valuable, proven programs that reach some of our most
vulnerable populations.
As you mentioned, the proposed rescission would cut
$12.5 million or 10 percent from the National Health Service Corps — a
program that has brought more than 20,000 health practitioners to
areas which otherwise would be without health providers. Today,
58 percent of the NHSC serve in rural America. The rescission
translates into 125 fewer service obligation scholarships and loans
to students in health practitioner training. Ultimately, the
reduction will result in over 300,000 fewer medically underserved
citizens receiving adequate health care.
The House Bill would cut Federal matching funds for State
Offices of Rural Health, possibly causing 10-15 of these offices to
close immediately and another 10 to close within two years.
Another $186 million of the proposed rescission will come from
progreuns that offer children the chance to grow up healthy and safe,
progreuns such as Foster Care, Community Schools and Healthy Start. A
cap on Foster Care Administrative Costs contained in the House Bill
would actually have the effect of penalizing States that are trying
to implement automated child welfare systems.
Mr. Stokes: Are there specific rescissions which really fall
into the "penny wise a pound foolish" category with respect to the
health problems that would result in the long-term?
Secretary Shalala: I think that the cap on Foster Care
Administrative Costs contained in the House Bill, which would reduce
enhanced Federal funds for States that are trying to implement
automated child welfare systems, may be viewed as "penny wise pound
foolish". In many ways, the cuts to the National Health Service
Corps could be viewed in this way also. As we sacrifice primary care
for our underserved population, we risk more advanced and costly
care. We should not take one step forward on the deficit by taking
two steps backward on our progress in these other areas.
Block Grants
Mr. Stokes: My constituents have raised considerable concerns
with respect to "block granting." In your professional judgement, are
there specific concerns that you have with respect to the "block
grant" approach being used as a primary funding mechanism?
Secretary Shalala: I agree with current attempts at reducing
federal bureaucracy and streamlining grant programs to increase state
76flexibility. However, we must not forget the lessons learned from
earlier block grants. If the blocks are too big, too diffuse, they
lack identity and lose support. That is why, in proposing the
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Performance Partnerships in DHHS, we are creating a new relationship
with States to maximize flexiblity, reduce administrative burdens AND
preserve sufficient identity for each block to protect against the
otherwise inevitable erosion of support that undermines "generic"
block grants.
I also have concerns that huge block grants unfairly shift
administrative burdens to States without sufficient transition time.
Most States do not have the infrastructure to handle the range of
categorical programs proposed to be blocked to them. States are also
under political mandates for downsizing, yet they will need time and
technical assistance to develop management arrangements and staff
expertise to manage the range of programs proposed for blocks.
In addition, there are some activities for which States are not
the appropriate grantee to accomplish the goals of the grant. For
example, most health professions grants go to colleges and
universities including many private institutions. A sudden shift in
grantees could result in serious disruption in services.
Finally, we must recognize that there are legitimate and
essential roles for the Federal government that would be lost in huge
"generic" block grants. Foremost is providing leadership in areas
such as research, training, technical assistance, collection and
analysis of data. States cannot replicate these functions.
Responsibilities which are of national benefit and which exceed the
expertise and capacity of individual States should be maintained and
supported at the Federal level where they are most effectively
accompl ished .
Health Professions Shortage Areas
Mr. Stokes: Are we making progress in addressing the health
care needs of individuals living in health professions shortages
areas in our inner cities and rural areas?
Secretary Shalala: Yes. The revitalization of the National
Health Service Corps (NHSC) beginning in the late 1980s has led to a
significant increase in NHSC field strength. Increasing numbers of
individuals in the field strength will result in continued progress
in addressing the health care needs of individuals living in
underserved areas. Currently, there are approximately 1,900 obligors
serving underserved communities. Field strength levels for FY 1995
and for the FY 1996 President's budget request are expected to
increase to 1,987 and 2,161, respectively.
In addition, NHSC recruitment activities are targeted toward
attracting individuals who are more likely remain in Health
Professional Shortage Areas (HPSAs) after completing their
obligation. As a result, the NHSC retention rate for practitioners
who have stayed beyond their obligation has increased from 39 percent
in 1991 to 53 percent in 1994.
Despite this progress, there still remain a significant number
of rural and urban areas in the United States with limited
availedsility or accessibility to care. Individuals living in these
areas are usually economically disadvantaged, minority, and high-risk
populations with high rates of infant mortality, poverty, substance
ahuBG, and many other problems.
Historically, most health care providers have not located in
these areas. The role of the NHSC is to address this mal-
distribution through assignment of service obligated health
professionals to underserved areas.
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The NHSC recruits and places primary health care professional
recipients of service obligated scholarship and loan repayment awards
in high priority HPSAs to serve their obligations. These obligors
are placed in settings such as community and migrant health centers,
federally qualified health centers, health departments, free-standing
private practices and other similar systems of care located in HPSAs,
offering a full range of comprehensive and continuous primary health
care services. These systems of care are financially viable and are
tied to a health care system committed to serving the underserved
residents of HPSAs. The systems are willing to provide primary
medical treatment for these residents without regard for their
ability to pay. Health systems located in HPSAs have come to rely
heavily on the NHSC cadre of culturally competent, community
responsive, primary care providers.
In the early 1980 's. Federal scholarship program funding was
greatly diminished until a low point of $2.2 million was reached in
FY 1988. Beginning in FY 1988, the Federal Loan Repayment progrcun
was established. Since then, through the revitalization of the NHSC,
the Scholarship and Loan Repayment programs have received
increasingly greater amounts of funding, resulting in significant
increases in the number of awards.
The NHSC Field strength is composed of individuals who received
scholarships and loan repayment awards (in addition to State Loan
Repayors, Community Based Scholars, and non-obligated Federal
employees) and are now serving their obligation. Because
scholarships are awarded during a students' educational years, these
individuals are not ready for service for as many as seven years
after the initial award. Therefore, the drop in the number of
scholars in the field strength, resulting from low funding levels in
the 1980s, did not occur until FY 1990. The lowest point in the
field strength was 1,001 in FY 1991. However, Federal Loan Repayors,
who receive their awards after completion of education and residency
training, are immediately availetble for service and initially helped
to keep the field strength from dropping any lower in FY 1991.
Federal Loan Repayors now compose almost 60 percent of the Federal
Field Strength.
The NHSC remains committed to serving the health care needs of
urban and rural health professional shortage area residents.
Mr. Stokes: Has the number of health professions shortage area
designations increased or decreased over the last five to ten years?
Secretary Shalala: As of December 31, 1994, there were 2,736
designated primary medical HPSAs, 1,843 rural and 893 urban. On
December 31, 1984 and 1989, there were 1,876 and 1,935 designated
HPSAs, respectively. The number of HPSAs is constantly being updated
for new designations and, on occasion, withdrawal of a designation
when a review of updated data indicates that an area no longer meets
the HPSA designation criteria. In 1990, there was a definitional
change related to HPSAs. As a result, under certain conditions, a
HPSA can be not just communities, but also facilities operated by a
city or county and a health facility operated by a tribe or tribal
organization. Of the 2,736 primary care medical HPSAs, 165 HPSAs are
hospitals under the revised definition.
Mr. Stokes: What is the most effective way of addressing the
shortage?
Secretary Shalala: The National Health Service Corps (NHSC)
remains the most proven, effective mechanism to deal with health care
shortages in Health Professional Shortage Areas (HPSAs). The NHSC
has made great strides in recruiting individuals to serve in high
priority HPSAs, who, when their obligations are completed, are more
likely to stay.
196
The question was asked during the 1980s — "If there is a surplus
of doctors as a whole for the entire United States, why are there
shortages in rural and urban areas, and, if more doctors continue to
graduate each year from medical school, why don't they go to work in
these underserved areas?" In reality, many doctors graduating from
medical school want to specialize in particular areas of medical
practice because of personal interests in addition to significantly
increased earnings realized from the practice of these specialties.
Primary care doctors, with less earning capacity, have a more
difficult time repaying their medical school loans. Many doctors
want to locate their practices in suburban or urban middle and upper
class areas where there is a much greater possibility of seeing large
numbers of patients who can pay or are insured, in addition to the
lifestyle benefits that come with living in a metropolitan area.
HPSAs are located in remote rural or inner city areas of high
poverty and minority percentage populations, and are not usually the
kinds of places where the average practitioner wants to set up
practice. General or family practitioners, not specialists, are
needed in HPSAs because they can treat a wide range of medical
problems. In addition, many older doctors who settled in rural areas
years ago have retired in recent years and there is no one to replace
them.
Among the criteria for a HPSA designation is the population-to-
practitioner ratio of at least 3,500:1, reducible to 3,000:1 if
unusually high need is indicated taking into consideration poverty
level, infant mortality rates and birth rates. The doctors who are
counted for this ratio are those who have established a permanent
practice in the area. NHSC doctors who are serving their scholarship
or loan repayment obligations are not counted. If NHSC doctors
permanently remain in the area once their obligation is complete,
then their numbers are counted in a revised ratio. HPSAs are
routinely reviewed for updated statistics, and, if positive changes
occur in the numbers of doctors or population demographics,
designations may be withdrawn.
For the foreseeable future, there will be a need for NHSC
primary care practitioners in HPSAs. As of December 31, 1994, there
were 2,736 designated primary medical HPSAs, 1,843 rural and 893
urban. Currently, the minimum number of additional primary care
physicians that would be required to achieve the population-to-
practitioner ratio of 3,500:1 is 5,341.
Employment
Mr. Stokes: With respect to the Department of Health and Human
Services, specifically, what has been the impact of affirmative
action on employment opportunities for minorities and women?
Secretary Shalala: Generally, this Department has been
successful in attracting Blacks, Asians, Native Americans, and
non-minority women. We have had limited success in attracting
minority males and Hispanic women. We have not been successful in
attracting Hispanics males and persons with dis2d3ilities.
The Department has also been successful in raising the glass
ceiling. That is, the representation of minorities and women in the
higher grade levels has increased. It is closer to their
representation in the general workforce. For example, the Washington
Post reported on March 16, 1995 that women represent only 5 percent
of top management at Fortune 2000 industrial and service firms. In
HHS, 27 percent of the employees in the Senior Executive Service are
women .
197
Mr. Stokes: Specifically, what has been the impact of
affirmative action on the preparation of minorities and women for
career advancement in the Department?
Secretary Shalala: Developmental programs have been a main
focus of affirmative employment efforts. For example, we assured
that women and minorities were well-represented in our most recent
SES Candidate Development Program. More than half of the candidates
in the class were women and 29% of the candidates were minorities.
We have implemented a Women's Management Training Initiative
aimed at facilitating the upward movement of employees at the GS-9
through 12 levels.
The idea was that employees would become more successful at
competing for promotions to the GS-13 level, which was where the
glass ceiling started
To enhance recruitment and promotion of persons with targeted
disabilities, HHS established an interdisciplinary, interagency team.
The Disabilities Initiative Team (DInT) developed a recruitment guide
with materials on all aspects of recruitment from sources of persons
with targeted disabilities to interviewing techniques. The Secretary
has a Comnittee on Employees with Disabilities that provides advice
on issues and concerns regarding the employment of persons with
disabilities.
In 1992, at the request of the Department's Committee on
Employees with Disabilities, a detailed analysis was conducted of
career mobility and advancement for this population. The analysis
showed that employees with disabilities while similar to the overall
HHS workforce in terms of demographics and length of service, were
disproportionately represented at the lower grades with only 7% of
severely disabled people holding supervisory jobs compared to 17% of
the total workforce. The analysis also included a survey of 3,052
HHS employees both disabled and nondisabled. Respondents were severe
disabilities were more likely to report their disability had a
negative effect on their career mobility than those with less severe
diseUiilities. In addition respondents who reported their needs for
accommodation had not been met said they had fewer opportunities for
training, promotions and career-enhancing assignments. Follow-up
activities have included increased attention to accommodation needs
particularly related to training and inclusion of employees with
disabilities in developmental programs.
198
Mr. Stolces: Last year, the Office for Civil Rights
indicated that the number of discrimination complaints had
leveled off, and that for the last several years the largest
percentage of complaints involved discrimination on the basis
of AIDS. Is this still the case, elaborate?
Secretary Shalala: No. During fiscal year 1994,
nearly three of four new investigated complaints raised
issues related to discrimination on the basis of a wide array
of disabilities. These complaints included cases raising
AIDS or HIV-related discrimination. However, the proportion
of all new investigated complaints that raised AIDS or HIV
issues decreased from 18 percent of all such complaints
received between fiscal years 1987 and 1992 to eight percent
of such complaints received in fiscal years 1993 and 1994.
With respect to the overall number of discrimination
complaints, in fiscal year 1994, the number of new complaints
increased to 2,222. This was an increase of 128 complaints
from the 2,094 complaints received during fiscal year 1993.
The Office for Civil Rights is currently projecting increases
of approximately two percent per year in complaint receipts
for fiscal years 1995 and 1996.
Mr. Stokes: To what extent is there a case backlog in
the Office for Civil Rights?
Secretary Shalala: At the end of fiscal year 1994, the
Office for Civil Rights had 1,103 complaints in its
inventory. A backlog is frequently defined as those cases
that an agency has not had a chance to begin to process.
Given this definition, the Office for Civil Rights did not
have an unattended backlog since the year-end inventory of
open complaints was made up of cases in process, including
cases received during the last few months of the year.
Mr. Stokes: According to the Congressional
justification, civil rights protection must be an integral
part of the deliberations on issues as disparate as long-term
care, preventive health initiatives, and the location and
integration of services. To what extent, has the Agency made
these provisions an integral part of its operations including
progreum planning, reviews, evaluations, and audits?
Secretary Shalala: In 1993, I charged each of the
Department's Operating and Staff Division heads to work with
OCR to create a more effective civil rights compliance
program. Each member of my management teeun and I are
committed to ensuring that Department funds are disbursed and
programs are operated without discrimination based on race,
national origin, disaibility, sex, or age.
In partnership with the Operating and Staff Divisions,
the Office for Civil Rights developed and is implementing an
HHS Civil Rights Strategic Plan. This plan includes
objectives for training, program planning, pilot survey and
audit standards development, and monitoring activities
through which program decision-making and implementation will
incorporate consideration of civil rights issues.
During the past two years, civil rights concerns have
been part of the process as we have handled issues as diverse
as the review of AFDC and Medicaid waiver proposals,
relocation of hospital services, provision of renal dialysis
services to persons who are HIV positive, patient dumping,
transracial adoption policies, and distinct part
certifications and financial screening as related to nursing
home admissions.
199
AIDS Demographics
Mr. Hoyer: My colleague from Oklahoma has indicated that the
number of new cases of AIDS declined in 1994. I think that we are
all pleased that our efforts to prevent the spread of this disease
may have been somewhat successful. However, I understand that
behavioral scientists who are following this disease have noticed a
recent upswing in risky behaviors. Have AIDS cases in 1994 fallen?
Secretary Shalala: During 1994, CDC received reports of 80,691
AIDS case among US adults, adolescents, and children, representing
approximately one-fifth of the 441,528 cumulative reported AIDS
cases. While the number of cases reported in 1994 is less than the
106,618 cased reported in 1993, this decline was expected because of
the substantial increase in the number of reported cases in 1993
following the expansion of the AIDS surveillance case definition. The
expansion of the AIDS surveillance case definition allowed persons to
be reported as having AIDS that were not previously eligible.
However, both 1993 and 1994 totals exceed the 47, 472 cases reported
in 1992.
Because of the change in the case definition, comparison of
annual reported cases cannot be used to describe trends in the
epidemic. CDC has conducted analyses to estimate the number of AIDS
cases that would have occurred if the case definition had not been
changed. Based on analyses using consistent definition, the rate of
AIDS-related illnesses increased 3% in 1993 compared with 1992; a
similar increase is expected for 1994 compared with 1993.
Mr. Hoyer: Does the number of new cases in 1994 justify
reduced vigilance on the part of scientists, researchers and
appropriators?
Secretary Shalala: Absolutely not. With the continued
increase in the rate of AIDS-related illnesses, the changing
demographics of the epidemic, and new population groups beginning to
show the effects of HIV infections acquired years ago, this is no
time to let our epidemiologic guard down. As a Nation, we should
continue to use the best surveillance methods to track the epidemic,
prevent new infections in person who are at risk, and do what is
necessary to extend the productivity and quality of life for those
who are already infected.
Mr. Hoyer: What projections are researchers making for the
demographics of this disease in the future?
Secretary Shalala: Women, blacks and Hispanics, and persons in
the South and Northeast accounted for higher percentages of reported
cases during 1994 than during 1993. Among cases in 1994 for which
risks were reported, the largest proportions were in homosexual and
bisexual men, heterosexual male injection drug users, and women.
However, the proportion of AIDS cases reported among homosexual and
bisexual men has been declining slightly in recent years. These
findings indicated a continuation of trends for certain population
groups, including an increase in the proportion of cases accounted
for by women, racial and ethnic minorities, persons infected by
heterosexual contact, a decrease in the proportion accounted for by
homosexual and bisexual men, and an increase in the number of cases
in children. These patterns reflect the evolution of the HIV
epidemic.
200
JUSTIFICATION OF THE BUDGET ESTIMATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES
DEPARTMENTAL MANAGEMENT
OFFICE FOR CIVIL RIGHTS
1996 Estimate
Departmental Management :
General Departmental Management . .
Working Capital Fund
Policy Research
Office for Civil Rights
Office of Inspector General
General Provisions
TOTAL
1,265
842
26
276
1,260
3,669
$119,704,000
12,400,000
21,330,000
101,726,000
$255,160,000
5
52
61
77
97
125
201
OVERVIEW
FY 1996 PRESIDENT'S BUDGET REQUEST
DM/OCR/OIG
Dollars in Millions
The FY 1996 budget request for Departmental Management (DM)', the Office for
Civil Rights (OCR) , and the Office of Inspector General (OIG) includes $255
million in appropriated funds (see Figure 1) . This request will support 3,669
full-time equivalent positions (FTE)--a reduction of 365 FTE (9.0 percent)
from the FY 1995 target and 623 FTE (14.5 percent) below the FY 1993 baseline.
This request also includes activities
and resources which will be
apportioned to the Social Security-
Administration (SSA) , as required by
the Social Security Independence and
Program Improvements Act of 1994,
which establishes SSA as an
independent agency effective ^ril 1,
1995.
The eight Staff Divisions (STAFFDIVs)
included under DM^ provide assistauice
to the Secretary in administering and
overseeing the organization,
programs, and activities of the
Department . These STAFFDIVs are
responsible for Department -wide
policy and standards, program
integration aind coordination,
administrative support,
organizational maintenance (such as
legal services) , and external
representation and intergovernmental
affairs. In addition, OIG and OCR
perform important programmatic functions; for example, OIG is responsible for
safeguarding and protecting the integrity of HHS programs through a
comprehensive program of audits, investigations, and progreun inspections and
evaluations. In FY 1994, over $8 billion in savings, settlements, fines,
restitutions, and receivables resulted from OIG activities cuid the
implementation of OIG recommendations. Return on investment has also
increased from $160,000 per OIG FTE in FY 1981 to $6.4 million in FY 1994.
The HHS Worlcing Capital Fund (WCF) is a revolving fund authorized under 42
U.S.C. and chartered in FY 1987. This legislation permitted the Department to
establish a fund without fiscal year limitation for the expenses necessary to
maintain and operate centralized administrative, fiscal and personnel support
services on behalf of Departmental agencies. The WCF is directed by a Board
of Governors comprised of representatives from each Operating Division
(OPDIV) , OIG, and those STAFFDIVs which provide services under the Fund. The
WCF does not have its own appropriation, but is funded through payments by the
OPDIVs and STAFFDIVs based on fee-for-service billing procedures. The Fund
has its financial statements audited cinnually.
$266.1 Million
Figure 1
' "Departmental Management" is a new title referring to all budget
accounts in the Office of the Secretary except the Office for Civil Rights and
the Office of Inspector General. This terminology is consistent with other
agencies included under the Departments of Labor, Health and Human Services,
amd Education, euid Related Agencies Appropriations bill.
' Including the Immediate Office of the Secretary, Public Affairs,
Legislation, Planning and Evaluation, Management and Budget, Personnel
Administration, Intergovernmental Affairs, and General Counsel.
202
In FY 1995, organizational changes within the framework of the Department's
Continuing Improvement Process have had an importemt in^jact on this DM/OCR/OIG
budget request :
DM/OCR/OIG*
FY 1993-1996 FTE REDUCTIONS
n»i 1996
Fiscal Year
Figure 2
Continued Personnel
Streamlining As shown in
Figure 2, reinvention efforts,
streamlining reductions, cuid
functional transfers will
result in staffing levels for
the DM/OCR/OIG accounts being
decreased from 4,292 FTE in
FY 1993 to 3,G69 FTE in
FY 1996. This reduction of 623
FTE (14.5 percent) exceeds the
FY 1993-1999 reductions
mandated by Executive Order
12839.
Regional Office Restructuring
and Transfer of Functions The
National Performance Review
recommended that HHS conduct a
comprehensive review of its
organizational structure auid
management systems, to
determine the appropriate balcince between centralized emd decentralized
functions. In an initial effort, the Department proposes to divest
regional administrative support emd overhead functions to the OPDIVs and
STAFFDIVs. The purpose of this change is to reduce duplication, align
support functions more closely with customer agencies, amd increase the
use of cross -servicing arrangements instead of maintaining large
administrative support structures in OS. These changes will result in
the transfer of 203 FTE to the OPDIVs and STAFFDIVs, with resulting
savings of 54 FTE auid $24 million over the next five years.
Process Improvement All STAFFDIVs have been forced to examine their
work processes to increase efficiency without sacrificing quality. For
excunple, in implementing its strategic plan, OCR is concentrating on
ensuring quicker responses to its customers. OCR will experiment with
using alternative dispute resolution techniques, limiting the scope of
inquiries in some investigations, and focusing on keeping current with
complaints filed by the public. During FY 1995, pilot projects will
result in a 7.5 percent reduction in time spent per case- -and that rate
is expected to accelerate to 16 percent in FY 1996. Cumulatively, OCR
estimates that in FY 1996 its investigators will be able to handle
complaints while using 25 percent fewer hours them in FY 1994.
Next Steps The second phase of HHS reinvention- -to be completed by
March 31, 1995- -will focus on the appropriate field euid headquarters
structure for the STAFFDIVs and OPDIVs following SSA independence.
203
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Management
GENERAL DEPARTMENTAL MANAGEMENT
FY 1996 Budget Page
Organization Chart 6
^propriation Lemguage 7
Amounts Availctble for Obligation 8
Summary of Chauiges 9
Obligational Authority by Activity 11
Obligational Authority by Object 12
Administrative Costs 13
Significant Items in House, Senate euid Conference
T^propriations Committee Reports 14
Authorizing Legislation 15
impropriations History Taible IG
Justification :
General Statement 17
Immediate Office of the Secretary 19
Assistant Secretary for Public Affairs 21
Assistant Secretary for Legislation 23
Assistcmt Secretary for Planning and Evaluation 24
Assistant Secretary for Mcmagement and Budget 26
Assistant Secretary for Personnel Administration 36
Office of Intergovernmental Affairs 43
Office of the General Counsel 44
RENT and Common Expenses 50
Working Capital Fund 52
Detail of Full -Time Equivalent (FTE) Employment 57
Detail of Positions 58
Centrally-Managed Projects 59
204
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205
DEPARTMENT OF HEALTH AND HOHAH SERVICES
Departmental Management
GENERAL DEPARTMENTAL MANAGEMENT
For necessary expenses, not otherwise provided, for general departmental
management, including hire of six medium sedfms, [$91,247,000] $89,779 ,000
together with [$31,008,000] $30,925,000, to be trcinsf erred and e3q)ended as
authorized by section 201(g) (1) of the Social Security Act frcxn any one or all
of the trust funds referred to therein. (Department of Health and Human
Services impropriations Act, 1995.)
206
GENERAL DEPARTMENTAL MANAGEMENT
AMOUNTS AVAILABLE FOR OBLIGATION'
FY 1994 FY 1995 FY 1996
Actual^ Estimate Estimate
General funds :
Annual appropriation $94,431,000 $91,247,000 $88,779,000
Rescission pursuant to P.L. 103-211 -656,000
Reductions pursucint to P.L. 103-333 -998. 000
Subtotal, adjusted appropriation . 93,775,000 90,249,000 88,779,000
Comparable transfers to:
OIG from lOS for security
protection function -324,000 -420,000
AoA from ASMS for White House
Conference on Aging -500,000
PHS from ASMB for NCS/NSEP
telecommunications function . . . -99,000 -103,000
FDA from OGC for legal functions . -2.460. 000
Subtotal 90,392,000 89,726,000 88,779,000
Real transfers to:
National Commission to Prevent
Infant Mortality -249.000
Subtotal, adjusted general funds . 90,143,000 89,726,000 88,779,000
Trust funds:
Annual appropriation 31,261,000 31,008,000 30,925,000
Reductions pursuant to P.L. 103-333 -332.000
Subtotal, adjusted trust funds . . 31,261,000 30,676,000 30,925,000
Unobligated balance lapsing -37. 000
Total obligations $121,367,000 $120,402,000 $119,704,000
General funds 90,106,000 89,726,000 88,779,000
HI/SMI trust funds 8.002.000 7.279.000 7.220.000
Subtotal, budget authority .... 98,108,000 97,005,000 95,999,000
OASDI trust funds 23.259.000 23.397.000 23.705.000
Total obligations $121,367,000 $120,402,000 $119,704,000
' Excludes the following cunounts for reimbursements: FY 1994- -
$24,077,000; FY 1995 - -$23 , 662, 000 ; FY 1996- -$23 , 662 , 000 .
^ Excludes supplemental appropriation of $75,000,000 for the Public
Health and Social Services Emergency Fund to respond to flooding along the
Mississippi River eind its tributaries.
8
207
GENERAL DEPARTMENTAL MANAGEMENT
SUMMARY OF CHANGES
1995 General fxinds adjusted appropriation $90,249,000
HI/SMI trust funds transfers 7,279,000
Comparative and real transfers -523 , 000
Total estimated budget authority $97,005,000
(Obligations) ($120,402,000)
1996 Request- -General funds $88,779,000
Request- -HI/SMI trust funds transfers 7. 220, 000
Total estimated budget authority $95,999,000
(Obligations) ($119,704,000)
Net change -$1,006,000
(Obligations) (-$698,000)
1995 Base
Obligational
(FTE) Authority
Increases :
A. Built-in:
1. Armualization of January 1995
pay raise (1,343) $88,446,000
2. Effect of January 1996 pay
raise (1,343) 88,446,000
3 . Career ladder promotions and
within-grade increases . . . (1,343) 88,446,000
4 . Increase from one additional
day of pay (1,343) 88,446,000
5 . Increase in Rental Payments
to GSA/Delegated Authority . 13,659,000
Subtotal
Total increases
Decreases :
A. Built-in:
1. Decrease in RENT Related
Services $2,155,000
2 . Decrease in share of Working
Capital F\and costs 4,284,000
Subtotal
9
Change from Base
Obligational
(FTE) Authority
+$563,000
+1,558,000
+887, 000
+340, 000
+619.000
+3,967,000
+3, 967, 000
-207,000
-55.000
-$262, 000
208
GENERAL DEPARTMENTAL MANAGEMENT
SDMKARY OF CHANOBS
(Cont.)
1995 Base
Pos. Obligational
(FTE) Authority
B. Program:
1. FTE reduction (1,343) $80,446,000
2 . Net reductions in other non-
salary administrative costs . 21,318,000
3. Reduction in Equipment . . . 1,318,000
Subtotal
Total decreases
Net change
Change from Base
Pos. Obligational
(FTE) Authority
(-78) -$3,749,000
-579,000
-75.000
(-78) -4,403,000
(-78) -4,665,000
(-78)
-$698,000
209
GENERAL DEPARTMENTAL MANAGEMENT
OBLIGATIONAL AUTHORITY BY ACTIVITY'
(Dollars in thousands)
1994 1995 1996
Actual Appropriation Estimate
FTE Amount FTE Amount FTE Amount
Immediate Office of the
Secretary 88 $5,841 88 $5,677 81 $5,643
Public Affairs 39 2,842 38 2,834 35 2,816
Legislation 28 2,213 30 2,453 28 2,438
Plcinning and Evaluation .... 109 6,414 112 6,700 108 6,660
Management and Budget 267 22,658 274 22,584 254 22,438
Personnel Administration . . . 161 12,166 173 12,132 159 12,056
Intergovernmental Affairs ... 35 3,143 39 3,323 36 3,302
General Counsel 608 50,287 589 49,528 564 49,192
RENT and Common Expenses
(non-OGC) -- 13,357 -- 12,282 -- 12,265
Payment for Working Capital
Fund services (non-CX3C) . . . -- 2.446 ^^_^^ 2. 889 ^^_:^ 2. 894
Total obligations 1,335 $121,367 1,343 $120,402 1,265 $119,704
General funds $80,106 $89,726 $88,779
HI/SMI trust fund transfers . . 8. 002 7. 279 1 . 220
Subtotal, budget authority . 98,108 97,005 95,999
OASDI trust fund transfers . . 23.259 23.397 23.705
Total obligations 1,335 $121,367 1,343 $120,402 1,265 $119,704
' Reflects the following comparable adjustments (see page 8, Amounts
Available for Obligation, for further explanation) :
1994 1995 1996
Non- Comparable Total 1,377 $124,999 1,348 $120,925 1,265 $119,704
Immediate Office -4 -324 -4 -420
Management euid Budget -6 -599 -1 -103
General Counsel -32 -2,460
Common Expenses -249
Comparable Total 1,335 $121,367 1,343 $120,402 1,265 $119,704
210
GENERAL DEPARTMENTAL MANAGEMENT
OBLIGATZONAL AUTHORITY BY OBJECT
1995 1996 Increase or
Appropriation Estimate Decrease
Full-time equivalent en^loyment . . . 1,343 1,265 -78
Full-time equivalent of overtime cund
holiday hours 4 6 +2
Average SES salary $108,374 $110,653 +$2,279
Average GS grade 11. 0 li.O —
Average GS salary $44,270 $45,332 +$1,062
Personnel compensation:
Full-time permanent $70,730,000 $70,413,000 -$317,000
Other than full-time permeinent . . 2,086,000 2,116,000 +30,000
Other personnel compensation . . . 1.269. 000 1.234 .000 -35. OOP
Total personnel compensation . . 74,085,000 73,763,000 -322,000
Civilian personnel benefits 14,167,000 14,093,000 -74,000
Benefits to former personnel .... 194. 000 189. 000 -5.000
Total compensation and benefits . . 88,446,000 88,045,000 -401,000
Travel 800,000 796,000 -4,000
Transportation of things 107,000 111,000 +4,000
Rental payments to GSA 9,320,000 9,851,000 +531,000
Rental payments to others 98,000 98,000
Communications, utilities, and
miscellaneous charges 3,188,000 3,127,000 -61,000
Printing and reproduction 1,223,000 1,187,000 -36,000
Advisory and assistemce services . . 483,000 429,000 -54,000
Other services 7,762,000 7,710,000 -52,000
Purchases of goods and services from
other government accounts 6,735,000 6,178,000 -557,000
(Working Capital Fund payment) . . (4,284,000) (4,229,000) (-55,000)
Operation of GOCOs
Research emd Development contracts .
Supplies and materials 922,000 929,000 +7,000
Equipment 1.318.000 1.243.000 -75.000
Total obligations by object . . $120,402,000 $119,704,000 -$698,000
12
2ir
GENERAL DEPARTMENTAL MANAGEMENT
ADMINISTRATIVE COSTS'
(Obligational Authority)
1995 1996
Estimate Estimate Change
Personnel Compensation:
Full-Time Permanent (11.1) $70,730,000 $70,413,000 -$317,000
Other than Full-Time Permanent (11.3) 2,086,000 2,116,000 +30,000
Other Personnel Compensation (11.9) . . 1.269.000 1. 234. 000 -35. 000
Total Personnel Compensation (11.9) . 74,085,000 73,763,000 -322,000
Civilian Personnel Benefits (12.1) . . . 14,167,000 14,093,000 -74,000
Benefits to Former Personnel (13.0) . . . 194,000 189,000 -5,000
Travel (21.0) 800,000 796,000 -4,000
Transportation of Things (22.0) 107,000 111,000 +4,000
Rental Payments to Others (23.2) .... 98,000 98,000
Communications, Utilities, and
Miscellaneous Charges (23.3) 3,188,000 3,127,000 -61,000
Printing and Reproduction (24.0) .... 1,223,000 1,187,000 -36,000
Advisory and Assistance Services (25.1) . 483,000 429,000 -54,000
Other Services (25.2) 7,762,000 7,710,000 -52,000
Purchases of Goods emd Services from
Other Government Accounts (25.3) . . . 6,735,000 6,178,000 -557,000
Operation of GOCOs (25.4)
Research eind Development Contracts (25.5)
Supplies and Materials (26.0) 922.000 929.000 +7.000
TOTAL $109,764,000 $108,610,000 -$1,154,000
' Excludes the following cunounts for Delegated Buildings Authority:
FY 1995--$4,339,000; FY 1996- -$4 , 427 , 000 .
212
GENERAL DEPARTMENTAL MANAGEMENT
SIGNIFICANT ITEMS IN HOUSE, SENATE AND CONFERENCE
APPROPRIATIONS COMMITTEE REPORTS
Item
Action Taken or to be Taken
1995 House Report 103-553
Hispeuiic Representation
1 . The Committee urges the
Secretary to continue working
to improve the representation
of HispanicB in the
Department ' s workforce ,
particularly at policy-making
levels. (p. 108)
Secretary Shalala has
authorized the creation of a
temporary Departmental working
group charged with addressing
salient Hispanic issues
affecting HHS . This working
group will seirve as a filter
to sort and contextualize the
recommendations of the
Department to better serve and
represent the Hispeinic
community. The administration
of this working group- -
including staff support,
follow-up and organization of
policy development- -will be
coordinated by the Immediate
Office of the Secretary (lOS) .
1995 Conference Report 103-733
Notification of Office
Closings
1 . The conferees direct the
Department to notify the
Committees on impropriations
at least fifteen days in
advance of any office closings
or relocations within the
Department. (p. 27)
The Department will notify the
Committees on impropriations
at least 15 days in advsuice of
einy office closings or
relocations.
213
GENERAL DEPARTMENTAL MANAGEMENT
AUTHORIZING LEGISLATION
(Non-ComparsOjle)
1995 1995 1996 1996
Amount Appro- Amount Budget
Authorized priation Authorized Recmest
General Departmental
Management Indefinite $91,247,000 Indefinite $88,779,000
214
GENERAL DEPARTMENTAL MANAGEMENT
APPROPRIATIONS HISTORY TABLE
(Non- Comparcible)
FY 1987
Appropriation
Supplemental
Trust Funds
Budget
Estimate
to Congress
$108,319,000
2,200,000
27,500,000
House
Allowcmce
$108,319,000
2,200,000
27,500,000
Senate
Allowance
Net Enacted
Appropriation
$122,819,000 $121,819,000
2,200,000 2,200,000
27,500,000 27,500,000
FY 1988
Appropriation
Trust Funds
67,135,000
7,000,000
66,359,000
7,000,000
70,859,000
7,000,000
67,840,000
7,000,000
FY 1989
impropriation
Trust Funds
68,160,000
7,000,000
68,160,000
7,000,000
68,160,000
7,000,000
67,342,000
6,916,000
FY 1990
Appropriation
Sequester
Trust Funds
Sequester
71,046,000
5,085,000
80,327,000
31,201,000
80,577,000
31,201,000
80,399,000
-983,000
31,201,000
-101,000
FY 1991
^propriation
Sequester
Trust Funds
81,350,000
31,100,000
82,250,000
31,950,000
75,500,000
28,950,000
78,944,000
-1,026
30,350,000
FY 1992
impropriation
Trust Funds
91,673,000
31,001,000
86,673,000
26,001,000
79,444,000
30,350,000
90,572,000
30,694,000
FY 1993
i^PJ^opj^iation
Trust Funds
93,359,000
30,861,000
91,159,000
30,252,000
92,093,000
30,305,000
90,384,000
29,985,000
FY 1994
impi'opi' i 'It i on
Rescission
Trust Funds
94,149,000
31,261,000
94,149,000
31,261,000
92,793,000
31,261,000
94,431,000
-656,000
31,261,000
FY 1995
Appropriation
Trust Funds
FY 1996
i^Pi^opi^iation
Trust Funds
93,351,000
32,161,000
88,779,000
30,925,000
89,500,000
31,008,000
88,774,000
31,008,000
90,249,000
30,676,000
215
GENERAL DEPARTMENTAL MANAGEMENT
FY 1994 FY 1995 FY 1996 Increase or
Actual Appropriation Estimate Decrease
FTE Amount FTE Amount FTE Amount FTE Amount
1,335 $121,367,000 1,343 $120,402,000 1,265 $119,704,000 -78 -$698,000
General Statement
The General Departmental Management (GDM) appropriation supports those
activities associated with the Secretary's roles as chief policy officer auid
general manager of the Department. The GDM appropriation supports the policy
and administrative management functions performed by eight of the ten OS Staff
Divisions, including personnel management, administrative and management
services, information resources management, intergovernmental relations, legal
advice and representation, planning and evaluation, finance and accounting and
external affairs.
The FY 1996 budget request for GDM proposes total funding of $119,704,000 and
1,265 full-time equivalent (FTE) positions- -decreases of $698,000 (0.6
percent) and 78 FTE (5.8 percent) below comparable FY 1995 levels. This
request reflects the full impact of the FTE reductions mandated by Executive
Order 12839, plus further personnel reductions required by funding
limitations- -GDM staffing levels decrease by a total of 167 FTE (11.7 percent)
between FY 1993 and FY 1996. In FY 1995, FTE usage in GDM is currently
estimated at 1,325 FTE, or 18 under the FY 1995 target. This budget request
also includes resources which are to be trainsferred to the Social Security
Administration (SSA) on T^ril 1, 1995, as required by P.L. 103-296, the Social
Security Independence and Program Improvement Act of 1994. These resources
are primarily FTE and Old-Age, Survivors and Disability Insurance (OASDI)
trust funds.
The GDM section of this justification includes narrative chapters describing
the activities of each STAFFDIV, plus two major GDM-related costs: RENT/
Common Expenses and the Working Capital Fund. Resource tables include only
funding provided from the GDM appropriation, except for the special charts in
the Worlcing Capital Fund section. FTE figures include full-time, part-time,
temporary, and ceiling -exempt employees.
GDM also carries out centrally-managed projects which benefit the Department's
OPDIVs and STAFFDIVs, under the authority of the Economy Act (31 U.S.C. 1535)
or other specific statutes. Costs for these activities are distributed among
the OPDIVs and STAFFDIVs on a proportional basis, vising am estciblished cost
distribution formula. Proposed FY 1996 projects are shown on pages 59 and 60
of this document.
Non- comparable appropriated funding for GDM during the last five years,
including amounts availalDle for obligation from both general funds and trust
fund transfers, has been as follows:
Fiscal Year Funds FTE
1991
$109,293,000
1,469
1992
$121,266,000
1,502
1993
$120,369,000
1,477
1994
$125,036,000
1,377
1995
$120,925,000
1,325
216
The HHS Working Capital Fund (WCF) is a revolving fund authorized under 42
D.S.C. and chartered in FY 1987. This legislation permitted the Department to
esteiblish a fund without fiscal limitation for the ejqpenses necessary to
maintain and operate centrally administrative, fiscal and personnel support on
behalf of Departmental programs and bureaus. The Fund is directed by a Board
of Governors consisting of representatives frooi each OPDIV, OIG, and those
STAFFDIVs which provide services under the Fund. The Fund does not have its
own appropriation, but is instead funded through payments made to it by the
OPDIVs 2uid STAFFDIVs based on fee -for -service billing procedures. Additional
information related to WCF operations is included in the section beginning on
page 52 .
The President's appropriation request for this account represents current law
requirements. No proposed law amounts are included.
217
IMMEDIATE OFFICE OP THE SECRETARY
FY 1994
Actual
FY 1995
ADoroDriation
FTE Amount
88 $5,677,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
88 $5,841,000
FTE Amount
81 $5,643,000
FTE Amount
-7 -$34,000
PuiTDOse and Method
of Ooerations
The Immediate Office of the Secretary (IDS) provides policy and management
guidcuice to the Department, and support for the Secretary cind Deputy Secretary
in their roles as representatives of both the Administration cuid HHS. The
major objectives of lOS are: to direct the programs and activities of HHS; to
implement Executive and Congressional directives; and to provide assistance,
direction suid coordination to the various organizations within the Department.
lOS serves as the nucleus for HHS activities, providing the oversight
essential for the management of the Department. Responsibilities associated
with policies and issues that the Secretary amd HHS must confront daily
nclude :
Reforming the nation's welfare system to empower recipients of Aid to
Families with Dependent Children (AFDC) to escape the cycle of
dependence and move toward self-sufficiency.
Improving infant mortality through the elimination of barriers to
prenatal euid perinatal care for pregnamt women emd young children.
Improving the lives of children and youth by ensuring access to
immunization, developmental programs such as Head Start, auid quality
physical cmd mental health care.
Implementing efforts to prevent child abuse and neglect, auid encouraging
personal responsibility to combat violence, HIV/AIDS and teen pregnancy.
Strengthening biomedical auid behavioral research efforts to better
understand and treat disease eind disability, thus helping to prevent or
treat the onset of cancer, HIV/AIDS, heart disease, stroke, hypertension
cmd mciny other diseases.
Increasing the efficiency and cost -effectiveness of HHS through improved
management of resources and restructured operations.
Coordinating all Departmental actions and regulations requiring
Secretarial action; mediating the resolution of differences between
Departmental components; communicating Secretarial decisions; and
ensuring the implementation of those decisions.
Reviewing all new regulations cind regulatory changes; performing ein on-
going review of regulations which have already been published, with a
particular emphasis on reducing the regulatory burden.
Maintaining the HHS information and document control system that tracks
over 200,000 documents, including Secretarial correspondence, reports to
Congress, regulations briefings, memos and external/internal mail.
218
Rationale for the Budget Request
The FY 1996 request for lOS is a decrease of $34,000 and 7 FTE from FY 1995
levels. The dollars saved as a result of the PTE reduction will help to
defray the costs of the annualization of the JeUiuary 1995 pay raise, the
anticipated January 1996 pay raise of 2.4 percent, and mandatory personnel
costs such as within-grade increases and career-ladder promotions.
219
ASSISTANT SECRETARY FOR PUBLIC AFFAIRS
FY 1994
Actual
FY 1995
ADDroDriation
FTE Amount
38 $2,834,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
39 $2,842,000
FTE Amount
35 $2,816,000
FTE Amount
-3 -$18,000
Puroose and Method
of Operations
The Office of the Assistant Secretary for Public Affairs (ASPA) serves as the
principal public affairs office in all aspects of Departmental policy and
activities; oversees the planning, mcuiagement and execution of communication
activities in HHS; conducts HHS-wide public affairs programs; provides public
information and support on legislative initiatives which cut across the
Department's program cind OPDIV lines; administers the Freedom of Information
Act (FOIA) and Privacy Act Department -wide; and provides information on
Departmental activities to the public in general.
ASPA is also responsible for:
• Providing information, advice and counsel to the Secretary and other
senior Department officials to assure that public affairs aspects are
considered in the establishment of Department activities.
• Conducting an active progrcun of communication with the public on behalf
of the Department through the media and other avenues, to further public
understanding of Departmental prograuns and issues.
• Providing fvinctional msinagement of public affairs activities throughout
HHS, to assure that Departmental priorities are followed cind that public
affairs and public education activities are cost-effective and not
duplicative. Such functional management includes the review cind
evaluation of OPDIV public affairs activities, thereby ensuring that
informative materials are delivered to the public in the most cost-
effective manner possible.
• Setting policies and procedures within the Department for administering
FOIA, the Privacy Act, and other information-access statutes that assure
the public's right to know and protect cin individual's right to privacy.
• Communicating the effectiveness of HHS radio to local radio stations to
provide up-to-the minute audio news and information on health eind social
issues .
• Initiating outreach to the Hispanic media and community by providing
importamt health messages through such materials as Speinish- language
audio news releases aund news mattes, and Spanish- lain guage stories on HHS
radio.
• Reviewing Departmental requests for clearance of publications and audio-
visual materials, with the goal of eliminating wasteful spending,
improving communications to the public, and finding more strategic amd
cost-effective meains of providing information.
• Providing OpEd and other materials on a regular basis to national,
regional and minority media, with a special emphasis on personal
responsibility auid the importance of the family.
• Producing speeches, statements, articles, editorials, video scripts amd
other written materials for Department officials.
220
Rationale for the Budget Request
The FY 1996 request for ASPA is a decrease of $18,000 and 3 FTE from FY 199S
levels. The dollars saved as a result of the FTE reduction will help to
defray the costs of the annualization of the January 1995 pay raise, the
anticipated January 1996 pay raise of 2.4 percent, and mandatory personnel
costs such as within-grade increases and career-ladder promotions.
22
221
ASSISTAHT SECRETARY FOR LEGISLATION
FY 1994
Actual
FY 1995
AocroDriation
FTE Amount
30 $2,453,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
28 $2,213,000
FTE Amount
28 $2,438,000
FTE Amount
-2 -$15,000
Purtjose and Method
of Oraerations
The Office of the Assistant Secretary for Legislation (ASL) serves as the
principal information resource and liaison with the Congress for health and
human service issues; serves as HHS chief legislative liaison to executive
officials of the White House, 0MB, and other Executive Branch departments; and
serves as the principal advisor to the Secretary and the Department on
congressional activities.
ASL is also responsible for:
• Providing information, data, euid materials concerning issues cind
programs within the jurisdiction of the Department to Members of
Congress and their staffs.
• Advocating the Administration's health and human services legislative
agenda with members of Congress cind congressional staff.
• Managing the Department's legislative agenda, including the introduction
cUid consideration by Congress of the President's and Welfare Reform and
health care proposals as well as the Secretary's legislative
initiatives .
• Directing and coordinating legislative initiatives to ensure consistent
euid strong advocacy before the Congress.
• Providing guidance on the development and analysis of Departmental
legislation and policy, including formulation of the budget.
• Preparing, clearing and editing testimony and bill reports on pending
legislation.
Rationale for the Budget Request
The FY 1996 request for ASL is a decrease of $15,000 and 2 FTE from FY 1995
levels. Dollar savings from this FTE reduction will help to defray the costs
of the einnualization of the January 1995 pay raise, the anticipated January
1996 pay raise of 2.4 percent, and mandatory personnel costs such as wi thin-
grade increases emd career-ladder promotions.
23
222
ASSISTANT SECRETARY FOR PLANNING AND EVALUATION
FY 1994 FY 1995 FY 1996 Increase or
Actual Appropriation Estimate Decrease
FTE Amount FTE Amount FTE Amount FTE Amount
109 $6,414,000 112 $6,700,000 108 $6,660,000 -4 -$40,000
Purpose and Method of Operations
The Office of the Assistant Secretary for Planning eind Evaluation (ASPE)
provides policy analysis amd advice; guides the formulation of legislation;
coordinates strategic and implementation planning; conducts regulatory
analysis eind reviews regulations; oversees the plcinning of evaluation, non-
biomedical research, and major statistical activities; conducts and
administers evaluation, data collection, and research projects that provide
information needed for policy development; eind provides other technical
support services, including simulation modelling, progrcuraning, and technical
assistcince.
The major accomplishments plcumed for ASPE in FY 1996 are as follows:
Provide planning, analytic support, and evaluation of activities
implemented in support of the President's HHS-related goals and
objectives.
Conduct planning and policy analysis for major policy issues --in
particular, health care reform, welfare reform, disability, long-term
care, and progrcuns for children, youth and the elderly.
Conduct short-term analyses of issues and options for the Secretary and
the White House.
Conduct evaluation and policy research studies to provide information on
importcuit policy issues, and coordinate the Department -wide planning of
such studies .
Provide policy- relevcint information on national trends which are
relevcint to health and human services issues.
Manage the development of the Department's legislative program.
Coordinate the Department's planning of high priority regulations, and
review regulations for policy, economic, and family impact.
Guide Department -wide plcuming for the implementation of new public laws
affecting HHS .
Coordinate the development cind implementation of policies to integrate
the Policy Support Services function.
Maintain and further develop microsimulation models to support the
Administration's initiatives on health care reform, welfare reform, and
other issues.
223
Rationale for the Budget Request
The FY 1996 request for ASPB is a decrease of $40,000 and 4 FTB from FY 1995
levels. Dollar savings from this FTE reduction will help to defray the costs
of the annualization of the January 1995 pay raise, the anticipated January
1996 pay raise of 2.4 percent, and mandatory personnel costs such as within-
grade increases and career- ladder promotions.
25
224
ASSISTANT SECRETARY FOR MAMAGEMBMT AHD BUDGET
FY 1994
Actual
FY 1995
Appropriatipn ,
FTE Amount
274 $22,584,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
267 $22,658,000
FTE Amount
254 $22,438,000
FTE Amount
-20 -$146,000
Purpose and Method
of Ooerations
The Office of the Assisteuit Secretary for Management and Budget (ASMB) advises
the Secretary on all aspects of administration and financial management, smd
provides general oversight and direction of the administrative euid financial
organizations and activities of the Department. Major areas of ASMB
responsibility in the areas of financial services, information resources
management services, budget services, grants, acquisition and logistics
services, and administrative services include the following:
• Fincuicial Services Advises the Secretary on all aspects of financial
management, auid directs, coordinates and provides support for all
financial management activities across the Department. Provides
leadership to OPDIV senior finemcial mamagers, including the OPDIV Chief
Fineuicial Officers (CFO) , through the CFO Council. Manages and directs
implementation of the requirements of the CFO Act and the government
Meuiagement Reform Act (GMRA) . Provides support to program and f ineuicial
meuiagers for implementation of the government Performance and Results
Act (GPRA) . Develops department -wide financial management policies and
stemdards . Serves as departmental liaison with central agencies on
fincUicial matters. Manages the day-to-day finance and accounting
activities for OS, ACF and AoA, and departmental systems for all HHS
OPDIVs . Directs regional reviews cuid negotiations of cost allocation
plans and indirect cost rates. Conducts cost determination reviews of
ADP facilities operated by State and local governments.
• Information Resources Management (IRM) Services Advises the Secretary
and the ASMB on issues cind policies pertaining to the utilization of
information resources. Coordinates the Department's annual IRM
strategic planning and budgeting process. Develops policies, conducts
IRM and major information system reviews, amd oversees the Department's
IRM acquisition management activities. Monitors the Department's
complieuice with the Paperwork Reduction Reauthorization Act of 1986 auid
the Computer Security Act of 1987. Develops infrastructure and
information system standards to enhauice the Secretary's mcuiagement of
the Department . Kanagea the OS Central Network euid ADP support
contracts. Develops IRM plems cuid coordinates the IRM activities of OS,
including the provision of telecommunications and reprographics
services.
• Budget Services Advises the Secretary on Departmental budget and
mcuiagement policy issues. Manages the preparation of the Department's
annual budget, and prepares the Secretary to present and defend the
aumual budget before Congressional committees and the public. Matnages
the production of work products prepared specifically for 0MB and/or
Congress, such as justifications of estimates, hearings transcripts and
related materials, and effect statements. Furnishes analyses, options,
and recommendations on all budget and management issues. Establishes
and maintains equal employment opportunity (EEO) prograuns for OS.
Estedslishes amd manages audit follow-up policy for the Department, and
prepares the Secretary's semi-cumual report for Congress on audit
management. Manages the Federal Managers Financial Integrity Act
(FMFIA) process for the Department amd prepares the Secretary' s amnual
26
225
FMFIA report to the President and Congress. Administers the
Department's systems for delegations of authority and reorgsuiization.
• Grants. Acquisition and Logistic Services Advises the Secretary and the
ASHB in the areas of grants management, acquisition, and logistics.
Develops Department -wide grants, acquisition, and logistics policies and
training, and works with 0MB and other Federal agencies in formulating
government -wide policies. Condu<^ts projects to pursue innovation and
improvement in the management of the Departments ' s procurement, grants,
and logistics operations. Formulates cost principles and related
policies for determining and reimbursing grant and contract costs.
Develops and manages training and certification programs for HHS grants
and acquisition staff. Resolves cross -cutting audit findings on
grsmtees auid contractors. Msmages the Department's Small smd
Disadvantaged Business Utilization Program. Awards euid administers
contracts in support of the program needs of OS .
• Administrative Services Provides a variety of administrative and
management services that benefit the OPDIVs, STAFFDIVs, and regions.
Develops, interprets, coordinates and enforces administrative services
policies throughout HHS, including those governing real property
meuiagement, occupational safety £uid health, environmental management,
energy meuiagement, physical security, postal management cuid historical
preservation. Provides direct operational services to HHS agencies and
offices in the Southwest Washington, D.C. complex, including ID badging,
records mamagement, mail delivery, occupational safety suid health,
trcmsportation, shipping and warehousing, parking, and facilities cuid
management services for HHS assigned space.
The FY 1996 budget request will allow ASMB to carry out the following major
goals auid objectives:
Finemcial Services
• As required by the CFO Act of 1990, issue the Department's Annual CFO
Report and the Financial Management Status Report and Five -Year Plan amd
provide support to government -wide CFO initiatives. In addition, as
required by the GMRA of 1994, oversee the preparation of OPDIV/Agency
audited and unaudited financial statements. Develop eind issue the
Departmental consolidated finamcial statements to include the
development and publication of performance measures in conjunction with
the HHS plan.
• Provide support to the government -wide initiatives of the National
Performance Review (NPR) , including Electronic Benefit Transfer (EBT)
cmd Electronic Commerce.
• Provide general guidance and direct assistance to OPDIVs, programs and
activities which are implementing the requirements of the government
Performance and Results Act (GPRA) .
• Provide effective direction and oversight of HHS regional Divisions of
Cost Allocation in conducting annual reviews and negotiations of cost
allocation pleuis and indirect cost rates with State and local
governments, universities, and other organizations.
• Develop electronic commerce alternatives for the processing of financial
information in acquisitions using a government bank card and expctnd the
Electronic Data Interchange (EDI) capability with vendors for financial
information in accordeuice with the government -wide initiatives on
streamlining procurement activities.
226
Maintain the Financial Information Reporting System (FIRS) which
provides summary financial information in a central database that can be
readily accessed by managers at all levels of the Department.
IRM Services
Issue cpjidance for the implementation of stcuidards to marshal movement
away from costly proprietary-based systems to open systems solutions,
using domestic cuid international standards where appropriate.
Coordinate the development of OPDIV plans in this direction.
Provide technical oversight of OS LAN systems and expeuid the network's
capcibilities to include the sharing of OS datcdsases, the creation and
support of an OS Dataserver, the addition of new services such as
Departmental World-Wide Web (WWW) and Gopher servers, and the support of
network-based applications in personnel cmd financial management.
Consolidate IRM policies in key functional areas. Periodically conduct
performance based, outcome -oriented reviews of the OPDIVs to assess
mission results achieved through the use of information technology; the
management of IRM programs; the management of information systems
investments; and Major Information Systems (MIS) .
Review significant OPDIV procurement requests for Federal Information
Processing resources, requests for information collections, and Computer
Matching Agreements to ensure effectiveness and con^liance with Federal
regulations .
Pursue the integration of OS telecommunications cuid printing operations
with other information resources memagement activities.
Issue guidcince eind provide oversight to the OPDIVS and STAFFDIVs so that
they meet the administration's goals as they relate to technology as
delineated in the National Performemce Review and the National
Information Infrastructure Agenda for Action.
Budget Services
Plan all HHS events for the FY 1997 Departmental budget, including
reviewing OPDIV requests, developing alternative recommendations, and
ensuring timely submissions to 0MB and the Congress.
Provide the Secretary with all budget -related materials and information
necessary for presentation to amy audience . This involves ensuring that
the Secretary is successful in budget presentations in support of the
programs of the President.
Respond to 0MB in successfully addressing the major workloads in^osed by
0MB in support of the amnual budget submission etnd in other prograun
budget analyses and estimates which occur throughout the year.
Develop amd make modifications to all Departmental budget preparation
processes, presentations, amd submissions to reflect chamges due to
functional restructuring and the reshaping of major on-going
discretionary programs.
Coordinate the divestiture of regional administrative support functions
and associated staff to the regional Operating and Staff Divisions.
Develop and conduct practical dispute resolution training, tailored to
the most frequent issues generating EEO conplaints in each organization.
227
• Evaluate procedures for providing reasonable accommodations for
employees with disabilities, ensuring that funds are included in budgets
and that all employees understand how to request accommodations.
• Manage the FMFIA euid audit follow up programs for the Department,
streamlining program processes and strengthening corrective actions.
• Direct the operations of the Working Capital Fund and manage the
policies set by the Board of Governors.
Grants. Acquisition, and Logistic Services
• Manage all Departmental Small Business Acquisition and Grant programs.
• Initiate full development and testing of a new Department -wide grants
information system.
• Conduct an outcome measurement of HHS Procurement Operations .
• Introduce and manage a new performance measurement system to replace
operational reviews of HHS procurement offices.
• Work with OMB to revise and strengthen government-wide cost principles
and grant administration policies for universities. State and local
governments, and other non-profit organizations.
• Develop and implement innovative grant, acquisition, and logistics
solutions to National Performance Review and OFPP Pledge Initiatives.
• Effectively and efficiently resolve audit report recommendations within
the mandated time frame.
• Initiate testing and full development of an electronic information
system technology on the Departmental WWW server, to find and exchange
acquisition and logistics information about and for the Department.
• Work with Department's Electronic Commerce Architecture Team (ECAT) to
implement the government -wide program for conducting Federal procurement
through electronic commerce.
Administrative Services
• Ensure a safe and healthful work environment for HHS employees, as well
as HHS complieuice with occupational safety/health suid environmental
protection laws, regulations and procedures.
• Issue and implement policy and procedures to ensure effective and
efficient mainagement of the Department's real property assets.
• Continue a comprehensive analysis of HHS compliance with the National
Energy Conservation Policy Act, Executive Order 12759, Federal Energy
Management, and the Energy Policy Act of 1992.
Monitor and implement Building Improvement Projects designed to improve
working conditions for HHS employees located in the Hubert H. Humphrey
building
Rationale for the Budget Request
The FY 1996 request for ASMB is a decrease of $146,000 and 20 FTE from FY 1995
levels. The dollars saved as a result of the FTE reduction will help to
defray the costs of the annualization of the January 1995 pay raise, the
29
228
cuiticipated January 1996 pay raise of 2.4 percent, ouid mandatory personnel
costs such as within-grade increases and career-ladder promotions.
ASSISTANT SBCRBTARY FOR HAMAOBMEMT AMD BDDOBT
Program Impact Data
FY 1994
Workcounts
FY 1995
Workcounts
FY 1996
Workcounts
Finamcial Services
Key Departmental cind OS systems
operated, maintained cuid enhcuiced
Audit reports related to indirect
cost rates and cost allocation plans
resolved
Cost negotiation agreements
completed
Policy direction, technical
assistance, training, and other
functional management activities
related to negotiations of indirect
cost rates «md cost allocation plams
Cost avoideuice/savings resulting
from regional reviews smd
negotiations of indirect cost rates
amd cost allocation plams (millions)
Apportionments/reapportionments
processed
Financial reports issued*
Grants transactions*
Grants closed*
Commercial treUisactions*
Travel transactions*
Prompt payment invoices*
Prompt payment penalties:
- Number of penalties assessed*
- Dollar value*
* Headquarters accounting
operations only.
2,000
1,200
$650
2,000
1,200
$650
2,000
1,200
$650
276
275
275
56,
500
60,
,000
50,000
105,
,000
120,
,000
120,000
5,
,000
8,
,000
8,000
335,
,000
350,
,000
350,000
30,
,000
35,
,000
35,000
13,
,000
15,
,000
15,000
200
150
150
$2,
,600
$1,
,200
$1,200
229
IRM Services
OPDIV long-range IRM pleuis reviewed
STAFFDIV long-range IRM plans reviewed
STAFFDIV IRM budgets reviewed
Bene£it-cost euialyses for major
Information Technology Systems (ITS)
initiatives reviewed cuid submitted to 0MB
OPDIV ITS budget submissions reviewed
Information collection requests
reviewed and submitted to OMB
FOIA requests handled
On-site IRM reviews of OPDIVs
HHS IRM Advisory Co'jncil meetings
conducted/supported
OS IRM Advisoiry Council meetings
conducted
Computer matching agreements approved
by Data Integrity Board
Computer security plans reviewed
Disposition authorities, exceptions,
and other actions relating to records,
forms and reports management
Major information systems reviews
Printing requests emd waivers
Policy direction, technical assistcuice,
training, and other functional
management activities relating to
information management
Federal Information Processing (FIP)
procurement requests :
- Number of requests processed
- Dollar value (millions)
Major excess ADP equipment
reassignments :
- Number of reassignments
- Current market value (millions)
New microcomputers installed in OS
Office networks designed and
installed in OS (cumulative)
FY 1994
Workcounts
FY 1995
Workcounts
FY 1996
Workcounts
6
6
8
1 10
10
10
11
11
11
OMB 3
3
2
6
6
e
40
40
40
10
15
15
3
2
2
20
15
65
2
10
80
$600
3
$6
20
20
15
15
60
60
2
2
10
10
40
$1,200
3
$4
40
$1,200
3
$4
230
IRM procurements processed in OS
Telephone bills processed
Telecommunication service orders
handled
Printing jobs contracted out
Reprographic jobs done in-house
FY 1994
Workcounts
FY 1995
Workcounts
FY 1996
Workcounts
250
200
- 200
2,250
2,400
2,400
1,500
1,500
1,500
1,425
1,500
1,500
1,700
1,650
1,650
Budget Services
Briefing materials for Secretary' s
Budget Council decisions:
- Briefing books prepared
- Total number of pages
charts
APTs
Briefing materials and opening
statements for appropriations
hearings :
- Briefing books prepared
- Total number of pages
statements
APTs
Hearings transcripts of testimony by
HHS witnesses
Reports provided to the Appropriations
Committees
Formal/informal EEO cases processed
EEO counselors trained/appointed
Meetings with complainants and managers
re : EEO complaints
Affirmative employment plans developed,
monitored and evaluated
Training workshops for managers on
EEO initiatives
Reorganization proposals reviewed
Delegations of authority approved
Interagency agreements reviewed
OS public use reports approved
Administrative code revisions reviewed
60
60
70
4,350
5,200
5,000
90
90
95
10
10
15
167
217
150
53,965
74,171
65,500
140
140
140
10
10
15
140
60
160
10
400
60
60
180
140
10
10
40
40
50
40
40
20
30
34
30
10
10
10
15
15
15
2,000
1,500
1,500
231
FY 1994
Workcoupts
FY 1995 FY 1996
Workcounts Workcounts
Grants. Acouisition. and Logistic Services
Contracts, delivery orders, and
modifications awarded
Cost analyses conpleted
Close-out modifications handled
FOIA requests handled
Purchase orders and addenda awarded 5,
Oral purchase requests awarded
Blanket purchase agreements awarded
In-house and outreach covtnseling,
assistance, euid advisory services for
small and minority businesses 1,
Analyses conducted and policy
developed on issues such as
accountability, con^etition. Federal
Acquisition Regulation implementation,
preference contracting, IRM
procurement integrity, debarment, etc.
Technical assistance given to OPDIVs,
OMB, GSA cuid contractor comnnanity on
award and administration of contracts
Special studies on procurement
activities, as mandated by HHS, OMB
and Congress
Review, revision and development of
logistics policy and procedural guides
Technical assistance given to OPDIVs,
GSA and OMB on logistics
Performance measurement of OPDIV
procurement emd logistics activities
Operational reviews of OPDIV grants
activities
Reports analysis and follow-up to
ensure implementation of recommendations
from reports issued by HHS, OMB, GAO
and OIG; analysis of periodic reporting
by OPDIVs (including audit reports)
Development of HHS positions on
contract protests and bid mistakes
Quick assessment reviews (unscheduled)
in procurement practices and logistics
400
450
400
125
125
100
100
100
100
120
124
125
000
4,500
3,800
400
450
400
50
50
50
2,500
3,000
232
FY 1994 FY 1995 FY 1996
Workcounts Workcounts Workcounts
Procurement training courses developed
and presented to HHS personnel 220 230 250
Training workshops conducted on
contracts, grants and logistics 7 10 H
Grants mcuiagement training courses
provided for HHS personnel 50 50 50
Technical assisteince given to OPDIVs,
STAFFDIVs, 0MB, and grantees on award
and management of grants 1,000 1,000 1,000
Identification and development of
logistics training courses for HHS
personnel 4 4 4
Regulations, program announcements,
and other Federal Register documents
reviewed 50 50 12O
OPDIV Program Announcement Plans
reviewed 13
Audit reports resolved 750
Logistics approvals/certifications 30
Logistics reports prepared 13
Logistics motor vehicle misuse/underuse
investigations 12
* To be taken over by OPDIVS in 1996
Administrative Services
Technical assistetnce given to OPDIVs,
0MB, other agencies, and/or contractors
re:
- real property issues
- occupational safety and health issues
- environmental management issues
- energy conservation issues
- historic preservation issues
- physical security issues
- postal management issues
- Fitness Center policy
Building passes issued
Parking permit applications reviewed
Visitor permits issued
Repair and alteration orders processed
13
13
800
850
11
10
13
14
220
230
230
200
210
220
150
180
200
200
210
220
50
60
60
25
30
30
10
10
10
40
40
40
5,000
5
000
5
000
1,600
1
600
1
600
6,000
6
000
6
000
350
400
450
233
Facility cuid maintenemce problems
solved
Preventative maintenance inspections
(hours)
Custodial maintenance inspections
(hours)
Elevator maintenance inspections
(hours)
Pieces of incoming/outgoing mail
processed
HHS locator calls handled
Property disposed of as surplus to
GSA
Property rehabilitated
Legislative materials distributed
Staff car/truck assignments
Shuttle dispatches
Cholesterol screenings (Health and
Wellness Center)
Py 1994
FY 1995
FY 1996
Workcounts
Workcounts
Workcounts
5,000
5,500
5,500
4,160
4,160
4,160
2,800
2,800
2,800
300
300
300
2,310,000
2
,287,000
2
,265,000
143,000
145,000
147,000
4,500
4,500
4,500
250
350
350
315,000
315,000
315,000
6,500
6,500
6,500
12,700
12,700
12,700
234
ASSISTANT SECRETARY FOR PERSONNEL ADMINISTRATION
FY 1994
Actual
FY 1995
Appropriation
FTE Amoiant
173 $12,132,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
161 $12,166,000
FTE Amount
159 $12,056,000
FTE Amount
-14 -$76,000
Puroose and Method
of Operations
The Office of the Assistant Secretary for Personnel Administration (ASPER)
provides leadership in personnel administration in HHS, as well as directly
providing personnel and payroll services to the Department. Through its
servicing personnel offices in Washington D.C. and ten regional offices, ASPER
provides personnel services to over 65,000 Department employees; in addition,
ASPER manages the Department's payroll operations, providing pay services to
all HHS employees (more thaui 125,000) every pay period.
ASPER' s headquarters staff provides policy development, oversight and
technical assistance to the Department's OPDIVs in the areas of alternative
dispute resolution, equal employment opportunity (EEO) , recruitment, employee
relations, labor -management relations, employee development, employee
assistcince progrcuns, classification, and compensation. In addition, ASPER
serves as the administrator of the Departmental Drug Testing Program.
ASPER also provides administrative services and resources for the Departmental
Appeals Board (DAB) , which decides post-award grant disputes and civil
assessment, penalty, euid other remedy cases prosecuted by the Department.
Since FY 1992, DAB has been involved in implementing the Administrative
Dispute Resolution (ADR) Act, which requires HHS to provide skills training
for mediators. In recent years, DAB has also been given responsibility for
reviewing Civil Rights Reviewing Authority cases, scientific misconduct cases,
Clinical Laboratory Improvement Amendment (CLIA) cases, amd HCFA adversarial
appeals cases.
Based on strategic planning, the following programmatic goals eUid major
operational efforts are planned for FY 1996 to achieve ASPER' s mission:
Personnel and Payroll Systems
• Complete HHS implementation of the automated Time and Attendance
Information Management System (TAIMS) . Continue enhancements to the
system as mandated by 0PM and support the needs of the users .
• Continue the Payroll Re-engineering Project (PREP) implementing business
processes which will use increased automation to diminish many labor-
intensive activities.
• Provide application/transition support for the conversion of the WANG VS
system to an "open architecture" environment.
• Continue to implement the Top Level Design (TLD) which will position HHS
for appropriate additional automation efforts into the 21st century.
• Implement a Data Dictionary which identifies all of the personnel suid
payroll data elements, and complete a relational data base design.
• Identify software tools which provide the capaUaility to re-engineer
legacy applications, auid will result in several legacy applications
being re-engineered using the selected tool.
235
Fully implement the Fee -for- Service System after nonning a parallel
system during FY 1995,
Enhemce the network server to include additional capabilities for data
and datcUsases. This will reduce the amount of data and databases stored
on mainframe at DCRT cmd reduce the associated costs .
Personnel Services
Coordinate with 0PM the on-line scheduling and receipt of personnel
security investigations, to further reduce processing time.
Conduct on-site security assistance smd evaluation visits at specific
OPDIVs and STAFFDIVs.
Develop em assistcuice program to aid drug progreun coordinators to carry
out guidance of the HHS Drug -Free Workplace Program. Conduct management
control review of drug-testing operations.
Conduct on-site evaluations of executive personnel activities within
HHS. Continue to streamline internal procedures for executive personnel
activities .
Continue support of the HHS automated training system.
Implement the restructuring of the administration of the Employee
Assistance Prograun.
Provide on-going support for Total Quality Management (TQM)
implementation throughout HHS. Continue a variety of TQM enhancements
across the Department, eind work with customers in their TQM programs.
Support teeun leadership approach to supervisory and management
development through the dissemination of external developmental programs
and assignments.
Conduct aui end- of -year conference and graduation for Class IV of the
Women's Management Training Initiative.
Develop cuid implement new staffing and classification programs resulting
from new legislation.
Continue to develop and strecunline personnel policies.
Expand partnership efforts in the decision-making process on issues
affecting the conditions of the employment of bargaining unit employees.
Hvmtan Resources Planning and Policy
Coordinate humeui resource strategic planning efforts with work force
analysis and affirmative employment initiatives, to assist OPDIVs and
STAFFDIVs in meeting long-term programmatic, employment atnd management
needs .
Continue to provide technical assistauice to OPDIVs and STAFFDIVs on
overall policy management.
Continue to develop Departmental policy to implement changes resulting
from the National Performance Review euid work force streamlining
initiatives. Monitor work force reporting policies amd assist OPDIVs in
tracking progress and analyzing results.
37
236
• Continue to develop Departmental policy for implementing new Federal Pay
Reform provisions concerning Performiuice Management and Health Care
Occupational Pay. Continue to provide technical assistance to OPDIVs
and Regions on overall pay reform in^lementation .
Humctn Relations
• Continue expeuision of the Labor -Management and Enployee Relations
Electronic Information Systems, which provide electronic (rather thzui
paper) access to current information in the Labor Relations area.
• Continue administration of the Consolidated Regional Labor -Management
Agreement .
• Continue to modernize the union dues collection system and bargaining
unit statistical bases.
• Continue to expeuid development and implementation of Alternative Dispute
Resolution (ADR) programs in the following areas:
lAbor relations: involve more HHS organizations and more unions;
utilize interest -based negotiations to develop cooperative leUjor-
meuiagement partnerships.
anplpyee relations: continue facilitation of ADR in the agency
grievance procedure euid alternative discipline progreuns.
Piscri nil nation complaints; maximize opportunities to resolve conplaints
(juickly and in a less adversarial m2uuier.
HHS progzanmatic areas: provide primary support to HHS ADR Specialists
in their vork. with OPDIVs.
• Continue to utilize TQM principles into the management of complaints
processing.
• Ensure operating procedures are adapted to comply with, euid entploy
flexibility under, current EEOC regulations.
• Continue merit systems investigations as referred by the OIG hotline to
identify sources of fraud, waste, eUsuse, mis -management and other merit
systems violations.
Departmental Appeals Board
• Complete work on grant award docket cases representing $1.4 billion in
disputed funds.
• Con^lete work on civil sanction cases representing approximately $2
million in proposed penalties and 600 years of exclusions for providers
who submit false claims.
• Receive 53 cases under miscellaneous new authorities and conplete work
on 68.
• Receive 60 recjuests for mediation services in cases of alleged
discrimination filed under the Department's EEO process.
• Complete work on 26 Indiaui Health Service cases arising under the
LaBaron agreement.
38
237
• Conqplete work as the third party review authority in approximately 30
SSA disability cases arising from Small v. Shalala.
• Encounter work on 24 appeals of Administrative Law Judge decisions in
penalty and exclusion cases and cooiplete work on 24 .
• Continue to lead Departmental efforts in Alternative Dispute Resolution
and Negotiated Rulemaking (Reg-Neg) , providing both training and
services.
Rationale for the Budget Request
The FY 1996 request for ASPER is a decrease of $76,000 and 14 FTE from FY 1995
levels, generated by program reengineering and streamlining efforts begun in
FY 1994. These efforts will continue in FY 1996, in accordance with ASPER' s
Strategic Plan and Continuous Inprovement Program initiatives. Emphasis will
be on incorporating autca\ated processes to replace manual ones and delegating
authorities to the greatest extent possible under current law.
In addition, dollars saved as a result of the reduction of 14 FTE will help to
defray the costs of the annualization of the January 1995 pay raise, the
anticipated January 1996 pay raise of 2.4 percent, and mandatory personnel
costs such as within-grade increases au:id career-ladder promotions.
39
238
ASSISTANT SECRETARY FOR PERSONNEL ADMINISTRATION
Program Impact Data
Personnel and Payroll Systems
Paychecks issued biweekly to
civilian enployees
Paychecks issued monthly to active
and retired PHS Commissioned
Officers and medical students
Debt collection actions processed
biweekly
Pay and leave records updated
annually (e.g., amended time cards,
late personnel actions, pay
correction cards, lump sum leave
payments)
Retirement actions processed
cmnually
Dnemployment compensation actions
taken annually
Requirements analyses to modify the
Personnel cind Payroll Systems amd/or
to alter support services as a
result of systems changes recpiested
by personnel offices
FY 1994
WorkcountB
FY 1995
WorkcountB
FY 1996
WorkcountB
.27,705
127,155
125,855
11,500
11,500
15,500
8,810
9,500
10,000
50,000
52,000
50,000
25,000
25,000
20,000
5,000
3,500
2,000
365
325
325
Personnel Services
Services to employees located in
Southwest Washington D.C. euid to
certain regional employees:
- Personnel cind pay actions processed
- Job Information Service
- Enployee career counseling
- Employee substcuice aJsuse and
other coianseling
- Benefit counseling
- Performance management
counseling
- Training counseling
- Organizational development
training
28,000
28
,000
30
,000
2.500
2
,500
3
,200
220
320
500
240
240
260
300
300
300
50
100
200
50
100
200
50
200
300
FY 1994
FY 1995
FY 1996
Wprkpounts
Worltcovint?
Workcovint^s
2,470
3,705
4,075
160
175
200
5,200
5,000
5,000
4,000
4,000
4,000
200
1,540
1,500
239
- Enployees trained at Mary Switzer
Training Center (MSTC)
- Courses held at Switzer
- Total training courses authorized
(including MSTC) 5,360 5,360 5,360
Actions in support of Advisory
Conmittee management activity (e.g.,
charters, nominations, availability
cards, invitations)
Security investigations processed
Drug tests administered
HHS-wide humem resource development
activities:
- Employee Assistance Program, new
cases 4,800 4,800 4,800
- Employees trained in AIDS
Awareness 5,000 75,000 45,000
- TQM/tecun training sessions 10 20 20
- Facilitators trained to deliver
other TQM training 35 60 100
- Participants in HHS developmental
assignments 60 50 50
- Participants in external developmental
programs (eg. FEI, LEGIS Fellows) 55 60 60
Executive and Employee Development
Program activities:
- Participants in Secretary's
Executive Leadership Forum 80 160 120
- Participants in "Supervisor in
Context" training 240 260 260
- Participants in Women' s Management
Training Initiative 100 100 100
- Participants in SES Candidate
Development program 85 85 50
Executive Personnel activities 365 365 340
240
FY 1994
WorkcountB
Human Resources Planning and Poliev
Technical assistance on policies and
programs (e.g., pay, benefits,
performance management, affirmative
action, enployment, disciplinary
actions, grievances, evaluations,
awards and financial disclosure)
and on guides and models developed to
assist in policy interpretation
Policy issuances, legislative
proposals, regulations, and standards
reviewed or issued
Personnel program assessments and
special studies supported, conducted
or reviewed
Affirmative action plans cuid
activities
Human Relations
Oversight of EEO counseling
Fact finding and dispute resolution
Participants trained in ADR concepts
and skills
Hearings, decisions, and appeals
Program monitoring
Departmental Anoeala Boarij
Appellate Cases
- Received
- Decisions issued
- Closed
Remedies Cases
- Received
- Decisions
- Closed
Total Cases
- Received
- Decisions
- Closed
FY 1995
Workcounts
FY 1996
Workcounts
3,100
30
230
65
210
200
50
155
430
135
360
3,100
120
270
100
235
210
60
170
480
160
405
2,700
25
25
1,850
2,370
3,080
1,320
1,585
1,820
2,000
2,000
2,500
600
790
1,065
3,995
5,150
6,530
270
100
235
210
60
170
480
160
405
241
OFFICB OF ZNTBROOVBRHMENTAL AFFAIRS
FY 1993
Actual
FY 1994
ADDrooriation
FTE Amount
39 $3,323,000
FY 1995
Estimate
Increase or
Decrease
FTE Amount
35 $3,143,000
FTE Amount
36 $3,302,000
FTE Amount
-3 -$21,000
Puroose and Method
of Operations
The Office of Intergovernmental Affairs (IGA) is composed of a headquarters
office and the ten offices of the Regional Directors. IGA undertakes a
variety of assignments for the White House, the Secretary, and the Deputy
Secretary in the areas of administration, management, and intergovernmental
affairs. IGA also works closely with national intergovernmental interest
groups and with individual State and local officials in ensuring that
important lines of communication are maintained among all levels of
government . The Regional Directors coordinate a range of outreach activities
and facilitate cross-cutting initiatives in the field.
IGA is also responsible for:
• Providing advice to State and local entities about the potential impact
of proposed Departmental legislative, regulatory, and administrative
decisions. This includes working with both the HHS OPDIVs and State and
local officials throughout the review process on comprehensive health
and welfare reform demonstration waivers.
• Providing Departmental leadership in several areas, including many
reflected on the Secretary's agenda (e.g., health care reform, welfare
reform, immunization, initiatives for children and families. Empowerment
Zones, and AIDS policy) .
• Representing the Secretary auid the Deputy Secretary in contacts with
officials from other Federal agencies, Congressional committees, members
of Congress, the White House, officials of State and local governments,
their representative organizations, non-governmental organizations and
other outside parties.
• Promoting general public understanding of programs, policies, auid
objectives of the Department.
The Regional Directors are the Secretary's chief representatives in working
with the 104 urbein cind rural communities which have been designated by HUD and
USDA as Empowerment Zones or Enterprise Communities. As part of the
streamlining eind restructuring of the Department's field operations during
FY 1995, the Regional Directors will be receiving new job titles which reflect
their enhanced euid refocused roles as liaisons to State and local officials,
constituency groups, private business, smd advocates.
Rationale for the Budcret Request
The FY 1996 request for IGA is a decrease of $21,000 and 3 FTE from FY 1995
levels. Dollar savings from this FTE reduction will help to defray the costs
of the annualization of the January 1995 pay raise, the anticipated Jcinuary
1996 pay raise of 2.4 percent, and mandatory personnel costs such as within-
grade increases and career-ladder promotions.
242
OFFICB OF THB GENERAL CODNSBL
FY 1994
Actual
FY 1995
ADcrocriation
FTE Amount
589 $49,528,000
FY 1996
Estimate
Increase or
Decrease
FTE Amount
608 $50,287,000
FTE
564
Amount
$49,192,000
FTE Amount
-25 -$336,000
Purpose and Method
of Ocerations
The Office of the General Counsel (OGC) directs or oversees the provision of
legal advice and representation to all components of the Department on all
aspects of agency operation. The General Counsel directs the operation of
specialized headquarters divisions, which are structured to have principal
responsibility for providing advice to the Department's major programs, and
the operation of Regional Chief Counsel's offices, which are responsible for
providing the full range of legal services to the Department's regional
operations .
Functional legal services provided by OGC to the Department include:
representation in both administrative and judicial litigation; preparation of
legal opinions; legal review of legislation, regulations, contracts and other
documents; eind provision of informal legal counsel.
Following are OGC's planned accomplishments, listed by major activity.
Business and Administrative Law (BAL)
• Represent the various HHS contracting activities in protests before the
General Services Administration Board of Contract Appeals involving
automated data processing equipment, as well as represent HHS in major
protests before the General Accounting Office.
• Attempt to recover pension funds that the Inspector General's Office of
Audit has determined Medicare contractors have overcharged the Medicare
program.
• Assist the Department's leasing officers in negotiations regarding the
large number of leases directly negotiated and executed by HHS
components .
• Represent HHS before the Armed Services Board of Contract Appeals in
appeals filed under the Contract Disputes Act of 1978 by HHS
contractors .
• Assist Department officials in planning for and implementing the SSA
independent agency legislation.
Office of Inspector General (OIG)
• Provide review, assistance (and representation as necessary) in OIG
program exclusion cases, including a pilot program being developed with
selected Medicare carriers .
• Provide legal assistance and representation with respect to: civil
settlements resolving allegations of health care fraud aind abuse; cases
referred to OIG for sanctions under the Patient Anti-Dumping Statute;
euid cases involving the imposition of administrative sanctions under the
Civil Monetary Penalties Law.
243
Provide legal assistEince on various regulations being developed by OIG,
including new "safe harbors," eind PRO sanction procedures.
Provide assistance to the OIG Office of Audit Services in reviewing
audit reports cind recommendations of program disallowances euid
recoupment of funds .
• Complete drafting of agency-specific supplemental regulations to augment
the Office of Government Ethics Stamdards of Ethical Conduct, and revise
residual HHS Standards to state only those provisions not superseded by
the government -wide standards.
• Provide legal advice, guidance, and assistance with respect to ethics,
criminal conflict of interest statutes, political activity restrictions,
anti-lobbying provisions, travel reimbursement guidelines, procurement
integrity rules, and standards of conduct matters to Department
officials, agency personnel, advisory committees and others.
• Perform reviews and certifications of Executive Branch Personnel
Financial Disclosure Reports (the SF 278) submitted by high level
officials and all political appointees, as required by the Ethics in
Government Act .
• Manage and oversee the distribution and review of the Confidential
Financial Disclosure Statements (the SF 450) to mid-level government
officials within the Department who exercise discretion in certain
sensitive areas.
• Complete co-sponsorship guidelines and implement through the
Department's ethics program.
Legislative Activities
• Draft bills necessary to carry out the Department's legislative program.
Through subsequent legal advice and technical assistance, aid in the
movement of these legislative proposals through the clearance process
within the Department, and at 0MB, and then through various stages of
Congressional consideration.
• Provide draft appropriations act language for inclusion in the
President's proposed FY 1996 and 1997 budgets.
• Provide technical assistance, at the request of appropriate Department
officials, to both the House and Senate Appropriations Subcommittee
staffs in connection with the FY 1996 and 1997 Labor, HHS, Education and
Related Agencies Appropriations Acts, and to other House and Senate
Committee staffs.
• Review and refer requests for the Secretary' s views on proposed or
pending legislation, and ensure the accuracy and responsiveness of
replies from the Secretary. Also, prepare replies to requests from 0MB
for the Secretary's views on enrolled bills.
• Draft bills necessary to carry out the Department's legislative program.
Through subsequent legal advice and technical assistance, aid in the
movement of these legislative proposals through the various stages of
Congressional consideration.
244
Pviblic Health Service (PHS)
• Assist PHS in collecting monies from NHSC scholarship recipients who
default on service obligations and from student locin recipients who
default on repayment. Also assist PHS in making recoveries from
grantees under the Hill -Burton and Community Mental Health Centers
programs .
• Represent the Department in the 3,000 pre-enactment and the several
hundred post -enactment cases under the Vaccine Injury Compensation
Program .
• Defend against lawsuits involving eUiimal rights, environmental cmd other
controversial issues which could limit the ability of PHS to conduct and
support biomedical and behavioral research.
• Assist CDC and PHS on AIDS-related legal issues, including the In re:
Factor VJJX Blood Products Litigation involving HIV-infected
hemophiliacs, the lOM study of HIV transmission to hemophiliacs,
reviewing proposed or updated guidelines for preventing HIV
transmission, eind any investigations of unexplained HIV tramsmissions.
• Assist NIH and DoJ in recovering misexpenditures of funds aind other
damages resulting from misconduct in science and other fraudulent
activities by recipients of funds.
Health Care Financing Administration (HCFA)
• Pursue negotiations with suid litigation against the insurance industry
to recover millions of dollars in mistaken Medicare payments for
beneficiaries covered by employer group health plans.
• Pursue civil money penalty actions against physicians who charge
Medicare beneficiaries amounts in excess of statutory limitations.
• Defend the Department against challenges to its final nursing home
reform enforcement regulation.
• Assist HCFA in revising national drug rebate agreement and issuing final
drug rebate regulations, cutid assist HCFA euid Department of Justice in
defending these regulations .
• Defend cinticipated challenges to the regulations implementing the
Medicare Ambulatory Surgical Center benefit involving the payment
amounts for intraocular lenses and for extracorporeal Shockwave
lithotripsy.
Social Security Administration (SSA)
• Work closely with SSA and the Department to ensure SSA' s smooth
treuisition to independent agency status.
• Assist SSA in implementing the requirements of the Social Security
Independence and Program Improvements Act of 1994, including the
issuance of regulations and the provision of legal advice concerning the
provisions of that Act.
• Defend SSA's final adjudicatory decisions by handling an estimated
11,500 projected new court cases euid the many thouseuids of pending cases
that accompany this workload.
245
• Defend court challenges to SSA's procedures and practices in
administering the OASDI and SSI programs.
• Defend SSA's implementation of the Social Security Independence and
Program Improvements Act of 1994 in court actions challenging SSA's
actions under the statute .
• Defend additional court challenges to the validity of the Coal Industry
Retiree Health Benefit Act of 1992 and the coal miner beneficiary
assignments to coal mine operators made thereunder, and continue to
assist SSA in responding to the appeals of assignments filed by coal
mine operators under this law.
• Assist SSA' s implementation of a process to reengineer the disability
program .
Administration for Children and Families (ACF)
• Assist the Administration on Developmental Disabilities in implementing
amendments to the Developmental Disabilities Assistance and Bill of
Rights Act, including development of any regulations necessary for that
purpose .
• Provide assistance to the Office of Community Services in implementing
recent changes to the CSBG Act .
• Assist the Office of Refugee Resettlement in responding to comments aind
issuing a final rule comprehensively revising its regulations, and in
revising the formula used to make the targeted assistance formula
grants .
• Assist the Administration for Native Americans in developing final
regulations to provide for appeal to the Secretary of decisions to
reject applications for funding either because the organization or the
activity proposed is ineligible.
• Assist with development of final regulations for the four ACF child care
programs (AFDC child care, transitional child care, at-risk child care
and child care and development block grant) to make the requirements
more consistent.
• Continue to defend challenges in several States ibout the automobile
equity limit regulation in the AFDC program, as well as represent the
Department in a number of cases on appeal following district court
decisions.
• Assist ACF regarding anticipated additional proposals for demonstration
projects, particularly in connection with the AFDC program.
• Defend legal challenges to welfare reform demonstration projects
approved by the Department .
• Advise ACF regarding recent amendments to the Head Start Act and assist
in developing regulations to implement those amendments, including
developing regulations to implement new provisions of the Head Start Act
concerning children up to three years old.
• Assist in developing final Head Start regulations concerning the
purchase of facilities, emd defend the Head Start program in appeals of
anticipated grant terminations .
246
Administration on Aging (AoA)
• Provide assistance to AoA in developing final regulations concerning the
Ijong-Term Care Ombudsman program.
• Assist AoA in developing interstate funding formula guidelines under
Title III of the Older Americeuis Act. Assist AoA in promulgating
additional regulations dealing with the Title III, other them the
intrastate fiinding formula guidelines.
Rationale for the Budget Request
The FY 1996 request for OGC of $49,192,000 and 564 PTE reflects a decrease of
$336,000 ctnd 25 FTE from comparable FY 1995 funding levels. The dollar
decrease results primarily from the reduction in FTE, offset somewhat by the
increases necessary for the annualized cost of the Jeuiuary 1995 pay raise, the
etnticipated January 1996 pay raise, cUid other memdatory personnel costs.
This request reflects a compareOsle transfer of OGC's Food and Drug Division--
consisting of 32 FTE euid associated personnel /overhead costs of $2,460,000--
to the Food euid Drug Administration, beginning in FY 1995.
247
OFFICE OF TBB GSHERAL COUNSEL
Program Intact Data
Business cuid Administrative Law
Inspector General
Ethics
Legislation
Administration £or Children aind
Families/Administration on Aging
Health Care Finauicing Administration
Public Health Service
Social Security Administration
TOTAL
The numbers cibove include cases and items. A case is one which has actually
been filed, or which HHS or the Department of Justice is preparing to file.
An item is each discrete request for legal services, ranging from formal legal
opinions to internally generated items of work, conferences, meetings, and
informal advice .
FY 1994
FY 1995
FY 1996
10,512
11,560
12,163
4,332
4,861
5,483
5,960
6,088
6,208
856
951
856
3,690
3,934
3,944
16,131
18,048
18,745
41,654
41,484
41,927
19.037
20.208
21,390
102,172
107,134
110,716
49
248
SKNT AMD COMMON SXPKHSSS'
FY 1994
Actual
GDM (excluding OGC) :
RENT $4,228,000
Delegated Authority .... 4.251. 000
Subtotal 8,479,000
Related Services 2,191,000
Common Expenses 2.687. OOP
Total 13,357,000
RENT 6,397,000
Related Services 420,000
Common E^qpenses 762. OOP
Total 7,579,PPP
TOTAL:
RENT 10,625,000
Delegated Authority .... 4.251.000
Subtotal 14, 876, OOP
Related Services 3,111,000
Common Expenses 2.949. OPP
Total $20,936,000
FY 1995
ADDrOD.
FY 1996
Estimate
Increase/
Decrease
$3, 203, OPP
4.3??.QP0
7,542,000
$3,779,000
4, 427, poo
8,206,000
+$576,000
+98.000
+664,000
1,745,000
2.995.000
12,282,000
1,563,000
2.496.000
12,265,000
-182,000
-499. PPP
-17, PPO
6,117,000
410,000
739.000
6, 072, POP
385, PPO
739.000
7, 196, OPP
-45, OPP
-25,000
7,266,000
-70,000
9,320,000
4.339.000
13,659,000
9,851,PPP
4.427. QpQ
14,278,PPP
+531,000
+99.PQO
+619,000
2,655,000
3.2?4,000
$19,548,000
1,948,PPP
3.235, OQP
$19,461, POO
-207,000
-439.00Q
-$87,000
Purpose and Method of Operations
Rental payments to GSA (RENT) includes funds to cover the rental of office
space, non-office space, and parking facilities in GSA- control led facilities.
Before FY 1995, the annual RENT payment covered both buildings which GSA
managed and buildings for which management authority had been delegated by GSA
to HHS. Funds to cover the operation, maintenance cuid repair of such
"delegated buildings" were transferred by GSA into its Federal Buildings Fund
and are referred to as Delegated Authority funds.
The FY 1995 Treasury and Postal Operations Appropriations Act included a
government -wide general provision directing GSA and OMB to include Delegated
Authority funds in individual agency budgets; it also provided agencies with
the necessary authority to directly spend the portion of RENT that they had
been submitting to GSA for delegated building operating expenses. Therefore,
the RENT/Delegated Authority amounts shown above reflect this split. (NOTE:
Delegated Authority amounts are spread across object classes other tham 23.1,
Rental Payments to GSA, where the RENT amount is shown.)
Related Services includes funds for the procurement of facility- related items
such as housekeeping, security, building maintenance, and renovations.
Coosnon Expenses includes funds to cover administrative items and activities
which cut across and impact all STAFFDIVs under the GDM appropriation. The
' Excludes the following RENT amounts for the Working Capital Fund:
FY 1994--$9,723,PPP; FY 1995- -$9 , 985, 000 ; FY 1996- -$9, 318, 000 .
249
major costs in this area include telecommunications (e.g., FTS emd commercial
telephone expenses), postage, printing. Worker's Compensation, Unemployment
Insuramce, and health units.
Payments to cover all of the above items are made from centrally-managed
accounts on behalf of all GDM STAFFDIVs except the Office of the General
Counsel (OGC) , whose share is included in the OGC section of the budget
request .
Rationale for the Budget Request
The increase of $619,000 in RENT/Delegated Authority in FY 1996 reflects a 4.5
percent rate increase, consistent with the latest estimates provided by GSA.
The decrease of $499,000 in Common Expenses reflects the fact that funding for
the Human Services Transportation Technical Assistance Grant has not been
included in the FY 1996 budget request.
250
WORXIKO CAPITAL FUND
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
Increase or
Decrease
FTE Amount
933 $93,298,000
FTE Amount
911 $94,825,000
FTE
842
Amount
$93,370,000
FTE Amount
-69 -$1,455,000
Purcose and Method
of Ooerations
The OS Working Capital Fund (WCF) was authorized under 42 D.S.C. 3513, 3513(a)
and 3513 (b) . This legislation permitted the Department to establish a fund
without fiscal year limitation for the expenses necessary to maintain and
operate central and common administrative, fiscal and personnel support
services on behalf of Departmental programs eind bureaus. The Fund was
chartered in FY 1987 and is directed by a Board of Governors consisting of
representatives from each of the Department's OPDIVs, the Office of Inspector
General, euid those OS STAFFDIVs which provide services under the Fxind.
The WCF operates on a fully-funded, business-like basis by including the cost
of property depreciation, accrued cinnual leave, auid other Fund overhead costs
in the OPDIV billings, so as to recover the full cost of Fund services. Each
activity financed through the WCF is separately billed to the Department's
OPDIVs, based upon fee -for -service billing rates.
Rationale for the Budget Request
The FY 1996 request for WCF is a decrease of $1,455,000 and 69 FTE from
FY 1995 levels. The request is comprised of the following:
• Personnel Compensation Funds are included for mandatory pay and
benefits costs for WCF employees, including the emnualization of the
January 1995 pay raise, the euiticipated January 1996 pay raise, within-
grade increases and career- ladder promotions.
• Personnel and Payroll Systems Automation Initiatives Funds are included
to continue improvements to the personnel and payroll systems. These
improvements are designed to increase operating efficiency and respond
to new fvinctional requirements, including those still generated by the
Federal Employees Pay Comparability Act of 1990.
• Personal Computer (PC) Maintenance eind Local Area Network (LAN) Support
Funds are included to cover cost increases for PC mainteneuice contracts
and contract support of the LANs used to link the PCs together.
• Regional Operations Funds have been adjusted to reflect the elimination
of the Department's ten Regional Administrative Support Centers (RASCs) .
Functions currently performed by the RASCs have been trauisferred to the
OPDIVs and STAFFDIVs.
• GSA Rent and Related Services A decrease in sc[uare footage related to
the elimination of the RASCs is projected for FY 1996. Funds have been
adjusted to reflect this decrease in space smd in rent-related services.
• Payment Metnagement System (PMS) Fvinds are no longer included for PMS,
as this function has been transferred to the PHS Service and Supply
Fund, effective October 1, 1994.
The following tables display conparable funding levels by both activity and
OPDIV for FYs 1994, 1995, and 1996.
251
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GENERAL DEPARTMENTAL MANAGEMENT
DETAIL OF FDLL-TIME EQUIVALENT (FTE) EMPLOYMENT
1994 1995 1996
Actual Estimate Estimate
Immediate Office of the Secretary 88 88 81
Public Affairs 39 38 35
Legislation 28 30 28
Planning aind Evaluation 109 112 108
Management and Budget 267 274 254
Personnel Administration 161 173 159
Intergovernmental Affairs 35 39 36
General Counsel • 608 589 564
Total, GDM 1,335 1,343 1,265
Average GS Grade
1991 10.0
1992 10.2
1993 10.5
1994 11.0
1995 11.2
1996 11.2
256
GENERAL DEPARTMENTAL MANAGEMENT
DETAIL OP POSITIONS
1994 1995 1996
Actual Estimate Request
Executive Level I 1 i i
Executive Level II 1 i i
Executive Level III
Executive Level IV 4 4 4
Executive Level V
Subtotal 6 6 6
Total - Executive Level Salaries .... $744,000 $744,000 $744,000
ES-6 2 3 3
ES-5 4 4 4
ES-4 26 24 24
ES-3 16 17 17
ES-2 9 10 10
ES-1 15 11 7
Subtotal 72 69 65
Total - ES Salaries $7,601,000 $7,072,000 $7,221,000
GS-15 185 159 150
GS-14 311 310 264
GS-13 150 176 140
GS-12 131 138 138
GS-11 101 148 148
GS-10 9 12 13
GS-9 86 69 71
GS-8 53 46 47
GS-7 91 132 119
GS-6 49 50 60
GS-S 85 50 57
GS-4 62 38 43
GS-3 28 7 11
GS-2 2 3 3
GS-1 2 7 7
Subtotal 1,345 1,345 1,271
Commissioned Corps 11 11 11
Ungraded 32 33 33
Total positions 1,467 1,464 1,386
Total FTE usage, end of year 1,335 1,343 1,265
Average ES level 3
Average ES salary $105,570
Average GS grade 11.0
Average GS salary $42,889
Average Special Pay (Commissioned Corps) . . . $47,700
Average Ungraded $16,087
$108,374
11.2
$44,270
$50,004
$16,409
$110,653
11.2
$45,332
$51,204
$16,967
257
GENERAL DEPARTMENTAL MANAGEMENT
CENTRALLY -MANAGED PROJECTS
The Staff Divisions funded under GDM are responsible for administering
centrally-managed projects on behalf of the Department. Authority for
carrying out these efforts may be authorized by specific statute (such as
authority for the Secretary to carry out prograun evaluations under the Public
Health Service Act) or by general transfer authority (such as 31 U.S.C. 1535,
the Economy Act) . Project funding is obtained through reimbursctble billings
from the OPDIVs and STAFFDiVs in proportion to the estimated benefit to be
derived. In FY 199G, the Department is proposing to administer the following
TAP projects, at a total cost of $18,168,254.
PROJECT
DESCRIPTION
PONDING
SOUTHWEST
TRAINING
CENTER
The Southwest Training Center provides
personal computer training and employee
development services for all OPDIVs and
STAFFDiVs located in the Southwest Complex.
$220,900
EXECUTIVE AND
MANAGEMENT
DEVELOPMENT
PROGRAM
The Executive and Meinagement Development
Progrcun consolidates all Department -wide
programs for the development of executives,
managers, and supervisors. The project
includes funds for the costs of the
Department's SES Candidate Development
Program, the Women's Management Development
Initiative, the Supervisor in Context training
course, as well as programs for the
development of incumbent executives, such as
the Secretary's Executive Leadership Forum.
$554,400
SECRETARY'S
QUALITY OF
WORKLIFE
INITIATIVE
The Quality of Worklife Initiative includes:
(1) administration of the Human Resource
Management Index (HMRI) , a tool used to
measure mcuiagement effectiveness amd employee
morale; (2) development of training materials
and other tools to support the continuation of
Total Quality Meinagement in the OPDIVs amd the
regions; (3) training of employees to serve as
facilitators for Quality Improvement Teauns;
euid (4) activities in support of the
President's workforce literacy effort.
$160,000
SAFETY
MANAGEMENT
INFORMATION
SYSTEM
The Safety Management Information System is a
Department -wide computerized accident and
injury reporting analysis system which
verifies the accuracy of Worker's Compensation
claims charged to the Department, identifies
accident prevention prograun deficiencies, amd
assists in accident prevention efforts in
compliance with Department of Labor
regulations amd Executive Order 12196.
$18,000
SAFETY,
HEALTH, AND
ENVIRONMENTAL
PROGRAMS
The Safety, Health, and Environmental Program
enables the Department to continue conducting
safety amd occupational health program
evaluations and environmental compliance
assessments necessary to ensure that HHS
employees have a safe amd healthful working
environment as required by statute.
$75,000
258
PROCOREMENT
ASSISTANCE
AND LOGISTICS
REVIEWS
This activity implements ASMB's oversight
mission in assuring Department -wide compliance
with Federal and HHS assistance (grants and
cooperative agreements) , procurement, and
logistics policies, and complements Federal
Managers' Financial Integrity Act (FMFIA)
requirements .
$26,700
SINGLE AUDIT
CLEARINGHOUSE
The Single Audit Clearinghouse, administered
by the Department of Commerce, is responsible
for receiving, reviewing, tracking, and
keeping records on audits of State and local
governments under the Single Audit Act and OMB
Circular A- 128.
$125,000
DEPARTMENTAL
CONNECTIVITY
Departmental Connectivity funds will be used
to develop eui umbrella network to improve
computer connectivity within the Department as
well as linkage to other government agencies.
$160,000
HHS HEALTH
AND WELLNESS
CENTER
The HHS Health and Wellness Center funds are
used to provide a portion of the ongoing
operating costs of a health facility which
promotes physical fitness for all HHS
employees located in the Southwest Complex.
$281,000
ENERGY
PROGRAM
REVIEW
The Energy Progreun Review will fund a private
contractor to evaluate the status of HHS/OPDIV
energy conservation programs and to update
existing policies to ensure Departmental
complicuice with existing regulations.
$50,000
MEDIA
OUTREACH
Media Outreach project initiatives include
expanded production cuid distribution of public
service announcements (PSAs) and video news
reports for air time on TV and radio;
production and distribution of PSAs in
Spanish; and production and distribution of
media fact books and health care kits directed
to the disadvantaged amd minority audiences.
$75,000
ONE PERCENT
EVALUATION
The Assistant Secretary for Planning and
Evaluation is engaged in initiating the design
work on multi-year evaluations of HHS
programs. Authority to allocate funds to
Departmental Meuiagement to conduct progreun
evaluation is authorized by the Public Health
Service Act (Section 2313) , the Older
Americcins Act, and the Head Start Act.
$16,000,000
PRESIDENT'S
RURAL
DEVELOPMENT
INITIATIVE
The President's Rural Development Initiative
is managed by the Rural Development
Administration, USDA, cuid involves all Ceibinet
Departments except State and Justice. Under
the initiative over 40 States have developed
State Rural Development Councils (SRDCs)
designed to support rural development based on
the principles of cooperation between Federal,
State, and local governments.
$422,254
259
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Management
POLICY RESEARCH
FY 1996 Budget p^^^
Organization Chart g2
Appropriation Language g3
Amounts Available for Obligation 54
Summary of Chemges gg
Budget Authority by Activity gg
Budget Authority by Object g7
Administrative Costs gg
Authorizing Legislation gg
impropriations History TcU>le 70
Justification :
General Statement 71
Health Policy ............ 71
Hximan Services Policy 72
Disability, Aging and Long-Term Care Policy . . . 73
Policy Support Services '.'.'.'.'. 74
Rationale for the Budget Request ......... 74
Detail of Full -Time Equivalent (FTE) Entployment 75
Detail of Positions 7g
260
ASSISTANT SECRETARY FOR PLANNING AND EVALUATION
David T. Ellwood
Principal Deputy for Pianning and Evaluation
Judith Feder
OFFICE OF
PROGRAM
SYSTEMS
Gerald Brinen
DIVISION OF
POUCY4
REGULATORY
ANALYSIS
Walton Francis
Vacant
DIVISION OF
TECHNICAL
AND
COMPUTER
SUPPORT
DIVISION OF
PLANNING &
POUCY
COORDINATION
Joan Turek-Brezina
OFFICE OF
HEALTH
POLICY
Kenneth Thorpe
DIVISION OF
HEALTH
RNANCING
POUCY
George Greent>erg
DIVISION OF
PUBLIC HEALTH
POUCY
Cheryl Austein
OFFICE OF
DISABILITY,
AGING,
AND LONG-
TERM CARE
POLICY
Robyn Stone
DIVISION OF
DISABILITY
AND AGING
POUCY
Vacant
DIVISION OF
LONG-TERM CARE
POUCY
Mary Harahan
OFFICE OF
HUMAN
SERVICES
POLICY
Wendell Primus
DIVISION OF
ECONOMIC SUPPORT
FOR
FAMIUES
Canta Pian
DIVISION OF
CHILDREN &
YOUTH
POUCY
Bart>ara Broman
DIVISION OF
DATA
AND
TECHNICAL
ANALYSIS
Don Oelierich
DIVISION OF
ECONOMIC SECURITY
FOR THE ELDERLY &
PERSONS WITH
DISABILITIES
Steve Sandell
62
261
DEPARTMENT OF HEALTH AND HOMAN SERVICES
Departmental Management
POLICY RESEARCH
For carrying out, to the extent not otherwise provided, research studies
under Section 1110 of the Social Security Act, [$13,659,000] $12,400,000.
(Department of Health and Human Services ;^propriations Act, 1995.)
262
POLICY RESEARCH
AHOUNTS AVAILABLE FOR OBLIOATIOK'
FY 1994 FY 1995 FY 1996
Actual Estimate Estimate
General funds:
Annual appropriation $12,000,000 $13,659,000 $12,400,000
Rescission pursuant to P.L. 103-211 -259,000
Reductions pursuant to P.L. 103-333 :.^_l -102.000
Subtotal, adjusted appropriation . 11,741,000 13,557,000 12,400,000
Unobligated balance lapsing Z-is.
Total obligations $11,741,000 $13,557,000 $12,400,000
' Excludes the following aunounts for reimbursements:
$4,343,000; FY 1995- -$5, 000, 000; FY 1996--$5, 000, 000 .
263
POLICY RESEARCH
SDMMARY OF CHANGES
1995 Adjusted appropriation $13,557,000
Total estimated budget authority $13,557,000
1996 Request $12,400,000
Net change -$1,157,000
1995 Base
Obligational
(FTE) Authority
Decreases :
A. Built-in:
1. Rental payments to GSA ... $300,000
Subtotal
B. Program:
1. Research contracts 4,592,000
2. Research grants 3,000,000
Subtotal
Total decreases
Net change
Change from Base
Obligational
(FTE) Authority
-$41.000
-41,000
-616,000
-500.000
-1,116,000
-$1,157,000
-$1,157,000
264
POLICY RESEARCH
BUDGET AUTHORITY BY ACTIVITY
(Dollars In thouscinds)
1994 1995 1996
Actual Appropriation Estimate
FTE Amoiint FTE Amount FTE Amount
Total obligations 26 $11,741 26 $13,557 26 $12,400
66
265
POLICY RESEARCH
BUDGET AUTHORITY BY OBJECT
1995 1996 Increase or
Appropriation Estimate Decrease
Full-time equivalent employment ... 26 26
Full-time equivalent of overtime and
holiday hours
Average SES salary
Average GS grade 13.0 13.0
Average GS salary $51,557 $52,640 +$1,083
Personnel compensation:
Full-time permanent $880,000 $880,000
Other than full-time permcment . . 490,000 490,000
Other personnel compensation . . . 27. 000 27. 000
Total personnel compensation . . 1,397,000 1,397,000
Civilian personnel benefits 335,000 335,000
Benefits to former personnel ....
Total compensation and benefits . . 1,732,000 1,732,000
Travel 115,000 115,000
Tramsportation of things 3,000 3,000
Rental payments to GSA 300,000 259,000 -41,000
Rental payments to others
Communications, utilities, auid
miscellaneous charges 30,000 30,000
Printing eind reproduction 110,000 110,000
Advisory euid assistance services ..
Other services 2,398,000 2,398,000
Purchases of goods and services from
other government accounts 877,000 877,000
(Working Capital Fund payment) . . (75,000) (75,000) ( )
Operation of GOCOs
Research and Development contracts 4,592,000 3,976,000 -616,000
Supplies eUid materials 50,000 50,000
Equipment 350,000 350,000
Grants, subsidies and contributions . 3. 000. 000 2.500. 000 -500.000
Total obligations by object . . . $13,557,000 $12,400,000 -$1,157,000
67
266
POLICY RESEARCH
ADMINISTRATIVE COSTS
(Budget Authority)
1995 1996
Estimate Estimate Change
Personnel Compensation:
Full-Time Permauient (11.1) $880,000 $880,000
Other than Full-Time Permanent (11.3) 490,000 490,000
Other Personnel Compensation (11.5) . . 27.000 27.000
Total Personnel Compensation (11.9) . 1,397,000 1,397,000
Civilian Personnel Benefits (12.1) . . . 335,000 335,000
Benefits to Former Personnel (13.0)...
Travel (21.0) 115,000 115,000
Transportation of Things (22.0) 3,000 3,000
Rental Payments to Others (23.2).... —
Communications, Utilities, and
Miscellaneous Charges (23.3) 30,000 30,000
Printing and Reproduction (24.0) .... 110,000 110,000
Advisory eind Assistcuice Services (25.1)
Other Services (25.2) 2,398,000 2,398,000
Purchases of Goods cind Services from
Other Government Accounts (25.3) . . . 877,000 877,000
Operation of GOCOs (25.4)
Research and Development Contracts (25.5) 4,592,000 3,976,000 -616,000
Supplies cind Materials (26.0) 50.000 50.000 —
TOTAL $9,907,000 $9,291,000 -$616,000
68
267
POLICY RESEARCH
AUTHORIZING LEGISLATION
1996 1996
Amount Budget
Authorized Request
Policy Research Indefinite $13,659,000 Indefinite $12,400,000
1995
1995
Amount
Appro -
Authorized
priat;ion
69
268
POLICY RESEARCH
APPROPRIATIONS HISTORY TABLE
FY 1987
Appropriation
Rescission
FY 1988
impropriation
FY 1989
Appropriation
FY 1990
impropriation
FY 1991
Appropriation
Sequester
FY 1992
Appropriation
FY 1993
Appropriation
FY 1994
Rescission
FY 1995
;mpj^opi^i=ition
FY 1996
impi^op>^i^t:ion
Budget
Estimate
to Congress
5,000,000
-2,200,000
5,090,000
5,019,000
5,012,000
5,017,000
5,037,000
5,224,000
15,868,000
13,000,000
12,400,000
House
Allowance
8,200,000
4,873,000
8,000,000
5,012,000
9,167,000
5,037,000
8,415,000
12,000,000
14,632,000
Senate Net Enacted
Allowance Appropriation
7,200,000
4,873,000
7,851,000
5,012,000
8,167,000
5,037,000
8,263,000
12,000,000
10,741,000
8,200,000
4,873,000
7,851,000
5,001,000
8,928,000
-116
5,012,000
8,047,000
12,000,000
-259,000
13,557,000
269
POLICY RESEARCH
FY 1994 FY 1995 FY 1996 Increase or
Actual Appropriation Estimate Decrease
FTE Amount FTE Amount FTE Amount FTE Amount
26 $11,741,000 26 $13,557,000 26 $12,400,000 --- -$1,157,000
General Statement
Purpose and Method of Operations
The Policy Research program examines broad issues that cut across agency and
subject lines, as well as new policy approaches developed outside the context
of existing programs. Its broad goals are to: (1) provide policy-relevant
information on national trends concerning public and private health and humein
services activities in order to identify emerging policy problems euid
potential solutions, and (2) provide specific information to develop and
assess the impact of new potential public and private sector policy proposals,
in particular their costs and benefits.
The FY 1996 level of $12,400,000 will provide for research focused in
particular on health care reform, welfare reform, poverty, family support and
preservation, and issues concerning disability and long-term care. This
research can be categorized into three major areas: health policy, humeui
services policy, and disability/aging/long- term care policy. In addition,
policy support will provide services for carrying out policy research in these
three areas.
Appropriated funding for Policy Research during the last five years has been
as follows:
9
9
16
25
26
Health Policy
Health Policy research includes both health care financing aund public health
issues. Analysis of incentives for cost-effective changes in health care
finamcing and service delivery, and measures to control growth in health care
costs will be major foci. An additional focus will be enhancing the quality
of health care for major population groups emd improving access for special
populations such as disadvantaged infamts, children, and minorities, with
special emphasis on managed care.
In FY 1996, planned major accomplishments for Health Policy are:
• Continue evaluative, oversight and redesign activities for periodically
collected national cuid State -level data on the health care system.
Particular focus is placed on efforts to maiximize the opportunity for
effective integration of health care cost, (juality and utilization data
collected by various State, national and private entities.
• Continue development and improvement of microsimulation models of the
health care system to better understand effects of major system changes.
Fiscal Year
Funds
1991
$8,928,000
1992
$5,012,000
1993
$8,047,000
1994
$11,741,000
1995
$13,557,000
270
• Continue efforts to understand and evaluate changes in the health
insurance market place, with special emphasis on how they effect access
cuid affordability.
• Oversee, help sponsor, participate in, and provide technical assistance
to States cuid other entities undertaking health care reform efforts.
• Support, participate in and oversee the plauining zmd development of
steps necessary to evaluate State and private sector mauiaged care
initiatives on health services for disabled populations, including the
mentally ill. This includes working with States and private employers
to develop necessary data and to design emd carry out evaluative
analyses .
• Undertake research on access to health care, including the factors
limiting access for uninsured persons; the role of health risk adjusters
in ensuring appropriate competition eunong health plans; the role of
employers in the health care system; issues specifically related to
changing the primary care/specialist mix in medical education; and ways
to assure necessary access in underserved areas with special emphasis on
the availability of primary care providers.
• Assess costs of care, including the role of managed care, reduction of
administrative costs, the Medicare physician fee schedule, the Uniform
Clinical Data Set (UCDS) , proposed reforms of the malpractice licOaility
system, and changes in the reimbursement for post-acute care.
• Develop cind improve methodologies with which to undertake risk and cost-
ef fectiveness emalyses of current and proposed preventive health and
health care regulations .
• Examine the integration of health services with other social services at
the State amd local levels and improved delivery of health services to
special populations such as the developmentally disabled, substcuice
abusers, and the mentally ill.
Human Services Policy
Humain Services Policy research will support the analysis of Federal and State
welfare reforms. This will include studies of program caseloads, demographic
and labor force characteristics, and State welfare airid child support systems,
to ensure the implementation of appropriate income security policies for poor
populations, persons with disabilities eind the elderly. In addition. Human
Services Policy will explore a number of issues and programs affecting
children, youth, and their families, particularly those of family support and
feunily preservation, as well as child care. Head Start, child abuse and
neglect, child welfare, foster care, exposure to drugs and alcohol, pediatric
AIDS, homelessness, and mental health. Finally, along with SSA, Human
Services Policy will explore the reasons for prograim growth in the SSI and
SSDI programs .
In FY 1996, plainned major accomplishments for Human Services Policy are:
• Analysis of major welfare reform proposals.
• Continue studying early State welfare reform demonstration results auid
managing the multi-year contract to evaluate the Family Support Act's
JOBS program.
• For FY 1995, the Administration plans to continue its current activities
related to poverty research. In FY 1996, the Administration plans to
271
award competitively a multi-year grant to build upon existing knowledge
relating to poverty.
• Continue studies designed to increase understanding of child support cuid
methods of ensuring its payment.
• Begin the evaluations of family support amd family presei-vation as
required by legislation.
• Provide information on the organization, financing, and delivery of
services to disadvcuitaged children, youth, and their families.
Diseibilitv. Aging and Long-Term Care Policy
Policy research priorities for Diseibility, Aging emd Long-Term Care Policy
include issues affecting children, working age adults euid older people with
disabilities. Research is focused on improving and reforming Federal long-
term care cuid disaJsility policies including Medicare and Medicaid to insure
that they promote independence, economic self-sufficiency, health and well-
being of people with chronic illness and impairment in a manner that is
efficient amd cost effective.
In FY 199G, plcuuied major acconplishments are:
• Continue to lead the Department in completing policy development,
legislation, and structural reform cuialyses to support the
administrations policy objectives around disability and long term care.
Policy Research will address how HHS progrcuns fit with other Federal and
State programs to assure that children, working age adults and the
elderly with discibilities receive needed supports in ways that are
caring, just and fiscally prudent.
• Continue to support the cost estimating requirements for developing long
term care policy options using the Long-Term Care Financing Model.
• Continue a major demonstration/evaluation to inform the policy debate
around the costs cUid efficacy of cash, voucher and service benefit
options for financing personal assistance and long term care services
for the elderly euid younger disabled populations.
• Implement evaluation of the impact of managed care arrangements on high
risk populations and develop/analyze options for improving the
appropriateness of managed care arrangements for persons with special
needs .
• Continue to support the National Disability Survey, the only source of
comprehensive information on the numbers, characteristics, progreun
participation, and service use of children and working age adults with
significant disabilities.
• Complete the national study of assisted living facilities to understand
the role that assisted living plays in the long term care system,
including the extent to which and for whom it substitutes for nursing
home care .
• Complete the study of Medicare Home Health to examine how coverage
decisions are made, the factors which determine who gets covered and for
how long auid to make recommendations regarding the need for more uniform
coverage guidelines.
272
• Continue the development and field testing with selected States of
indicators of effective orgaunization and oicuiagement approaches for
implementing emd operating home and community -based service. The final
product of this study will be a self assessment system. A system that
States Ceui use to evaluate their progress in inplementing new long term
care systems .
Policy Support Sexrvices
Policy Support Services will provide simulation modelling, statistical
analysis, and other technical and amalytic services needed in order to carry
out policy research. The goal is to ensure efficient, reliable, and timely
cuialytical support while offsetting increases in costs through the
introduction of cost-saving technologies. Major emphasis will be on support
for Administration initiatives on health care and welfare reform, auid on
disability, children, long-term care, youth euid the elderly.
In FY 1996, planned major accomplishments for Policy Support Services are:
• Provide a full rauige of computer and statistical support, including
ongoing major HHS micro- simulation models used in policy euialysis.
• Prepare special tabulations of persons in poverty and other groups of
special interest such as the uninsured, in support of the
Administration' s initiatives on health care and welfare reform and
children, youth, euid feunilies, elderly, and people with discQsilities .
• Simulate the costs and distribution impacts of alternative options for
implementing the Administration's initiatives on health care and welfare
reform and on children and youth utilizing microsimulation models.
Continue enhancement of these models to expand their aUjility to simulate
policy changes.
Rationale for the Budget Request
The FY 1996 request for Policy Research is a decrease of $1,157,000 from the
FY 1995 level. To accommodate this reduction. Policy Research will decrease
the eunount of funding awarded for greuits and for research emd development
contracts, while still focusing on priority research.
273
POLICY RESEARCH
DETAIL OP FULL -TIKE EQOIVALENT (FTE) EMPLOYMENT
1994 X995 199e
Actual Betimate Estimate
Policy Research 25 26 26
Average GS Grade
1991 13.0
1992 12.0
1993 11.5
1994 12.4
1995 13.0
1996 13.0
274
POLICY RESEARCH
DETAIL OF POSITIONS
1994
Actual
1995
Estimate
1996
Request
Executive Level I
Executive Level II
Executive Level III
Executive Level IV
Executive Level V
Subtotal
Total - Executive Level Salaries
ES-6
ES-5
ES-4
ES-3
ES-2
ES-1
Subtotal
Total - ES Salaries
GS-15
GS-14
GS-13
GS-12
GS-11
GS-10
GS-9
GS-8
GS-7
GS-6 . .
GS-5
GS-4
GS-3
GS-2
GS-1
Subtotal
Experts
Total positions
Total FTE usage, end of year
Average ES level
Average ES salary
Average GS grade
Average GS salary
Average Special Pay (Experts)
$ --
23
_2
25
1
$---
$--■
25
1
12.4
13.0
13.0
$46,202
$51,557
$52,640
$75,000
$75,000
$75,000
76
275
DEPARTMENT OF HEALTH AND HUMAN SERVICES
OFFICE FOR CIVIL RIGHTS
FY 1996 Budget Page
Organization Chart 78
Appropriation Lcuiguage 79
Amounts Available for Obligation 80
Summary of Chcinges 81
Obligational Authority by Activity 83
Obligational Authority by Object 84
Administrative Costs 85
Authorizing Legislation 86
Appropriations History TaOale 87
Justification:
General Statement 88
Complicince Activities 90
Office of the General Counsel (Civil Rights) 93
Program Management 94
Rationale for the Budget Request 94
Detail of Pull -Time Ecpiivalent (FTE) Employment 95
Detail of Positions 96
276
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o
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Hi
CO
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I
o
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78
277
DEPARTMENT OF HEALTH AND HUMAN SERVICES
OFFICE FOR CIVIL RIGHTS
For expenses necessary for the Office for Civil Rights [$18,409,000]
$17,979,000, together with not to exceed [$3,874,000] $3,351,000, to be
transferred and expended as authorized by Section 201(g) (1) of the Social
Security Act from any one or all of the trust funds referred to therein.
(Department of Health and Humein Services Appropriations Act, 1995.)
79
278
OFFICE FOR CIVIL RIGHTS
AMOUNTS AVAILABLE FOR OBLIGATION'
FY 1994 FY 1995 FY 199G
Actual Estimate Estimate
General funds :
Annual appropriation $18,308,000 $18,409,000 $17,979,000
Rescission pursuant to P.L. 103-211 -1,000
Reductions pursuant to P.L. 103-333 -142. 000
Subtotal, adjusted appropriation 18,307,000 18,267,000 17,979,000
Trust funds :
Annual appropriation 3,874,000 3,874,000 3,351,000
Reductions pursuant to P.L. 103-333 -45. 000
Subtotal, adjusted trust funds . . 3,874,000 3,829,000 3,351,000
Unobligated balance lapsing -148 . 000
Total obligations $22,033,000 $22,096,000 $21,330,000
General funds 18,159,000 18,267,000 17,979,000
HI/SMI trust funds 3.776.000 3.732.000 3.251.000
Subtotal, budget authority .... 21,935,000 21,999,000 21,230,000
OASDI trust funds 98.000 97.000 100.000
Total obligations $22,033,000 $22,096,000 $21,330,000
' Excludes the following amounts for reimbursements: FY 1994- -$50, 000;
FY 1995--$50,000; FY 1996- -$50, 000 .
279
OFFICE FOR CIVIL RIGHTS
SOMHARY OF CHANGES
1995 General funds adjusted appropriation
HI/SMI trust funds transfers ....
$18,267,000
3.732.000
Total estimated budget authority $21,999,000
(Obligations) ($22,096,000)
1996 Request- -General funds
Request- -HI/SMI trust funds transfers
$17,979,000
3.251.000
Total estimated budget authority $21,230,000
(Obligations) ($21,330,000)
Net change .
(Obligations)
-$769,000
(-$766,000)
Increases :
A. Built-in:
1. Annualization of Jemuary 1995
pay raise
2. Effect of January 1996 pay
raise
3 . Career ladder promotions auid
within-grade increases . . .
4 . Increase from one additional
day of pay
1995 Base Change from Base
Obligational Obligational
(FTE) Authority (FTE) Authority
(297) $17,827,000
(297) 17,827,000
(297) 17,827,000
(297) 17,827,000
Total increases
+$146,000
+296,000
+81,000
+66.000
+589,000
Decreases :
A. Built-in:
1. Decrease in Worker's
Compensation costs
2 . Decrease in Rental Payments
to GSA
3 . Decrease in share of Working
Capital Fund costs
317,000
2,007,000
714,000
Subtotal
-15,000
-11,000
-32.000
-$58,000
81
280
OFFICE FOR CIVIL RIGHTS
SimHARY OF CHANGES
(Cont . )
1995 Base
Obligational
(FTE) Authority
Decreases:
B. Program:
1 . Decrease resulting from
attrition cind lower-grade
hiring (297) 17,827,000
2. Reduction in Other Personnel
Compensation (297) 17,827,000
3 . Decrease in Benefits to Former
Personnel 84,000
4. Decrease in program travel . . 265,000
5. Decreases in Communications,
Utilities, and Miscellaneous
Charges 260,000
6. Decrease in Printing cuid
Reproduction 82,000
7. Decreases in Other Services
(Information Resources
Management, data center costs,
interagency agreements) .... 663,000
8. Decrease in Equipment --- 136,000
Subtotal
Total decreases
Net chzuige
Change from Base
Obligational
(FTE) Authority
(-21)
(-21)
-$674,000
-5,000
-49,000
-65,000
-10,000
-17,000
-351.000
-126.000
-1,297,000
-1,355,000
-$766,000
281
OFFICE FOR CIVIL RIGHTS
OBLIGATIOMAL AUTHORITY BY ACTIVITY
(Dollars in thousands)
1994
Actual
FTE
Compliance Activities .... 236
Legal Services 23
Program Management 25
Total obligations 284
General funds
HI /SMI trust funds
Subtotal , budget authority
OASDI trust funds
Total obligations 284
21,935
98
$22,033
1995
Aopropriation
21,999
97
1996
Estimate
Amount
FTE
Amount
FTE
Amount
$18,309
252
$18,754
234
$18,084
1,785
23
1,705
21
1,623
1.939
^2
1,637
21
1,623
$22,033
297
$22,096
276
$21,330
$18,159
$18,267
$17,979
3,776
3,732
3,251
21,230
Iflfl
297 $22,096
276 $21,330
83
282
OFFICE FOR CIVIL RIGHTS
OBLIGATIONAL AUTHORITY BY OBJECT
1995
Appropriation
Full-time equivalent employment . . . 297
Full-time equivalent of overtime eind
holiday hours
Average SES salary $106,995
Average GS grade 11.48
Average GS salary $52,966
Personnel compensation:
Full-time permanent $14,843,000
Other than full-time permcuient . . 100,000
Other personnel compensation . . . 110. 000
Total personnel compensation . . 15,053,000
Civilian personnel benefits 2,690,000
Benefits to former personnel .... 84 . 000
Total compensation auid benefits . . 17,827,000
Travel 265,000
Trouisportation of things 15,000
Rental payments to GSA 2,007,000
Rental payments to others 50,000
Communications, utilities, and
miscellcuieous charges 270,000
Printing and reproduction 82,000
Advisory and assistance services . . 165,000
Other services 225,000
Purchases of goods and services from
other government accounts 987,000
(Working Capital Fxind payment) . . (714,000)
Operation of GOCOs
Research cind Development contracts
Supplies and materials 67,000
Equipment 136.000
Total obligations by object . . . $22,096,000
84
1996
Estimate
Increase or
Decrease
$109,505
+$2,510
11.37
-0.11
$52,781
-$185
$14
,793,
,000
-$50,
,000
100,
,000
105,
,000
-5,
,000
14
,998,
,000
-55,
,000
2
,640,
,000
-50,
,000
35,
,000
-49,
,000
17
,673,
,000
-154,
,000
200,
,000
-65,
,000
15,
,000
...
1
,996,
,000
-11,
,000
50,
,000
---
260,
,000
-10,
,000
65,
,000
-17,
,000
...
-165,
,000
227,
,000
+2,
,000
767,
,000
-220,
,000
(682,
,000)
(-32,
,000)
67,000
10.000
$21,330,000
-126.000
-$766,000
283
OFFICE FOR CIVIL RIGHTS
ADMINISTRATIVE COSTS
(Obligational Authority)
1995 1996
Estimate Estimate Change
Personnel Compensation:
Full-Time Permcinent (11.1) $14,843,000 $14,793,000 -$50,000
Other thcin Full-Time Permanent (11.3) 100,000 100,000
Other Personnel Condensation (11.5) . . 110.000 105.000 -s.qqq
Total Personnel Compensation (11.9) 15,053,000 14,998,000 -55,000
Civilian Personnel Benefits (12.1) . . . 2,690,000 2,640,000 -50,000
Benefits to Former Personnel (13.0) . . . 84,000 35,000 -49,000
Travel (21.0) 265,000 200,000 -65,000
Transportation of Things (22.0) 15,000 15,000
Rental Payments to Others (23.2) .... 50,000 50,000
Communications, Utilities, and
Miscellaneous Charges (23.3) 270,000 260,000 -10,000
Printing and Reproduction (24.0) .... 82,000 65,000 -17,000
Advisory and Assistance Services (25.1) . 165,000 -165,000
Other Services (25.2) 225,000 227,000 +2,000
Purchases of Goods and Services from
Other Government Accounts (25.3) . . . 987,000 767,000 -220,000
Operation of GOCOs (25.4)
Research and Development Contracts (25.5)
Supplies and Materials (26.0) 67.000 67.000
TOTAL $19,953,000 $19,324,000 -$629,000
85
284
OFFICE FOR CIVIL RIGHTS
AUTHORIZING LEGISLATION
1995
1995
1996
199G
Amount
Appro-
Amount
Budget
Authorized
priation
Authorized
Reauest
Office for Civil Rights:
P.L.
88-352;
42 U
.S.C. 300s
P.L.
91-616;
P.L.
92-157;
P.L.
92-158;
P.L.
92-255;
P.L.
93-282;
P.L.
93-348;
P.L.
94-484;
P.L.
95-567;
P.L.
97-35 .
P.L.
92-318;
P.L.
93-112;
P.L.
94-135;
P.L.
101-336
Indefinite $9,134,000 Indefinite $8,990,000
Indefinite 9.133.000 Indefinite 8.989.000
$18,267,000 $17,979,000
86
285
OFFICE FOR CIVIL RIGHTS
APPROFRIATIOHS HISTORY TABLE
FY 1987
impropriation
Trust Funds
FY 1988
/^propriation
Trust Funds
FY 1989
impropriation
Trust Funds
FY 1990
i^P'^opi'i^tion
Sequester
Trust Funds
FY 1991
Sequester
Trust Funds
FY 1992
Appropriation
Trust Funds
FY 1993
Appropriation
Trust Funds
FY 1994
Appropriation
Rescission
Trust Funds
FY 1995
i^PJ^opriation
Trust Funds
FY 1996
Appropriation
Trust Funds
Budget
Estimate
to Congress
15,285,000
4,000,000
17,395,000
4,000,000
16,173,000
4,000,000
17,567,000
4,000,000
17,585,000
4,000,000
18,524,000
4,000,000
19,389,000
3,969,000
18,308,000
3,874,000
18,516,000
3,874,000
17,979,000
3,351,000
House
Allowance
15,285,000
4,000,000
17,070,000
4,000,000
16,173,000
4,000,000
17,567,000
4,000,000
17,585,000
4,000,000
18,524,000
4,000,000
18,635,000
3,917,000
18,308,000
3,874,000
18,516,000
3,874,000
Senate
Allowance
15,285,000
4,000,000
17,070,000
4,000,000
16,173,000
4,000,000
17,567,000
4,000,000
17,585,000
4,000,000
18,524,000
4,000,000
18,635,000
3,917,000
18,308,000
3,874,000
18,516,000
3,874,000
Net Enacted
Appropriation
15,285,000
4,000,000
16,343,000
3,830,000
15,979,000
3,952,000
17,528,000
-234,000
4,000,000
17,066,000
-222
3,904,000
18,323,000
3,957,000
18,635,000
3,917,000
18,308,000
-1,000
3,874,000
18,267,000
3,829,000
286
OFFICE FOR CIVIL RIGHTS
FY 1994 FY 1995 FY 1996 Increase or
Actual Appropriation Estimate Decrease
FTE Amount FTE Amount FTE j^ount FTE Amount
284 $22,033,000 297 $22,096,000 276 $21,330,000 -21 -$766,000
General Statement
The Office for Civil Rights (OCR) is responsible for enforcing nine major
civil rights statutes that prohibit discrimination in Federally-assisted
health and human services programs. These statutes include Title VI of the
Civil Rights Act of 1964, Section 504 of the Rehabilitation Act, the Hill-
Burton community service assurance, the Age Discrimination Act, authority
delegated under the Americans with Disabilities Act, aund provisions of the
Omnibus Budget Reconciliation Act of 1981 requiring non-discrimination in
block grant prograuns administered by HHS . In addition, OCR is responsible for
coordinating implementation of the Section 504 regulation which prohibits
discrimination against persons with disabilities in programs and activities
conducted by the Department .
Under the civil rights laws enforced by the Department, providers of health
care and social services are prohibited from discriminating on the basis of
race, color, national origin, disability, or age. Recipients of Department
funds include hospitals, extended care facilities, children and family
programs (including Head Start) , mental health centers, alcohol and drug
treatment programs, State and local public assistance agencies, adoption and
foster care programs, and senior citizens programs.
Appropriated funding for OCR during the last five years (including amounts
available for obligation from both general funds and trust fund treuisfers) has
been as follows:
Fiscal Year Funds FTE
1991
$20,970,000
336
1992
$22,280,000
326
1993
$22,182,000
309
1994
$22,181,000
284
1995
$22,096,000
276
The President's appropriation request for this account represents current law
requirements. No proposed law amounts are included.
Purpose cund Method of Operations
OCR enforces non-discrimination requirements by processing and resolving
discrimination complaints, conducting reviews and investigations, monitoring
corrective action plans, emd carrying out voluntary compliaince, outreach euid
technical assistance activities. OCR's FTE allocation for its three staff
components is as follows:
FY 1994 FY 1995 FY 1996
FTE FTE FTE
Compliance Activities . . 236 252 234
Legal Services 23 23 21
Program Management . . . 25 22 21
TOTAL 284 297 276
287
The FY 1996 budget request supports 276 FTE on an euinualized basis. This
represents a constant level from FY 1995, when OCR expects to operate at a
level of 276 FTE, or 7.6 percent below than the appropriation authorization of
297 FTE. This reduction from the authorized level represents OCR's
accelerated achievement of multi-year streamlining goals.
In FY 1994, with 8.4 percent less staff them the prior year, OCR completed
2,231 discrimination complaint cases, a decrease of only eight case closures
from the 2,239 cases closed in FY 1993. OCR also conducted a total of 255
post-grcuit reviews cind investigations of compliance in FY 1994, completing 204
of these actions. This represented a two-thirds increase above the 153 such
reviews smd investigations conducted in FY 1993, emd a more than doubling of
the 99 such reviews suid investigations completed in FY 1993. OCR also
completed 3,532 pre-grant reviews eind 865 monitoring actions, an increase of
14.1 percent and 31.3 percent, respectively, over the number of such actions
completed in FY 1S93. While FTE usage dropped from 309 in FY 1993 to 284 in
FY 1994, productivity in closing reviews and complaint investigations rose for
the third consecutive year. During the past three years, investigative
productivity has increased by nearly one -third.
OCR has made significant progress in addressing issues related to Title VI
access to health care and non-discrimination on the basis of disability. In
FY 1994, OCR closed 39 complaints, reviews cind investigations in which formal
letters of findings had been issued citing violations of the civil rights laws
cuid regulations. Also completed were a total of 2,013 complaint cases cind
reviews in which prograun recipients agreed to implement policies or procedures
to prevent or remedy compliance problems.
During FY 1995, OCR is implementing a strategic plan focused on issues
identified through a broadly consultative plemning process that included
clients euid providers of HHS services and partners within the Department suid
at the State and local levels. From hospitals and nursing homes to Head Start
centers and senior centers, the public expects to receive high quality
services without regard to race, color, national origin, disability, age, sex
or religion. As the primary defender of the public's right to non-
discriminatory access to and receipt of services, OCR will be working to
provide the highest quality service at the lowest possible cost. This will be
accomplished through partnerships with other components of the Department cind
with State and local governments in areas such as pre-gramt reviews, outreach
and technical assistance, data collection and analysis, and investigations.
Civil rights protection must be an integral part of the deliberations on
issues as disparate as long-term care, preventive health initiatives, and the
location and integration of services. OCR's strategic plam emticipates
challenges resulting from the accelerating chemges in our society. It also
addresses the government -wide imperative for change reflected in the
recommendations of the National Performcince Review, and in the Secretary's
Continuous Improvement Program and the HHS strategic plan.
In implementing its strategic plan, OCR is concentrating on ensuring quicker
responses to its customers. Through pilot projects, OCR will experiment with
using alternative dispute resolution techniques, limiting the scope of
inquiries in some investigations, and focusing on keeping current with
complaints filed by the public. During FY 1995, as OCR implements its
strategic pleui, pilot projects should result in a 7.5 percent reduction in the
amount of time spent per case. OCR expects that, through continuous
improvement efforts, this rate of reduction will accelerate to 16 percent in
FY 1996. Cumulatively, OCR estimates that in FY 1996 investigators will be
able to hcindle complaints using 25 percent fewer hours than in FY 1994,
thereby increasing responsiveness to citizens filing con^laints.
89
FY 1994
FY 1995
FY 1996
FTE
FTE
FTE
141
143
130
74
78
78
8
8
7
13
13
19
288
COMPLIANCE ACTIVITIES
OCR's compliance activities are as follows:
• Complaint Processing
• Reviews and Investigations
• Monitoring
• Voluntary compliance and outreach activities
Of the 276 FTE in the OCR request, 234 FTE are to be allocated to compliance
activities. The following table compares the actual distribution of FTE among
the compliance activities in FY 1994 to the FY 1995 and FY 1996 projections:
Complaint Processing
Reviews and Investigations ....
Monitoring
Voluntary Compliance and Outreach .
TOTAL 236 252 234
Complaint Processing
OCR's policy is to resolve all complaints of discrimination that are filed and
to conduct an investigation when necessary. This policy is based on the
Department's regulations implementing the various non-discrimination statutes
and the Department of Justice coordinating regulations requiring compliance
agencies such as OCR "to establish procedures for the prompt processing and
disposition of complaints" alleging discrimination (28 CFR Section 42.408(a)).
During the five-year period from FY 1990 to FY 1994, the number of
c!iscrimination complaints filed with OCR increased by an average of almost 7
percent per year, with increases experienced in every year except FY 1993.
However, based on standard forecasting techniques, this budget request assumes
that the annual rate of increase will be slowed to approximately 2 percent per
year in both FY 1995 and FY 1996. OCR expects to receive approximately 2,312
new complaints in FY 1996.
As a result of ongoing efforts to streamline complaint handling through
changes in investigative processes and the use of negotiated resolution and
alternative dispute resolution, OCR expects continuing productivity increases
and faster responses to complainants during both FY 1995 and FY 1996. The
relatively small increases in complaint receipts, coupled with increases in
productivity, will enable OCR to reduce the number of FTE allocated to
complaint handling by 7 percent from FY 1994 to FY 1996. Concurrently, due to
substantive changes in complaint processing identified through pilot projects
during FY 1995, the inventory of open complaints should decrease by nearly 2 3
percent from the beginning of FY 1995 to the end of FY 1996.
The following table summarizes the FY 1994 complaint workload and projects
FY 1995 and FY 1996 activity:
Complaint Workload
FY 1994 FY 1995 FY 1996
Beginning Inventory 1,112
Complaints Received 2,222
Complaints Closed 2,231
Ending Inventory 1,103
1,103
1,100
2,266
2,312
2,269
2,562
1,100
850
289
Reviews and Investigations
During the past two years, OCR has altered its complieuace review approach to
provide greater flexibility, to expand coverage, and to make it more
consistent with regulatory provisions. Under the regulations implementing the
non-discrimination laws, OCR must periodically review the policies and
practices of program recipients to assess compliance. In addition, the
regulations require an investigation whenever a review, report, complaint, or
other information indicates a possible failure to comply with non-
discrimination standards. A proactive review and investigation program
enables OCR to target its compliance resources to address priority civil
rights issues. This enables more effective prevention efforts than can be
accomplished through handling of issues raised by complainants alone.
Accordingly, OCR conducts reviews and investigations as follows:
• Reviews of Compliance A review examines the compliance status of a
program recipient. Reviews may be comprehensive or of limited scope
with respect to the compliance issues involved and the statutory
authorities applied.
• Investigations When a review, complaint case, or other information
indicates serious problems of possible discrimination, OCR conducts an
investigation .
• Pre-grant reviews A pre-grant review is conducted when health care
facilities seek approval from the Department's Health Care Financing
Administration to participate in the Medicare program.
OCR estimates that a total of 3 50 limited scope compliance reviews will be
conducted in FY 1996, including carry- in cases and new starts. In addition,
OCR expects to conduct a total of 121 investigations, closing 86
investigations by the end of the fiscal year. The total workload for such
reviews and investigations will increase by 85 percent between FY 1994 and
FY 1996, and the number of closures will increase by slightly more than 90
percent. An estimated 37 FTE will be utilized for reviews of compliance and
investigations in FY 1996, compared with 29 in FY 1994.
The following table summarizes the FY 1994 compliance review workload and
projects FY 1995 and FY 1996 activity:
Reviews of Compliance and Investigations
FY 1994 FY 1995 FY 1996
Beginning Inventory 54 51 49
New Reviews/Investigations . . 201 246 423
Actions Completed 204 248 388
Ending Inventory 51 49 84
Pre-grant reviews are mandated when health care providers such as nursing
homes and home health agencies apply to participate in the Medicare program.
When providers seek Medicare certification, OCR conducts a pre-grant review to
determine whether they will be able to comply with Title VI, Section 504, and
the Age Discrimination Act. OCR will be working with the Department's OPDIVs
and with State agency partners to determine whether and how to expand the pre-
grant process beyond Medicare certification. These efforts will focus on ways
in which the OPDIVs and/or State agencies can aid in pre-grant reviews. An
estimated 41 FTE will be used for pre-grant reviews, a decrease of five FTE
from FY 1995. The reduction results from ongoing efforts to reduce case
processing time and efforts to involve partners in the process.
290
The following table summarizes the pre-greuit review workload in FY 1994 and
provides projections for FY 1995 and FY 1996:
Pre-Grcint Reviews
FY 1994
940
3,658
FY 1995
1,066
3,749
3,788
1,027
FY 1996
1,027
3,843
3,532
1,066
4,037
833
Beginning Inventory . . .
New Reviews
Reviews Completed ....
Ending Inventory ....
Monitoring
The purpose of monitoring is to ensure that progrsun recipients carry out the
measures set forth in corrective action plans negotiated by OCR. Corrective
action plans are negotiated to resolve compliance problems that are uncovered
or verified during a review or a complaint or post -grant investigation.
Monitoring involves reviewing reports or information submitted by program
recipients. In some instances on-site visits may be necessary to assess a
recipient's progress in implementing corrective measures.
OCR anticipates that monitoring actions will be necessary in 1,505 cases and
1,650 cases in FY 1995 cind FY 1996 respectively. To support this activity OCR
plans to allocate seven FTE in FY 1996.
Voluntary Complieince and Outreach
Through voluntary compliauice activities, OCR provides compliance information
to beneficiaries and technical assistemce to recipients of HHS funds to
encourage voluntary compliance with the non-discrimination laws and
regulations. Technical assistance is made available through training, by
developing cind disseminating compliance information, cuid by providing
recipients, recipient groups, amd State and local officials with guideuice on
how to voluntarily comply with applicable civil rights laws. Initiatives
undertaken with State cind local governments, provider and beneficiary
organizations auid with advocacy groups are intended to prevent future problems
through early identification of problems cuid interventions to avoid or correct
them.
OCR will allocate 19 FTE to voluntary compliance and outreach in FY 1996, cin
increase of six FTE from FY 1995. The assignment of more staff time to
voluntary compliance euid outreach and partnership activities represents a
commitment by OCR to listen to its customers and work collaJDoratively with its
internal cuid external partners, to best focus OCR resources and efforts to
address acute auid chronic civil rights problems.
With this allocation OCR will:
• Work cooperatively with recipient State agencies to plan eind initiate
pilot projects to encourage sub-recipient compliance with non-
discrimination standards.
• Work with HHS program staff and their program providers, provider
groups, advocacy groups, State agencies and other experts to develop and
monitor remedial plans.
• Work with partners to prepare and distribute "methods of compliauice" for
recipient State agencies to self -monitor and to help State and local
partners to monitor local efforts to achieve euid maintain complieince at
the sub- recipient levels.
291
• Sponsor and participate in training sessions cuid other progrsuns designed
to ensure access to health care euid social services for minorities,
limited English speaking persons, persons with disabilities, and senior
citizens.
• Strengthen relationships with major constituency groups through co-
sponsorship of meetings to bring together advocacy groups, providers.
States and community leaders to address specific issues.
• Prepare periodic reports regarding civil rights trends and activities
HHS-wide.
• Work jointly with the HHS OPDIVs, advocacy groups, provider
orgcmizations and others to produce program or industry- specif ic
materials for use by grantees euid their employees to help them to avoid
civil rights problems.
• Provide technical assistcuice to program recipients to help them comply
with non-discrimination rules and procedures, develop and implement
corrective action plans, and con^ly with the Hill -Burton community
service requirements .
Successful voluntary compliance and outreach initiatives euid the ready
availcibility of OCR compliance standards and policies to serve as guides to
service providers will result in a growing number of indicators of State,
local, and program provider solutions that provide quality local level
resolution of civil rights problems.
LEGAL SERVICES
OCR' s budget request includes funds to support the Civil Rights Division of
the Department's Office of the General Counsel. Division attorneys in
headquarters and the regional offices provide OCR staff with legal advice and
assistance in interpreting cuid applying the non-discrimination laws and
regulations.
Specifically, the Civil Rights Division:
• Prepares cases for administrative enforcement proceedings emd refers
cases to the Department of Justice for enforcement.
• Assists the Department of Justice in litigating court cases involving
civil rights issues and health euid humsm services progreuns.
• Reviews or assists in developing civil rights regulations, policy
interpretations, and cfuidelines.
• Issues legal opinions at OCR's request.
• Provides legal guidcuice in applying the Privacy Act, the Freedom of
Information Act, and other statutes and regulations with which OCR must
comply.
OCR will allocate 21 FTE to legal services in FY 1996. OCR anticipates that
at the plcuined FTE level the Civil Rights Division will be able to provide
necessary legal assistcuice in connection with letters of findings, corrective
action plcuis, regulations, legal interpretations, guidelines, and technical
assistance materials. Specifically, in FY 1996 the attorney staff is expected
to provide legal advice in connection with an estimated 380 investigated
complaints, reviews, cind corrective action plsms, eUid 70 litigation matters.
In addition, the attorney staff will review potential enforcement actions.
292
represent OCR at administrative hearings auid appeals, and provide general
legal guidance regarding court decisions and the scope and applicability of
statutory and regulatory requirements.
PROGRAM MANAGEMENT
This component provides OCR with overall policy direction and mcinagement
services needed to plan and accomplish program objectives. Mauiagement
determines compliance and enforcement priorities, including program and
strategic planning; provides policy direction; allocates staff to priority
objectives; monitors smd evaluates progress; makes final decisions on OCR's
complieuice steuidards, procedures, proposed regulations and policy
determinations; formulates amd executes the budget; provides a full range of
administrative services in areas such as Information Resources Mcinagement,
procurement, property management, supplies, and personnel; and ensures
coordination with departmental officials and with other executive breinch
departments and agencies .
OCR will assign 21 FTE to management functions in FY 1996. This staff will
continue to provide OCR with the full reinge of administrative services and
with overall policy direction and progrsim coordination; they will also
implement and monitor OCR's operating plans. These 21 FTE are a reduction of
16 percent from the FY 1994 level. This is consistent with the streamlining
goals of the National Performance Review to reduce administrative controls and
to lower the ratio of supervisors to staff.
Rationale for the Budget Request
The FY 1996 request for OCR is a decrease of $766,000 and 21 FTE from FY 1995
levels. Dollar savings from this FTE reduction will help to defray the costs
of the annualization of the January 1995 pay raise, the anticipated January
1996 pay raise of 2.4 percent, and mandatory personnel costs such as within-
grade increases and career-ladder promotions.
293
OFFICE FOR CIVIL RIGHTS
DETAIL OF PtJLL-TIME EQUIVALENT (PTE) EMPLOYMENT
Office of the Director, including
Policy and Special Projects Staff
Office of the General Counsel (Civil Rights) . .
Office of Management Planning and Evaluation . .
Office of Program Operations
Regional Offices
Total, OCR
Average GS Grade
1991 11-5
1992 11-5
1993 11-6
1994 11-7
1995 11-5
1996 11-4
1994
1995
1996
Actual
Estimate
Estimate
16
16
15
12
12
11
27
27
20
33
33
25
196
209
205
284
297
276
294
OFFICE FOR CIVIL RIGHTS
DETAIL OF POSITIONS
1994
Actual
Executive Level I
Executive Level II
Executive Level III
Executive Level IV
Executive Level V
Subtotal
Total - Executive Level Salaries
ES-6
ES-5
ES-4
ES-3
ES-2
ES-1
Subtotal
Total - ES Salaries
GS-15
GS-I4
GS-13
GS-12
GS-11
GS-10
GS-9
GS-8
GS-7
GS-6
GS-5
GS-4
GS-3
GS-2
GS-1
Subtotal
Total positions
Total FTE usage , end of year
Average ES level
Average ES salary
Average GS grade
Average GS salary
Average Special Pay
1995
Estimate
S---
1996
Request
$---
1
1
1
1
1
1
2
2
2
2
2
2
6
6
6
$634,000
$642,000
$657,000
19
19
17
37
37
35
36
36
29
112
112
111
26
27
27
2
3
3
13
14
14
3
5
5
13
13
12
6
6
5
9
9
9
3
3
3
4
4
4
283
288
274
289
294
280
$105,707
11.7
$51,235
$106,996
11.5
$52,001
$109,505
11.4
$53,249
Friday, March 24, 1995.
HEALTH CARE FINANCING ADMINISTRATION
WITNESSES
BRUCE C. VLADECK, ADMINISTRATOR, HEALTH CARE FINANCING
ADMINISTRATION
LEE MOSEDALE, DIRECTOR, OFFICE OF FINANCIAL MANAGEMENT,
HEALTH CARE FINANCING ADMINISTRATION
WILLIAM R. BELDON, DIRECTOR, DIVISION OF PUBLIC HEALTH AND
SOCIAL SERVICES BUDGET ANALYSIS, DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Mr. Porter. The subcommittee will come to order.
We continue our hearings on the fiscal year 1996 appropriations
for the Department of Health and Human Services. We are pleased
to welcome this morning the Health Care Financing Administra-
tion, Dr. Bruce Vladeck, the Administrator.
Dr. Vladeck, why don't you introduce those gentlemen who are
with you, and then we can proceed?
INTRODUCTION OF WITNESSES
Mr. Vladeck. Okay. I believe Mr. Mosedale needs no introduc-
tion to members of this subcommittee. He is Director of the Office
of Financial Management at the Health Care Financing Adminis-
tration. You know Mr. Beldon, from the Office of the Assistant Sec-
retary for Management and Budget at the Department.
Opening Statement
I am very pleased to be here today to present our fiscal year
1996 budget request.
Nothing is clearer than the need for change in health care in
America and the ability of organizations, such as ours, to adapt
quickly to a changing environment. We are dedicated to serving our
beneficiaries better by working in collaboration with providers of
health care services, States that administer the Medicaid program,
and much of our quality program and other partners.
The President's budget is good news for beneficiaries. It protects
both access to and quality of care, and that's our bottom line, en-
suring that the 70 million Americans for whom we provide health
insurance have access to the best possible care when they need it.
Our budget focuses on improving customer service, strengthening
program administration, increasing operational efficiency and pro-
ductivity, and continuing to implement continuous quality
improvement.
Mr. Chairman, the President, Secretary Shalala, and I are com-
mitted to improving efficiency in our administration of Medicare
and Medicaid so that we maximize the effectiveness of the tax dol-
(295)
296
lars used to serve our beneficiaries. In response to the demands of
American citizens that we do more with less, we continue to con-
centrate on a smaller and more efficient Government.
Three principles govern both the formulation and the execution
of our budget: effective management of Medicare and Medicaid;
customer service for our beneficiaries; and flexibility for our part-
ners. If you will put that last chart back up for one second, let me
just point out that in terms of efficiency, one of the things that is
often less well-recognized about our programs is the extent to
which we are serving significantly more people each year. Just
since 1989, to use this chart, the number of Medicare and Medicaid
beneficiaries combined has grown by something like 10 million per-
sons. We are serving approximately 2 million more beneficiaries be-
tween Medicare and Medicaid each year in those programs.
EFFECTIVE MANAGEMENT
But at the same time, under President Clinton's leadership,
growth in projected spending for both Medicare and Medicaid has
been reestimated downwards considerably. We have reduced ex-
penditure projections by a total of almost $80 billion for Medicare
and $133 billion for Medicaid over the five-year period 1993
through 1998. These changes have made a significant contribution
to lowering the deficit. They are due in large part to the results of
the President's historic deficit reduction measures enacted in 1993
for a strong economy with low inflation, as well as to the bipartisan
legislation enacted in 1991 which limited the use of taxes and do-
nations to finance the Medicaid program.
We have also taken steps to significantly improve program man-
agement and to reduce fraud and abuse. We are developing data
systems to enable us to quickly detect patterns of inappropriate
services which are not only costly, but may put the beneficiaries at
risk. The best example of that is the Medicare Transaction System,
which we will begin phasing in during fiscal year 1997.
As you know, program management accounts for less than 1 per-
cent of HCFA's total expenditures. We are presenting to you today
a budget for program management that requests 2.1 percent more
than the 1995 appropriation. We are doing this while the overall
budget of the agency calls for Medicaid obligations in 1996 to in-
crease by $7.5 billion, and Medicare by $20 billion.
On the program management budget, the salaries and expenses
portion of administrative costs has increased by 3.3 percent over
the current estimate for this year. We have reduced our employ-
ment ceiling from almost 4,300 FTEs in 1993 to just over 4,100 in
1996. It would have been greater but, as you know, the Depart-
ment is eliminating the Regional Service Centers which provided
various administrative services to our 10 regional offices, and as a
result we are having to absorb 43 FTEs next year to do budget, fa-
cilities, labor relations, and equal opportunity functiong at our re-
gional offices.
We believe we have been able to continue to manage the program
effectively in light of reduced employment through significant
streamlining, through devolution of responsibilities to employees,
and particularly a heavier reliance on our regional offices, while
still maintaining a very high quality in our programs.
297
Our budget for Medicare contractors — which is the single largest
{>art of our program management request — has increased $16 mil-
ion, or less than 1 percent over the 1994 appropriation. Even
though our contractors will process approximately 5 percent more
claims, more than 822 million, we are able to hold down costs by
continued productivity investments. In addition, we continue to ex-
perience rates of return well in excess of 10 to 1 on our expendi-
tures on program safeguards.
We have requested an 11 percent increase, a total of $16 million
in the Medicare State certification activities, largely to respond to
the increasing workload and continuing statutory mandates that
we annually inspect almost 14,000 nursing homes and more than
8,300 home health agencies. We are trying to maintain an ade-
quate level of coverage for all the other facilities, which has not
been possible under current budgets, and we are also seeking to in-
vest some dollars in a significant reengineering of the entire survey
and certification process in the direction of greater emphasis on
outcomes measures, and less on traditional "cops and robbers"
kinds of surveys.
The Clinical Laboratory Improvement Amendments, or CLIA
program, is funded entirely through user fees which are credited to
the program management account, and therefore requires no ap-
propriation. In fiscal year 1996, we will inspect over 20,000 labora-
tories.
Our research, demonstration, and evaluation request has been
reduced by $24.5 million, or 27.5 percent below the 1995 appropria-
tion. We estimate spending of $48 million for research and develop-
ment activities, many of which provide information to the Con-
gress, to the rest of the Executive Branch, to health care providers,
and to other interested parties. About $13.2 million in the fiscal
year 1996 request is for Congressionally-mandated studies.
CUSTOMER SERVICE
There are two items that I want to call to your attention, particu-
larly because they are new and represent, frankly, the major new
items in this request over previous years.
The first is a request for distribution in fiscal year 1996 of the
Medicare Handbook, the basic guide to the Medicare program, to
every beneficiary. I personally find it rather dismaying that this
very elementary level of service, which is expected by enrollees in
every health insurance plan in the United States, is not something
that we regularly provide to Medicare beneficiaries. We have not
sent out the handbook to all our beneficiaries in eight years, since
the repeal of the catastrophic legislation. I would argue very
strongly that this ought to be an annual expectation, particularly
as we increasingly emphasize managed care and other choices that
beneficiaries have in the Medicare program. They need up-to-date
information about their benefits and how to get customer service.
In addition, there is a very modest sum of money for the start
of what we call "HCFA On-Line," a new communications strategy
designed to help us meet the information needs of our 70 million
beneficiaries, and the providers, and other governmental agencies
with whom we work. To the extent that we communicate at all
with those folks, it's in a very paper-intensive, very slow and awk-
298
ward process. "HCFA On-Line" represents an effort to convert our
very significant data resources in the direction of customer serv-
ice— being able to answer people's questions, being able to respond
to them. In addition, we seek to experiment with some of the new
communications media, including not only computer on-line, but
the distribution of videotapes, working through public libraries,
through a variety of volunteer agencies, and so forth to emphasize
preventive services for Medicare beneficiaries, to emphasize choices
in managed care, and perhaps most importantly, to give them a
place they can turn to when they have questions and need answers.
I might add in this regard that the fact that the Social Security
Administration becomes an independent agency next week leaves a
complication in the principal source of information to which bene-
ficiaries have customarily turned about Medicare issues. While we
will continue to work closely with SSA and they will continue to
operate our enrollment processes, the need for customer service in
other mechanisms increases as a result.
Let me just say a few words about flexibility by way of
conclusion.
FLEXIBILITY
The Health Care Financing Administration operates, by design
and necessity, through a series of partnerships. We have enhanced
those partnerships in the Medicaid programs to assist States in im-
plementing waiver programs and to encourage innovation. We have
worked closely with the National Governors Association and the
State Medicaid Directors Association to streamline our processes
for waiver approval and to work together to implement the 1991
Provider Tax and Donation laws. We are experimenting with our
partners in State Survey and Certification agencies with a variety
of ways to make the survey process more efficient and less costly
to both of us. In addition, we are proposing legislation as part of
the budget proposal to give the States greater flexibility in
targeting home health agencies most prone to deficiencies for sur-
veys, and to no longer require annual inspections of home health
agencies with good track records in terms of quality of
performance.
We are also working very extensively with the managed care in-
dustry, with large private sector buyers, with the States, with the
academic community, and with private foundations on new tools for
measuring the quality of managed care and for developing new
ways of paying for managed care services.
We will be proposing legislation that is not quite ready yet that
will provide us with greater flexibility in Medicare contracting.
This will allow us both to save money and to identify new partners
who can help us process Medicare claims and perform other admin-
istrative functions more efficiently and effectively.
In summary, this budget provides for effective management, cus-
tomer service, and flexibility: by protecting Medicare and Medicaid
for future generations, by keeping our focus on our purpose of serv-
ing the 70 million beneficiaries of these programs, and by working
in collaboration and increasing flexibility with all our partners in
the administration of these programs, of those fiscal intermediaries
and carriers, and in many important ways, of the almost 1 million
299
providers, without whose services our beneficiaries wouldn't be get-
ting the health care they need.
I thank you very much for the opportunity to present our budget.
We look forward to working with the committee and, of course, I
am happy to respond to any questions or suggestions you might
have.
[The prepared statement and biography of Bruce Vladeck follow:]
300
Mr. Chairman and Members of the Subcommittee:
I am honored to be here today to pres^it the fiscal year (FY) 1996 budget
request of the Health Care Financing Administration (HCFA).
As we look to the future of American health care, nothing is clearer than the
need for change, and the ability to adapt quickly to a new environment. We are
dedicated to serving beneficiaries better by working with providers of health care
services, States that administer the Medicaid program, and other partners. This
budget is good news for beneficiaries. It protects both access and quality of care for
beneficiaries. That's our bottom line: ensuring that the 70 million Americans for
whom we provide health insurance have
access to the best possible care when
they need it.
The budget focuses on
improving customer service,
strengthening program administration,
increasing operational efficiency and
productivity, and implementing
continuous quality improvement.
Nfr. Chairman, the President,
Secretary Shalala and I are committed
to improving efficiency in our
administration of Medicare and Medicaid so that we maximize the effectiveness of
the tax dollars used to serve our beneficiaries. In response to the demands of
American citizens that we do more with less, we continue to concentrate on a
smaller and more efficient government.
Three principles govern both the formulation and execution of HCFA's
budget: effective management of Medicare and Medicaid funding; customer
service for our beneficiaries; and, flexibility for our partners.
EFFECTIVE MANAGEMENT
80
60
'40
20
HCFA SERVES
70 MILLION BENEFICIARIES
1968 1975 1982 1989 1996
Under President Clinton's
leadership, growth in projected benefit
spending has been reestimated
downward for both Medicare and
Medicaid. We have reduced
expenditure projections by a total of
$79 billion for Medicare and
$133 billion for Medicaid over a five-
year period. This change marks a
significant contribution to lowering the
deficit.
301
This extraordinary drop is due in large part to the President's historic deficit
reduction measures, a strong economy with low inflation, and the 1991 bipartisan
l^slation limiting the use of Medicaid taxes and donations.
Additionally, we have taken stq>s to improve significantly program
management and reduce fraud and waste, notably in durable medical equipment.
Also, we are developing data systems to enable us to quickly detect patterns of
imq^ropriate use of services which are not only costly, but may cause needless pain
and su^ering. The current Common Working File and the new Medicare
Transaction System, which will be phased in b^inning in the Fall of 1997, are
examples of such data systems.
Program management accounts for less than 1 percoit of total agency
expenditures. We are presenting to you today a budget for program management
that requests 2. 1 percent more than the 1995 appropriation. We are doing this while
Medicaid obligations for 1996 are expected to increase by $7.5 billion over 1995 and
Medicare by $20 billion.
Through the use of an effective management team, we are able to minimize
cost increases of the Program Management account as follows:
FY 1996 PROGRAM MANAGBiENT,
1« OF HCFA OUTLAYS
The salaries and expenses
portion of the Administrative Costs
request has increased by $12 million or
3.3 percent over the 1995 current
estimate. We have reduced our
employment ceiling from 4,272 Full-
Time Equivalent (FTE) employees in
1993 to 4,147 in 1996. This reduction
would have been greater; however, due
to the Office of the Secretary's regional
restructuring, 43 FTEs, and their
functions, will be transferred to HCFA
in FY 1996. An emphasis on a total
quality environment and its primary
tenets of employee inclusion and empowerment has greatly helped us meet the
challenge of such reductions and still maintain a high quality, customer-focused
team.
The Medicare Contractors request has increased $16 million, less than
1 percent over the 1994 appropriation. Even though our contractors will process an
estimated 822 million claims, a 4.7 percent increase over 1995, we will be able to
hold down total costs. The level of return on Payment Safeguards increases to 16: 1
even though the budget has remained the same for 1996.
The Medicare State Certiflcation request has increased by
$16 million or 11 percent over the 1995 appropriation. This program ensures that
institutions and agencies providing health care services to Medicare and Medicaid
302
beneficiaries meet Federal health, safety, and program standards. We will inspect
over 13,700 nursing homes and more than 8,300 home health agencies annually as
mandated in statute, as well as at least 20 percent of other facilities such as those
offering hospice care and kidney dialysis. We consider $16 million a wise
investment because a portion of this increase will be used for the total redesign of
the survey process with an eye toward making the survey process much more
efficient.
The Clinical Laboratory Improvement Amendments or CLIA program is
funded entirely through user fees credited to the program management account and
therefore requires no appropriation. It is responsible for ensuring— through
inspection and proficiency testing— the quality of laboratory testing for all Americans,
not just Medicaid and Medicare beneficiaries. In 1996, we will inspect over 20,000
laboratories.
The Research, Demonstrations and Evaluation request has been reduced by
$24.5 million, or 27.5 percent below the 1995 appropriation. HCFA estimates
spending $48 million for research activities that provide information to the Congress,
the Secretary, the Office of Management and Budget, and other interested parties to
enable them to make informed and rational decisions regarding HCFA program,
policy, and budget matters affecting the Medicare and Medicaid programs. We
estimate that we will spend $13.2 million for Congressionally-mandated projects in
FY 1996.
CUSTOMER SERVICE
This budget is governed by a strong commitment to customer service. At
HCFA, customer service is not just a slogan. It is a pervasive attitude backed up by
real commitments in this budget. For example, this budget will support sending a
new handbook to every Medicare beneficiary, something HCFA has not done for 8
years. I find it dismaying that Medicare in the past
has not provided basic information on an aimual basis to all beneficiaries, as does
every other health insurance company in this country.
Additionally, this budget includes a new communications strategy for HCFA,
called HCFA On-Line. HCFA On-Line is designed to help the agency meet the
information needs of our 70 million beneficiary customers. The principles that will
guide all our efforts in this area are the essence of customer service in government:
diversity, flexibility, clarity, and timeliness.
HCFA On-Line would heavily emphasize listening to customer needs as a
first step. We expect this to help us build information systems that are better
targeted. We want to take a hard look at harnessing emerging technologies to serve
beneficiary information needs more effectively than in the current paper-intensive
environment. Use of media such as CD-ROM, interactive video, and on-line
information services can speed the flow of information, simplify access, and further
reduce costs.
303
With the ftinds we have requested for FY 1996, HCFA will start to identify
needs, build systems, and better coordinate existing communication efforts.
Thoroughly informed beneficiaries and business partners will make better treatment
choices and will be able to let us know how to better serve them.
In addition, the funding increase in the Survey and Certification program will
provide better customer service and will allow more systematic surveying of dialysis
facilities, ambulatory surgical centers, psychiatric hospitals, and other facilities to
better ensure that we identify any quality problems. Also, we will develop, test, and
implement performance indicators and quality standards for nursing homes, home
health agencies, and other types of providers. These changes protect Medicare
beneficiaries by further ensuring the delivery of high-quality care.
Furthermore, people need choices. The availability of managed care provides
our beneficiaries with many of the same kinds of choices available to other
Americans. Under a managed care plan. Medicare enrollees frequently receive
preventive services that Medicare does not normally cover and enrollees typically
incur lower out-of-pocket costs than their counterparts in fee-for-service Medicare.
Under Medicaid, enrollees also receive enhanced primary care access. Nearly
8 million Medicaid beneficiaries are enrolled in managed care plans in
44 States and the District of Columbia, representing a nearly 63 percent increase in
enrollees from 1993 to 1994. More than 3 million Medicare beneficiaries are
currently enrolled in managed care plans, representing a 16 percent increase since
last year.
FLEXIBILITY
HCFA operates, by design and necessity, through a series of partnerships,
and partnerships cannot be successful without flexibility.
We have enhanced Federal/State partnerships in the Medicaid program to
assist States in implementing their State program waivers and to encourage
innovation. We worked closely with the National Governors' Association and the
State Medicaid Directors' Association to streamline our processes for waiver
approval and to facilitate a workable and understandable provider tax and donation
policy.
In the State-administered survey and certification program, which I mentioned
before, we are proposing legislation to give the States the flexibility to target those
home health agencies most prone to deficiencies. Thus, working through our
partners in the States, we can ensure quality care and. enhance our quality oversight
activities in other types of facilities without further increasing the survey budget.
We are working in partnership with private foundations, the managed care
industry, states, and others to develop new tools for measuring managed care plan
performance and quality.
We will be proposing legislation that will provide flexibility in Medicare
contracting. This will allow new partners to join us in our continuing efforts to
304
more efficiently process
Medicare claims and other
administrative functions, such
as payment safeguards and
services to Medicare
beneficiaries and providers.
SUMMARY
In sumnuuy, this
budget provides for effective
management, customer
service, and flexibility by:
HCFA PYRAMID
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o protecting Medicare and Medicaid for future generations;
o never losing sight of the purpose of our agency-serving our 70 million
beneficiaries; and,
o providing flexibility to the States, our over 70,000 agents, and, most
importantly, our almost 800,000 providers.
Thank you very much for the opportunity to present HCFA's budget. I look
forward to working with the Committee and I would be happy to respond to any
questions or suggestions that you may have.
305
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309
BRUCE C. VLADECK
Administrator
Health Care Financing Administration
Department of Health and Human Services
Bruce C. Vladeck was swom-in as Administrator of the Health Care Financing
Administration on May 25, 1993, having been nominated by President Clinton on
March 5, 1993 and confirmed by the Senate on May 24, isi93.
As HCFA Administrator, Vladeck directs the Medicare and Medicaid progrzmis,
which help pay the medical bills of 70 million Americans at a projected cost of almost
$250 billion '" fiscal year 1994. Vladeck also serves as a key health policy advisor to the
HHS Secretary emd other top administration ofGcials.
Vladeck came to HCFA fi-om New York City where he had been President of the
United Hospital Fund of New York since 1983. Vladeck also was a member of the
Prospective Payment Assessment Commission, the New York State Council on Health
Care Financing, and the New York State AIDS Advisory Council.
Prior to joining the United Hospital Fund, Vladeck was Assistant Vice President
of the Robert Wood Johnson Foundation in Princeton, New Jersey, during 1982-1983.
He served as New Jersey's Assistant Commissioner for Health Planning and Resources
Development from 1979-1982. From 1974-1979, Vladeck taught public health and
political science at Columbia University.
Vladeck was a member of the board of directors of the New York Qty Health
and Hospitals Corporation and a trustee of the Henry J. Kaiser Family Foundation. . He
also served as a member of the Institute of Medicine, Nationel Academy of Sciences,
where he chaired the Committee on Health Care for Homehss People.
Vladeck received a bachelor's degree from Harvard University in 1970. He
received a master's degree in 1972 and a Ph.D. in political science in 1973, both from the
University of Michigan.
He is the author of "Unloving Care: The Nursing Home Tragedy" and of many
articles and book chapters on various subjects.
Vladeck was bom in New York City on September 13, 1949. He is married to the
former Fredda Wellin of Detroit, Michigan, and they have three children.
May 1994
310
LEE MOSEDALE
Director
Office of Financial Management
Health Care Financing Administration
Department of Health and Human Services
1969 - 1971 Naval Flight Officer, USNR
1971 - 1S)74 Financial Management Specialist, National Institutes of Health
1974 - 1981 Budget Examiner, Office of Management and Budget
1981 - 1986 Associate Executive Secretary, Department of Health and
Human Services
1986 • Present Director, Office of Financial Management, Health Care
Financing Administration
311
GROWTH IN BENEFICIARIES AND EXPENDITURES
Mr. Porter. Dr. Vladeck, can you go back to charts 1 and 2? Let
me ask kind of a basic question.
The number of beneficiaries being served has obviously gone up
greatly. How much of that is due to more people being eligible, in
other words, people living longer, as opposed to expanding
programs?
Mr. Vladeck. On the Medicare side, there are about 1 percent
more people per year, about 350,000 people per year more who turn
65 than people over age 65 who die. So that's simple demographics.
The faster part of the growth in Medicare eligibility is among the
disabled. As you know, in recent years there has been a very rapid
increase in the number of disabled persons, as defined under the
Social Security Act.
On the Medicaid side, obviously, most of the growth is associated
with newly-eligible people, partially as a result of statutory
changes in the late 1980s and early 1990s.
Mr. Porter. Okay. Can we go to chart 2 for a second?
You have a greatly expanded population, and then there is high-
er spending, obviously. There is not less spending, there is more
spending. But the question is, is the rate of growth in spending
slowing? The rate of growth in spending is slowing, according to
the chart. How much of that is coming through greater productivity
and changes in delivery, and how much is coming through shifting
costs away from the Government, to private paying?
Mr. Vladeck. Again, the circumstances need to be discussed
slightly separately in Medicare and Medicaid. On the Medicaid
side, in fact, during this period, in most categories of provider reim-
bursement, since the late 1980s there has been some catch-up of
the Medicaid program relative to private payers rather than an in-
crease, in the traditional definition. There is an enormous growth
in managed care in the Medicaid program to which some of these
savings can be attributed. However, I think that both the tax and
donation issue and the general deflation or reduction in the rate of
increase in health care costs has much more to do with it than
managed care savings so far. We expect to see more in the future.
On the Medicare side, the principal cause of the decreased rate
of growth has been the overall reduction of inflation in the econ-
omy, particularly in the health care sector of the economy. In fact,
for the first time in more than a decade, between 1993 and 1995,
our payment rates — our prices — went up more quickly than private
sector prices, because we are not gaining as quickly from this slow
down in inflation as the private sector has over that period.
So if anything, in the terms you used of cost-shifting, that has
been reduced in this period of time. We are paying a somewhat big-
ger share for the services that we're paying for, and the private
sector, a somewhat smaller share.
PAYMENT SAFEGUARDS
Mr. Porter. Okay.
As you know, I've been concerned about resources allocated to
payment safeguard activities within the Medicare contractors ac-
count. Health care experts have estimated that as much as 10 per-
312
cent of national health spending is lost to waste, fraud and abuse.
Yet, GAO states that Medicare is paying more claims with less
scrutiny than at any time in the last five years. I was especially
concerned to see that your 1996 budget request proposes a decrease
in funding for pajonent safeguard activities.
With a projected return on investment of $16 for every $1 in-
vested, isn't a budget cut in this area terribly shortsighted?
Mr. Vladeck. If I may I'll answer that question in two stages.
First, our request for fiscal year 1996 is identical to our request
and initial appropriation for fiscal year 1995. What we were able
to do in the current fiscal year is identify some savings elsewhere
in the contractor budget which we reallocated to pajrment safe-
guards because of the importance that we attach to them.
Nonetheless, we have felt for quite some time — and I know many
members of both parties have — that the budget enforcement rules
about the distinction between discretionary and entitlement sav-
ings created an anomaly in the area of payment safeguards, where
for every $1 we spend we save the trust fund $6 or $8 or $10. How-
ever, the way in which we have customarily accounted for those
has limited our ability to increase payment safeguard spending.
And within a very short period of time the Administration will be
making a proposal to address that and to provide for substantially
increased investments in program integrity. That will be part of
the second stage of the Reinventing Government initiative, and I
hope in the very next few weeks it will be publicly announced.
Mr. Porter. Why don't we do this here, in your budget?
Mr. Vladeck. As I am sure you understand, Mr. Chairman,
within the context in which I work, there are other folks in the Ad-
ministration who are very much involved and want to be part of
this process.
Mr. Porter. Well, in particular, why do you target your reduc-
tion to Medicare secondary payer activities, which have the highest
return of all, $35 for every $1 invested?
Mr. Vladeck. In part because we are seeking to put every mar-
ginal dollar of investment into those program integrity activities
targeted particularly on fraud and abuse, and in part we are hope-
ful of coming to settlement in some of the litigation in which we've
been engaged which would permit us to install new systems to
identify private payers with primary responsibility for Medicare
cases before we pay bills, rather than continuing to pursue the so-
called "pay and chase" method, which is both very expensive and
very inefficient. But however, we think we can get more "bang for
the buck" out of Medicare secondary payer activities. Nonetheless,
again, we are going to be coming to the Congress very shortly with
proposals to increase our investment in all these activities.
Mr. Porter. You don't disagree with the characterization of
GAO, that you're paying more claims with less scrutiny than at
any time in the last five years, however?
Mr. Vladeck. I would not disagree with that. However, I would
say that we have increasingly targeted our review of claims and
used some very sophisticated sampling and focusing methodologies
that we've borrowed from some private sector organizations, such
as credit card companies. So I think, while we are reviewing a
smaller proportion of claims as the number of claims grows each
313
year and the budget doesn't, we have some methodologies that we
think are more sensitive to identifying potentially suspect or inap-
propriate claims.
MEDICARE PAYMENT CODES
Mr. Porter. Some feel that current procedural terminology codes
that are used in claims payment are imprecise, unmanageable, and
permit gaming of the reimbursement system at the cost of billions
of dollars in the Medicare program. They believe that detailed
modification of the current codes at the provider level, done with
an understanding of up-to-date clinical protocols and technologies,
could resolve the problem, resulting in considerable savings.
I understand that at one point you expressed interest in pursu-
ing such an approach, but that no action has been taken. Can you
give us your reaction to this proposal and indicate what plans you
may have to follow up on it?
Mr. Vladeck. I am afraid, Mr. Chairman, that I would respect-
fully have to disagree with the notion that we've taken no action.
In fact, last year we held a very extensively-advertised open com-
petition for a contractor to study this issue and make recommenda-
tions to us. We awarded the contract last year to AdminiStar Fed-
eral, which is one of the most sophisticated private payers around,
to look at precisely these issues for us. We expect a report this
summer about the results of that study. It may well be that we
need to invest more work on these issues. In fact, we are very
much concerned about it. Again, we did undertake a competitive
procurement for assistance in looking at it. We have a high degree
of confidence that we will learn a lot from the current contract.
Mr. Porter. You agree that there's a lot of potential for savings
involved in this?
Mr. Vladeck. I am a little bit skeptical about the extent of the
savings, because some of the proposals that I've seen suggest an
administrative and bureaucratic apparatus that is necessarily very
complex to achieve those called-for savings. But frankly, we're of an
open mind about that until we get our contractors to take a sys-
tematic look at the issue.
Mr. Porter. Thank you.
Mr. Obey.
MEDICAID MATCHING RATES
Mr. Obey. Thank you, Mr. Chairman.
Let me talk to you for a few moments about Medicaid. Would you
describe for the record how the Federal matching rates under Med-
icaid are established, what the factors are that go into that?
Mr. Vladeck. I will try, sir. There is a formula specified in the
statute from the initial days of Medicaid for which the major num-
ber in the equation is per capita income in the States, squared, to
skew matching rates in favor of lower income States.
Mr. Obey. And it's the squaring to which I would like to address
my comments, because I frankly think that that produces some
very warped results.
I don't know if you've noticed it, but I've noticed that the posture
of most governors when they come to town these days is this: hand
over their hearts, pledging fealty forevermore to balanced budgets
314
and fiscal responsibility, and at the same time the other hand is
out to Uncle Sam saying, "Gimme, gimme, gimme, gimme, gimme."
And nowhere is that more apparent than in the Medicaid area.
Matching rates vary from a minimum of 50 percent, as I under-
stand it up to a high of 79 percent in a State like Mississippi.
There are a dozen States with rates above 70 percent. The vari-
ation in those rates means that, for instance, a State like mine gets
$2,800 per recipient while a state like Louisiana gets $3,800.
Why on earth should we continue to provide such a high rate of
reimbursement to States above the national average, given the fact
that those States have balanced budgets and we have a huge defi-
cit? I was on the Wisconsin commission that created the first Med-
icaid program in Wisconsin. I remember all of the gaming that peo-
ple discussed then. Isn't it time to reduce the leakage out of the
Federal Treasury to these States, whose only posture is to have
their hands out all the time?
Mr. Vladeck. Mr. Obey, I'm from New York, so I S3rmpathize
very much with the arguments of the 50 percent States relative to
the formula. On the other hand, I think it is fair to say that from
the Administration's perspective, the major concern we have is pre-
serving the fundamental structure of the Medicaid program. If we
can do that and address some of the concerns that people have
about the way the formula works, we would be happy to do it.
Mr. Obey. Well, my concern is this. Some of the Members of Con-
gress who have posed for the biggest holy pictures on balanced
budgets are from the States who have their hands out the furthest
for the mostest. It seems to me that that's a quaint inconsistency,
to be kind about it.
Do you have any estimates of how much money would be saved
if those rates were capped at a level of, say, 65 percent, as an in-
terim step while we had a full review of the Federal matching
issue?
Mr, Vladeck. I believe that a 65 percent cap would save, in fis-
cal year 1996, about $1.3 billion.
Mr. Obey. That's almost as much as we took away from low-in-
come people in the recent rescission bill to help pay their heating
bills.
Mr. Vladeck. That's right, sir.
Mr. Obey. For the record, would you please include at this point
a copy of the table which I asked the Secretary to prepare, showing
the estimated savings from a cap in 1 percent increments?
Mr. Vladeck. Yes, we will.
Mr. Obey. Thank you very much.
[The information follows:!
315
The following table displays the estimated benefit payment
savings from a cap of the Medicaid Federal medical assistance
percentage (FMAP) fi-om 65 percent through 78 percent:
$1,331
$1,105
$902
$718
$536
$364
$242
$146
$90
$62
$47
$32
$17
$2
316
DISPROPORTIONATE SHARE HOSPITAL PAYMENTS
Mr. Obey, A number of States dramatically increased Federal
matching rates in the early 1990s by using reimbursement strate-
gies that were at best highly questionable, if not fraudulent. Those
schemes involved overuse of the disproportionate share hospital
payment mechanism, and complex reimbursable taxes on providers.
Those schemes were supposedly ended by the 1993 amendments.
Has the Department fully implemented the change in the law en-
acted in 1993 to block those abuses?
Mr. Vladeck. We are in the midst of a process of enforcing those
requirements, back to the adoption of the final regulations in the
summer of 1993. I believe there are 23 States where we are cur-
rently involved in discussions, both to clarify whether or not the
taxes are indeed impermissible, and if so, to identify exactly how
many dollars are involved.
I would expect that before this calendar year is out — although I
can't be certain it will be done in this fiscal year — we will begin re-
couping some of those excess taxes.
Mr. Obey. I would like you to expand further on that for the
record so that we have a good idea of how much can be saved with
aggressive pursuit of that.
[The information follows:]
Nine States have taxes that are considered to be impermissible under section
1903(w) of the Social Security Act. These taxes are estimated to represent about
$480 million. Because these are only estimates, we will be scheduling audits in the
near future to determine the exact amount of the impermissible tax.
Sixteen States, some which also had impermissible taxes, may submit a request
for the approval of a waiver of the broad-based and/or uniformity requirements in
order for the tax to be permissible under the law. We are working with these States
in either developing or reviewing their waiver requests.
FEDERAL MATCHING RATE UNDER WAIVERS
Mr. Obey. Several States involved in the disproportionate share
scheme have requested Medicaid waivers, I understand, which
would have the effect of maintaining Medicaid payments at the
1994 level. As an example, I am told that the first year of one of
those waiver requests for one State would provide a 90 percent
Federal match.
What is the status of those waiver requests?
Mr. Vladeck. We have told the particular State to which you
just referred that we would not accept that proposal in that form.
Mr. Obey. Good.
Mr. Vladeck. We met again with them earlier this week, and
they have significantly modified the financing of their proposal.
Our general policy is that we will not approve a Medicaid waiver
if it is not budget-neutral, that is, if it would cost more than cur-
rent law allows, and that current law includes not only the 1991
taxes and donations law, but also the OBRA 1993 provisions rel-
ative to disproportionate share payments, so that even if they may
have been in excess of those — there's an effective date of the last
part of the OBRA 1993 requirements of July 1st of this year. Even
if they are over it now, we won't count it in the baseline; we will
only count where they would have been once the OBRA 1993 provi-
sions are fully implemented.
317
Mr. Obey. Well, I would very strongly urge the Administration
to consider supporting a proposition which would put a very strin-
gent cap on the Federal matching requirement in Medicaid until
such time as we achieve a balanced budget, so that we can have
some of the folks around here put their votes where their mouths
are on the subject of saving Federal dollars.
Mr. Vladeck. We'll take a very hard look at that, sir, and talk
to you further.
Mr. Obey. Thank you.
Mr. Porter. Thank you, Mr. Obey.
Mr. Istook.
OKLAHOMA'S SECTION 1115 WAIVER
Mr. ISTOOK. Thank you, Mr. Chairman.
I wanted to ask you — Mr. Obey, of course, was mentioning dif-
ferent waivers that States seek, and sometimes they seek waivers
that cost money and sometimes they seek waivers that save money.
I believe that this week some people at HCFA have been meeting
with personnel from Oklahoma's Health Care Authority regarding
a section 1115 waiver that is being sought, so that a Statewide en-
actment of HMOs for Medicaid would be enabled, rather than just
in the urban areas. The projections that I've received show that
there would be a $90 million savings over five years, substantially
being Federal savings, but about $24 million of it being State sav-
ings.
I realize that in your testimony you emphasize the need to have
flexibility with the States, to have waivers, trying to move to man-
aged care, and that's what this is about, to enable HMOs under
legislation that passed the State Legislature in 1993. But I am told
there may be some difficulty as to whether that waiver is per-
mitted, if it has to be considered a demonstration project or other-
wise. I am very interested in helping them to expedite obtaining
such a waiver, which I think is good for the Federal Government,
good for the State, good for the people that are being treated on
that.
But can you tell me your understanding of a waiver on this, if
it is not permitted by <rrent law, in your view? I would like to
know what would have to be changed, either in substantive law or
through something that might be on an appropriations bill, to
make that possible.
Mr. Vladeck. Well, sir, you probably have more up-to-date infor-
mation on the conversations that the State has had with my staff
last week than I do, but my understanding is that the particular
issue to which you're referring, if it hasn't been resolved, it is about
to be.
The question is — without getting into all the minutiae — whether
States may, under section 1915 of the Medicaid statute, enroll folks
in managed care plans through a waiver process that is much sim-
pler than the Statewide demonstration projects, but it also has
somewhat more elaborate and detailed programmatic require-
ments, particularly concerning consumer protection.
Many parts of the Oklahoma proposal would also qualify under
that waiver, although some of the particularly innovative parts of
318
the Oklahoma proposal, as they refer to managed care in rural
areas, clearly are a demonstration of something new.
We suggested to the State that two different waivers were being
proposed within the waiver, but the State feels strongly that it's all
one proposal. I think we're going to find a way to do that, and I
think that should happen very quickly.
Mr. ISTOOK. I appreciate that and I hope so, because especially —
frankly, it becomes a question of availability, to have it a Statewide
plan rather than just an urban one, which I think is what section
1915 essentially requires, because there is a lot of migration of peo-
ple from rural areas to urban areas to get their health care that
a managed care plan would enable them to still receive in that set-
ting. I don't need to tell you about the difficulties that many rural
areas have in attracting and maintaining health care professionals,
which is something that, in addition to the savings, would be ad-
dressed under the Statewide plan, but not addressable under sec-
tion 1915.
Mr. Vladeck. My understanding is that that's one of the things
that our staff learned last week. As I say, I think that's the basis
for moving on this very quickly.
Mr. ISTOOK. We'll certainly stay in touch with your office, and I
appreciate the words of encouragement and hope that we can find
a way to do what will be necessary. I think it is good for all
concerned.
EFFECT OF MORE DISABLED BENEFICIARIES ON MEDICARE
Let me go back to some of the answers you mentioned in re-
sponse to Chairman Porter's questions.
You mentioned, of course, regarding Medicare, I believe you said
there is annually about a 1 percent Medicare population increase,
but then most of the other Medicare increase has been driven by
a rise in the number of disabled persons. Can you elaborate more
on what it is, within the context of disability? Is it some things in-
volving backlogs of certifications? Is it changes in the law, either
by Congress or by court rulings, or in the program itself? Because
I have a concern, and many people do, that what we have done by
taking disability and msiking the definition so broad and so expan-
sive, is put people in that maybe you and I would not personally
consider it a disability, or maybe would consider to have a slight
disability, but by putting them in the program we have stolen ben-
efits that need to go to a person who is indisputably disabled and
who is severely disabled, and that the broadened definition hurts
those who most need the assistance.
If you would elaborate, please, on this expansion within the dis-
ability portion of Medicare.
Mr. Vladeck. I'll be brief because very honestly I don't know
that much about it, sir. I do know that our experience has been,
over the life of the Medicare program or since 1972, when we began
covering the disabled under Medicare, that when unemployinent is
relatively high, the number of people who are certified for disability
increases.
Mr. ISTOOK. Is that because there's a connection between some-
body actually becoming disabled just because they're unemployed —
or what's the relationship there?
319
Mr. Vladeck. My understanding, not as an expert, is that the
test of disability has to do with the ability to effectively participate
in the workforce, and that threshold may get a little higher when
there are more people looking for jobs. But, frankly, you've really
just about exhausted my knowledge of this subject. We take our ac-
tuarial estimates from those of the Social Security actuaries.
Mr. ISTOOK. Sure. That may be information that you can provide
for the record.
Mr. Vladeck. We would be happy to ask them if we can have
information that we could forward to you on that, sir.
Mr. ISTOOK. Certainly.
[The information follows:]
Disabled persons are eligible for Medicare benefits after they have been entitled
to Social Security disability benefits for 24 months. During the period 1990 through
1993, the number of people applying for Social Security disability benefits increased
rapidly, and a substantial portion of these applicants were found to qualify for bene-
fits. As a result of this increase, the number of disabled persons entitled to Medicare
benefits increased fi:x)m 3.6 million in 1992 to 4.5 million currently.
The reasons for the rapid increase in disability applications are not fiilly under-
stood. A 1992 report to the Congress by the Department of Health and Hvunan Serv-
ices listed economic conditions, changes in legislation and regulations, certain court
decisions, and outreach efforts as probable contributing factors. The Social Security
Administration is preparing a report to the Congress about the growth in the dis-
ability rolls. The report, mandated by the Social Security Independence and Pro-
gram Improvements Act of 1994, is due on October 1, 1995. Many individuals man-
age to work despite having severe impairments. During economic recessions, some
such individuals may lose their jobs and turn to income security programs, such as
Social Security and unemployment insurance, if they are unable to find other em-
ployment.
Although the number of applicants for disability benefits leveled off in 1994, it
is impossible to draw a conclusion for the long term based on this limited experi-
ence. However, at present the number of persons awarded disability benefits each
year is substantially greater than the number of persons whose disability benefits
terminate due to recovery, death, or attainment of retirement age. Consequently,
the total number of disabled individuals eligible for Medicaire benefits is expected
to continue increasing for the foreseeable future, although at a somewhat slower
rate than in recent years.
TRUST FUND SOLVENCY
Mr. ISTOOK. That's really important to know, because obviously,
you cannot influence the number of people that become of age to
qualify for Medicare or the number of people who are deceased, but
certainly, what's driving it within disability is something that we
need to address.
There has also been a lot of discussion, of course, regarding the
Medicare funds. Sometimes you get into semantics with the trust
funds and things being financed from current expenditures, but the
bottom line is that there's a lot of discussion about Medicare's fund-
ing going bankrupt before the turn of the century.
Can you fill us in on what you perceive to be the status if the
current funding mechanisms and the program requirements are
not changed?
Mr. Vladeck. Yes, sir. The report of the Trustees of the Hospital
Insurance Trust Fund last April predicted, under intermediate case
assumptions — ^they do a best case, a worst case, and then a consen-
sus case — that the trust fund would be exhausted in the year 2001.
The Trustees meet again the week after next, I believe. I don't
want to totally scoop their report, but I think the situation has im-
320
proved somewhat in the intervening years since their last report,
but not very dramatically. I think in the last year we probably
gained about a year, so essentially the trust fund has held its own.
Obviously, the long-term prospects of the fund are that the cur-
rent Hospital Insurance Trust Fund share of FICA tax revenues is
not enough to sustain the program, given expectations about the
rate of growth in health expenditures and the growing size of the
population that would be covered under HI.
I think, frankly, that we have two problems here. We have a
long-term problem that all of our retirement-related programs
have, which is that when our contemporaries start to become eligi-
ble, with the enormous demographic shift represented by the baby
boomers, sometime after the year 2010 we will have major social
implications. Then we will have a series of short-term issues in get-
ting there in terms of the Hospital Insurance Trust Fund which I
think are much less difficult. Again, we will be running all that out
in much more detail when the Trustees meet on the 3rd of April.
I think it would be more appropriate for a detailed discussion
thereafter. If you would like to have it, I would be happy.
REFORM PROPOSALS
Mr. ISTOOK. If I might ask just one final question on that, Mr.
Chairman.
Realizing, of course, whether it's 2001 or, as some estimates say,
1998, we're close to it. Is there any recommendation from HCFA
or the Clinton Administration on what to do?
Mr. Vladeck. Yes. We believe the President has written to the
Congressional leadership that we should begin talking about what
we're going to do this year about health care reform. Looking at
some of these issues on the future of Medicare ought to be part of
those discussions.
Mr. ISTOOK. Thank you, Mr. Chairman.
Mr. Porter. Thank you, Mr. Istook.
Mrs. Lowey.
Mrs. Lowey. Thank you, Mr. Chairman.
I just would like to associate myself, Mr. Vladeck, with the com-
ments of my colleague, Mr. Obey, regarding, the matching rate
under Medicaid. We've been very concerned about that. In the
course of health care reform there was a standing commitment
from the President to address that issue of reimbursement.
I assume that you don't have any additional information to pro-
vide me, other than that whic- transpired during the discussion
with Mr. Obey, but it has a tremendous impact on New York 2ind
we're very concerned.
Mr. Vladeck. This is almost more a personal view than a formal
Administration position, but to amplify just a bit on what I said to
Mr. Obey, I think I personally would feel enormously relieved and
reassured if we could focus debate this year relative to the future
of the Medicaid program around changes in the formula within the
existing program.
Conversely, I think if we can keep the existing basic structure of
the program intact, we will have the opportunity to make improve-
ments in aspects of it, such as reimbursement.
321
NEW YORK'S SECTION 1115 WAIVER
Mrs. LowEY. Thank you. And with regard to changes, New York
recently submitted a concept paper to discuss a waiver to put the
State's Medicaid population into managed care, and there have
been concerns expressed. Can you discuss the process through
which HCFA and HHS will evaluate this proposal? I've heard con-
cerns from a number of groups that the State did not consult ade-
quately on a local level, and I'm concerned that adequate consider-
ation be given to local concerns.
Could you comment on that?
Mr. Vladeck. If I may, let me begin by saying that I don't con-
sider myself an unusually cowardly person, but I have recused my-
self from action on this particular proposal, in large part because
almost everyone I know is involved on one side of it or another, so
I can't say very much about any of the details.
However, I can assure you that the Secretary, the folks in HCFA
who will be working on this, and other people in the Administra-
tion have already heard extensively from a variety of folks and or-
ganizations in New York State who are concerned about this pro-
posal, as well as from the Governor and the other people in the
State administration who have submitted this proposal. There will
be very extensive discussions before any decision is reached.
Mrs. LowEY. Thank you.
Frankly, I personally think it's an opportunity to improve serv-
ices to underserved populations if it is handled adequately, with
appropriate outreach and enough input. I'm not convinced that the
underserved populations are getting such great medical care in
many situations now in parts of our city, but I do believe that it
has to be approached carefully and with adequate consultation. So
I thank you for that.
And although you are recusing yourself, I am sure there are
other people in the Department who are not, and if they can keep
us up to date on it
Mr. Vladeck. I will see to it that they do.
MEDICARE HANDBOOK
Mrs. LowEY. I understand, and I think it's a great improvement,
that you are currently mailing a booklet on Medicare to the popu-
lation. I have heard from many of my constituents throughout the
years that they just don't understand what's covered, what's not
covered, that it's very hard to communicate. As I look at the book-
lets I'm not sure that I understand them completely.
What kind of outreach do you have in place to make sure that
people really do understand what their coverage consists of?
Mr. Vladeck. We actually have a multi-pronged strategy in that
regard. We are in the process of completely reviewing and revising
all the material we send out or otherwise make available to bene-
ficiaries and others. There are several parts to that.
First, the Inspector General annually interviews a sample of
Medicare beneficiaries about the material they receive from us, the
extent to which they understand it, and asks them questions about
particular items to see whether, in fact, they have understood well
the information and material, and so forth. The most recent report.
322
which was based on interviews conducted in 1994, will be released
very soon. We have been working with them on that.
Second, we are reaching out to a number of different organiza-
tions— and frankly, contracting out much more of the process of the
initial design and production of much of our informational mate-
rial— to work with professionals in communications rather than
with professional bureaucrats — on trying to find better ways to con-
vey information. And we are pilot- testing all our new publications
with focus groups of beneficiaries, beneficiary caretakers and bene-
ficiary advocates, and we're learning an awful lot in the process
and obviously feeding back what we've learned in the course of
those discussions into the design and editing of the publication.
If I may, I just want to correct one part of your question. We
have not mailed an updated version of the Handbook to all bene-
ficiaries since 1988. We are proposing that in the 1996 budget. At
the moment we mail a copy to each new enrollee, and we distribute
a relatively limited number of copies through the Social Security
district offices and through area Administrations on Aging and so
forth. However, the last general distribution to beneficiaries was in
1988.
"800" NUMBER SERVICE
Mrs. LowEY. Do you still have "800" numbers in place?
Mr. Vladeck. We do, although we are also in the process of look-
ing at their operation. One of the things, frankly — at the risk of im-
plying criticism of my very capable colleagues on the HCFA staff —
is that there was an enormous investment in the late 1980s in a
desire to improve customer service with "800" numbers operated by
carriers using so-called "automated response units." If you have a
question about your claim, press 1; if you have a question about
coverage, press 2, that kind of thing. Almost one-third of Medicare
beneficiaries still have rotary telephones, and a very high propor-
tion of those with touch-tone phones are very unhappy about deal-
ing with computers in that regard. So we are going to pilot-test,
sometime in the next fiscal year, a national "800" number which
would be answered by a human being. We have a plan over the
next several years, as we modernize our data systems so that we
can do real customer service, to move in that direction. Given the
experience of Social Security when they went to a national "800"
number, we are proceeding relatively cautiously and we're going to
test it every step of the way so that, when we do go national, peo-
ple can get through. We're working on it.
REGISTRY FOR NURSE AIDES
Mrs. LowEY. Thank you.
Last year you discussed my concern about abuse and neglect in
the Nation's nursing homes, and though the changes made by
OBRA-87 to oversight of nursing home aides have made improve-
ments, there have been too many reports of nurse aides with
records of crime and patient abuse who just move from State to
State in order to keep working in the nursing homes.
As you know, the Committee report requested HCFA to look into
the options for improving interstate sharing of information about
abusers, including the possibility of establishing a national clear-
323
inghouse for abuse information to facilitate proper background
checks. The Committee did request HCFA to prepare a report on
this issue prior to hearings on the 1996 appropriations request.
Here today, so far as I know, you have not produced a report. This
is very important to me. I am concerned that no such report has
been produced by HCFA
Mr. Vladeck. Mrs. Lowey, I am embarrassed to agree with you.
The fact that the issue turned out to be somewhat more com-
pHcated than we expected is really not an excuse. I will promise
you that you will have the report within the next 60 days, and I
apologize that you don't have it by now.
Mrs. Lowey. Thank you.
In the budget justification you say that HCFA is considering two
options: continuing the State-based nurse aide registry, and num-
ber two, creating a "contiguous States registry." The first option
would clearly represent no change to the current system; clearly,
that's unacceptable. And the second option, as you yourself ac-
knowledged, would not resolve the problem of people who move be-
yond States that share contiguous borders.
My question is, why isn't there a third option? And why aren't
we establishing a national registry? That seems to make the most
sense to me. It's my understanding that this is one area where the
advocates and the industry agree. The American Health Care Asso-
ciation has stated its support to this approach, and likewise, the
States would be willing to share their information, if they had ac-
cess to a national registry. So why hasn't there been progress in
this area? And why isn't the third option being considered seri-
ously?
Mr. Vladeck. I believe the concern with the third option has to
do with the expense. But if I may, I will modify my previous an-
swer. You will have the report within 90 days, and it will consider
three options.
Mr. Porter. Thank you, Mrs. Lowey.
Mr. Miller.
STATUS OF THE TRUST FUNDS
Mr. Miller. Thank you, Mr. Chairman.
Thank you for coming. I'm sorry I missed the earlier meetings
this week; we've been in budget meetings talking specifically about
Medicare and the treatment of Medicare in the budget. There has
been great disappointment by Members on both sides of the aisle
over the fact that the Administration "took a walk" on the Medi-
care issue. They just threw their hands up and said, "You didn't
play our game last year on doing the entire comprehensive health
care reform, so we're not going to touch Medicare. The Medicare
trust fund goes bankrupt, as you know, in 2001, maybe 2002, so
let's talk." That's not really a solution to the problem. We need co-
operation. As I said, there was great disappointment.
You said that the report of the Trustees is going to be April 3rd?
Mr. Vladeck. Yes, sir.
Mr. Miller. You're not a Trustee, are you?
Mr. Vladeck. I am the Secretary of the Board of Trustees.
Mr. Miller. Okay.
324
So what will we be expecting on April 3rd? Will there be much
out of that report other than just a little update of numbers?
Mr. Vladeck. No, I think we will not have a very detailed or ex-
tensive set of proposals, but I think the analysis in the report will
give a much more focused identification of where some of the
sources of the problems are, relative to the long-term status of the
fund. And it will suggest a number of mechanisms in broad terms
for addressing the problems and call for some specific steps, but I
am not at liberty to share the details in advance.
MEDICARE EXPENDITURES PER CAPITA
Mr. Miller. Let me ask you a couple of specific questions first,
and then I will turn to more general questions.
Can you put up that one graph that shows the growth of Medi-
care and Medicaid?
Before I get to that graph, what is the cost of Medicare per per-
son?
Mr. Vladeck. In the current fiscal year, I think it's about $4,500
per beneficiary.
Mr. Miller. Is that for Parts A and B?
Mr. Vladeck. That's for the benefits we pay in total. Part A and
Part B, per year.
Mr. Miller. It costs the Federal Government $4,500 per year for
the total A/B package?
Mr. Vladeck. That's correct.
Mr. Miller. Okay. Do you know what the retirees would be pay-
ing for private insurance, what their cost would be? Do you have
an estimate of that number?
Mr. Vladeck. No, I don't. I do know that the average per capita
private health insurance expenditures run between $3,000 and
$3,500, but that's a real "apples and oranges" issue because it's dif-
ferent folks and different coverages. So I don't know what a good
comparative benchmark is. Marilyn Moon at the Urban Institute is
trying to develop that information.
Mr. Miller. Do you have an estimate, if someone retired today,
what their benefits from Medicare would be in their lifetime?
Mr. Vladeck. We can get those for you from our actuaries.
Mr. Miller. We heard numbers this week of, around $250,000
per person if you retired today. Therefore if husband and wife both
retired at age 65, they would receive about $500,000.
Mr. Vladeck. I would have to supply that, sir.
[The information follows:]
The proportion of Mediceire costs paid by individual program participants varies
substantially, depending on their lifetime earnings level and other factors. For the
Hospital Insurance (HI) Trust Fund program, we prepare estimates annually, com-
paring the accumulated value of a worker's HI payroll taxes with the actuarial
present value of his or her future benefits. For workers with average earnings over
their working careers, at age 65 today, past employee and employer payroll taxes,
together with interest, represent about 40 percent of the value of future benefits.
A corresponding analysis of Supplementary Medical Insurance (SMI) Trust Fund
benefits, premiums, and Federal income tax pa5Tnents is significantly more com-
plicated, and we have generally not performed such calculations. A very rough anal-
ysis, however, shows that for HI and SMI combined, an average worker's HI pajToll
taxes (including employer share), pro-rated Federal income taxes, and SMI pre-
miums collectively represent roughly 40 percent of the value of his or her combined
HI and SMI benefits.
325
Significantly higher or lower figures than those above are possible depending on
the individual's income level. The combined rough analysis above has only been
done for individuals, not married couples.
Mr. Miller. I know when you go that many years into the fu-
ture, it's obviously very tentative, your projections.
Mr. Vladeck. I just can't do it in my head.
GROWTH OF THE DISABLED BENEFICL^RY POPULATION
Mr. Miller. I think the Urban Institute was talking about that.
Mr. Istook brought up the issue that Medicare is increasing
about 1 percent per year as far as the number of people cov-
ered
Mr. Vladeck. No, the elderly are increasing by 1 percent per
year. The disabled are increasing about 3 percent a year. That's
about 1.5 percent per year in terms of enrollees, because they are
a smaller share of the base.
Mr. Miller. Okay. It's 1 percent for elderly, and it's 3 percent
for disabled?
Mr. Vladeck. Right. In total, it's about 1.5 percent.
Mr. Miller. Okay. Why is there such high growth in the dis-
abled? It was interesting to me, the observation that the disabled
have a relationship to or correlation with the economy.
Mr. Vladeck. Again, this is an amateur's view, sir, but my un-
derstanding is that when employers are finding employees scarce,
they will make more accommodations and deal with limitations of
one sort or another. Disabled persons can compete more effectively
for jobs in a tight labor market than in a surplus labor market. But
it would be more useful if I could provide you with some of the in-
formation from the experts on this.
Mr. Miller. Is there any abuse in this area? I know that one
issue that springs up in the welfare bill that we'll be voting on
today is the change in SSI. I know one of Mr. Dickey's pet peeves
is about the "crazy kids that take advantage of SSI," and I think
60 Minutes did a special about that. I'm not asking you about SSI,
but the illustration, if you are taken advantage of. Is there abuse
in the disabled?
Mr. Vladeck. I'm sure there is.
Mr. Miller. Is there a study on that?
Mr. Vladeck. My understanding is that at the same time, for a
variety of reasons, there has been a considerable backlog which the
Social Security Administration is now addressing, both in review of
new claims for disability under Social Security disability, and in
the periodic review of existing claimants. And what that balance is
between people who are inappropriately getting the benefit and
people who might be getting the benefit but haven't been processed
yet is, I don't know.
Mr. Miller. Well, I understand there is a big backlog, but
there's no study to see whether there is abuse? Because it is grow-
ing at a very fast rate.
Mr. Vladeck. Again, I will just have to try to supply you with
information from people more familiar with Social Security's dis-
ability issues.
[The information follows:]
326
The Social Security Administration (SSA) maintains a Quality Assurance Sample
to check whether the State disability determination service agencies are adjudicat-
ing disability claims accurately. The sample results have consistently shown a high
degree of accuracy for many years. SSA also reviews about half of all initigd disabil-
ity allowance decisions before they are implemented, and returns cases determined
to have been inappropriately allowed for further development by the State agencies.
The law requires SSA to review the continuing eligibility of most disabled bene-
ficiaries every three years. Due to resource limitations and the workload caused by
the large increase in disability applications, SSA has been unable to perform the
mandated number of reviews. SSA decided to use its resources to process initial dis-
ability claims, because disability applicants often have no means of support other
than Social Security when they become disabled.
SSA has taken steps to make the review process more efficient and to increase
the number of reviews performed. In FY 1996, SSA plans to conduct 431,000 con-
tinuing disability reviews, a significant increase over previous years.
MEDICARE AND MEDICAID GROWTH RATES
Mr. Miller. One thing I need to know on this graph. What is
the growth rate of Medicare on this graph, and what is the growth
rate of Medicaid on that graph? Do you know the percentage fig-
ures?
Mr. Vladeck. Yes. The projected growth rate in Medicare, I can
talk about more prospectively than retrospectively. I believe it is
about 9.5 percent per year over the 1995 through 1998 period.
Mr. Miller. And Medicaid?
Mr. Vladeck. Medicaid is just under 9 percent per year.
Mr. Miller. It looks like, as the graph shows, that Medicaid is
growing at a slower rate.
Mr. Vladeck. That's correct. It is also decelerating faster. Medic-
aid grew very quickly in the late 1980s and early 1990s because
of some of the factors that Mr. Obey mentioned.
Mr. Miller. So you say that the percentage growth on that
graph, one 9 percent and one is 9.5 percent? One looks like more
of an upswing.
Mr. Vladeck. That's a very good point, sir. Let me see what the
actual numbers are and try to figure out why the curves look so
different.
Mr. Miller. One of the things we were talking about on the wel-
fare issue today and other programs is the idea to block grant pro-
grams to the States. I know the Medicaid situation, for example,
is still being discussed for the block granting concept. Just looking
at that graph alone, it shows that States are doing a better job
than the Federal Government in managing health care. And I have
to commend the Clinton Administration; it has done a very fine job
in granting these waivers, as Oklahoma is going through right
now, because the States — as we found also in welfare — have really
been the leaders in coming up with the idea to bring spending
under control; the Federal Government is just not as good at fiscal
restraint. That shows me that the States are doing a better job of
bringing it under control than the Federal Government.
Mr. Vladeck. I think that in recent years they are. Although a
few years earlier Medicaid was growing in the 25 percent range an-
nually. If you look over a long period of time, however, it is true
that Medicaid has grown more slowly than Medicare, certainly on
a per capita basis, which I think is probably the best measure. But
it does say something about the way in which the States have al
ways managed the Medicaid program.
327
Mr. Miller. So the States are really doing a little better job
right now, and partly because of the waivers that you're willing to
grant, and the innovations, whether it's Oregon, Oklahoma, New
York or Florida who want to try.
Mr. Vladeck. I also think part of it is that, frankly, as a society
we are more willing to take chances with programmatic changes for
Medicaid beneficiaries than we have been for Medicare
beneficiaries.
SAVINGS FROM MANAGED CARE
Mr. Miller. Another question is the issue of managed care. The
Mathematica study raises doubts of whether we're going to save
money through managed care, and there's still a lot of questions.
Are you familiar with the competitive bid demonstration project
that you all might be starting?
Mr. Vladeck. Yes, sir, I believe it's our personal baby.
Mr. Miller. Okay. Would you describe that a little bit more? Ms.
Shalala mentioned it but she didn't say much more about it than
that you're looking at it.
Mr. Vladeck. That's only fair, since it's something that we've
been working on.
I'll tell you, it's complicated and it's hard, consulting with a lot
of people. The basic idea, of course, is to have a number of HMOs,
and ideally a number of Medigap plans as well in the fee-for-serv-
ice sector, seeking to enroll Medicare beneficiaries in a particular
market. Then you want to set the price for the HMOs and presum-
ably tie in the price for Medigap coverage, as well. If you could gen-
erate a real competitive market in terms of pricing, presumably
that would be the best way to get at a price and you might save
a fair amount of money.
Part of the problem in figuring out how to do that, or following
the lead of some of the private corporations or organizations like
CalPers that have had some success with these approaches, is that
we are so big. It's very hard for a system in any community to go
through very rapid moves of a large share of the Medicare popu-
lation. For example, let's say you have five HMOs, and you said
they are all to bid for the business, and they have a bid that has
a price and a capacity attached to it, because there are real econo-
mies of scale in HMOs, and we're going to set our price at the low-
est bid. Let's say the lowest-priced HMO comes in with a good bid
and increases by 50 percent the number of folks that it gets en-
rolled. If the high-priced guy goes out of business, you're left with
a lot of folks who aren't in any plan at all because potentially, de-
pending on what the other plans are able to absorb you end up
with a lot of people in the high-priced plans just because you need
the capacity.
One of the major reasons why we are not saving money in the
Medicare HMO program at the moment is because of this issue of
different risk among different beneficiaries in risk selection. That
becomes, I think, even more important to compensate for in a bid-
ding kind of choice process.
So maybe instead of setting the price at the lowest, you set the
price at the average bid. What do you do in the next year? Do you
rebid it? Do you give everybody just an inflation increase? Do you
328
sign multi-year contracts? Does that affect the kind of bids? This
is all new to us. There are a lot of design issues.
MANAGED CARE PRICING DEMONSTRATION
We are having a meeting next week with a bunch of folks just
to seek their advice on this. We had hoped to be able to start test-
ing this in a couple of markets sometime next year. This is an idea
that everybody thinks is right in theory, but it can be kind of com-
plicated. So we want to find several markets so that we can test
different varieties of this.
If I may, with the risk of going on too long, let me give you one
other consideration in terms of how to design this.
Medicare HMO penetration varies very much from one market to
the next, one metropolitan area to the next, largely in conjunction
with variation in private sector HMO penetration, but not entirely.
You start experimenting in an area with high HMO penetration
and moderate costs, which might mean — depending on how the ex-
periment played out — ^that a lot of folks would end up switching
plans, with the disruption in relationships with providers, relation-
ships with physicians, and so forth, that would result. Or would
you try it in the low-penetration area where, in a sense, nobody has
an3rthing to lose from reallocation of service patterns under bids?
On the other hand, the populations a whole may be less eager to
enroll in HMOs and may throw you off in terms of the way it
works. They may have less experience with plans.
We are committed to the idea in principle. The more we look into
it, the more complicated it gets, and we're trying to put together
a program to think it through very systematically and in collabora-
tion with the industry and others so that we don't launch an exper-
iment to which nobody comes. We will begin finding ways to test
it in the very near future.
Mr. Miller. One quick follow-up on that. Do you have the legis-
lative ability to make the adjustments to try this, such as the 50
percent rule and the reenrollment at any time, or do you have to
get special legislation?
Mr. Vladeck. We probably need special legislative authority for
the following reason, and we will be seeking it later this year as
the process goes on. The reason is, we can't require plans to partici-
pate in a demonstration at the moment. We can get them to par-
ticipate if they volunteer. What that means is that in any pricing
demonstration, only those who think they would benefit will par-
ticipate. Therefore, it is very hard for us to run a fair demonstra-
tion. So we will need to talk with you, as we will, later in the year
about a relatively narrow piece of legislation for expansion of our
demonstration authority.
Mr. Miller. Thank you, Mr. Chairman.
Mr. Porter. Thank you, Mr. Miller.
I have to say that Dr. Vladeck used up all of your time for this
round and the next round as well. [Laughter.]
Mr. Porter. In calling on Ms. Pelosi, I want to note that Sunday
is her birthday, and we congratulate you and wish you a very
happy birthday.
329
EXPENDITURES PER CAPITA
Ms. Pelosi. Thank you. Thank you, Mr. Chairman. How sweet.
Thank you.
Welcome, Dr. Vladeck. Thank you for your testimony, which I
think is very impressive. I have a few specific questions and a few
budget questions, one of which sprang from what you said in an-
swer to a colleague's question about average cost for a retiree,
$4,500, and then you mentioned $3,000 to $3,500 as an average for
younger people — of course, they're younger and healthier, and are
expected to cost less.
In that $4,500 figure, does that include the "high cost of dying?"
Mr. Vladeck. Yes.
Ms. Pelosi. So that for some people, $4,500 seems like a lot of
money if you're just taking some pills because you're older, but
Mr. Vladeck. Like all health insurers, we spend a very large
proportion of all our expenditures on a relatively small fraction of
all the people we cover. One of the problems with getting at some
of these competitive pricing model projects risk selection.
Ms. Pelosi. It reminds me of Secretary Reich when he was talk-
ing to us under different circumstances. He said, "On average,
Shaquille O'Neal and I are 6'1", but the details are more interest-
ing." [Laughter.]
Ms. Pelosi. So there's a high end for a few people, and some peo-
ple don't cost quite that much.
Mr. Vladeck. That's absolutely correct.
beneficiary estimates
Ms. Pelosi. Well, that's an interesting figure because in fact, in
light of all of that, it isn't as different from the younger, healthier
population as one might have suspected.
I want to relate to one of your charts, as well. First of all, I want
to commend you for the 1 percent program management. That's im-
pressive. I wish more people could make that claim and live up to
it.
On your "HCFA Serves 70 Million Beneficiaries" chart, it seems
Uke a big jump from 1989 to 1996. And I wonder about two things.
Was that mostly on the Medicare or the Medicaid side?
Mr. Vladeck. That's mostly on the Medicaid side. The growth in
Medicare has been very steady, about 1.5 percent a year, for a long
time. Beginning in the late 1980s, there was a very big jump in
Medi-caid enrollment. Between 1988 and 1993 we added 5 million
Medi-caid recipients, which was an average increase of almost 8
percent a year, and we're still growing between 4 and 5 percent a
year in the number of Medicaid recipients.
[Clerk's note. — Subsequent to the hearing, HCFA corrected the
increase in Medicaid recipients between 1988 and 1993 to 10 mil-
lion.]
proposed health care spending cuts
Ms. Pelosi. Interesting. That leads me to my next question,
which is about the budget and deficit reduction. Of course, as we've
heard over and over and as you know better than any of us, one
of the leading causes of the increase in the deficit is the increased
330
cost of the health care funded by the Federal Grovemment. The
Contract proposes to balance the budget within seven years and cut
taxes at the same time. Chairman Kasich is discussing what mag-
nitude of cuts would be necessary in Medicare and Medicaid in
order to meet the Republican budget goals; most Medicare bene-
ficiaries don't fully understand what this might mean to them.
Could you tell us what large-scale cuts to Medicare and Medicaid
in the budget agreements would mean for the 70 million
beneficiaries?
Mr. Vladeck. Well, obviously, it depends to some extent on what
form the cuts would take. On the Medicare side, I believe the kind
of numbers that have been talked about in some of the scenarios
for a year 2002 balanced budget would mean that in the year 2002,
we would be spending about 30 percent less on Medicare in that
year than we would under current law.
The average Medicare beneficiary now spends 12 percent of his
or her out-of-pocket income on health care. That's three times as
much as the average person under 65. You have a lot of Medicare
beneficiaries going without rent money or food money to pay those
increased costs, because most of our beneficiaries live in households
below $25,000 a year in income. So, if you increase their out-of-
pocket expenditures by that extent, it has a major, major effect on
their disposable income.
If you try to save that much money by reduction in payments to
providers, you would have a different set of problems, to a large ex-
tent because a number of providers are especially dependent on the
Medicare program, particularly rural hospitals and inner city hos-
pitals, in which Medicare and Medicaid account for more than half
of all their revenue. If you took 30 percent of that out of those in-
stitutions, which aren't swimming in money at the moment, I think
you would have very severe access problems to health care at all
in many rural communities and in many inner-city communities, as
well.
On Medicaid, you can't get from here to there in terms of the
numbers being talked about in some of these preliminary budget
documents without substantially reducing the number of people
you are covering.
Ms. Pelosi. That's interesting. I understand the President's posi-
tion, that any reductions in health-related entitlement programs
would be used to fix what I consider to be our badly broken health
care system. And I think our budget concerns about reducing the
deficit would be well-served if we find savings in Medicare and
Medicaid, and I certainly don't mean by putting more pressure on
seniors that live in households with under $25,000 a year, to in-
crease their contribution. But if there were savings that could be
obtained in Medicare and Medicaid that would help us in all that
we're trying to do here — if we could help to subsidize insurance
premiums for working poor people in America who are not on Med-
icaid, thereby maybe moving some people off of welfare because
they're not tied there by their need for health care benefits and
Medicaid, this would end the shifting in cost because more people
in the working poor sector would be covered.
Could you comment on that?
331
Mr. Vladeck. Well, that is in fact what we have been able to ac-
complish with some of the Statewide waivers in Medicaid that
we've had some earlier discussion of this morning. Oregon is the
example that is probably closest to your home, where I believe
more than 100,000 previously uninsured people are currently cov-
ered under their Medicaid program than were at the start of 1993.
To the extent that we can leverage efficiencies or savings in Med-
icaid into coverage, as is being done in Oregon and a number of
other States at the moment, that seems to me to be the best oppor-
tunity we have to expand coverage to low-income working people.
Ms. Pelosi. And that, indeed, would help us with what we all
want to do here, which is to reduce the deficit.
Since it's my birthday, may I ask a California question, Mr.
Chairman? [Laughter.! I will be brief.
MEDICAID DISALLOWANCES
Ms. Pelosi. Dr. Vladeck, recently HCFA issued a denial of $315
million in claims from California for MediCal administrative costs.
As I understand the issue, the rate of reimbursement for outpatient
care is the central problem.
What is the current status of your discussions?
Mr. Vladeck. Well, as you may know, we've had a team out in
California, a team from Baltimore and Washington periodically this
month as well as a team full-time on the ground based in San
Francisco. They have been working very extensively through three
separate committees with a group of county representatives and a
group of State representatives and our representatives to work
through these issues.
As you know, in the California structure the issue is complicated
by the fact that these involve county activities, with the State in
effect as an intermediary between the counties and us in the ad-
ministration of the Medicaid program. But we have a number of
people working full-time to resolve these claims and resolve these
issues.
We are hopeful that we can begin to release some dollars to at
least some of the counties next month, and that the bulk of the is-
sues will be resolved before the end of this State fiscal year. I must
emphasize though that this will not be 100 percent of the dollars
on the claim that the State originally submitted.
Ms. Pelosi. I appreciate that. Well, we have $33 million in un-
paid claims in San Francisco alone which have not been reviewed,
so we are most eager for your process to proceed.
Mr. Vladeck. The other thing we're doing is getting an accept-
able, mutually agreed-upon system in place prospectively, so as of
July 1 of this year the counties will have considerably more pre-
dictability in what they'll be able to claim as Medicaid costs.
Ms. Pelosi. As you know, the Governor has ratcheted down what
the State is willing to pay for outpatient care, with the other de-
mands in the California budget like building prisons and the rest,
so I think that's caused part of this problem.
But I appreciate what you're doing, and thank you very much.
Thank you, Mr. Chairman.
Mr. Vladeck. And happy birthday.
Ms. Pelosi. Thank you.
332
Mr. Porter. Thank you, Ms. Pelosi.
Mr. Wicker.
LIMITING PROGRAM GROWTH RATES
Mr. Wicker. Thank you, Mr. Chairman.
Dr. Vladeck, it is a pleasure to be here with you today. I have
appreciated your testimony. Let me just ask a quick question to fol-
low up on Mr. Obey's question about the Medicaid match.
Do I understand that the Administration does not have a pro-
posal to change that Medicaid match?
Mr. Vladeck. You are absolutely correct.
Mr. Wicker. It would be the Administration's position to keep
that as it is?
Mr. Vladeck. Yes, sir.
Mr. Wicker. Okay. I am certainly interested in those statistics
and the chart that you may prepare for Mr. Obey.
Let me ask you, then, about the graph that is before it. Cer-
tainly, this is a difficult issue, as Ms. Pelosi mentioned, because it
involves health care for a lot of people that need it, but at the same
time I think we all acknowledge that this is where a large portion
of the money is, and if we're going to be serious about deficit reduc-
tion, we have to look at this side of the equation.
Let me refer to the dotted line on Medicare, which is no longer
applicable, but what was the rate of growth projected between 1995
and 1998?
Mr. Vladeck. I believe it was somewhere in the 12 percent
range. From the 1993 projections it has come down, as I said, to
just under 10 percent.
Mr. Wicker. Under 10 percent. There was even a higher rate of
growth projected for Medicaid according to your chart. Do you have
a figure on that?
Mr. Vladeck. I think at the time, in 1993, we were projecting
an increase of almost 14 percent a year on the Medicaid side.
Mr. Wicker. Okay.
Mr. Vladeck. Again, coming off that very rapid growth of the
late 1980s and early 1990s.
Mr. Wicker. Right.
Now, in your testimony you talk about President Clinton's lead-
ership in reducing this rate of growth, and you mention deficit re-
duction measures, lower inflation, and the 1991 bipartisan
legislation.
What factor would you credit as the most significant?
Mr. Vladeck. I think the explanations are somewhat different on
Medicare and Medicaid. On Medicare, it's clearly the general reduc-
tion in inflation in the economy, and the reduction in particular in
the rate of increase in medical care pricing.
Mr. Wicker. On Medicare?
Mr. Vladeck. On Medicare. On Medicaid, that's also an impor-
tant factor. But again, I think implementation of the limits enacted
both in 1991 and 1993 on State use of taxes and donations mecha-
nisms, and on disproportionate share payments, accounts for at
least as large a contribution to the reduction of the growth rate as
the change in inflation rate.
333
PAYMENTS FOR DISPROPORTIONATE SHARE HOSPITALS
Mr. Wicker. Well, you should be able to give me a dollar figure
on the impact of the disproportionate share changes. Are you able
to do that at this time?
Mr. Vladeck. Well, we can give you an estimate.
It's a little hard because we're talking about behaviors here, so
we can say how many dollars we actually disallow, but how many
State legislatures altered or changed provider taxes or took another
mechanism to deal with disproportionate share programs after the
law was passed or after our regulations were issued, as opposed to
before, were a little bit more than the estimation. But again, I
think our estimate is that about 1 percent off that growth rate —
well, we do have a dollar estimate, and that is that the 1991 and
1993 limitations on State use of taxes and donations mechanisms
and on disproportionate share payments are expected to save
over — it's not exactly for the same years — save somewhere on the
order of $5 billion or $6 billion a year in the period of time covered
in these graphs.
Mr. Wicker. That's $5 billion or $6 billion per year?
Mr. Vladeck. Per year.
PROPOSALS TO control PROGRAM SPENDING
Mr. Wicker. Okay.
In looking at the solid line, the 9.5 percent on Medicare and 9
percent on Medicaid, do you agree with me that that is a com-
pletely unacceptable rate of growth?
Mr. Vladeck. Yes. I think we've been very explicit about that.
Mr. Wicker. So the question comes back to Mr. Miller's earlier
statement. Has the Administration punted on this issue? What is
their proposal to lower these growth rates to the rate of growth of
the economy? And specifically, what does the President suggest?
Mr. Vladeck. Well, let me just say two things in response to
that.
First, I don't think we'll ever get it to the rate of growth of the
economy — maybe on a per capita basis we can, but again, we're
covering more people all the time.
But the second thing I would say is, to be as direct as I can about
it, we had quite a set of proposals as part of a comprehensive effort
to address the problems of the health care system last year, which
the Congress rejected. We continue to believe that there is very sig-
nificant risk in addressing the rate of growth of Medicare and Med-
icaid outlays in isolation from the rest of the health care system
for at least two reasons. One is that in fact Medicaid is the safety
net which has been available, particularly over the last decade, as
the number of people covered by private insurance has fallen very
dramatically, to see to it that the number of uninsured in the soci-
ety as a whole has not gone through the roof And if you try to save
money in the Medicaid program alone, what that does to the pat-
terns of who has insurance of any kind in this society and who
doesn't can become very important.
Second, as I suggested earlier, Medicare is such a big part of the
health care system as a whole, particularly as a source of revenue
for hospitals, for home care agencies, for laboratories, for many
334
physicians, that if you do something to Medicare without being con-
cerned about or addressing the rest of the health care system, you
can do great things for your budget numbers and at the same time
have very adverse effects on the health care system in communities
throughout the country.
So that's why I think this Administration, since the day it came
to office, has been very consistent in its position that these issues
must be addressed, and they must be addressed in terms of the
health care system as a whole.
Mr. Wicker. Is it your testimony that because the Clinton com-
prehensive health care package was not enacted in the previous
Congress, that the Clinton Administration is going to leave it up
to the Congress to come forward with suggestions in the absence
of that Clinton comprehensive health care plan? Is that what you're
saying?
Mr. Vladeck. No, sir. I think, again, that we've been reasonably
clear and reasonably explicit that our experience with a summary
comprehensive proposal, and then trying to get the Congress to
enact it, wasn't too successful. Now the President is seeking to try
a different approach, and he has asked the Congressional leader-
ship to sit down in a two-party — it would be three-party, if you
count the leadership of both parties in the Congress, as well as the
Executive Branch — process to discuss how we ought to move for-
ward before anyone from any direction submits any legislation.
As I say, that is the general process that the Administration has
proposed and one that I believe we very much would hope could go
forward in the very near future.
RESOURCES FOR HEALTH CARE REFORM
Mr. Wicker. Okay. Well, let me just ask one final line of ques-
tioning.
Were any of your HCFA actuaries used by Mrs. Clinton's Health
Care Task Force?
Mr. Vladeck. I'm not sure, with all respect, sir, that I would use
exactly that formulation, but our actuaries did an awful lot of work
to advise the Task Force. And they were called on for very exten-
sive analysis.
Mr. Wicker. All right. Do you have any idea how many FTEs
were used for assistance to Mrs. Clinton's Task Force?
Mr. Vladeck. Yes. We have estimated that over the period of the
work on the President's proposal, approximately 41 full-time
equivalents within HCFA worked on the health reform proposal
during fiscal year 1994.
Mr. Wicker. Did you have any question as to the authorization
to utilize these FTEs for that purpose?
Mr. Vladeck. No, sir. We have at least that many FTEs at all
times working on the analysis of legislative or other policy propos-
als, both Executive Branch-initiated proposals and those that come
from the Congress. So the particular subject matter on which those
folks were working was determined by the Administration's initia-
tive on health reform, but the fact that they were spending most
of their time estimating the costs of various potential legislative
proposals is par for the course for those people.
Mr. Wicker. Thank you very much. I appreciate the time.
335
Mr. Porter. Thank you, Mr. Wicker.
Mr. Bonilla?
Mr. Bonilla. Thank you, Mr. Chairman.
Good morning, Mr. Vladeck.
Mr. Vladeck. Good morning.
SURVEY AND CERTIFICATION
Mr. Bonilla. I would like to spend my time this morning talking
about surveys and certification. My district in Texas is gigantic; it's
58,000 square miles, and larger than any State east of the Mis-
sissippi. During the 1980s, more hospitals closed in Texas than in
any other State.
So I was greatly concerned when I learned that administrators
from all over my district contacted me about the February morato-
rium on surveys and certification activities. The moratorium affects
39 providers in Texas with surveys in progress, and many more
that have made a financial commitment.
My first question is, did HCFA request a supplemental appro-
priation to help conduct the increase in surveys?
Mr. Vladeck. No, sir.
Mr. Bonilla. Why not?
Mr. Vladeck. Well, to be honest with you, at a time when this
subcommittee was acting on a series of rescissions, at a time when
we had become quite accustomed to stringency in the survey and
certification budget, it didn't seem to us to be a particularly prom-
ising approach to deal with this short-term problem.
Mr. Bonilla. Even though there is a determination by this Con-
gress to cut costs, there is also a determination to assist Federal
programs that are necessary, so I'm a little bit puzzled as to why
that was not sensed by you when this crisis was first hitting. Agri-
culture, for example, had no qualms about asking for more money
for food and safety inspection, so isn't providing health care to
these areas that already suffer from a lack of health care and have
been hit hard — don't you see that as a threat to the public interest?
Mr. Vladeck. Well, we did. And frankly, sir, I believe that the
actions by the Texas agency were something of an overreaction to
the instructions that we issued in February. In fact, we have sur-
veyed all of the States in the last couple of weeks, and the response
of the Texas agency was considerably more dramatic and more lim-
iting than that of any other State.
At the same time, there is a more significant problem in Texas
than in any other State because of the very, very rapid growth in
the number of new providers. And to that extent, while we don't
believe that the State agency should have suspended any surveys
or should have rescheduled any surveys already scheduled, we
have gone through the process that we usually go through at this
point in the fiscal year of going back to all the States, looking at
their outlays at this point this year relative to budgets, trying to
find States that might have some extra money available and doing
some reallocation. And within the existing appropriation, we hope
within the next fev/ weeks to be able to reallocate some monej^to
address the particular problems of Texas.
336
CONSTITUENTS AWAITING INITIAL SURVEYS
Mr. BONILLA. Well, I have some letters here — and this is not a
result of collusion or any kind of conspiracy — these letters I'm
going to read span different parts of the State. I'm not going to
read the whole letter in each case, but just to highlight.
The first one is from David Vaughn, who is Vice President of
Home Health Services in Odessa, Texas: "There is a limited
amount of time we can wait before we will be forced to close our
operation and lay off our employees. We have three employees and
over $40,000 invested in the start-up of our operation. It is a large
investment that we've put in place here, to put in jeopardy, an in-
vestment that we would never have made had we been notified at
the time of application that this reprioritization could be a possibil-
ity. We respectfully request HCFA to restart certification surveys
on those entities that have already completed their licensing and
certification application process and invested large amounts of cap-
ital in their operations."
I have a letter here from Del Rio, Texas, which is a long way
from Odessa, from Mr. Mike Deaton, the Administrator of Haci-
enda Health Services: "Our temporary license is ready to be issued
in Austin. For us to receive a license, and eventually a provider
number and eventual reimbursement, we are still looking at three
to four months. This current freeze can be financially back-break-
ing for us. We had to sign a lease, pay for installation of phones,
sign up an administrative staff. As we got closer to the time, we
knew that a temporary license would be issued. We leased comput-
ers and computer software necessary to establish care plans that
were required for this survey. As of today we have a monthly obli-
gation in excess of $2,000. This does not include salaries. We knew
we would have to have close to $100,000 to start an agency and
saved for three years to be able to open this business. Every week
the current freeze is on, it will cost us an additional $6,000. We're
trying to open an agency in an underserved area. Our patient load
will be predominantly Hispanic. We are trying to provide services
to a population that needs the services the most. This freeze may
very well prevent us from providing services at all."
From the Uvalde Memorial Hospital, from the Administrator,
Mr. Ben Durr: "HCFA's halt on Medicare certification for hospital-
based home care and health care in rural clinics has caught Uvalde
Memorial Hospital in the middle of opening both services. The hos-
pital has spent in excess of $264,000" — that's a lot of money in
Uvalde, Texas — "in developing a more economic method of caring
for Medicare, Medicaid, and indigent patients not presently in the
area of health care delivery systems. The State Licensing Division
has been apprised of this plan from the beginning, for over two
years, and has approved the progress. Additional funds have been
spent for clinic furnishings, equipment, and recruitment of physi-
cians and physician extenders. We have so much riding on this
project, including, but not limited to, a loan from the First State
Bank of Uvalde to finance this expansion. It is one thing to give
notice that no more applications will be taken, but to totally freeze
certifications after application and temporary licensing have been
337
issued and we are ready to open — this is unnecessarily
destructive."
These letters come, again, from areas that span a large portion
of the State. There was no kind of plan among them to coordinate
this effort. All of these providers have made the commitment to
seek certification in good faith based on the rules that were in ex-
istence at the time. Now they find out that they have been
blindsided by this abrupt change in the rules through no fault of
theirs, other than trusting in those rules as they saw them at the
time that they made their decision, and this is not fair.
ASSUMPTIONS ABOUT HCFA'S ACTION
I also find it interesting that Region 6 in Dallas is the region tak-
ing the lead on this issue. I don't know if it is a coincidence or not,
but that region also contains Texas, Louisiana, Oklahoma, and Ar-
kansas, all having Members on this subcommittee.
Where I come from we have a word for that, it's called a shake-
down. The rules change. HCFA claims it is out of money because
Congress has frozen their account. HCFA gets our constituents all
worked up, scaring them into thinking they're going to lose thou-
sands of dollars that they have invested; they contact their Con-
gressmen and Congress women, and we give HCFA more money. I
think this is wrong. If this was needed, we should have put it in
the supplemental, if it's important and it's an emergency and nec-
essary. If we didn't, it was our mistake. If HCFA didn't make us
aware of the problem, then shame on HCFA.
Six months are left in this fiscal year and I hope, Mr. Vladeck,
that you find a way to continue all surveys and certifications this
year. These are real people out there that are being hurt by this.
I would be happy to hear how you are going to lift the moratorium
for the remainder of the fiscal year.
CLARIFICATION OF SURVEY DIRECTIVE
Mr. Vladeck. Well, let me begin, sir, that we never imposed a
moratorium. We asked all the State agencies to identify priorities
in survey allocation, emphasizing the statutorily-obligated annual
resurveys of nursing homes and home care agencies, and the statu-
torily-obligated surveys for complaint follow-ups and anti-dumping
complaints, which have been a particularly large volume of surveys
in our Dallas region. And then, among the discretionary surveys,
to focus on the kinds of facilities where we have been having sig-
nificant quality problems and not doing an adequate monitoring
job.
Nonetheless, our initial instructions also made it clear that in de-
ciding how to allocate their budgets. State agencies were expected
both to give special consideration to certification of new providers
in underserved areas, and also to recognize that for some, but not
all classes of Medicare providers there is a State licensure and cer-
tification process which we follow up on, and that they should con-
tinue to do so.
Now, I can't tell you exactly why the agency in Texas responded
the way it did. They were certainly not instructed to suspend sur-
veys that were in process, to cancel any scheduled surveys. They
do have a terrible workload problem in Texas. But I must tell you
338
that this was the only State agency that responded nearly as dra-
matically to those February instructions.
Nonetheless, in response to the particular problems that are oc-
curring in Texas, as I say, we have gone back and reallocated some
of the money across the States in this fiscal year to provide an ad-
ditional $300,000 to the Texas survey agency for the balance of the
current fiscal year in order to be able to meet some of the demands
of the workload.
Let me finally say, however, as a last point, in terms of respon-
sibilities in balancing the issues, that we have to make it very clear
that there is no entitlement on the part of any particular entity or
enterprise to enter as a provider in the Medicare program. In the
last five years we have had a 40-percent increase in the number
of Medicare-certified home health agencies. The home health bene-
fit is the most rapidly growing part of the program. It is unclear
to me, except in underserved areas, why we should give priority to
continuing to permit new entrants into a market where we are con-
cerned about having an oversupply already, and have stretched our
resources very thin in terms of ensuring quality among the existing
providers.
So clearly our instructions are that in underserved areas, new
providers ought to get priority. In areas that aren't underserved,
our first obligation is to ensure the quality of services among peo-
ple who are now currently providing services. That's what the in-
struction was meant to convey.
Mr. BONILLA. Mr. Chairman, my time is up, is it not? May I
make one closing comment?
These areas are underserved, and I have here a letter of March
8th from the HCFA Regional Office in Dallas that says, "HCFA di-
rected States to immediately delay initial certifications of new pro-
viders and suppliers who are subject to survey and certification re-
quirements." I don't know how to look at that, aside from that
being a moratorium.
Mr. Vladeck. Well, we had a little miscommunication within our
organization. I'll admit to that, and I think it's been straightened
out now.
Mr. BONILLA. Thank you for working with us on this, Mr.
Vladeck.
Mr. Vladeck. Surely.
LYMPHEDEMA PUMPS
Mr. Porter. Thank you, Mr. Bonilla.
Mr. Vladeck, I have two staffers in my district office at home,
both of whom are dependent on lymphedema pumps. It is my un-
derstanding that last year HCFA, and in particular some of the re-
gional carriers, have taken fairly severe action to limit the avail-
ability of these pumps. While I know there have been significant
abuses in this area, I am concerned that in eliminating these
abuses, HCFA may have gone too far and erected insurmountable
barriers to legitimate prescriptions for these pumps.
What are you doing to make sure that patients who need these
devices can get them in a timely way?
Mr. Vladeck. Thank you, Mr. Chairman. We have — I say "we"
in the collective sense, because the science and medicine here is
339
way over my head — but our staff has spent an enormous amount
of time on this issue over the last year.
The basic issue is that there are essentially two broad categories
of lymphedema pumps. All the medical advice that we get suggests
that a quarter or fewer of folks who require lymphedema pumps
should be using the substantially more expensive device. Prior to
the change in policy in 1994, three-quarters of the prescriptions
were being written for the more expensive pumps.
We have been working very extensively with the medical direc-
tors of our durable medical equipment carriers, with the industry,
with our other physician advisors, including those in the Public
Health Service, with one goal in mind, to try to get some medical
consensus — and some clear medical consensus — on the appropriate
indications and uses of the more expensive pump so that we can
say that in cases of patients with those conditions, clearly they
ought to getting the more expensive pump; and in cases that don't
have those conditions, that those aren't necessary. And frankly, we
have yet to be able to get consensus among our medical advisors
on that. We are working on it intensively, and I hope to be able
within the next couple of months to promulgate a clarification of
that policy.
ILLINOIS' SECTION 1115 WAIVER
Mr. Porter. Thank you.
I know you're prepared for the next question. Can you tell me
where you stand on the Illinois Medicaid waiver request?
Mr. Vladeck. I hope we're very close to conclusion of discussions.
We have some continuing concerns about the way in which the pro-
gram meets the budget neutrality requirements that we have for
all the section 1115 waivers, and we have a particular concern that
arises from the following.
The State of Illinois has a particularly unfortunate record in
terms of living up to its obligations under the Medicaid program to
make timely payments to providers. We had understood that as
part of the changes in the Medicaid program, that included the
waiver, there would be a considerable catch-up in that backlog of
payments, and that was a very positive feature of the proposals the
State was making.
But we understand — frankly, mostly second-hand — ^from our
reading of the Illinois press and from what we've heard from other
folks in Illinois, that the budget the Governor introduced a couple
of weeks ago, while continuing with the waiver, backs off on the
catch-up on those back payments to providers. This has raised
some questions on our part about the overall financial integrity of
the Medicaid program and its relationship to the waiver.
That's a question. It's not a derailment, it's not an ending of the
discussion. We've been sa3dng for some time that we hope to con-
clude these discussions in April, and we are still on track for April.
There are still some issues, mostly around financing, to be worked
out.
Mr. Porter. "Concluding the discussions" means coming to some
decision?
Mr. Vladeck. Yes, sir. And I would suspect, if I may say so, that
our experience with section 1115 waivers, at least in this Adminis-
340
tration, is that there are two outcomes of the process. One is ap-
proval; the second is continued discussion. We have yet to dis-
approve a State's proposal of this scope, although many of them
have been significantly modified in the course of discussion. We're
still on that track with Illinois.
Mr. Porter. I realize the need to safeguard the program, and I'm
not disputing that at all. You also realized the need for Illinois to
move to a more efficient system that will provide better quality and
get them caught up, so there's a balance there somewhere.
Mr. Vladeck. I hope next month we can conclude that.
FEDERAL UPPER LIMITS ON DRUG PURCHASES
Mr. Porter. Now, I'd like to follow up on a letter I wrote to you
last month concerning the way HCFA sets the Federal upper limit
on Medicaid purchases of drugs for which there are generic and
branded alternatives.
As I understand it, for some frequently-prescribed products, the
brand name drug may actually be less expensive than the generic
because of negotiated State rebates, yet current HCFA policy pre-
vents States from purchasing the brand name drugs, even if their
net price is cheaper than the generics. I am told that California,
for example, spends $5 million more a year on one drug alone be-
cause it must purchase the generic version.
Have you reviewed this policy? Wouldn't it make sense to let the
States save their and our money by buying drugs as inexpensively
as they can?
Mr. Vladeck. Yes, sir. I don't know if it was as a result of your
letter or if we were in the process of figuring this out anyway. I'm
happy to attribute it entirely to your letter
Mr. Porter. Fine. I'm happy to take credit, even if you figured
it out. [Laughter.]
Mr. Vladeck [continuing]. But we have clarified this policy. As
I understand it, what we now say as we now interpret the law, the
upper limits apply to the entire set of drugs, all 700 or more dif-
ferent kinds of drugs that the State purchases under its Medicaid
program and under its rebate program. So as long as, in the aggre-
gate, across the entire Statewide Medicaid program, their expendi-
tures for drugs don't exceed the upper limits, then in the kind of
instance you describe, the State is perfectly free to pay for the
brand name drug. I am advised that Ohio is already doing that.
Mr, Porter. When did this reinterpretation occur?
Mr. Vladeck. Well, as I say, I presume it was immediately after
receipt of your letter, but I am advised that we had already worked
that out with Ohio. So given the rate at which we have moved
within the last couple of months, I suspect we've also had discus-
sions with California and will with any other State that wants that
kind of clarification.
Mr. Porter. Thank you.
Mr. Miller.
OUTLAYS PER CAPITA
Mr. Miller, I want to follow up on a couple of things for clari-
fication.
341
When you are talking about the competitive bid idea, one of the
questions is that different States have different cost directories. I
know we were talking about this the other day in the Budget Com-
mittee. Minnesota — is that a relatively low-cost State?
Mr. Vladeck. Yes, sir.
Mr. Miller. And New York is a relatively high-cost State?
Mr. Vladeck. Relatively. It's not among the highest.
Mr. Miller. That's your State, right?
Mr. Vladeck. Yes, that's right. About as high as California.
Mr. Miller. California, okay.
Do you know how the cost would vary for Medicare? If it's $4,500
nationally, how low does it go? What is the range?
Mr. Vladeck. On the Part A side, the hospital side, it ranges na-
tionally by a rate of about 1.5 to 1; that is to say, the most expen-
sive communities are about 50 percent more expensive than the
less expensive communities. On the Part B side, the range is sub-
stantially greater, and it's as much as — if you compare our Part B
outlays per capita in Miami, which is our highest cost Part B com-
munity, to those in the Twin Cities, which is not our lowest cost
but is one which is talked about all the time, it's a range of about
2.5 to 1.
Mr. Miller. Do you have any type of report on that, the varia-
bility of States?
Mr. Vladeck. Yes, sir, we do.
Mr. Miller. Could we get a copy of that?
Mr. Vladeck. We certainly will.
[The information follows:]
Our latest report on Medicare spending by State disp ays fiscal year (FY) 1992
and 1993 spending and enrollment figures. National per enrollee spending in Medi-
care averaged $3,941 in FY 1993. To compare high and low cost States, we suggest
disregarding data from the District of Columbia and the Commonwealth of Puerto
Rico. The District exhibits the extreme of high spending due to provider concentra-
tion in a large urban area, combined with a relatively lower number of enroUees
actually residing within the District. Puerto Rico's extremely low spending per en-
rollee suggests substantially diflierent cost and utilization patterns from those seen
in the 50 States.
Of the 50 States, Massachusetts had the highest FY 1993 Medicare spending en-
rollee, at $4,923, while Idaho had the lowest, at $2,402. Thus, the ratio of spending
in the highest versus lowest cost State is about 2 to 1.
State-by-State data for the two most recent years for which data are available
follow:
342
Medicare Benefit Payments
Medicare Enroltees
F
($ in thousands)
As of
'iscaiYear
Fiscal Year
September
September {
1992
1993
1992
1993
ALABAMA
$Z100.140
$Z460,573
606.983
1
6182461
ALASKA
81.727
97,340
28279
30.0981
ARIZONA
2.076.849
2.178.377
534.067
553.500!
ARKANSAS
1.309.391
1,306.041
404.687
409.9021
CAUFORNIA
15,652,577
16.487.553
3.434.524
3,503.976 1
COLORADO
1.242.210
1.429.580
383.560
396.4531
CONNECnCUT
1.953.460
2.0SZ656
485299
491.0551
DELAWARE
266.962
368.391
93.120
95.5391
DISTRICT OF COLUMBIA
1.11Z051
1,111.826
78.441
78.4961
FLORIDA
10.361.327
11.721,988
2.447.906
Z493.700I
GEORGIA
2.864.106
3.301.647
' 771.347
790.781 1
HAWAII
404.329
47Z706
136.507
141.1241
IDAHO
299.869
341.832
139.119
142.3091
ILUNOIS
5.564.774
6.136,399
1.579230
1 .593.485 1
INDIANA
2.454,767
2.876.565
790.985
8025721
IOWA
1,241,751
1.305.372
466.860
469.081 1
1 KANSAS
1,160,503
1 ,350.204
373.408
376.481 1
i KENTUCKY
1,787,513
1,958,777
555.198
564.958 1
LOUISIANA
2,318,049
2,607,035
553299
562.561 1
MAINE
513.553
561,490
190.932
194.3761
MARYLAND
2.262,085
2.469,631
567,667
578.31 1 1
MASSACHUSETTS
3,779,672
4.487.227
897.540
911.4201
MICHIGAN
4,641,997
5.171.403
1.287.741
1.308.6941
MINNESOTA
1,942,733
^106.232
608.201
615.3271
MISSISSIPPI
1 ,234.661
1.327.867
378.257
383.9221
MISSOURI
2.673,985
3.12^092
805.024
814.2001
MONTANA
307,276
369.612
! 123.008
125.084!
NEBRASKA
631,275
689.4-0
242,929
244.825 1
NEVADA
598.224
663.596
159.164
169.6141
NEW HAMPSHIRE
428.024
462.196
145.018
148.4421
NEW JERSEY
4.188,080
4,749.355
1,130,236
1.143.6581
: NEW MEXICO
489.277
556.534
192,341
198.4661
NEW YORK
10,268.609
1 -, .447,774
2,573.080
2.594.326 !
NORTH CAROLINA
3,005,797
3.242.292
945,314
971.2091
NORTH DAKOTA
j 35Z151
347.160
101,123
101.9201
OHIO
5,720.970
6.086.116
1 ,603,389
: .626.085 1
OKLAHOiM
! 1,471,347
1.546,624
466.655
472.900 1
: OREGON
1.356.953
1 ,443,639
443.961
452.3531
PENNSYLVANIA
8.365,352
9,270,961
2.019.052
2.039.305 1
RHODE ISLAND
587.786
628.236
163.602
164.9101
1 SOUTH CAROUNA
1.243.924
1.440,25?
468.267
481.173!
SOUTH DAKOTA
275.842
331.488
113217
114.5141
TENNESSEE
2.894,51 1
3251.676
72Z847
737.9101
TEXAS
6,978,035
8.007.117
1 .925.526
1.973.3431
UTAH
426,940
590.761
171.434
176.7991
VERMONT
200,092
227.995
77.7C5
79.351 1
1 VIRGINIA
2,226,413
2,420,279
760.930
779.0061
WASHINGTON
2.145,409
2.166.637
645.448
657.780 1
! WEST VIRGINIA
1 931.431
1.017,016
317,683
321.9491
WISCONSIN
2.125.566
2,305,182
735,709
744.796 1
WYOMING
97.803
138.637
55,326
56.921 1
PUERTO RICO
555.523
709.145
446,172
456.525 1
i OTHER OUTLYING AREAS
5,416
13.232
301,776
317.2051
: TOTAL
1 $129,179,077
$142,933,727
35,649.173
36.270.936 1
343
Mr. Miller. This was discussed over the last two years during
the health care debate, because there is a lot of variability.
Mr. Vladeck. Some of it we can explain and understand in
terms of cost of living, in terms of styles of medical practice, in
terms of characteristics of the population, and some of it remains
a total mystery to us. But we have looked at it quite a lot and will
be happy to provide you with that information.
Mr. Miller. My district in Florida, which is Sarasota and Bra-
denton and such, has the largest number of seniors of any Congres-
sional district in the United States. So the whole issue of Medicare
is a big issue in my district for the constituents that are affected,
but also as an economic activity in our community. You have the
hospitals and home health agencies and rehab facilities and nurs-
ing homes and physicians — I mean, it's obviously the biggest em-
ployer that we have. So there is a great deal of concern.
FRAUD AND ABUSE
One of the questions that comes up with some of my constituents
is the whole issue of fraud. A lot of people think you can balance
the budget if we just take away the pork from Congress and we do
away with fraud and give up foreign aid, and that would solve the
problem. Obviously, it's a much bigger problem than that.
On the whole issue of fraud, I remember when I first came up
here two years ago a friend of mine wrote me complaining about
a doctor that overcharged the Government. I ended up responding
to him that the big fraud is when you have widespread use of it
by one provider. You can't send in Medicare police to every single
practitioner in the country.
I noticed some articles recently in Louisiana that 10 percent of
the cost of the Medicaid program is fraud. What is the cost of fraud
in the system, in both Medicare and Medicaid? And how do you go
about assessing it for individual cases? We have the vague, system-
wide durable medical equipment company, that's one thing, but
that one little provider which may be a single doctor — how do you
handle those types of cases? And how many resources can you de-
vote to it?
GAO STUDY ON FRAUD AND ABUSE
Mr. Vladeck. In terms of the quantitative estimate, the General
Accounting Office issued a study some years ago in which they esti-
mated that 10 percent of Medicare and Medicaid outlays were
fraud and abuse, and "abuse" is a somewhat broad and somewhat
imprecise term. And everyone has used that figure since.
I am very reluctant, frankly, to put any more precise estimate on
it, or any estimate, because if we really knew how much, it was we
wouldn't be doing our jobs. There's more than we can put our fin-
gers on, which means that we have more work to do in identifying
and eliminating these kinds of problems in the program.
Strategically, I think in addressing these issues you look at the
80/20 rule of life; that is to say, that most of the problems, whether
it's 10 percent or 4 percent or 14 percent, are going to be con-
centrated in certain areas of the programs and among certain "bad
guys," for want of a more technical term. And you try to identify
them and so after them.
344
One of the things that has prevented us in the past from being
nearly as aggressive or proactive as we should be about fraud and
abuse was exactly the fear that if you really cracked down, you
would end up hassling the overwhelming proportion of providers
who are honest and scrupulous and dedicated in order to get the
few bad apples, and that you would do as much harm as good in
the process.
We think that particularly through two mechanisms, which are
what we increasingly rely on, you can in fact go much more aggres-
sively after fraud and abuse without making life too much more
difficult for the honest providers. One is, again, the application of
increasingly sophisticated statistical and data processing tech-
niques to our claims records. We've recently had some very good
success with cracking down on some durable medical equipment
problems in Florida from precisely that. Consolidation of computer
processing, the use of some sophisticated variance analysis pro-
grams, pick out some weird-looking stuff in the claims to follow up
by some first-hand investigation, to find some serious problem.
The second thing is, frankly, we — and by "we" I mean all of us
involved here, since we do prevention, deterrence, detection, but
not prosecution; we work with the Inspector General and the De-
partment of Justice on that — we do what every other law enforce-
ment activity does, we rely an awful lot on informers, competitors
who feel that the other guy is cheating on them, and increasingly
on our beneficiaries who get an explanation of benefits, see that
Medicare was billed for a service that they had never heard of or
never received, and then call us and tell us that there may be a
problem out there.
But I think, again, we're getting much more sophisticated about
targeting our investigative efforts at places where we have some
real reason to believe there's a real problem, rather than sort of
uniformly harassing all the providers.
Mr. Miller. Let us have an update, then, on this 10 percent
number. That's the number I find confusing.
Mr. Porter. Actually, why don't you ask one more question? I'm
going to have to go to Mr. Stokes.
Well, let's go to Mr. Wicker and see if he has some other ques-
tions, and then we'll go to Mr. Stokes.
Mr. Wicker. I really don't have any other questions.
Mr. Porter. All right, then Mr. Miller can finish.
program integrity
Mr. Miller. There's a lot of discussion about reforming the sys-
tem to save Medicare, and that we need to get the individual in-
volved in the process, like this gentleman from Long Boat Key who
was complaining; he was concerned. It wasn't his money directly,
but it was his money in the sense that it was the taxpayers' money,
and he was frustrated that he couldn't do anything about it.
In going to the competitive bid model and the voucher system
and such, I realize you never can get rid of fraud entirely, but how
does that address that issue?
Mr. Vladeck. Well, I believe the Director of the FBI testified at
the Senate Aging Committee earlier this week on exactly that
question. He said that what it does is to change the form and type
345
of abuses and crimes you encounter, and therefore requires sub-
stantial changes on the part of law enforcement and program integ-
rity folks. But the FBI's perspective — and they know better than I
do — is that the number of people susceptible to criminal behavior
out there is basically the same, whether you have a fee-for-services
system or a capitated system. The particular schemes they come up
with may vary, depending on the kind of organization or finance
group, but you can be sure that you'll fmd schemes, either way.
PROGNOSIS FOR FEE-FOR-SERVICE PRACTICE
Mr. Miller. Just one general question. On fee-for-service, do you
think fee-for-service will be around five years from today?
Mr. Vladeck. I think fee-for-service will be around for a long
time.
Mr. Miller. You think so? There is obviously a trend away from
fee-for-service, but you don't think it's accelerating that fast?
Mr. Vladeck. I think the trend away from fee-for-service is
somewhat overstated. If you look at the real growth in managed
care in the private sector, and even some of the growth in managed
care in Medicaid, over the last five years or so, much of it is in fee-
for-service-based managed care, either preferred provider organiza-
tions or point of service option kind of plans, that sort of thing,
which are managed care but they are still tied to fee-for-service.
But you look all over the world, all these countries with so-called
socialized medicine and national health systems, they pay their
physicians — not their hospitals, but pay their physicians — and
other professionals on a fee-for-service basis.
Mr. Miller. Thank you.
Mr. Porter. Thank you, Mr. Miller.
Mr. Stokes.
STATUS OF section 1115 WAIVERS
Mr. Stokes. Thank you, Mr. Chairman.
Mr. Vladeck, it's nice to see you again. Let me thank you once
again, for the visit you made out to Cleveland, Ohio in conjunction
with the OhioCare program. I appreciate the assistance you pro-
vided throughout the waiver process.
Mr. Vladeck. Thank you for having me.
Mr. Stokes. How many Medicaid 1115 waivers have been ap-
proved by the agency, and how many are now pending?
Mr. Vladeck. If you only count the Statewide demonstration
waivers, because there are a lot of smaller and more particularistic
section 1115 waivers, there have been eight since this Administra-
tion came into office. I believe Ohio was the eighth. And then we
have about 11 in the pipeline at the moment. There have been a
number of other projects, smaller in scale, which we have also ap-
proved under section 1115.
Mr. Stokes. Can you tell us how many additional individuals be-
came Medicaid-eligible under each of the approved waivers?
Mr. Vladeck. We have a count of those that are up and running.
Of the eight that we've approved, only four are actually operating
on a large scale at the moment, and we count about half a million
folks in just those four States that are operating. I think if we look
at the four States that are approved but not yet operating, there
346
are more than 2 million additional covered persons once those pro-
grams are fully implemented, which in some instances could take
several years.
Mr. Stokes. What percent of the total number of individuals ex-
pected to be served by each of the waivers are new Medicaid
eligibles?
Mr. Vladeck. Again, it varies considerably from State to State,
but the 2 million are all new eligibles. Everyone is different. I be-
lieve in Ohio we're talking about a 20 to 25 percent increase in the
number of persons in the Medicaid program over the current sta-
tus, about 500,000 people, as I understand it.
In Oregon, actually, the proportion is slightly higher but the
numbers are smaller because Oregon is a smaller State.
It just varies a lot from State to State, but I think on average
it's 20 or 25 percent.
Mr. Stokes. Are the resources as outlined in the waiver propos-
als sufficient to expand coverage to these additional eligibles?
Mr. Vladeck. Well, that's exactly the issue that we're now argu-
ing about with Illinois. We hope in each of the proposals that we've
approved — and we hope they will turn out to be in each of the
States that we have proposals from, because that's obviously one
of the things about which we're most concerned. We wouldn't have
approved those eight unless we believed that there were enough re-
sources to do the job.
CRITERIA FOR STATEWIDE WAIVERS
Mr. Stokes. Sure.
Tell us, how are the criteria established to ensure continued
quality assurance and measurable outcomes?
Mr. Vladeck. Well, we have several requirements that we expect
of all the States in these regards. One is, when there are managed
care providers involved, we oversee the content of the contract be-
tween the State and the managed care providers, and between the
managed care plans and the providers with whom they contract.
We require each of the managed care plans to have its own quality
assurance mechanism, which we review. We also require the State
to arrange for external quality assurance review of the managed
care plans.
We also require in each instance that the plans maintain data
on 100 percent of all patient encounters, patient services, so that
outside evaluators under contract to us as well as our own staff can
look independently at what happens to beneficiaries under the
waiver.
Mr. Stokes. And, of course, you also have a monitoring process
in effect as it relates to each of these States, is that correct?
Mr. Vladeck. With each of the State waivers we have a team of
our regional office and central office staff that monitors the imple-
mentation of the State proposal very closely.
LEARNING FROM EXISTING DEMONSTRATIONS
Mr. Stokes. There has been a tremendous amount of hardship
surrounding the Tennessee waiver, TennCare in particular. It
ranges from patients being denied care and medications, to exten-
347
sive waiting periods. Can you elaborate on these problems and
what is being done to correct them?
And equally important, what provisions have been incorporated
in the HCFA waiver process to prevent these problems in other ap-
proved waivers?
Mr. Vladeck. We have a lot of anecdotes about the system in
Tennessee, but we don't yet have the sort of systematic data we
need to evaluate just what the overall effect has been. Nonetheless,
two lessons are clear to us from the Tennessee experience, two neg-
ative lessons that are cause for concern. There are also some very
positive lessons.
The first is that when one is implementing such a dramatic
change in the Medicaid program, you have to have adequate lead
time and adequate developmental time. The TennCare implementa-
tion was very rushed, was very rapid, and many of the problems
that arose occurred just because they tried to do too much of it too
quickly. We have made it very clear with subsequent States with
which we talked that we were going to be much more demanding
about the plans and the timetables for implementation.
The second thing that became clear in the Tennessee case was
that we, in a sense, relied on the States to oversee the performance
of the managed care plans for which they contracted, possibly to a
greater extent than we should have, and we are making it increas-
ingly clear with all the States since what we expect of the States
in terms of their monitoring of the performance of those plans and
how we will monitor those plans directly ourselves if those States
fail to do enough of the job.
Mr. Stokes. Would you say that this particular experience has
enabled you to transfer knowledge gained from this situation over
to the other waiver situations around the country?
Mr. Vladeck. Yes. One of the things we're trying to do more sys-
tematically is create the mechanisms by which States learn from
one another without necessarily having to always go through us in
that regard. We had a conference several weeks ago, attended by
about 400 people, including a couple hundred State people, to begin
to look at the common experience and the shared experience from
the section 1115 waivers and to identify better mechanisms to get
feedback out to the broader community more quickly.
POPULATION SERVED BY MANAGED CARE
Mr. Stokes. Mr. Vladeck, what portion, percentage, and number
of Americans receive health care services under managed care sys-
tems?
Mr. Vladeck. Well, it depends on how you define it. I believe the
number is that approximately — depending on how you define man-
aged care — approximately two-thirds of the privately insured popu-
lation is now enrolled in some kind of managed care arrangement
or another.
The proportion of the population with private health insurance at
the moment is only about two-thirds, so it's about two-thirds of
two-thirds, which — let me try to do my arithmetic — is about 100
million folks out of a population of 250 million who are in private
managed care arrangements. In addition, about 8 million Medicaid
beneficiaries and 3 million Medicare beneficiaries currently are en-
348
rolled in managed care plans. So just under half of the whole popu-
lation, I guess, is in managed care plans. Another 15 percent of the
whole population has no health insurance, and the balance are still
in some fee-for-service arrangement.
Mr. Stokes. Is there any way to quantify for us, in terms of the
increase that's taking place, how much of it is attributable to the
agency's granting of Medicaid waivers?
Mr. Vladeck. Well, in the last couple of years, Medicaid man-
aged care has been by far the fastest-growing part of the managed
care market. We've roughly tripled in the last three or four years.
Again, it's on a smaller base, but I would say of the 115 million
Americans in managed care, as a very rough estimate and we can
get you more precise numbers, there are 5 million more Medicaid
folks in managed care just in the last two years. So it's a big part
of the recent growth.
Mr. Stokes. Please feel free to expand on that question for the
record.
Mr. Vladeck. We will get you more information.
[The information follows:]
349
Nationwide, approximately 17.4 percent of the total population is
enrolled in an HMO. This equates to approximately 50.5 million
persons nationwide. Using a more expansive definition of managed care
would raise the enrollment percentage to about 50 percent, by including
health plan options that have managed care features, such as preferred
provider organizations that provide services through a selected network
of providers.
Enrollment in Medicaid managed care continues to increase.
Currently, there are approximately 8 million Medicaid beneficiaries,
representing about 22 percent of the Medicaid population enrolled in
managed caiQ. Medicaid enrollment in managed care increased more
than 60 percent between 1993 and 1994. We expect continued and
more steady growth in 1995 and 1996, and beyond.
While enrollment in Medicare and Medicaid managed care
continues to grow, a significant portion of the recent growth is
attributable to enrollment in Medicaid managed care.
Medicare/Medicaid HMO Enrollment
1991 to 1996
12
Enrollment
1991
1992
1993
1994
1995
1996
Medicare ■
2.16
2.35
2.70
3.11
3.68
4.37
Medicaid 9
2.70
3.63
4.81
7.79
9.25
11.00
Projected Estimates for Calendar Years 1995 and 1996
350
Section 1115 Statewide waivers represent a relatively new component in
the expansion of Medicaid managed care. An additional
1,155,000 people are projected to be covered under Medicaid managed
care systems in the States of Oregon, Hawaii, Rhode Island, Tennessee,
and Ohio. In addition, Florida is projected to have 1.1 million expansion
eUgibles if the State legislature approves implementation of the waiver.
Eleven additional section 1115 waiver proposals currently under review
are likely to further expand the Medicaid managed care population.
351
GROWING NUMBERS SERVED BY MANAGED CARE
Mr. Stokes. I think it is a very important question.
To what extent has there been an increase in the number of
Medicare-covered individuals receiving their health care under
managed care?
Mr. Vladeck. That's been growing at a rate in the last couple
of years — last year it grew about 16 percent, the year before it
grew about 11 or 12 percent. This year we're projecting growth of
about 20 percent.
Mr. Stokes. Is this a regional trend?
Mr, Vladeck. Well, what is happening is that our Medicare
HMO enrollment in the past has always been concentrated in just
a few regions. What we are seeing now is very rapid growth in re-
gions where traditionally there has been very little Medicare man-
aged care activity, particularly the northeast and some parts of the
midwest.
Mr. Stokes. The transition to Medicaid-waivered health care
systems must be carefully planned and executed, and to that end
there must be a strong disproportionate share program to assure
viability of safety-net hospitals during the transition to managed
care. Equally important, there must be the continued assurance of
health care services for those who are still uninsured after imple-
mentation of Medicaid managed care plans.
What is the agency doing to ensure that this is the case?
Mr. Vladeck. Well, again I would have to answer that with a
very broad, generic answer which has different specific outcomes in
the case of each State's proposal. But in general, we expect States
to maintain some degree of subsidy for essential community provid-
ers, particularly high disproportionate share hospitals, during any
transition period. Then for States that are going to continue to
have a large number of uninsured persons, indefinitely, even sifter
a waiver.
Mr. Stokes. Under the Medicaid managed care systems, the role
of and support needed for graduate medical education must be ad-
dressed. With respect to health care facilities doing the training,
what provisions are built into HCFA-approved Medicaid waivers to
ensure Federal and State funding support for facilities that conduct
graduate medical education and training?
Mr. Vladeck. Again, I would say that there is an awful lot of
variation in what the States propose to us. And there, frankly, we
are much more flexible than we are on some of these other issues
we've just discussed, because we feel that in almost every instance
the States have such a large financial as well as policy investment
in higher education and particularly graduate medical education in
their States that they want to have some flexibility as to whether
they seek to subsidize some of that through the Medicaid program
as opposed to subsidizing it through support of the university sys-
tem or whatever.
But we have approved a very wide variety of arrangements rel-
ative to graduate medicsd education purposes, and we tend to defer,
relatively extensively, to the policy preferences of the States in that
regard.
352
Mr. Stokes. Let me ask you another question about an area in
which, as you know, I have a great deal of concern relative to the
OhioCare situation, I would have the same concern nationally.
That is with respect to providers that have traditionally provided
quality health care services to the Medicaid population in our
inner-cities, and in particular, minority health providers who have
been more or less relegated in their practices to inner-city practices
before it became both popular and profitable.
What provisions are built into the approved waivers to ensure
that they continue to be a provider of health care services to this
particular population?
Mr. Vladeck. We, frankly, in part because of the concerns we
heard expressed in Ohio, learned in our approval of that waiver
how to write special terms and conditions into our approval to ad-
dress equitable treatment and open participation by minority pro-
viders, both by themselves and as parts of managed care arrange-
ments, and to give us, through the formulation of those terms and
conditions, the hook or the leverage to make sure that the States
do observe those requirements.
So we are going to expect — in the case of Ohio, for example — ^that
whatever bidding process or contracting process they have does not
discriminate against those traditional providers in any way, and in
fact reaches out to them in a variety of ways to make sure that the
traditional providers have a crack at full participation, not only for
their existing client base, but to expand under the terms of the
waiver. And we're going to monitor that very closely and we're
going to insist on that kind of provision.
Mr. Stokes. I think that's very important and I appreciate your
commitment in that respect.
With the welfare debate taking place on the floor — and I antici-
pate that within the next hour or two we will probably have com-
pleted our action here in the House on welfare reform — tell us
what impact is the proposed overhaul of welfare reform expected
to have on your agency's operations, the programs that it admin-
isters and the people served by those programs. I would appreciate
it if you could just take a moment to elaborate, and be as specific
as you can.
Mr. Vladeck. Well, I can't give you as many details as I would
like, Mr. Stokes, frankly, because I probably haven't paid as much
attention to it as I should have, both because we've been doing
other things and because of our hope that the House version is not
the final law that comes back.
Mr. Stokes. That's my hope, also.
Mr. Vladeck. I think there are several considerations there. In
the first instance, there are several million people, as we under-
stand it, that will lose eligibility for Medicaid by virtue of losing
eligibility for cash assistance under the bill now on the floor of the
House. Most of those are immigrants legally in the United States,
as well as certain disabled children and others.
Second, and of somewhat more concern, is that as we understand
it the removal of entitlement from the structure of the program for
cash assistance raises very significant questions about the basis for
entitlement for the 70 percent of Medicaid beneficiaries who are en-
titled as recipients of AFDC. And there are some ways to accommo-
353
date that, and I honestly don't know the extent to which that's
been addressed, but the States will have so much flexibility over
who gets benefits and who doesn't that the potential for both the
loss of many millions of other folks from Medicaid coverage on the
one hand, where the States are playing various games about Med-
icaid coverage, strikes me as very significant.
Third, to the extent that States now will have total freedom to
use what mechanisms they wish to decide who gets cash assistance
and who doesn't, that implies radical change in the administrative
infrastructure through which States determine Medicaid eligibility,
as well. I don't believe that anyone has really thought through the
implication of that considerable devolution of eligibility responsibil-
ity to the States on the Medicaid program. We know it's there;
we've talked to our colleagues in HHS who are knowledgeable
about welfare. They know that the problem is there, but they agree
with our perception that no one has really paid very much atten-
tion to it.
Mr. Stokes. I'm glad you mentioned that. That's also one of my
concerns. There are a lot of aspects of this whole program and
other ramifications that have not been well thought out or well
considered in terms of the legislation that is now being promoted
on the floor. The measure looks as though it will emerge from the
House. Hopefully, once again, in the Senate much more can be
done about bringing a much more rational and reasoned approach
to it.
Mr. Vladeck, I have a number of other questions which I will
submit to you for the record.
I appreciate very much the responses that we've had from you
this morning.
Mr. Vladeck. Thank you, sir.
Mr. Stokes. With that, we are adjourned until 10:00 a.m. Tues-
day morning.
Mr. Vladeck. Thank you.
[The following questions were submitted to be answered for the
record:]
354
PAYMENT SAFEGUARDS FUNDING
Mr. Porter: How much more money could be invested in
■payment safeguards activities before the returns begin to taper
off?
Mr. Vladeck: Any estimate of the rate of return on
incremental funding would be highly speculative. However, it
is reasonable to expect that a prudent amount could be invested
beyond the current request without any significant reduction in
the return ratio. Over the past several years, HCFA's
contractors have maintained a relatively constant rate of
return even though funding has fluctuated somewhat. It is
reasonable to expect that this performance would continue given
a limited, additional investment. Benefit Integrity does not
factor into the return ratio because the changes in scope and
nature of activities make it difficult to quantify savings for
this program. Additional funding would include Benefit
Integrity.
MEDICARE TRANSITIONS
Mr. Porter: Your 1996 request includes a $23.5 million
increase for the costs associated with an increasing number of
contractors leaving the Medicare program and transferring their
work to other contractors. What is happening in the program
that is causing these contractors to pull out?
Mr. Vladeck: Contractors may choose to leave the prograun
because of a business decision or because they may not be able
to continue at the performance level required by HCFA.
Contractor transition funding is required to update the
incoming contractor's claims processing system to accommodate
the increased claims workload. In many cases, the incoming
contractor must work with individual providers to ensure a
smooth conversion to the new claims submission protocols. In
addition, HCFA is responsible for many personnel and equipment
costs associated with the discontinuation of Medicare
operations by the outgoing contractor.
The costs associated with the transition of this workload are
substantial. In fact, the average contractor transition cost
was budgeted at $7.7 million in FY 1994. The funding requested
would pay between three and five contractors leaving in
FY 1996.
INCREASE IN THE PAYMENTS TO HEALTH CARE TRUST FUNDS
Mr. Porter: Your 1996 request for the Payments to the
Health Care Trust Funds increases by a startling $25.7 billion
— a 69 percent jump. I realize that this is an entitlement
account and won't count against our discretionary ceiling, but
I think an increase of that magnitude deserves some discussion.
Can you explain the reasons for the $25.7 billion increase?
Mr. Vladeck: Most of the increase, $25.2 billion, is in
the payment to the Supplementary Medical Insurance (SMI) Trust
Fund for the Federal match of Part B premiums. A number of
factors explain this increase.
355
The FY 1996 eetintate of the match includes $6.7 billion to
repay the SMI Trust Fund for financing an expected shortfall in
FY 1995. The FY 1995 appropriation was based on FY 1995
President's Budget estimates, which were revised upward at
Mid-Session Review and subsequent re-estimates of the program.
The growth includes projected increases in price, utilization,
and enrollees, and a higher contingency margin in the event
actual costs exceed projections.
The growth also reflects a change in the percentage of aged
beneficiaries' progreun costs covered by the Part B premium.
The Omnibus Budget Reconciliation Act of 1990 set the premium,
for calendar years (CY)s 1991-1995, at absolute dollar amounts
to cover 25 percent of costs as projected at the time of
passage. However, based on the latest estimates the CY 1995
premivim will cover more than 30 percent of these costs. Under
the Omnibus Budget Reconciliation Act of 1993, the premium
reverts to a simple 25 percent coverage in CY 1996. To offset
the loss of premium income, the FY 1996 Federal match will
increase by $300 million.
UNDOCUMENTED ALIENS
Mr. Porter; Although your budget documents include
almost no mention of it, you are proposing a $150 million
program to reimburse States for the medical care of
undocumented aliens. Can you explain how this prograun would
work, and how the funding would be distributed to States? Have
you submitted the necessary authorizing legislation for the
program to the Hill?
Mr. Vladeck: The President's Budget calls for creating a
new discretionary grant to help States pay for the emergency
medical care for undocumented immigrants. Medicaid coverage
for these services was required under the Medicaid program by
the Omnibus Budget Reconciliation Act of 1986. As with other
Medicaid services, the Federal government already shares the
cost of these services with the States, with matching funds of
between 50 percent and 78 percent. The new grant funds would
help pay for the non-Federal share of costs for these services
in States with the greatest burden of providing them. HHS
would forward funds to the State Medicaid agency for the non-
Federal share of these costs, up to the limit of the State's
allocation for that year. The Administration is currently
drafting implementing legislation, including the State funding
distribution procedures, which we plan to send to the Congress.
MEDICAID ABORTION PROVISION
Mr. Porter: As you know, the Medicaid abortion general
provision was debated in the recently passed rescission bill.
How many States does HCFA consider to be out of compliance with
the Administration's interpretation of the statute? Have any
sanctions been imposed against these States? Are they in any
short-term danger of losing their Medicaid funding?
Mr. Vladeck: HCFA considers six States (Alabama,
Kentucky, Mississippi, North Dakota, South Dakota, and Utah) to
be out of compliance with the statute. HCFA has notified these
States of their noncompliance.
356
The next step in the process is a compliance hearing.
Participants at the hearing Include the State, HHS Regional
Office, and the HHS Office of the General Counsel, along with a
designated hearing officer. The hearing officer will make a
recommendation to me and I will make the final decision. I
must also decide the amount of the State's Medicaid funds to be
withheld if the State(s) are found to be out of compliance.
Until that time, there will be no sanctions imposed or Medicaid
funds withheld.
MEDICARE HANDBOOK
Mr. Porter: Most people would agree that a new Medicare
handbook would be nice for beneficiaries to have, but is it
essential in this budgetary environment?
Mr. Vladeck: Yes, it is essential that beneficiaries
have a new and updated Medicare handbook. The last time a
Medicare handbook was distributed to every Medicare beneficiary
was approximately 8 years ago. Providing our 37.5 million
beneficiaries with up-to-date information to make Informed
health care choices is a top priority of this Agency. It is
clear from beneficiary feedback and communication with our
partners that the Medicare handbook is an Indispensable source
of Information on program benefits and policies for our
beneficiaries .
Every private Insurance company provides handbooks and policy
information to beneficiaries on an annual basis. Informed
beneficiaries will make better health care choices and reduce
the number of inquiries to HCFA.
HCFA ON-LINE INITIATIVE
Mr. Porter: Tell us more eUsout the HCFA On-Llne
initiative. Is the technology envisioned something the elderly
population is likely to use? Why does the start-up of this
project cost $10 million?
Mr. Vladeck: HCFA On-Llne is a comprehensive
communications strategy designed to enhance Interaction between
HCFA and our 70 million beneficiaries and their f£unilles, our
partners, and other customers. The five elements of the
initiative are to:
— Learn customer and partner information needs and
preferences;
— Enhance partnerships with other Federal agencies. States,
and other entitles;
— Build and operate data systems meeting the information
needs and preferences of customers and partners;
— Harness existing and emerging information technologies to
provide the best availeUsle service, most
coat-effectively; and,
— Employ a variety of customer-driven information delivery
techniques that are responsive and effective.
The technology envisioned by HCFA On-Llne will be
"user-friendly" and designed for the elderly population. The
technology may include "800" number telephone service, guidance
for written correspondence, cable television, free-standing
357
kiosks, interactive videos, and electronic bulletin boards.
HCFA On-Llne will also allow beneficiaries who use
microcomputers the ability to access compact-disc technologies
containing important health information.
In the past, information provided by HCFA was confusing, and
often times was not useful in assisting beneficiaries to make
informed health care choices. To improve services for
beneficiaries, HCFA will conduct market research to better
serve customer health information needs, gather data about
common questions and inquiries from beneficiaries and other
customers, establish a separate database environment to improve
customer access to health information, and develop a plan to
facilitate dissemination of existing health care information.
CONSOLIDATED FACILITY
Mr. Porter: Are you on schedule with your planned move
to the consolidated office facility in 1995? Will the move and
the associated expenses be completely funded from the 1995
appropriation?
Mr. Vladeck: The project is on schedule and no delays or
extra charges for construction are expected. We expect
construction to be completed this month (March 1995) and
relocation to begin in April 1995.
Since all final expenses for the new facility will be funded in
FY 1995, HCFA does not require any funding for the consolidated
facility in FY 1996.
PERFORMANCE AND OUTCOME MEASURES
Mr. Porter: Tell us more about your plans to convert the
survey and certification program from a process-oriented system
to one that is based on performance and outcome measures. What
sort of performance standards do you intend to establish?
Mr. Vladeck: We plan to replace the process and
structure requirements in Medicare survey and certification
with outcome measures whenever possible. To that end, we are
revising the conditions of participation for hospitals, home
health agencies, and end-stage renal disease (ESRD) facilities.
These changes will be made in consultation with the provider
and beneficiary communities and as part of the public
rule-making process. We've revised survey processes for home
health agencies, ESRD, and nursing homes and these survey
protocols are now in use. We will begin, in the very near
future, an intensive progrcun to retrain surveyors across the
country to strengthen their ability to focus on patient
outcomes. We are going to evaluate continuously evaluate these
processes and rework them as we identify opportunities for
improvement .
As part of our focus on outcomes, we have developed quality
indicators (Qis) for use in ESRD facilities, nursing homes, and
home health agencies. ESRD facilities were provided
comparative information in March on several key outcome
indicators, such as adec[uacy of dialysis and extent of severe
anemia in the population. This information will help them
improve processes of care, with a corresponding increase in
358
patient outcomes. Nursing homes in several states are already
using quality indicators. Computerization of the existing
nursing home assessment tool, on which the indicators are
based, is in progress. Full implementation of the nursing home
project will occur in 2 to 3 years, and the home health project
will be implemented in 4 to 5 years. Plans are being made to
develop quality indicators for hospices and intermediate-care
facilities for the mentally retarded as well.
FINANCING THROUGH USER FEES
Mr. Porter: With the current budget constraints, I am
somewhat surprised you have not resurrected the idea of
financing the survey and certification program through user
fees. Do you think that concept has any merit?
Mr. Vladeck: HCFA proposed the idea of financing the
survey and certification program through user fees in FY 1991
through FY 1993. Congress rejected those proposals.
We would support a new concept, that of charging fees for
initial surveys relating to provider and supplier participation
in the Medicare program. States would collect and retain these
fees to cover the costs of the initial surveys. Medicare has
experienced an extraordinary growth in the number of providers
and suppliers requesting to participate in the Medicare
program. Over the past three years initial surveys of long-
term care facilities have increased by 27 percent; home health
agencies by almost 40 percent, and other facilities by over
45 percent.
Current projections indicate that the savings from this
proposal will be approximately $8.7 million in FY 1996.
INSPECTION OF HOME HEALTH AGENCIES
Mr. Porter: Can you explain your legislative proposal to
adjust survey coverage requirements for certain types of
facilities?
Mr. Vladeck: Our home health agency (HHA)
recertification coverage level proposal requires State survey
agencies to conduct Medicare recertification surveys of HHAs on
a Statewide average of 24 months while retaining Secretarial
authority to conduct more frequent surveys when necessary to
ensure the delivery of quality home health services. It
further requires that all HHAs be subject to standard surveys
no later than 36 months after their previous standard survey.
Historically, HHAs have had a strong record of compliance with
Medicare requirements. Almost half of HHAs are deficiency-free
and only about four percent of HHAs have serious deficiencies.
As a result of this record, HCFA has proposed legislation that
will allow States the flexibility to target problem facilities,
while allowing us to inspect the deficiency-free facilities
less often.
Specifically, this proposal mandates that all "problem
facilities," approximately 4 percent of all HHAs, be surveyed
as often as every six months. Facilities posing a lesser
threat, the 50 percent of all HHAs with deficiencies that would
359
not be considered serious, would be surveyed between 12 and
24 months. Facilities having no deficiencies would be surveyed
within 36 months. As a result, this proposal would free up
resources to target non-mandated facilities.
EFFECTIVENESS OF LYMPHEDEMA PUMPS
Mr. Porter: HCFA has questioned the effectiveness of the
E0652 lymphedema pump relative to the less expensive pumps.
However, last year's draft proposal to change HCFA's Coverage
Issues Manual provision to incorporate that view was never
published, in part because the Office of Health Technology
Assessment report on which it was based had significant flaws
and omissions. Moreover, the national Lymphedema Network and
prominent physicians such as Dr. Susan Love, director of the
UCLA Breast Center, have expressed the view that this device
provides superior benefits. Has HCFA made a final
determination as to the circumstances in which the E0652 pump
is an allowable expense under Medicare? When will that
guidance be made public?
Mr. Vladeck: HCFA has made a preliminary determination
as to the types of patients for which the E0652 piunp should be
a covered service under Medicare. This will become a final
determination when we issue the manual instructions. The
instructions are currently in draft and in the clearance
process. These instructions are based on results of the review
of the medical literature and the recommendations of the
clinicians who gave us valueUsle input. The revised
instructions will help ensure the appropriate use of these more
costly devices by clarifying the type of documentation needed
to warrant payment of the more advanced pumps (E0652). HCFA
expects these instructions to be published in several months.
CURRENT PROCEDURAL TERMINOLOGY (CPT) CODES
Mr. Porter: In the past two years, how many proposals
have been received by HCFA for a comprehensive overhaul of the
CPT codes for reimbursement with a self-monitoring device? How
many of those specified use of appropriate, independent
clinical personnel? How has HCFA responded to any such
request?
Mr Vladeck: In the past two years, HCFA has received
only one proposal for a comprehensive overhaul of the CPT codes
for reimbursement with a self -monitoring device. That proposal
was submitted in the form of an "approach plan" that was
discussed with the Administrator in May 1993.
HCFA also received six comprehensive proposals for developing
rebundling policy for CPT codes that were in response to a
Request for Proposal (RFP) published on December 2, 1993. All
proposals specified the use of clinical personnel. A contract
was awarded on July 31, 1994 to AdminiStar Federal.
The contract awarded to AdminiStar Federal is to develop
rebundling methodologies to control overpayment of Part B
claims where manipulation of coding ("code gaming") leads to
inappropriately increased reimbursement. The end product will
include a final recommendation for rebundling edits to be
installed in the claims processing systems of all carriers.
360
Further, the contract specifies the use of appropriate,
independent clinical personnel. It also requires AdminiStar to
circulate for comments all tentative rebundling edits and
policy to all national physician specialty societies and the
American Medical Association.
At the present time, the tentative rebundling edits and
policies have been drafted and circulated for comment.
AdminiStar is just beginning its analysis of the comments that
have been received. A final report is due August 1, 1995.
HCFA has reviewed a draft report of the GAO that recommends the
use of commercial software systems to detect billing abuse.
Demonstrations of the capabilities of these systems by GAO are
scheduled for May 1995.
Mr. Porter: How serious a problem do you believe the
underlying CPT codes are from the perspective of inappropriate
use of Federal funds from "geuning"?
Mr Vladeck: We believe that any coding system,
including CPT, is subject to gaming and that the inappropriate
use of any Federal funds from gaming is a serious problem. We
do not know the extent of g£uning but the Office of Inspector
General estimates losses to the entire health care industry at
$1 billion to $2 billion per year.
The processing and paying of claims under the Medicare progr£un
is handled by contractors (carriers and intermediaries) who
also are responsible for identifying and preventing fraud,
waste and abuse. For many years, contractors have had edits in
their claims processing systems to identify and preclude
payment for claims where manipulation of coding leads to
inappropriately increased reimbursement.
Because of the escalating cost of health care, the growing
complexity of coding, the growing volvune of claims, and the
parallel decrease in funding for carrier activities, HCFA must
develop efficient methods to control overpayment.
Incorporating rebundling activities into the carriers' claim
processing systems has provided significant savings to the
Medicare program.
In February 1991, HCFA directed all carriers to put in place a
system of edits to limit overpayment for claims that had been
unbundled. That methodology, referred to as "rebundling,"
consisted of a HCFA-defined list of 87 codes. The list has
since been expanded to include several hundred codes. Between
April 1992 and January 1994, these edits have yielded an
average of $5 million per month in savings.
The contract awarded to AdminiStar is expected to expand
significantly the number of edits. Once the final edits have
been developed, we will be able to process a seunple of claims
through the system and determine the savings that can be
expected once the edits are implemented. We believe it is
vitally important to address this area prior to the completion
of the design of the Medicare Transaction System.
361
Mr. Porter: Did the Administrator of HCFA Indicate in
May 1993 that the agency would issue a request for proposals
for reforming the CPT coding system? Was this commitment
followed through on?
Mr. Vladeck: In May 1993, an "approach plan" to
reforming CPT was presented by a private firm. Venture
Resources, to the Administrator of HCFA. At that time, a
Request for Proposal (RFP) to develop rebundling policy for CPT
codes was under development and the firm was advised that HCFA
could not discuss the details of its approach since such
discussions could be viewed by other potential bidders as
providing the firm an unfair competitive advantage. The firm
was encouraged to submit a proposal once the RFP was published.
An RFP entitled "Developing National Rebundling Policy for
Part B Carriers" was published on December 2, 1993. Six
companies submitted proposals. Venture Resources did not
submit a proposal. A contract was awarded on July 31, 1994, to
AdminiStar Federal.
INFORMATION, COUNSELING AND ASSISTANCE (ICA) GRANTS
Mr. Porter: Your 1996 budget requests a decrease in
funding for the insurance counseling program. Can you tell us
why you think the progreun can operate with a lower funding
level? At this funding level, would you allocate funds by
formula or make discretionary grants?
Mr. Vladeck: The ICA program strengthens the capcUsility
of States to provide Medicare beneficiaries with information,
counseling, and assistance on adequate and appropriate health
insurance coverage. Funding will support ICA activities
related to Medicare, Medicaid, Medicare supplemental policies,
long-term care insurance, and other health insurance benefits.
The ICA grants program is also a volunteer-based counseling
program. Since the program has been fully funded to the extent
of approximately $10 million for each of 3 fiscal years. States
have had the opportunity to build and train a volunteer base.
We believe that the ICA grants program will continue to be
effective, having established this volunteer base. The grants
will continue to be formula based.
USES OF ICA GRANTS
Mr. Porter: What are the main uses of these funds? Is
any performance data reported by the States?
Mr. Vladeck: The funds are used primarily for
administrative costs incurred in operating the State counseling
programs. Such costs typically include a coordinator's salary;
travel expenses for volunteer recruitment, training, and public
presentations; volunteer training expenses; telephone; other
administrative and presentation equipment; and, various
promotional expenses.
Performance data are reported semi-annually by the State
programs. Reporting requirements include the number of
beneficiaries served, funds saved as a result of the counseling
activity, identification of the various issues on which
362
counseling was provided, a general narrative of each State
program's activity, and an accounting of the State's use of
grant funds .
OTHER STATE AND LOCAL PROGRAMS
Mr. Porter: Do any other local or State agencies (such
as area agencies on aging [AAA]) provide similar services?
Mr. Vladeck: The State ICA and local program personnel
work in cooperation with the various State agencies, including
the State Units on Aging (SUA) and the AAAs, in the various
outreach activities performed by the ICA program. The
distinction between the programs is that the local programs are
involved in a variety of senior-related activities, but lack a
specific focus, whereas the ICA programs are organized to
address and focus entirely on health care-related issues and
needs of the senior community. Many of the volunteers in the
ICA program are recruited from local programs.
363
CAUSES OF MEDICARE SPENDING GROWTH
Mr. Dickey: Why is spending for Medicare increasing
annually by almost 10 percent?
Mr. Vladeck: Enrollment has been growing by 2 percent
per year or more, in part due to faster growth in the number of
disabled beneficiaries. Enrollment growth is projected to slow
over the next ten years to 1.3 percent per year on average.
Price growth in the large inpatient hospital and physician
services categories is in the range of 3 or 4 percent per year.
Other factors such as utilization of these major services also
contributes to spending growth.
Moreover, faster growth in smaller but emerging services
significantly raises the overall Medicare growth rate. In
Medicare Part A, spending on skilled nursing and home health
services continues to expand rapidly. Though the rate of
growth has begun to decline, spending in these areas has been
rising in the range of 40 percent a year. Skilled nursing
growth is driven mostly by price increases, while home health
growth primarily represents increased utilization of home
visits. In Medicare Part B, physician service utilization
remains somewhat high. The smaller but faster growing
outpatient costs and laboratory service utilization continue to
raise total costs.
REDUCING GROWTH IN MEDICARE
Mr. Dickey: What needs to be done to reduce the rate of
growth in Medicare?
Mr. Vladeck: The most desiretble approach to controlling
Medicare expenditures is a comprehensive strategy of health
care reform. Without comprehensive reform, the number of
uninsured persons will continue to increase. This would
ultimately shift costs to the States and the private sector. A
rational plan for health care reform that reduced Medicare
spending could also consider issues such as insurance reform,
long term care, program streamlining, and curbing waste, fraud
and abuse.
BLOCK GRANT PROGRAMS
Mr. Dickey: Some in Congress have advocated a block
grant program to replace the Medicare program. Could a block
grant program be fashioned that would cost less and provide
more services?
Mr. Vladeck: We have not considered the rsunif ications
of a block grant program for Medicare; however, it is difficult
to imagine how one could structure such a block grant without
causing massive disruptions to the health care market and
potentially severe problems for Medicare beneficiaries.
Our concerns about block granting the Medicaid program are that
cutbacks in Federal Medicaid payments may lead to significant
reductions in Medicaid coverage and that States may be required
to drastically reduce provider payments. In addition, there
are also several technical and equity issues surrounding the
design of a block grant progreun. For example. States with the
higher program growth rates and/or the more rapidly growing
364
elderly populations would be dieproportionately affected by an
annual cap on growth.
PROTECTING SENIORS' HEALTH RIGHTS
Mr. Dickey: An ophthalmologist, a constituent from my
district, performed a routine two-year check-up on a Medicare
beneficiary, checking for such things as glaucoma, cataract,
and a need for any change in prescription. Since this type of
preventive care is not covered by Medicare, the beneficiary
simply paid for the service out of her own pocket and,
complying with regulations, my constituent informed HCFA of the
medical service. HCFA soon wrote to my constituent to inform
her that she had performed a "medically unnecessary service,"
and that she must reimburse the patient the eunount paid for the
check-up. I understand that the Medicare system acts to
protect seniors from situations of fraud and theft. To what
extent does HCFA balance its role as a guardian of seniors'
health rights and its duty to ensure that seniors receive the
care they need?
Mr. Vladeck: We believe that we can achieve both of
these goals. We have a variety of activities and progreuns which
support our efforts in these areas. Continuous education of
our beneficiaries and providers concerning health issues and
entitlement issues supports our efforts in both the areas.
Through specific initiatives such as distribution of the
Medicare Handbook to every beneficiary, which is included in
the FY 1996 Budget, we are continuing to ensure that our
beneficiaries have a clear understanding of the Medicare
program. Our approach to quality oversight is shifting from
individual case and provider review toward analyzing patterns
of care in multiple health care settings. This redirection
will protect the beneficiary and improve the mainstream of
health care. This approach has already proven its value
through the Cooperative Cardiovascular Project. We are
constantly reviewing our total program to ensure that our
beneficiaries receive the care they require in a quality
setting.
In order to ensure the provider' s right to collect and retain
payment for the services not considered reasonable and
necessary under Medicare guidelines, the physician must, in
advance of providing the services, give the beneficiary written
notice that the Medicare carrier is likely to deny payment for
the services, and the reason(s) why, and obtain the agreement
of the beneficiary to pay for the services himself or herself
on that basis.
In the present case, the Medicare carrier should have denied
payment for the ophthalmologist's services under section
1862(a)(7) of the Act as constituting a routine physical
checkup, and not under section 1862(a)(1) as being medically
unnecessary services. The ophthalmologist was entitled,
therefore, to collect and retain payment for these services
even though he did not give the beneficiary advance written
notice of their noncoverage and obtain the advance agreement of
the beneficiary to pay for the services himself. There was, in
fact, no reason for the physician to submit a claim for the
noncovered services unless the beneficiary requested a claim
determinat ion .
365
DMERCs TRANSITION
Mr. Dickey: I understand that the HCFA transition from
34 to four regional carriers (DMERCs) has caused a delay for
home medical equipment dealers who are seeking Medicare
reimbursement from HCFA. One small business owner in my
District complained that she has not been reimbursed for
approximately 70 percent of her claims within the timeframe
required by law. How is HCFA dealing with the logistical
problems associated with a transition of such a large
magnitude?
Mr. Vladeck: During the initial transition, the durable
medical equipment regional carriers (DMERCs) did sustain
significant backlogs in processing the DME claims. This was
regrettable and may have resulted in delayed reimbursements to
some providers. However, HCFA and the DMERCs reacted to the
situation quickly and the backlogs have been eliminated. We
have gained considereUsle experience from the DMERC transitions
which will be of benefit to HCFA as we move forward. The
question raises several other issues related to the DMERC
transition which should also be addressed.
Prior to the creation of DMERCs, suppliers could "carrier shop"
— identify and locate/bill in areas where carrier policy was
the most liberal. Under our new rules, suppliers must submit
claims to one of four DMERCS according to where the beneficiary
lives, thereby reducing the chances for fraudulent or abusive
billing practices.
In response to allegations that DMERCs are cutting back
coverage, we know that, historically, DME claims accounted for
a very small percentage of a carrier's claims volume.
Consequently, medical review policy to determine the medical
necessity of DME items was not always a high priority.
With just four DMERCs — each with a full-time medical director —
there is a new level of attention being given to the
development of sound and consistent local medical review with
the goal of paying appropriately for those items that are
reasonsJale and necessary. Also, backlogs in claims processing
that resulted from the transition should not be construed as a
cutback in coverage.
METHODS TO INCREASE MATCHING MEDICAID FUNDS
Mr. Dickey: Recent newspaper articles detailed illegal
methods used by 18 States and the District of Columbia to
increase the eunount of Federal matching funds for Medicaid.
Some estimates show that States may owe up to $3 billion to the
Federal Government. What is HCFA's role in correcting this
situation?
Mr. Vladeck: Nine States have taxes that are considered
to be impeirmissible under section 1903 (w) of the Social
Security Act. These taxes are estimated to represent about
$480 million. Because these are just estimates, we will be
scheduling audits in the near future to determine the exact
amount of the impermissible tax.
366
Sixteen States, some which also had impermissible taxes, may
submit a request for the approval of a waiver of the broad-
based and/or uniformity requirements in order for the teuc to be
permissible under the law. We are working with these States in
either developing or reviewing their waiver requests.
PREVENTION OF IMPERMISSIBLE TAXES TO INCREASE MEDICAID MONIES
Mr. Dickey: What plans do you have to ensure that
similar situations do not happen in the future?
Mr. Vladeck: States are now required to report on HCFA
Form 64-llA, the health care related teuces imposed by the
State. We will be reviewing these reports to ensure that the
taxes listed have been determined either to be permissible
under the law or that a waiver request has been submitted.
MEDICAID SAFEGUARDS FOR UNDOCUMENTED ALIENS
Mr. Dickey: What safeguards do you have to ensure that
Medicaid funds are not used for undocumented aliens, except in
case of emergency treatment?
Mr. Vladeck: Section 1137(d) of the Social Security Act
requires that all alien applicants claiming a satisfactory
immigration status must sign a declaration to that effect and
submit documents for verification with INS of the claimed
status. However, aliens who are not lawfully admitted for
permanent residence or permanently residing in the United
States under color of law, who are seeking emergency treatment
only, are exempt by S1137(f) from the declaration requirement.
They also do not have their immigration status verified with
INS.
Those otherwise eligible applicants who sign the declaration
are eligible to receive all services available under a State's
Medicaid program, both routine and emergency. Those otherwise
eligible applicants who do not sign the declaration are
eligible only for treatment of emergency medical conditions.
Therefore, when claiming Federal financial participation (FFP),
States must segregate claims for treatment of emergency medical
conditions attributable to illegal aliens from claims for other
Medicaid-eligible persons. Such claims are subject to the
usual review and audit procedures employed by HCFA in verifying
claims for FFP.
MEDICAID TRANSFER OF ASSETS
Mr. Dickey: A hypothetical couple is applying for
Medicaid coverage. The husband is 90 years old and his wife is
80. Their assets include a $75,000 home, 2 lots at $15,000
each, $50,000 in cash and a monthly income of Social Security
benefits plus $300 per month. Can the couple sell the 2 lots
and use the proceeds and their cash to make their home handicap
accessible without being made ineligible for Medicaid?
Mr. Vladeck: Yes. The issue here is not one of
eligibility for Medicaid, but whether the couple transfers an
asset (the value of the two lots plus the cash) for less than
fair market value. While a transfer for less than fair market
367
value does not affect Medicaid eligibility per se, it can
result in a penalty which could deprive the couple of payment
for certain Medicaid services. However, if the value of the
modifications to the home equals the amount spent, the couple
would get fair market value for the money it spent, and no
transfer penalty would be incurred. In the example given, the
couple would have to make $80,000 worth of modifications in
return for the $80,000 in assets they would be spending.
Mr. Dickey; Can the couple sell the 2 lots and their
home, and use all of the proceeds and their cash to purchase a
new/modern home without being made ineligible for Medicaid?
Mr. Vladeck: The transfer of assets policy discussed
above also applies in this situation. In addition, assiuning
the new home is the principle place of residence of at least
one member of the couple, the home would not be counted as a
resource in determining eligibility for Medicaid.
Mr. Dickey: Can the couple sell the 2 lots and use the
proceeds along with their cash to purchase a handicap
accessible vehicle?
Mr. Vladeck: Yes. Again, to avoid a transfer penalty
the value of the vehicle would have to equal the value of the
assets ($80,000) spent. Assuming this is the case, however,
under Medicaid the total value of a vehicle is excluded if it
has been modified to accommodate a handicapped individual.
Mr. Dickey: Can the couple sell the 2 lots and put the
proceeds along with their Social Security checks into a Miller
Trust?
Mr. Vladeck: No. A Miller trust can be established
only with income. It cannot be established or augmented with
resources. While the Social Security checks would be income,
the proceeds from the sale of the two lots would be a resource,
and so could not be placed in a Miller trust.
Mr. Dickey: Is there any type of trust the couple can
create by putting the 2 lots into the corpus without being made
ineligible for Medicaid?
Mr. Vladeck: The new rules for treatment of trusts
established by Omnibus Budget Reconciliation Act (OBRA) of 1993
have made it much more difficult to use trusts to shelter
assets. Under the OBRA 1993 rules, it is unlikely that the
couple could establish a trust not specifically exempt from
those rules that would effectively shelter the two lots. The
couple might be able to establish a "pooled" trust, which is a
type of trust, managed by a non-profit organization, which is
exempt from the OBRA 1993 rules. However, the couple would
have to be completely disabled, and the trust would have to
meet certain other specific requirements which could make
establishment of such a trust disadvantageous to the couple,
particularly in view of the relatively small value of the asset
($30,000).
368
GRADUATE MEDICAL EDUCATION UNDER MEDICAID MANAGED CARE
Mr. Stokes: Under Medicaid managed care systems, the
role and support needed for graduate medical education must be
addressed. The system must not focus on and reward primary
care alone. With respect to health care facilities doing the
training, what provisions are included in HCFA-approved
Medicaid waivers to ensure Federal and State funding support
for facilities that conduct graduate medical education
training?
Mr. Vladeck: In States that currently make payments for
graduate medical education training, we carefully look at their
section 1115 waivers to make sure that the States continue to
make such payments. For other States, Medicaid law does not
require that medical education payments be made. To date, of
the approved section 1115 waivers, only Tennessee had
provisions for such payments but those ceased after the first
year of the waiver. (In Tennessee, payments for medical
education were made only as long as full enrollment was not
reached. )
LABORATORY INSPECTIONS
Mr. Stokes; The agency is projecting that it will
conduct over 20,000 laboratory inspections in FY 1996. How
does it compare with the number inspected in FY 1995 and
FY 19947
Mr. Vladeck: In FY 1994, we conducted 18,563 laboratory
inspections, 17,217 of these were initial certification
inspections and 1,285 were follow-up or complaint inspections.
In FY 1995, we project that the number of inspections will
increase slightly to over 20,000.
STATUS OF CLINICAL LABORATORIES
Mr. Stokes: The Clinical Laboratory Improvement
Amendments of 1988 expanded survey and certification of
clinical laboratories from Medicare participating and
interstate commerce laboratories to all facilities testing
human specimens for health purposes. What is the state of the
nation's laboratories, what is being done to improve them, and
also, how often might a laboratory be inspected?
Mr. Vladeck: The inspection data of the laboratories we
have surveyed show that approximately 10 percent of the
laboratories were seriously lacking minimum practices that
ensure accurate and reliable testing. Eighty-four percent of
the laboratories had some deficiencies cited. Laboratories not
previously regulated, mostly physician office laJsoratories,
demonstrated a much higher rate of non-compliance with basic
requirements for quality control and quality assurance than
those previously regulated.
HCFA's specialized progreun for review of cytology laboratories
has identified many cytology laboratories with serious quality
problems and/or has removed permission to perform Pap testing.
Specifically, of the 178 specialized cytology inspections since
1989, 38 percent had serious deficiencies, including
misdiagnosis of Pap smears. Eight of these laboratories, which
369
%f«r« parfomlng mor* than half a allllon Pap taata annually,
had auch aavara problama with accuracy in raading Pap amaara
that thay %Mr« no longar allowed to parform thia taat.
Laboratoriaa found to ba in noncomplianca with tha raquiranenta
ara given tha opportunity to raapond and allowad time to
correct the def icienciea. In caaaa where laboratory practice
repreaenta aerioua riak of harm to patienta or the laboratory
refuaea to make the appropriate changea to enaure accurate and
reliable teat reaulta, aanctiona are impoaed. In extreme
caaea, a laboratory may loae it a capability to teat legally.
Inapectiona of facilitiea engaged in laboratory teating are
performed every t%ra yeara in accordance with the law.
STATUS OF HOME HEALTH AGENCIES
Mr. Stokea: What ia the at ate of the nuraing homea and
home health agenciea?
Mr. Vladeckt Aa a result of the Omnibus Budget
Reconciliation Act of 1987 (OBRA 1987), improvements have been
made in the care provided to residents in nursing homes in such
areas aa inappropriate physical restraints, a 50 percent
reduction, as well as a aignificant reduction in the
inappropriate use of psychoactive drugs. Studies further
reflect an 18 to 59 percent reduction in the use of
antipsychotic drugs.
During this same period, nursing homes have also become much
more attentive to the quality of life of their residents.
Home health agenciea (HHAa) have had a strong record of
compliance with Medicare requirementa. Almoat half of the HHAs
are deficiency-free and only about 4 percent of HHAa have
serious deficiencies.
INSPECTION OP HOME HEALTH AGENCIES
Mr. Stokest According to the justification, the agency
is proposing legislation that would give the States the
flexibility to target those home health agencies that are most
prone to deficiencies. What ie the status of the proposal and
if it is not implemented, to what extent does the agency's
current authority allow you to exercise such responsibility?
Mr. Vladeck: The proposal is a part of the President's
FY 1996 Budget Bill. If the proposal ia not Implemented, HCFA
will continue to abide by OBRA 1987, which mandates that
recertif ication surveys of home health agencies be conducted
every year.
EMERGING ISSUES
Mr. Stokes: Nursing homes have raised concern over
hospitals installing nursing home beds. They are concerned
that the high costs for the hospitals to buy and operate beds
would be passed along to consumers and taxpayers. Would you
comment on this matter?
370
Mr. Vladeck: The Medicare program has witnessed a
marked increase over the last few years in the nvunber of
hospital-based SNFs becoming certified for Medicare. This
trend seems to be one that is evolving nationally as hospitals
seek to manage cost containment pressures resulting from
hospital prospective payment and position themselves favorably
in a growing market for post-acute and "sub-acute" services.
It is true that, generally, hospital-based SNFs have higher
costs than their freestanding counterparts. This has resulted
in higher costs for the Medicare program, taxpayers and for
consumers of hospital-based SNF services.
MEDICARE CONTRACTOR LEGISLATION
Mr. Stokes: The Agency indicates that it is proposing
legislation that will provide flexibility in Medicare
contracting. What are the major features of the proposal, and
what will it allow the Agency to do that it currently does not
have the authority to do?
Mr. Vladeck: Contracting reform legislation will
provide HCFA with the flexibility to adapt to the changing
health care market place and the ability to streamline its
contracting to achieve opportunities for administrative
savings. Contracting reform has two main themes. The first is
to make Medicare contracting more like other government
contracting. The second is to increase flexibility in the
administration of the Medicare program. Both of these themes
arise from Medicare's critical need to respond to the
proliferation of vertical integration within the health
insuring industry and within an increasingly tight budget.
Medicare contractors have begun to acquire medical providers,
such as hospitals, physician networks, laboratories, etc., in
addition to the health maintenance organizations which they
have developed during the last ten years. Processing the
claims or settling the cost reports of providers which are
owned by the same corporation is a blatant conflict of
interest. Unfortunately, many of our effective contractors
have developed corporate visions in which they evolve from
insurers of health care to providers of health care. We cannot
afford to lose totally the knowledge and experience of these
contractors. Thus, vertical integration by health insurers
threatens the integrity of the current contracting environment
because contractors are either placed in a position where they
may be asked to perform program integrity functions like claims
review on their own providers. This could result in the loss
of good contractors.
MEDICARE CONTRACTOR LEGISLATION
Mr. Stokes: What is the status of the legislation and
when is it expected to be submitted to the Congress?
Mr. Vladeck: HCFA is working closely with the
Department and the Office and Management and Budget to develop
the legislative proposal that will improve HCFA's contracting
flexibility. By allowing HCFA increased flexibility, we can
improve the cost effectiveness of the Medicare contractor
371
budget and better protect program integrity for taxpayers and
beneficiaries .
ESCALATING COST OF MEDICATION
Mr. Stokes: According to the recent New York Times
article entitled "Some Drugs Rise in Price at a Fast Pace,"
pharmaceutical companies have increased the pace of price
increases on many of their best-selling drugs since the
collapse of the universal health care proposal. What impact
will this price escalation have on the agency's programs and
service population?
Mr. Vladeck: The prescription drug market is complex
and predicting the impact of price increases of specific drugs
on Medicaid beneficiaries and State programs is difficult.
However, price increases mean that States may have to pay more
for prescription drugs. Legislation included in OBRA 1991
affords States some protection against price increases
exceeding inflation for brand name drugs. To the extent this
legislation is ineffective, some States may find it necessary
to limit the number of prescriptions or refills, increase
copayments, reduce dispensing fees to pharmacists, or find
other cost controls that might result in decreased beneficiary
access to medically necessary drugs. On the other hand, drug
companies must offer Medicaid their best price through the
rebate progreun. The trend towards negotiated prices in the
private market may continue to allow the Medicaid program one
discount as a large purchaser of prescription drugs.
Medicare does not cover outpatient prescription drugs.
However, escalating prices could further disadvantage an
estimated 40 percent of Medicare beneficiaries who are without
third-party coverage, such as employer- sponsored insurance,
Medigap, or Medicaid, for prescription drugs. The Feunilies USA
report "Worthless Promises: Drug Companies Keep Boosting
Prices", upon which the New York Times article was based, cites
several examples of Medicare beneficiaries who skip pills or
meals to stretch or purchase necessary medications.
SLOW MEDICARE AND MEDICAID EXPENDITURES
Mr. Stokes: Expenditures for Medicare and Medicaid are
projected to be reduced by $79 billion and $133 billion
respectively over a five-year period, according to the FY 1996
budget request. Specifically, how are these reductions to be
achieved, and which services would no longer be provided or
curtailed under Medicare and Medicaid?
Mr. Vladeck: The President's economic program, combined
with improved efficiency in program administration, has
resulted in a significant reduction in the projected baseline
growth in Medicare and Medicaid spending.
For Medicare, projections of the average annual rate of growth
for FY 1994 to FY 1998 were lowered from 11.9 percent in the
January 1993 baseline to 9.9 percent in the FY 1996 President's
budget. This translates into a $79 billion drop in projected
spending over the five-year period.
372
In the FY 1996 President's budget, the primary contribution to
lower Medicare projections is slower growth in Hospital
Insurance (Part A) expenditures. The slower projected Part A
growth results primarily from a decline in forecasted hospital
cost inflation and slower growth in the complexity of Medicare
inpatient cases.
For Medicaid, projections of the average annual rate of growth
for FY 1994 to FY 1998 were lowered from 13.9 percent in the
January 1993 baseline to 8.7 percent in the FY 1996 President's
Budget. This translates into a $133 billion drop in projected
spending over the five-year period.
The drop in projected Medicaid spending is attributedsle to
several factors. First, similar to the Medicare program,
Medicaid has benefitted from the success of the Clinton
economic progreun. Second, lower projections of Medicaid
spending also stem from lower actual State spending, improved
economic conditions, slower projected growth in provider cost
inflation, and slower projected growth of the population
receiving Supplemental Security Income benefits. Finally, the
bipartisan passage of the 1991 provider t£uces and donation law
and the successful implementation of its regulations have had a
significant effect on the growth of Medicaid disproportionate
share hospital payments as well as limiting States' use of
creative financing mechanisms to increase Federal payments.
ADAPTIVE DEVICES FOR LOW-VISION DIABETICS
Mr. Stokes: The service most frequently requested by
people who have diabetes and visual impairment is to learn to
draw insulin no-visually. I understand that there are many
kinds of adaptive equipment currently available which make it
possible for people with low vision or no vision to measure
insulin safely and accurately. This appears to be one
situation where both the financial savings and the human needs
support the Scune course of action. Does the agency provide or
has it considered providing Medicare and Medicaid coverage for
adaptive insulin equipment, would you respond to this concern?
Mr. Vladeck: For Medicare to cover equipment, it must
fall into a statutorily-def ined benefit. This equipment does
not fit in any current benefit. Self-administered insulin is
not covered due to the statutory prohibition on coverage of
self -administered drugs.
Under Medicaid, State Medicaid programs may cover adaptive
insulin equipment.
MEDICARE OUTREACH
Mr. Stokes: The agency has indicated that one of its
goals is to strengthen its outreach and consumer-oriented
emphasis. What role do the ICA programs have in this
initiative?
Mr. Vladeck: The ICA programs support this initiative
by providing education and outreach services to the beneficiary
population, especially targeted populations such as rural and
minority. The ICA programs provide information and referral
services both over the phone and in person, counseling services
373
in health care and health insurance options, and assistance
with understanding and resolving payment and other related
items.
INCREASED UNDERSTANDING THROUGH ICA GRANTS
Mr. Stokes: To what extent does this progreun provide
assistance services to the elderly to increase their
understanding of the Medicare system and Medicare benefit
forms?
Mr. Vladeck: The ICA progreuns provide one-on-one
insurance counseling, and phone information and counseling
through the use of toll-free lines. The ICA counselors also
hold group seminars and presentations. Additionally, ICA
counselors will provide one-on-one assistance in explaining and
resolving questions on the Medicare benefit forms.
BUDGET FOR OUTREACH SERVICES
Mr. Stokes: How much is included in the FY 1996 budget
request for such outreach services and for the information,
counseling and assistance programs?
Mr. Vladeck: HCFA has requested $4.5 million in FY 1996
for the Information, Counseling and Assistance (ICA) program.
There is no single budget item which encompasses HCFA outreach
activities. The President and Vice President have empowered
each government agency to build outreach and education
activities into every routine activity. As a part of its
strategic planning, HCFA has focussed on improving outreach and
education in all of its activities. Therefore, costs for
outreach activities are included in many areas and are not
separately identifiable.
HCFA conducts outreach activities in a number of ways. HCFA's
carriers and intermediaries conduct direct outreach to
beneficiaries through staff educators and beneficiary liaisons.
In addition, carriers have toll-free lines which provide
information on Part B claims to beneficiaries. Durable Medical
Equipment Regional Carriers (DMERCs) and Peer Review
Organizations (PROs) conduct outreach and education activities
on durable medical equipment and quality of care, respectively.
DMERCs and PROs also have toll-free lines to answer beneficiary
questions. Outreach activities conducted by contractors are
included in HCFA's contractor budget.
HCFA On-Line is a comprehensive communications strategy
designed to enhance interaction between HCFA and our
beneficiaries. The technology envisioned by HCFA On-Line will
be "user-friendly" and designed for the elderly population.
The technology will also include a "800" telephone number,
guidance for written correspondence, cable television, free-
standing kiosks, interactive videos, and electronic bulletin
boards. HCFA On-Line will also allow beneficiaries who use
microcomputers the eUaility to access compact-disc technologies
containing important health information. HCFA will conduct
market research to better serve customer health information
needs, gather data about common questions and inquiries from
beneficiaries and other customers, establish a separate
database environment to improve customer access to health
374
information, and develop a plan to facilitate diasemination of
existing health care information.
The Office of the Associate Administrator for Customer
Relations and Communications (AACRC) prints a number of
publications for use by beneficiaries. In addition, AACRC
conducts outreach programs such as quarterly beneficiary
association meetings, disability outreach, and consumer survey
coordination.
The Office of Research and Demonstrations currently has
projects which focus on improving beneficiaries aUaility to
choose between health plans and providers, and make more
informed health care choices.
FY 1994-1995 FUNDING FOR OUTREACH SERVICES
Mr. Stokes: How does this compare with the FY 1995 and
FY 1994 funding levels for each?
Mr. Vladeck: In FY 1994, HCFA obligated $9.9 million
for the Information, Counseling and Assistance (ICA) program.
In FY 1995, HCFA was appropriated $10.0 million for the ICA
program; however. House and Senate rescission bills propose a
reduction in funding to $4.5 million.
375
PAYMENT SAFEGUARDS
Mr. Hoyer: When Secretary Shalala came to speak with
this Committee, she presented some very impressive figures on
what you, working with the Inspector General, have been aible to
achieve in your fight against waste, fraud and abuse. Could
you review for this Committee your efforts to preserve the
integrity of your trust funds and give us a preview of coming
attractions in that area?
Mr. Vladeck: HCFA has developed a three-prong strategy
to combat fraud and adsuse that includes prevention, early
detection and management, and multi-component coordination and
cooperation. HCFA and the Department will be proposing
legislation to protect the integrity of the Medicare trust
funds through our new program integrity initiative. This
initiative will provide a stable and reliable funding source
that will allow HCFA and the Office of Inspector General to
combat fraud and abuse in our programs.
In recognition of the fact that we will never have enough
resources to pursue each and every fraud case in a postpayment
manner, we have developed a strategy that emphasizes prevention
and paying claims right the first time. Examples include:
— Implementing specialized contractors for dureUsle medical
equipment and home health agency claims.
— Identifying and correcting existing vulnerabilities in
current policies and operating procedures.
Secondly, in the area of early detection and management, we are
working to utilize our databases to target better our payment
safeguard activities, specifically medical review and audit.
Exeunples include:
— Suspension of payments to providers suspected of fraud.
— Issuance of fraud alerts on emerging issues/problems.
— Facilitating contractor acquisition of sophisticated
fraud detection and analysis software.
Finally, in the area of multi-component coordination and
cooperation. Medicare contractor fraud units detect and conduct
preliminary fraud investigations. HCFA implemented agreements
with the Department of Justice and Federal Bureau of
Investigation to permit information sharing. Exeunples include:
— Participating in multi-Agency regional fraud task
forces.
— Conducting beneficiary education in detecting fraud and
abuse.
Facilitating contractor and law enforcement staff
cross-training .
MANAGED CARE
Mr. Hoyer: What is happening in the area of managed
care? Is it truly saving money? What steps are you taking to
ensure quality?
Mr. Vladeck: Approximately 8 million Medicaid
beneficiaries are currently enrolled in managed care.
376
representing about 22 percent of the Medicaid population.
Also, over 3 million Medicare beneficiaries are currently
enrolled in managed care, representing about 9 percent of the
Medicare population.
Enrollment in Medicaid managed care increased more than
60 percent between 1993 and 1994. We expect continued and more
steady growth in 1995, and beyond. Enrollment in Medicare
managed care increased approximately 16 percent between 1993
and 1994. We expect continued and comparable enrollment growth
in 1995 and 1996.
A recent utilization finding has demonstrated that the TEFRA
Risk Program is cost effective and has the potential to save
money for the Medicare progreun, if the payment formula is
corrected. The Datis Corporation reported that increased
Medicare risk penetration results in hospital savings due to
reductions in average length of stay.
HCFA is moving to develop performance measures to better
address the care provided to beneficiaries, and to collect
reliable and meaningful data to ensure continuous quality
improvement by managed care organizations. One aspect of
quality measurement is HCFA's ongoing evaluation of contracting
IDlO's internal quality assessment and improvement programs. In
addition, plans which receive risk-based payment are subject to
Peer Review Organization (PRO) review of the care they provide.
PROS perform review of random seunples of cases as well as all
beneficiary complaints received.
HCFA recently established a Quality and Performance Standards
Team to concentrate on ways of ensuring and improving quality
of care for Medicare and Medicaid beneficiaries in managed
care. The team has focused initially on the following
initiatives:
— Medicaid Managed Care Quality Assurance Initiative
(QARI);
— Medicaid Health Plan Employer Data and Information Set
(HEDIS);
— Medicare Managed Care Quality Improvement Project
(formerly called the Delmarva Project); and
— Coordinated monitoring of managed care plan quality
assurance and improvement systems.
REDUCING MANAGED CARE COSTS
Mr. Hoyer: In addition to Managed Care, what other
management steps are you taking to reduce costs?
Mr. Vladeck: Projected savings from several initiatives
are factored into the development of the contractor unit cost
targets used in the budget and performance requirements. Unit
cost targets are used by HCFA regional offices as a base for
their negotiations with the contractors. In this way, the
contractors are alerted to HCFA's expectations with regard to
cost and progreun efficiencies and are encouraged to perform in
a cost effective and efficient manner. Specifically, HCFA
— continues aggressive efforts to maintain rates of
electronic media claims (EMC) submissions already
377
attained. Use of EMC has been the largest single
contributor to contractor unit cost reductions.
— expects contractors to achieve additional savings from
reduced overhead and general technological improvements
related to increasing workloads.
— continues to stress the use of electronic data
interchanges for electronic funds transfers, electronic
remittance advices and other activities that can be done
in a standardized, automated manner.
Additionally, savings are anticipated in payment safeguard
activities. HCFA has begun an initiative in the audit area to
focus desk reviews and field audits on areas of high risk and
potential benefit savings to the program through limited review
procedures.
ENTITLEMENT SPENDING
Mr. Hoyer: In order to achieve a balanced budget, we
have to get entitlement spending under control. You oversee
two of the three largest spenders in our budget: Medicaid and
Medicare. Any discussion of controlling expenditures in these
programs is bound to be politically difficult and
controversial .
In your view, what issues do we — all of us, in the Congress,
the Administration, the media, and the public — need to tackle
to control these costs?
Mr. Vladeck: The most desirable approach to controlling
Medicare expenditures is a comprehensive strategy of health
care reform. Without comprehensive reform, the number of
uninsured persons will continue to increase. This would
ultimately shift costs to the States and the private sector. A
rational plan for health care reform that reduced Medicare
spending could also consider issues such as insurance reform,
long term care, program streamlining, and curbing waste, fraud
and abuse.
We are now exploring ways to expand managed care options in a
way that preserves choice and high quality. In addition, we
are trying to promote greater efficiency in the delivery of
health care services.
Mr. Hoyer: Do you have any recommendations to make
these discussions more fruitful?
Mr. Vladeck: A comprehensive solution to health care
reform requires a non-partisan commitment to the examination of
all the multi-faceted issues and interests that comprise our
health care system. Discussions should not be held in a vacuum
and should include the input of the American public, providers,
and a wide range of professional interest groups.
378
JUSTIFICATIC»I OF THE BUDGET ESTIMATES
HEALTH CARE FINANCING ADMINISTRATION
•*
STRATEGIC PLAN BUDGET
FISCAL YEAR 1996
379
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE HNANCING ADMINISTRATION
Section
Grants to States for Medicaid
Payments to the Health Care Trust
Funds
Program Management
Health Maintenance Organization
Loan and Loan Guarantee Fund
1996 Estimate
FTEs
4,147
Amount
$95,977,200,000 I
$63,313,000,000 II
$2,299,322,000 III
IV
380
381
HCFA SERVES
70 MILUON BENEFICIARIES
EXECUTIVE SUMMARY
The enactment of Medicare and Medicaid legislation in 1965 marked a new chapter in the
provision of services by the Federal Government to its citizens. The Medicare emd Medicaid
programs have dramatically altered the quality of life for many of our most vulnerable
citizens by increasing access to care,
improving physical health, and
minimizing tears of financial ruin
from medical bills. As these
programs approach their thirtieth
year, the Health Care Financing
Administration (HCFA) is
submitting a budget which will begin
a dramatic improvement in this
Agency's services to our primary
customers-the almost 70 million
aged, disabled, and needy
beneficiaries served by these
programs.
80r
70
60
SO
40
30
^
i t
I ft
10^ 1882 1989 1(
To provide improved levels of
beneficiary service and improved
operating efficiency, HCFA has embarked on a number of initiatives, notably the
development of an Agency strategic plan and the creation of a total quality work
environment with fewer but highly-trained employees. The budget also incorporates new
directions such as Agency streamlining; multi-year budgeting; cost-saving initiatives; and the
correlation of resources, mission, measurable goals, and results.
Finally, this budget proposes an investment called HCFA On-Line, to realign HCFA into a
proactive, customer-focused Agency. This investment is essential to improving the long-term
effectiveness and efficiency of this Agency. Most importantly, we would accomplish this plan
with a current law budget request for Program Management which is almost the same as last
year's appropriation.
AGENCY STRATEGIC PLAN BUDGET
The HCFA Strategic Plan provides a direction and focus for all elements of HCFA- The
seven goals provide a framework for moving toward our vision for the future which is "We
guarantee equal access to the best health care" while continuing to perform our current
mission which is "We assure health care security for beneficiaries." This budget was
developed around our strategic plan which caused us to focus on and demonstrate how we
plan to meet these goals with the funding requested. Beyond the Agency's direct control,
however, is the need for specific program legislation to reduce Medicare benefit cost growth
and insure the fiscal integrity of the program beyond this decade. The budget request
following this summary is presented in the traditional format for easy reference.
382
The following is a summaiy of our request by goal:
Build a high quality, customer-focused team . . .
Ensure programs and services respond to the
heahh care needs of beneficiaries
Promote improved health status of beneficiaries
Be a leader in health care information
resources management
Promote fiscal integrity of HCFA programs . . .
Create excellence in the design and administration
of our programs
Provide leadership in the continuing
evolution of the health care system
Total Funding
FY 1995
Current Estimate
FY 1996
Estimate
($ in millions)
$ 41.7
$ 43.5
1,134.2
330.9
1,241.9
962.4
71.9
537.6
76.5
506.7
127.7
154.7
81.1
$2,325.2
101.7
$3,087.2
The following is a summary of the request by appropriation category:
FY 1995 FY 1996
Current Estimate Estimate
($ in millions)
Appropriated:
Program Management $2,198.6 $2,253.8
Included above (non-add):
HCFA On-Line — (10.0)
HMO Loan Guarantee Fund ; . . . 15.0 —
Revolving and Other:
Health Maintenance Organization User Fee 0.1 0.1
Peer Review Organizations 54.8 777.2
ESRD Networks 10.7 10.7
CLIA 45.8 45.4
Total Funding $2,325.2 $3,087.2
Full-Time Equivalent Employment 4,129 4,147*
*The increase in FTE reflects 43 FTEs transferred from HHS regional offices to HCFA
as part of a regional office streamlining effort.
EXECUTIVE SUMMARY - 2
383
mnm JCHTS of oint program
HCFA's underlying concerns in every program area are customer service, efficiency, and
effectiveness. These themes are woven throughout our Strategic Plan and are the
foundation that link the goals together. In each of our programs we are constantly reviewing
and validating the objectives and our achievement of those objectives.
Medicaid Grants to States
HCFA's Medicaid program, which serves 37.6 million low-income recipients and the largest
funding source of health care for the poor, has estimated total Federal Medicaid obligations
of $96.0 billion for FY 1996. This is an increase of 8.5-percent or $7.5 billion from the
FY 1995 estimated obligations.
The FY 1996 request of $82.1 billion is a $7.1 billion decrease from FY 1995 due to a
$13.8 billion unobhgated balance to be carried over from FY 1995. However, the overall
growth in the Medicaid program is also slowing due to decreases in State expenditures and
actual outlays over the past year, lower medical price inflation and a gradual slowdown in
recipient growth.
Payments to Health Care Trust Funds
The Payments to Health Care Trust Funds accoimt is a passthrough ciccount which
reimburses the Medicare Trust Funds for charges related to the General Fund. The
payment to the Supplementary Medical Insurance (SMI) Trust Fund is the Federal match
of premiums paid by or for indrviduzils voluntarily enrolled in SMI, also known as Part B of
Medicare. This payment to the SMI Trust Fund increases by $25.2 billion in FY 1?%.
Program Management
Research
Providing leadership in the continuing evolution of the health care system requires a clear
focus. The major change in this area is in rural research. We are phasing out the less
effective Rural Health Transition Grants and replacing them with Rural Health Network
Reform. We are starting this program at a cautious level to ensure that we are properly
focused on the needs of rural communities. Also, FY 1995 is the final year we plan to fund
the essential access community hospital and rural primary care hospital (EACH/RPCH)
grant program. Providers are now receiving equitable compensation for services through
Medicare payments, hence, there is no longer a need for this program.
EXECUTIVE SUMMARY - 3
384
Medicare Contractors
We must ensure that our partners, the Medicare contractors, pay claims in a timely and
accurate manner. Our highest priority for funding is claims payment However, we have
major on-going and new efforts which will improve service provided by the contractors and
foster efficiency and effectiveness.
The Medicare Transaction System (MTS) will further standardize, consolidate, and
modernize our claims processing systems. Once fully implemented, it will result in claims
processing savings. The project is currently in the design phase and the FY 1996 request
includes funding for several activities leading up to and supporting implementation. While
we are working with our design contractor to develop a cost-effective system, major MTS
related efficiencies will not occur until implementation.
In recent years we have experienced an increase in Contractors leaving the Medicare
program. It is likely that this trend will continue. This request provides funding to cover
these transitions.
Protecting the solvency of the Medicare trust funds is a basic element of our mission, and
the Payment Safeguards Program is a crucial part of this effort. In cooperation with the
Office of the Inspector General (OIG), we stand in the forefront of the insurance industry'
in re-engineering current procedures to guard against fraud and abuse. As health care
delivery systems become increasingly complex, our activities must expand. We are examining
irmovative methods to fund and carry out these important program integrity responsibilities
to detect fraud and abuse and to prevent erroneous payments from the Medicare Trust
funds.
State Certification
Promoting improved health status of beneficiaries and ensuring the quality of the care they
receive is a critical element of moving toward our vision. This area has been held level, in
current dollars, having to absorb price increases since FY 1991. We must ensure that we
do not continue to neglect this area which has a direct impact on our customers, the
beneficiaries. Emphasis in this area will be to invest in the transformation of our process
oriented surveys to more cost-effective evaluations that focus on performance indicators and
outcome measures.
A legislative proposal to provide flexibility in the frequency with which home health agencies
are surveyed will improve the cost effectiveness and efficiency of this program without
compromising the quality of care beneficiaries receive.
EXECUTIVE SUMMARY - 4
385
Administrative Costs
After carehil consideration of the areas where service to 70 million beneficiaries and our
other customers needs substantial improvement, HCFA has developed an investment plan-
HCFA On-Line. Highlights of the investment include implementation of an on-going
customer-focused needs assessment, an interactive "800" number telephone system, improved
data systems which will allow data to be transformed into usable information for all
customers, research and demonstration projects on health status and consumer choice,
expanded availability of quality-of-care data, improved beneficiary and provider outreach
programs, and enhancement of the Federal-State partnership. Investing in HCFA On-Line
is essential to improving the level and quality of HCFA beneficiary service, and in making
visible progress in achieving our strategic vision.
With employment ceiUngs constrained, use of systems technology is the best means available
to improve significantly service to beneficiaries without substantial personnel increases. The
FY 1996 increment will be devoted to ensuring that our policies and procedures meet our
beneficiaries' needs.
Responding to beneficiaries' needs is essential. We must provide the beneficiaries and their
families information about HCFA programs. In FY 1996 we plan to update and improve
the Medicare Handbook, which we will provide to all beneficiaries.
HCFA has already begun streamlining efforts to increase its employee-to-supervisor ratio.
The initial effort, which focused on reducing the number of supervisory positions, is not
expected to produce significant savings in full-time equivalent (FTE) employment, however
the workforce will begin the cultural change required for success in the future. Non-
supervisory employees will be assuming non-managerial tasks currently performed by
supervisors. HCFA utilized the early-out, buy-out, and discontinued service retirement
options to help achieve the FTE targets for FY 1994 and FY 1995. This approach also will
provide new employment opportunities to increase diversity and acquire more speciedized
staff capable of handling the technical needs of the workplace of the future.
The FY 1996 budget assumes HCFA will achieve its FY 1995 target of 4,129 FTEs. In
FY 1996 HCFA's FTE level increases to 4,147. This is a combination of 2 initiatives:
downsizing the HCFA's current FTE level and redistribution within HHS of regional FTEs.
The current Agency FTE level reduces by 25 to 4,104 FTE in FY 1996. We will accomplish
this while continuing to serve our growing beneficiary population, as well as meeting
statutory obUgations and performing tasks required by our peirtners, including the Congress,
contractors, the Department of Health and Human Services, and the Office of Management
and Budget. The reassignment of the regional offices functions and FTEs from HHS to
HCFA results in HCFA gaining 43 FTEs to perform missions previously accomplished by
HHS in the regions.
EXECUTIVE SUMMARY - 5
Peer Review Organizations (PROs)
Funding for the Peer Review Organizations (PROs), which is not appropriated, accounts for
$722.4 million of the $762 million increase in FY 1996. Funding for the 3-year cycle, or the
fifth round, beginning in FY 1996, is $820.6 million. This amount is $69.1 million less than
the cxurent cycle. Obligations in FY 1996 will be $777.2 million because the majority of
funds JU"e awarded in the first year of a cycle. The fifth round of the PRO contracts
continues implementation of the Health Care Quality Improvement Program (HCXJIP).
Under HCQIF, ?ROs will shift fi-om traditional review of individual inpatient care to an
analysis of patterns of care. This approach can be more directly translated into higher
quality health care, the original intent of the PRO program.
We are continuing our efforts to ensure the best use of our resources. A legislative proposal
will be submitted which will enhance quality control of the PROs through clarification of the
Secretary's authority to non-renew contracts with specific PROs. We are examining
alternative approaches designed to streamline the appeals process. In addition, we are
reviewing pre-procedure approval requirements that may be inefficient and inconsistent with
the overall direction of the PRO program under HCQIP.
EXECUTIVE SUMMARY - 6
387
Summary of Significant Changes in Program Management Funding Levels'
(Dollars in millions)
,_, — ._^
FY 1995
Appropriation
FY 1996
Request
Difference |
Claims Payment
853.5^
854.1
+0.6
Medicare Handbook
1.2
20.0
+ 18.8
Contractor Transitions
5.0
28.5
+23.5
Sur/ey and Certification
145.8
162.1
+ 16.3
HCFA On-Line
-
10.0
+ 10.0
Medicare Transaction System (MTS)
11.8
20.2
+8.4
Payment Safeguards
396.3'
396.3
-
Rural Health Transition Grants
17.6
--
-17.6
Administrative Simplification
32.2
17.5
-14.7
EACH/RPCH
3.5
.
-3.5
' The Administration is proposing a supplemental which will reduce the Program Management
Account by S20.0 million. Details are discussed in the Supplemental Section of this document
^ The current estimate for FY 199S Claims Payment is S829.6 million.
' The cunent estimate for FY 199S Payment Safeguards is S414.6 million.
EXECUTIVE SUMMARY - 7
388
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
GRANTS TO STATES FOR MEDICAID
Budget for Fiscal Year 1996
Appropriation language 1
Language analysis 2
Amounts available for obligation 4
Summary of changes 5
Budget authority by activity 6
Budget authority by object 7
Significant items 8
Authorizing legislation 10
Appropriations history table 11
Justification:
A. Summary table 13
B. Purpose and method of operations 14
C. Rationale for the budget estimate 15
D. Impact of proposed legislation • 19
E. Adjustments to State estimates 19
F. National trends 22
G. Changes in State estimates 28
H. State table (FYs 1995-1996) 37
389
HEALTH CARE FINANCING ADMINISTRATION
Grants to States for Medicaid
Appropriation Language
For carrying out, except as otherwise provided, titles XI and XDC of the Social Security Act
[$62,640,775,000] $55,094,355,000, to remain available until expended.
For making, after May 31, [1995] 1996, payments to States under title XIX of the Social
Security Act for the last quarter of fiscal year [1995] 1996 for unanticipated costs, incurred
for the current fiscal year, such sums as may be necessary.
For making payments to States under title XIX of the Social Security Act for the first
quarter of fiscal year [1996, $27,047,717,000] 1997, $26,155,350,000, to remain available until
expended.
Payment under title XIX may be made for any quarter with respect to a State plan or plan
amendment in effect during such quarter, if submitted in or prior to such quarter and
approved in that or any subsequent quarter.
390
GRANTS TO STATES FOR MEDICAID
Language Analysis
Language Provision
Explanation
For carrying out, except as otherwise
provided, titles XI and XIX of the Social
Security Act, $55,094,355,000, to remain
available until expended.
This section provides a one-year
appropriation for Medicaid. This
appropriation is in addition to the advance
appropriation of $27.0 billion provided for
the first quarter of FY 1996 under the
FY 1995 Labor, HHS, Education and
Related Agencies Appropriations Act
(P.L. 103-333). Funds will be used under
title XIX for medical assistance payments
and State administrative costs and under
title XI for demonstrations and waivers.
For making, after May 31, 1996, payments
to States under title XIX of the Social
Security Act for the last quarter of fiscal
year 1996 for unanticipated costs, incurred
for the current fiscal year, such sums as
may be necessary.
For making payments to States under title
XIX of the Social Security Act for the first
quarter of fiscal year 1997,
$26,155,350,000, to remain available until
expended.
Tliis section provides indefinite authority
in the last quarter of fiscal year 1996 to
meet unanticipated costs.
This section provides an advanced
appropriation for the first quarter of fiscal
year 1997 to ensure continuity of funding
for the Medicaid program in the event a
regular appropriation for fiscal year 1997
is not enacted by October 1, 1996.
391
GRANTS TO STATES FOR MEDICAID
Language Analysis
Language Provision Explanation
Payment under title XIX may be made for This section makes clear that funds are
any quarter with respect to a State plan or available with respect to State plans or
plan amendment in effect during such plan amendments only for expenditures on
quarter, if submitted in or prior to such or after the beginning of the quarter in
quarter and approved in that or any which a plan or amendment is submitted
subsequent quarter. to HHS for approval.
392
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
GRANTS TO STATES FOR MEDICAID
Amounts Available for Obligation
1995
1994
Current
19%
Actual
Estimate
Estimate
Appropriation
$89,077,413,000
$89,240,775,000
$82,142,072,000
Indefinite appropriation
Unobligated balance,
start of year
5,228,590,000
13,032,713,000
13,835,128,000
Unobligated balance,
end of year
-13.032.713.000
-13.835.128.000
Total obligations
$81,273,290,000 $88,438,360,000 $95,977,200,000
393
GRANTS TO STATES FOR MEDICAID
Summary of Changes
1995 Budget authority $89,240,775,000
1996 Estimated budget authority 82.142.072.000
Net Change -$ 7,098,703,000
Explanation of Changes
Increases:
1. State Estimates
Medical Assistance Payments
2. Financial Adjustments
3. Vaccine Purchase
1995 Current
Estimate Base
$88,652,194,000
-4,807,878,000
376.700.000
Change From
Base
$5,007,810,000
2,667,510,000
35.500.000
Subtotal, increases
$84,221,016,000
$7,710,820,000
Decreases:
1. State Estimates
State Administration
2. Unobligated balance
start of year
3. Unobligated balance
end of year
4. Drug/Ale. Prov. (P.L. 103-296)
5. Medicaid Initiatives
4,558,344,000
-13,032,713,000
13,835,128,000
0
-341.000.000
-135,980,000
-802,415,000
-13,835,128,000
-5,000,000
-31.000.000
Subtotal, decreases
TOTAL
$ 5,019,759,000
$89,240,775,000
-$14,809,523,000
-$ 7,098,703,000
394
GRANTS TO STATES FOR MEDICAID
Budget Authority by Activity
(Dollars in thousands)
Medical Assistance Payments
State Administration
Subtotal
Indefinite Appropriation
Unobligated balance
start of year
Unobligated balance
end of year
Total budget authority
(Obligations)
1995
1994
Current
19%
Actual
Estimate
Estimate
$78,176,262
$84,835,700
$92,235,200
3.097.028
3.602.660
3.742.000
$81,273,290
$88,438,360
$95,977,200
0
0
0
-5,228,590
-13,032,713
-13,835,128
13.032.713
13.835.128
$89,240,775
0
$89,077,413
$82,142,072
(81,273,290)
(88,438,360)
(95,977,200)
395
GRANTS TO STATES FOR MEDICAID
Budget Authority by Object
Grants, Subsidies
and Contnbutions
Total budget authority
1995
Current Estimate
1996
Estimate
$89.240.775.000 $82.142.072.000
$89,240,775,000 $82,142,072,000
Increase
or
Decrease
$7.098.703.000
$7,098,703,000
396
SIGNIFICANT ITEMS IN HOUSE AND SENATE
APPRPRIATIONS COMMITTEE REPORTS
Item
Action to be Taken
FY 1995 Senate Report 103-318
Medicaid
Automation Demonstration Project
The Committee recommends an increase
of $3,000,000 for the Medicaid fraud
control units to conduct a pilot
demonstration of an information system
designed to help investigators detect
potential Medicaid fraud. The
demonstration should be conducted in four
to six States to include a diverse Medicaid
recipient and provider population, using
technologies that would allow rapid
analysis of large volumes of Medicaid
claims. The results of the demonstration
project should be continually monitored
and reported to the HHS inspector general
within the first 2 years of the system's
operation. That report should include an
analysis of the system's performance and
its costs and benefits.
VFC Fee Schedule
The Secretary has also established a fee
schedule, based on customary charges, for
private physicians who administer VFC-
purchased vaccine. The General
Accounting Office has found that this
schedule is not in accordance with OBRA
'93, which requires that fees be based on
actual costs, rather than prevailing
charges. The Committee shares GAO's
concern that the Secretary's fee schedule
represents an incentive to physicians at the
expense of children who are uninsured.
The Office of Inspector General is
working with the National Association of
Medicaid Fraud Control Units
(NAMFCU) to develop a health care
antifraud pilot project. The NAMFCU is
currently canvassing its members to
determine if 4-6 State fraud control units
are financially able to implement the
demonstration project. The expenditure
of part or all of the $3.0 million is
contingent upon the State Units obtaining
matching appropriated grant funds from
their State legislatures. The matching
grant funds are required to supplement
the Federal funds due to the nature of the
grant.
HCFA has initiated a contract to gather
the cost data necessary for the
establishment of fee caps on the basis of
costs. The contract is currently in the
stage of methodology development, but it
is expected that the contractor's approach
will include on-site visits to compute the
costs. After the contract is completed and
their data has been reviewed, we will
publish a Federal Register notice to
update the caps on the maximum fees
participating VFC providers can charge.
397
SIGNinCANT ITEMS IN HOUSE AND SENATE
APPRPWATIONS COMMITTEE REPORTS
Item Action to be Taken
Accordingly, the Committee directs the
Secretary to compute the actual cost of
administering vaccines and to revise the
fee schedule prior to October 1, 1994, and
in accordance with the requirements of
OBRA '93.
398
GRANTS TO STATES FOR MEDICAID
Authorizing Lerislation
1995 1995 1996 1996
Amount Current Amount Budget
Authorized Estimate Authorized Estimate
Grants to States
for Medicaid
(Social Security
Act, title XDC,
Section 1901) Indefinite $89.240.775.000 Indefinite $82.142.072.000
Total budget
authority $89,240,775,000 $82,142,072,000
10
399
GRANTS TO STATES FOR MEDICAID
Appropriations History Table
Budget
Estimate
House
Senate
Year
to Congress
Allowance
Allowance
Appropriation
1978
$11,765,000,000
$11,413,400,000
$10,699,000,000
$10,699,000,000
1979
12,138,589,000
12,050,589,000
11,785,589,000
11,758,589,000
1980
14,865,629,000
14,735,139,000
14,705,139,000
14,705,139,000
1981
15,877,052,000
15,877,052,000
...
17,071,043,000'
1982
18,918,365,000
17,539,843,000
...
17,539,843,000'
1983
17,006,162,000
17,895,162,000
...
19,361,845,000'
1984
20,737,578,000
20,737,578,000
20,673,708,000
20,673,708,000
1985
21,213,000,000
21,213,000,000
21,845,491,000
21,845,491,000
1986
23,690,469,000
23,690,469,000
24,295,492,000
24,643,904,352^
1987
24,708,122,000
25,880,359,000
26,270,000,000
27,612,359,812'
1988
28,120,000,000
30,046,000,000
30,046,000,000
30,768,496,80r
1989
32,732,589,000
32,739,589,000
34,236,000,000
34,857,674,120^
1990
37,398,197,000
38,616,497,000
39,136,654,000
40,690,085,460*
1991
44,901,509,000
45,014,966,000
47,281,301,000
53,393,353,752'
1992
59,807,649,000
59,899,149,000
59,899,149,000
69,765,840,968'
1993
84,401,234,000
84,411,234,000
82,605,650,000
82,595,650,000
1994
89,060,413,000
89,077,413,000
89,077,413,000
89,077,413,000
1995
89,237,775,000
89,237,775,000
89,240,775,000
89,240,775,000
1996
82,142,072,000
' The Senate did not pass an appropriation for this account. The figure in the appropriation column
represents the continuing resolution level.
^ Includes $754.9 million under the indefinite authority.
' Includes S1342.9 million under the indefinite authority.
* Includes S722.S million under the indefinite authority.
' Includes $621.7 million under the indefinite authority.
Includes $1,553.4 million under the indefinite authority.
' Includes $6,027.0 million under the indefinite authority.
' Includes $9,866.7 million under the indefinite authority.
11
400
jusnncATioN
GRANTS TO STATES FOR MFDICAID
Authorizing Legislation
(Dollars in thousands)
Medicaid
Activitv
FY 1995
Current
Estimate
FY 19%
Estimate
Increase/
Decrease
Medical Assistance
payments
$85,638,115
$78,400,072
-$7,238,043
Administration
3,602.660
3.742.000
+ 139.340
Appropriation/
budget authority
$89,240,775
$82,142,072
-$7,098,703
13
401
Purpose and Method of Operations
Title XIX of the Social Security Act was enacted to assist States in providing medical care
to low-income populations. Grants for medical assistance are made to States and
jurisdictions having Medicaid plans approved by the Department of Health and Human
Services. Including the Arizona Waiver, there is a Medicaid program in each of the
50 States, the District of Columbia, Puerto Rico and the Territories. In FY 1996, the
Medicaid program, which is the largest single funding source of health care coverage for the
poor in the United States, will finance health care services for nearly 37.6 million low-income
recipients. In general, eligibility for the Medicaid program is automatically linked to
eligibility for the Aid to Families with Dependent Children (AFDC) and Supplemental
Security Income (SSI) cash assistance programs. All AFDC and most SSI beneficiaries must
be covered under the State Medicaid program. At their option, States may also cover the
medically needy. Medically needy recipients are not eligible for SSI or AFDC because they
do not meet the income or resource standards, but incur large medical expenses. Medicaid
also covers a number of low-income groups including qualified Medicare beneficiaries,
pregnant women, infants, and children who meet certain eligibility criteria.
Title XIX requires States to provide a minimum benefit package including hospital inpatient
and outpatient services, health screening services to children under 21, physician services,
and nursing home care for individuals aged 21 or older. States may also elect to cover
additional items such as drugs, dental care, and services in intermediate care facilities.
States have considerable flexibility in structuring their programs within broad guidelines
established by the Federal Government. Therefore, Medicaid programs can differ greatly
from State to State.
The Medicaid program is administered by States and financed through joint Federal and
State funding. Under current law. Federal funds are made available for medical benefit
costs on the basis of a formula which determines the percentage of total program costs to
be matched by Federal dollars. Under section 1905(b) of the Social Security Act, the match
rates for vendor payments may range from 50 to 83 percent, depending upon each State or
jurisdiction's relative per capita income. In FY 1996 the highest match rate for vendor
payments is 78.07 percent (Mississippi).
Enhanced Federal reimbursement is available for certain benefits and certain administrative
activities. A 90 percent Federal match is available for family planning services; 100 percent
for Indian health services. The Federal share of administrative costs is generally 50 percent,
though higher rates are applicable for specific items. For example, a 90 percent Federal
match is available for development of automated claims systems; a 75 percent match for
Peer Review Organization (PRO) activities; and a 100 percent for immigration status
verification systems.
14
402
Medicaid operates as a vendor payment program under which payments are made directly
to the health care provider for services rendered to an eligible individual. Providers must
accept the State's Medicaid payment as full recompense. By law, Medicaid is the payor of
last resort. If any other party (including Medicare) is legally liable for services provided to
a Medicaid recipient, that party must Hrst meet its Onancial obligation before Medicaid
payment is made.
Funding levels and outlays for the past five fiscal years are provided below:
Appropriation Actual Outlays
1991 $53,393,353,752 $52,532,714,000
1992 69,765,840,968 67,827,253,000
1993 82,595,650,000 75,774,060,000
1994 89,077,413,000 82,033,658,000
1995 89,240,775,000 (Est.) 88,438,360,000
Rationale For Budget Estimate
Federal Medicaid obligations in FY 1996 are estimated to be $%.0 billion. This amount
represents an increase of $7.5 billion over the FY 1995 estimated obligations. This estimate
is based upon spending estimates submitted by the States during the November 1994
reporting cycle adjusted to project more accurately the Federal share of program
expenditures under current law. These adjustments are displayed and discussed on the
following pages.
The FY 1996 appropriation request of $82.1 billion reflects the amount of new budget
authority required. The appropriation request is the result of the estimated rY 1996
obligations reduced by the unobligated balance brought forward at the end of FY 1995. The
FY 1995 unobligated balance is estimated to be $13.8 billion.
The estimated FY 1996 Federal share of $96.0 billion represents 56.8 percent of the total
$169.0 billion which is projected for Federal, State and local expenditures under the
Medicaid program.
IS
403
State Estimates For Medical Assistance Payments CMAP^ And State/Local
Administration TADMI
Estimates of the Federal share of Medicaid costs are based on the November 1994 States
estimates adjusted for the impact of initiatives, legislation, and recent expenditure and
outlay experience. The States estimated the FY 1996 Federal share of MAP and ADM
costs at nearly $97.9 billion which is $4.9 billion higher than the FY 1995 Federal share of
$93.0 billion projected by the States. The increase of $4.9 billion represents a growth rate
of 5.2 percent over FY 1995.
Medicaid State Survey And Certification
The current FY 1996 Federal Financial Participation estimate for Medicaid State
Certification is $154.0 million. This increase of $7.4 million above the current FY 1995
estimate of $146.6 million reflects a 5-percent growth rate.
In FY 1996, there will be 8,100 Intermediate Care Facilities for the Mentally Retarded
(ICF/MRs) surveyed, an increase of 400 ICF/MRs over FY 1995. In addition, there will be
12,600 Nursing Facilities (NFs) that participate as dually-participating Medicare/Medicaid
NFs surveyed in FY 1996, an increase of 600 over FY 1995. The cost of surveying NFs is
shared equally between the Medicare and Medicaid programs. Approximately 3,400
Medicaid-only NFs will be surveyed in FY 1996.
State Medicaid Fraud Control Units
This appropriation provides funds for establishing and operating Medicaid fraud control
units which identify, investigate, and prosecute cases of fraud, abuse or patient neglect.
These units also make recommendations to the State Medicaid agencies on corrective
actions. Section 13625 of the Omnibus Budget Reconciliation Act of 1993 requires that all
States have Medicaid fraud control units. In FY 1995 and FY 1996, 51 fraud control units
are expected to be in operation at a projected cost of $76.0 and $79.0 million, respectively.
For FY 1995 Congress approved an additional $3.0 million specifically targeted to States for
pilot demonstrations of an information system designed to help investigators detect potential
Medicaid fraud.
16
404
STATEWIDE DEMONSTRATION WAIVERS
Recently, a growing number of States have requested to use the authority available under
Section 11 IS of the Social Security Act to launch statewide Medicaid demonstration
programs around the country. Although HCFA's Office of Research and Demonstrations
(ORD) has operated research and demonstration projects involving Medicaid recipients for
many years, the proliferation of statewide demonstrations is relatively new. This interest is
due in part to the publication last year of the Department of Health and Human Services'
(DHHS) policy guidelines on Section 1115 demonstrations and to the discussions that took
place on the need for national health reform. The increased number of requests for
demonstration waivers was also due to the States' interest in finding flexible approaches to
solving their own State health care problems.
As of January 1993, the country's only major Medicaid reform demonstration was the
Arizona Health Care Cost Containment Program (AHCCCS), the only statewide Medicaid
program run entirely on a managed care basis. In contrast, as of February 1, 1995,
seven additional States (Oregon, Tennessee, Hawaii, Kentucky, Rhode Island, Florida, and
Ohio) have had projects approved based on major managed care expansions. Of the seven,
four are currently operational, with Kentucky, Florida, and Ohio on hold pending the
passage of implementing State legislation. Nine other States (South Carolina, Massachusetts,
Missouri, Minnesota, New Hampshire, Delaware, Illinois, Louisiana, and Oklahoma) have
major reform proposals under consideration at HCFA, while another eight have discussed
reform plans with us in the concept stage.
Although the State waiver proposals differ widely from one another in detail, many employ
a common overall approach. This is to expand the use of cost-effective managed care
delivery systems for the Medicaid population and to use the resulting cost savings to provide
health care coverage for the uninsured. Many of the Section 1115 demonstrations propose
to expand coverage to uninsured families with incomes as high as 200 or even 300 percent
of the Federal Poverty Level (FPL). For the most part, they envision cost-sharing
responsibilities for people at the higher end of a sliding income scale. Through the use of
managed care techniques, most also hope to provide improved access to primary care for
low-income beneficiaries, along with increased exposure to preventive care measures and
health education.
17
405
MEDICAID REQUIREMENTS
(Dollars in thousands)
1995 1996
November *94 State Estimates
(MAP & ADM) $92,984,938 $97,849,538
State Certification 146,600 154,000
Fraud Control Units 79.000 79.000
Total, unadjusted estimates $93,210,538 $98,082,538
Adjustments
Financial adjustments -4,807,878 -2,140,538
Medicaid Initiative:
Medicaid Financial Mgt. Reviews -341,000 -372,000
Vaccine purchase 376,700 412,200
Substance Abusers Provisions
SSA Reform Act of 1994 (P.L. 103-296) -5.000
Subtotal, adjustments -$4,772,178 -$2,105,338
Current law requirement $88,438,360 $95,977,200
Unobligated Balances,
Start of year -13,032,713 -13,835,128
End of year 13.835.128 0
Appropriation/budget authority $89,240,775 $82,142,072
18
406
Impact of Proposed Legislation
(Dollars in thousands)
FY 1996 Current Law Estimate $95,977,200
Proposed Law for Later Transmittal
Reduce Excise Tax, Vaccine for Children Program -46,800
FY 1996 Estimate, Including Legislative Proposals $95,930,400
The savings to the Medicaid program in FY 19% are the result of the Administration's
proposal to reduce the tax revenue to the Vaccine Injury Trust Fund by 50 percent.
Reducing the vaccine excise tax results in lowering vaccine costs for public and private
purchasers, which also lowers program costs in mandatory vaccine purchases for the Vaccine
for Children program.
Adjustments to State Estimates
Various adjustments have been made to the November 1994 State estimates in order to
arrive at an accurate estimate of Medicaid expenditures.
1. Financial Adjustments
The estimates and growth assumptions contained in the November 1994 State
submitted estimates for FY 1995 and FY 19% are not consistent with and are not
supported by the actual FY 1994 outlays and recent quarterly Medicaid expenditure
reports. For example, the November 1992 State submitted estimate for FY 1994
Medical Assistance Payments (MAP) was $85.8 billion. This estimate was $7.6 billion
higher than the $78.2 billion obligated during FY 1994.
19
407
The November 1994 State estimates represent the first time States have submitted
estimates for FY 1996. Typically State estimation error is most likely to occur early
in the budget cycle because some States are occupied with their current year budget
and have not focused on their projections for the Federal budget year. The following
table displays the States who, in their November 1992 estimates, overestimated
FY 1994 Medicaid benefit expenditures the most:
STATE
OVERESTIMATE
(DOLLARS)
OVERESTIMATE
(PERCENT) '
New York
$1.5 billion
13.8%
Louisiana
.9 billion
28.9%
Florida
.8 billion
27.9%
Tennessee
.7 billion
39.4%
New Jersey
.5 billion
20.2%
Indiana
.5 billion
29.8%
HCFA's Office of the Actuary developed the MAP estimate for FY 1995. The
FY 1995 MAP state submitted estimate of $88.7 billion was reduced by $3.9 billion to
$84.8 billion to reflect recent State overestimation due to a combination of several
factors. The primary reasons are lower actual expenditure and outlay growth as
measured by the most recent HCFA-64 quarterly expenditure reports, and monthly
Department of Treasury outlays that no longer support earlier estimates. Additional
factors for the adjustment include the legislative limits imposed on disproportionate
share hospital expenditures, the continued effects of Umitations on provider taxes and
donations, and lower medical price inflation which may have contributed to slowing
recipient growth.
HCFA's Office of the Actuary also developed the MAP estimates for FY 1996. Using
the first three quarters of FY 1994 State-reported expenditures as a base, the
actuaries projected expenditures for FY 1995 and FY 1996 by applying factors to
account for assumed growth in Medicaid caseloads, utilization of services, and
reimbursement rates. These growth rates were derived mainly from economic
assumptions promulgated by the Office of Management and Budget and demographic
assumptions developed by the Administration for Children and Families for the Aid
to Families with Dependent Children (AFDC) program and the Social Security
Administration for the Supplemental Security Income (SSI) program.
Administration costs (excluding State survey and certification and fraud control units)
were reduced $956.0 million for FY 1995 and $680.0 million for FY 19% primarily to
adjust for unallowable claims included in the State estimates.
20
408
The foUowing adjustments have been made to the State estimates for FY 19%:
($ in thousands)
FY 1996
MAP
-$1,460,164
ADM
-$680,374
TOTAL
-$2,140,538
3
2. Medicaid Initiative - Medicaid Financial Management Reviews
Medicaid financial management reviews conducted by HCFA regional staff,
augmented by reviews performed under contract, are expected to produce savings of
$341.0 million in FY 1995, and $372.0 million in FY 1996.
3. Vaccine Purchase - Pediatric Immunizations
Under the provisions of Section 13631 of the Omnibus Budget Reconciliation Act of
1993 (P.L. 103-112), Medicaid eligible children, uninsured children, underinsured
children served by Federally-qualified health centers and rural health clinics, and
Indian children are entitled to free vaccines purchased for them by the Secretary. The
Secretary will negotiate discounted vaccine prices with the manufacturers. States will
be permitted to purchase, at their own expense, additional vaccines at the discount
price for children not covered by the Federal program. This program was effective
October 1, 1994, and is administered by the Centers for Disease Control and
Prevention (CDC).
Savings in Medicaid program costs for vaccine expenditures are included in the State
estimates and Medicaid baseline. New Federal program costs are estimated to be
$376.7 million for FY 1995 and $412.2 million for FY 1996.
4. Provisions Relating to Restricted Benefits for Substance Abusers.
Social Security Administrative Reform Act of 1994 fP.L. 103-296;)
Section 201 of P.L. 103-296 places restrictions on disability income (DI) and SSI
benefit payments to individuals disabled by drug addiction and alcoholism, and
suspends cash benefits for substance abusers who fail to comply with treatment
requirements. Medicaid benefits will be terminated if the abuser has been in non-
compliance for 12 consecutive months. Estimated Medicaid savings of $5.0 million are
expected for FY 19%.
21
409
NATIONAL TRENDS
HCFA ACTUARIAL ESTIMATES
Expenditures for medical assistance payments in all service categories are expected to
increase by $7.4 billion (8.7 percent) from FY 1995 to FY 1996. The greatest increase,
$2.4 billion (32.5 percent of total growth), is for hospital payments. The following table
shows the distribution of the program dollar growth, grouped by major service categories.
MEDICAL ASSISTANCE PAYMENTS
MAJOR SERVICE GROWTH
FY 1995 - FY 1996
(Dollars in millions)
Major Service Category
Hospital'
Health Insurance Payments^
Long-Term Care'
Other Acute Care^
Institutional Alternatives'
Remaining Services'
Physician/Practitioner/Dental
TOTAL
Percent
Dollar
Percent
of Total
Growth
Growth
Growth
$2,399
7.8
32.5
1,528
19.8
20.7
1,202
5.4
16.2
708
9.1
9.6
653
12.2
8.8
456
11.1
6.2
441
7.1
6.0
$7,385
8.7
100.0
' Inpatient and Outpatient Hospitals, Menial Health Facilities, and Disproportionate Share Hospital
Payments
^ Medicare Premiums, Coinsurance and Deductibles, Group Health and Other Premiums
' Nursing Facilities, ICFs/MR
* Prescription Drugs and Rebates, Lab/X-Ray, Clinics, Rural Health Clinics, Federally Qualified
Health Clinics, Early and Periodic Screening and Diagnostic Treatment (EPSDT)
' Personal Care, Home Health, Home and Community-Based Waivers, Home & Community Based
Care for the Frail Elderly, Community-Supported Living Arrangement Services
* Targeted Case Management, Abortions, Sterilizations, Hospice, All Other Services, Collections &
Adjustments
22
410
The projected FY 1995 to FY 19% growth rates for major service categories range from an
increase of S.4 percent for long-term care to an increase of 19.8 percent for health insurance
payments. Figure 1 displays the projected growth rates from FY 1995 to FY 1996 for the
largest service categories.
GROWTH RATES FOR MEDICAID SERVICES
FY 1995 - FY 1996
Figure 1
HEALTH INS. PAYMENTS
INST ALTERNATIVES
REMAINING SERVICES
OTHER ACUTE CARE
HOSPITAL
PHYSAPRACTADENT
LONG-TERM CARE
25*
23
411
Figure 2 displays the distribution of projected Medicaid services for FY 19% as reflected in
the FY 1996 President's Budget estimates.
DISTRIBUTION OF MEDICAL ASSISTANCE PAYMENTS BY SERVICE CATEGORY
HCFA ACTUARIAL ESTIMATES FOR FY 1996
Figure 2
HLTH INSURANCE 10 0%
LONG-TERM CARE 25 . 35K
ACUTE CARE 9 2%
INST, ALTERNATIVES 6
HOSPITAL 36 85K
PHYSICIAN, ETC 7 2%
REMAINING SERVICES 5 05K
The table on the following page displays estimated medical assistance payments for 34
individual service categories for FY 1995 and FY 19%. Projected rates of growth for
individual service categories range from zero growth for community supported living
arrangements to an increase of 25 percent for insurance payments-other and rural health
clinics.
24
412
MEDICAL ASSISTANCE PAYMENTS
BY TYPE OF SERVICE CATEGORY
HCFA ACTUARIAL ESTIMATES
(Dollars in millions)
FY 1995
FY 1996
Nursing Facility
Inpatient Hosp - Reg Pmnts
Inpatient DSH Adj Payment
Prescribed Drugs
Physician
Ins. Payments - Other
Outpatient Hospital
ICF/MR Public
All Other
Home and Commun. Waivers
Mental Health DSH Adj.
ICF/MR Private
Clinic
Personnel Care
Mental Health Pmnts
Ins Pmts - Pt B Prms
Ins Pmnts - Group Health
Home Health
Dental
Other Practitioners
Targeted Case Management
Ins Pmnts - Pt A Prms '
EPSDT Screening Services
Lab &. Radiological
Ins Pmnts - Coins. & Deduct.
Federal Qualified Health Ctr
Rural Health Clinics
Sterilizations
Hospice
H&C Care Disabled Elderly
Community Supported Living
Abortions
Drug Rebate Offset
Subtotal
Collections/Adjustments
Total
Amount
%
Amount
%
$16,586
19.6
$17,528
19.9
15,744
18.6
16,966
18.5
8,261
9.8
8,871
9.7
5,966
6.7
6,091
6.6
4,686
5.5
4,983
5.4
4,109
4.9
5,137
5.6
3,968
4.7
4,284
4.7
3,502
4.1
3,668
4.0
3,027
3.6
3,341
3.6
2,488
2.9
2,846
3.1
2,103
2.5
2,242
2.4
1,978
2.3
2,070
2.3
1,809
2.1
2,000
2.2
1,785
2.1
1,975
2.1
1,487
1.8
1,598
1.7
1,353
1.6
1,412
1.5
1,349
1.6
1,679
1.8
990
1.2
1,090
1.2
927
1.1
1,000
LI
594
0.7
665
0.7
556
0.7
666
0.7
515
0.6
615
0.7
474
0.6
544
0.6
471
0.6
518
0.6
374
0.4
386
0.4
257
0.3
288
0.3
163
0.2
203
0.2
151
0.2
155
0.2
135
0.2
163
0.2
58
0.1
62
0.1
25
0.0
25
0.0
0
0.0
0
0.0
-1,068
-1.3
-1,143
-1.2
$84,543
100.0%
$91,928
100.0%
-256
-256
$84,799
$92,184
25
413
RECIPIENT DATA
The following table reflects the estimated annual unduplicated number of recipients (by basis
of eligibility) receiving Federal medical assistance under the Medicaid program. The data
are based upon the 57 jurisdictions participating in the program. HCFA makes projections
based upon prior budget data or information from the form HCFA-2082, Statistical Report
on Medical Care.
The AFDC Adults and AFDC Children eligibility categories include certain low-income
groups as well as AFDC and AFDC-related recipients.
Number of Recipients
(In thousands)
FY 1995
FY 1996
% chance
Aged 65 and Over
4,214
4,373
3.8
Blind and Disabled
6,138
6,474
5.5
AFDC Adults
7,893
8,211
4.0
AFDC Children
17,178
17,879
4.1
Other Title XK
642
642
OO
Unduplicated Total
36,065
37,579
4.2
Figure 3 displays the growth rates for the eligibility categories for FY 1995 and FY 1996.
MEDICAID RECIPIENT GROWTH RATES, FY 1995 - FY 1996
Figure 3
AGED 65 t. OVER
BLIND e< DISABLED
NEEDY ADULTS
NEEDY CHILDREN
OTHER TITLE XIX
oos 2 OK 4cm em
e OK 10 OK 12 OK
26
414
Needy adults and children are expected to comprise approximately 69 percent of the
projected FY 1996 Medicaid population. Historically, although this group comprises over
half of the Medicaid population, they have accounted for less than 30 percent of program
spending. In FY 1995, needy adults and children represented 70 percent of the Medicaid
population, accounting for only 26 percent of the Medicaid outlays. In contrast, the elderly
and disabled population made up over a quarter of the Medicaid population, yet accounted
for approximately 60 percent of the program spending in FY 1995. Figure 4 illustrates the
distribution of the Medicaid population by eligibility category.
MEDICAID RECIPIENTS BY ELIGIBILITY CATEGORY, FY 1996
Figure 4
BLIND/ DISABLED 1796
AGED 65 & OVER 12*
OTHER TITLE XIX 2%
NEEDY ADULTS 21X
NEEDY CHILDREN
27
415
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
(Dollars in thousands)
FY
FY
Dollar
Percent
1995
1996
Growth
$1,624,200
Growth
New York
$13,144,633
$14,768,833
12.4
Texas
6,127,688
6,648,343
520,655
8.5
Florida
3,697,015
4,117,899
420,884
11.4
Ohio
3,865,120
4,261,438
396,318
10.3
North Carolina
2,445,832
2,772,985
327,153
13.4
Michigan
3,159,681
3,401,975
242,294
7.7
Louisiana
3,041,488
3,270,652
229,164
7.5
New Jersey
2,572,191
2,746,128
173,937
6.8
Georgia
2,301,771
2,473,153
171,382
7.5
Massachusetts
2,388,623
2,535,391
146,768
6.1
Illinois
3.134.551
3.275.735
141.184
45
Subtotal
$45,878,593
$50,272,532
$4,393,939
9.6
All Other
47.106.345
47.577.006
470.661
1.0
Totals
$92,984,938
$97,849,538
$4,864,600
5.2
Anticipated increases in 11 States account for over 90 percent of the $4.9 billion growth in
State estimates of Federal Medicaid expenditures between FY 1995 and F"V 1996.
Explanations of changes for individual States ere provided on the following pages.
28
416
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
NEW YORK TOTAL:
MAP;
ADM
+$1.6 Billion, -1-12%
+$1.6 Billion, +13%
-$3.6 Million, 0 %
liar Growth
Percent
fin millions')
Growth
602
38
324
20
210
13
112
7
106
7
Approximately 85 percent of New York's estimated Medicaid growth in FY 19% can be
explained by growth in the following services.
Inpatient/Outpatient Hospitals
Nursing Facilities
Managed Care
Home & Community Waivers
Personal Care
Total $1,354
Reimbursement increases contribute to approximately 56 percent of New York's projected
FY 1995 to FY 1996 growth. The number of eligibles is expected to rise 4-percent. New
York expects payment rate increases of 10 percent for outpatient hospitals and managed
care plans, 8 percent for inpatient hospitals, 6 percent for nursing facilities and only 2 and
4 percent for personal care and Home and Community-Based Waivers (HCBWs).
Utilization increases of 4 and 5 percent are projected for outpatient hospitals and HCBWs,
but no significant changes in utilization are forecast for inpatient hospitJils, nursing facilities
or personal care.
The significant expansion of Managed Care Plans (MCPs) throughout the State explains
most of the 58-percent growth in this category. The expansion results from a 1991 State law
requiring 50 percent of the non-exempt Medicaid population to participate in managed care
within seven years. Enrollment in MCPs will reach 712,000 eligibles in 19%, an increase
over FY 1995 of 47 percent.
29
417
EXPLANATION OF CEIANGES IN STATE ESTIMATES
FY 1995 - FY 1996
TEXAS TOTAL:
MAP
ADM
+$520 Million, +9%
+$513 Million, +9%
+$ 7 Million, +3%
Services under contract with Texas' insuring agent. National Heritage Insurance Company
(NHIC), are expected to increase 13 percent. Recently negotiated premium amounts
include inpatient and outpatient hospitals, physicians, other practitioners, lab, x-ray, and
home health services. A decline in the Federal matching rate will reduce expenditures by
$104.0 million.
Additional purchased health services for rehabilitation. Early Periodic Screening Diagnostic
Testing (EPSDT), and undocumented aliens covered under the NHIC contract accounted
for 15 percent of the growth. Prescription drugs and reimbursement rates for nursing
facilities are expected to grow by 5 percent. However, utilization growth in prescription
drugs is forecast at 10-percent while only a 2-percent utilization growth is expected in
nursing facilities.
FLORIDA TOTAL
MAP
ADM;
+$421 Million, +11%
+$403 Million, +11%
+$ 18 Million, +20%
The State's Medicaid growth rate of 11 percent for FY 1996 is driven mainly by a 5 percent
general rate increase. The overall eligibility rolls are estimated to rise an additional
2 percent from FY 1995 along with a 3-percent increase in utilization. However, these
increases do not reflect the statewide impact of the Section 1115 Waiver which has been
submitted to the State Legislature.
Approximately 77 percent of Florida's MAP growth between FY 1995 and FY 1996 is
explained by increases in health insurance-group health plans, nursing facilities, and
prescription drugs.
Florida projects that 35 percent of MAP growth will be in health insurance-group health
plans as a result of a 13-percent increase in reimbursement rates and a 21-percent increase
in eligibles. Rate increases of 13 percent account for 75 percent of the growth in nursing
facilities while a 4-percent increase in eligibles account for the remaining 25 percent. The
expected growth in prescription drugs is caused by a 13-percent increase in reimbursement
rates and a 3-percent increase in utilization.
30
418
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
OfflO TOTAL:
MAP;
ADM
+$396 MiUlon, +10%
+$393 Million, +10%
+$ 3 Million, + 3%
Dollar Growth
rin millions'J
Group Health Plans
Nursing Facilities
Clinics
89
73
49
DSH Payments
Prescription Drugs
Home & Community
41
36
Waivers 31
The State is projecting a Medicaid growth rate of 10 percent for FY 1996. Approximately
80 percent of Ohio's total program growth between FY 1995 and FY 1996 is explained by
increases in the following services.
Percent
Growth
23
18
12
10
9
8
Total $319
Ohio projects that the reimbursement rate for group health plans will grow in excess of
6 percent. Nursing facility eligibility increases reflect recent growth patterns and a projection
of an additional 3,300 beds. Prescribed drug costs are expected to grow by 10 percent per
claim as a result of the dispensing fee being increased by $.27 per claim. The largest part
of the increase in Home and Community-Based Waiver services is in the Passport waiver
program administered by the Department of Aging. The number of eligibles for the waiver
are projected to increase from 16,501 in FY 1995 to 17,968 in FY 19%. Overall, the State
projects that eligibles will increase just over 3 percent, with higher rates of increase within
the aged, blind, and disabled Medicaid populations.
Ohio has recently had approved a Section 1115 Research and Demonstration Waiver called
OhioCare. Under OhioCare, the State plans to expand Medicaid eligibility to include the
uninsured population with incomes up to 100 percent of the Federal poverty level. Clients
are to be enrolled in managed care capitated-fee delivery systems. Home and community-
based waiver and long-term care clients will remain under a fee-for-service system and the
State plans to phase in the aged, blind, and disabled clients into managed care within a few
years after implementation. The project's first phase is projected to be implemented on
January 1, 19%. The implementation will depend on passage of State legislation approving
OhioCare.
31
419
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
NORTH CAROLINA
TOTAL!
MAP:
ADM
+$327 Million, +13%
+$320 MilUon, +13%
+$ 6 Million, +10%
Approximately 79 percent of North Carolina's MAP growth between FY 1995 and FY 1996
is explained t^ the following services.
Dollar
Growth
Percent
0n
millions')
Growth
Inpatient Hospital
63
20
Prescription Drugs
45
14
DSH Payments
39
12
Nursing Facilities
37
12
Outpatient Hospital
27
8
Physician Services
21
7
Home & Community Waivers
19
6
Total
$251
Overall, the State forecasts reimbursement rates and eligibles to increase by 7 and 6 percent
respectively. Projected growth in eligibles is due to the change in North Carolina's eligibility
status which expands the coverage to aged, blind and disabled recipients. No growth in
utilization is forecast between FY 1995 and FY 1996.
For the services listed above, projected reimbursement rate increases range from a low of
6 jjercent for nursing facilities to 12 percent for outpatient hospitals. The growth in
eligibles is expected to be 2 percent for nursing facilities; 6 percent each for inpatient
hospitals, outpatient hospitals and physicians' services; 1 1 percent for prescription drugs; and
19 percent for Home and Community-Based Waiver services.
32
420
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
MICfflGAN TOTAL: +$242 Million, +8%
MAP: +$237 Million, +8%
ADM: +$ 5 Million, +4%
Approximately 91 percent of Michigan's estimated MAP growth in FY 1996 can be
explained by increases in the following categories.
Percent
Growth
24
21
13
12
11
10
Total $215
The State is projecting a 6-percent utilization growth rate and an inflation rate adjustment
of almost 5 percent over FY 1995 in nursing facility payments. Inpatient hospital regular
payments are expected to increase as a result of full implementation of the State's Healthy
Kids Initiative (HKI). This initiative provides full coverage of children up to age 16 living
at or below 150 percent of poverty. Inpatient hospitali2^tion is expected to cost
approximately 20 percent of the HKI program expense.
Clinic services are expected to rise 9 percent, due to a 7-percent increetse in eligibles and a
2-percent increase in utilization from service expansions. Home and community-based
waiver services are also expected to show a 50-percent utilization increase as a result of a
revised mental health child waiver.
Other health insurance payment increa^^es result from Health Maintenance Organization
(HMO) utilization growth in managed care expansion including more months of coverage
and additional participating HMOs. Most of the prescribed drug increase reflects drug
product inflation of 12 percent. Eligibles are also expected to increase slightly as a result
of HKI.
Dollar Growth
(in
millions)
Nursing Facilities
Inpatient Hospital - Regular
Clinic Services
56
50
31
Home & Community Waivers
Health Insurance Payments
Prescription Drugs
28
26
24
33
421
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
LOUISIANA TOTAL;
MAP:
ADM
•t-$229 Million, •<-8%
+$221 Million, +7%
+$8 Million, -<-17%
Louisiana estimated FY 1996 growth at 22 percent, excluding changes in Disproportionate
Share Hospital (DSH) Payments. With the exception of long-term care facilities, which the
State expects will grow 5 percent, Louisiana has estimated substantial growth in all other
categories of services. For most other services, the State estimated reimbursement growth
at 6 percent, utilization growth of 10 to 16 percent and eligibility growth of 7 to 8 percent.
A large decrease in projected DSH expenditures reflect the cost limit change effective
July 1, 1995, from 200 percent to 100 percent of uncompensated costs in accordance with
OBRA 93.
NEW JERSEY TOTAL:
MAP:
ADM
+$174 Million, +7%
+$167 Million, +7%
+$7 Million, +8%
Approximately 80 percent of New Jersey's estimated Medicaid growth in FY 1996 is
explained by the net growth in Group Health Plans (GHPs) of $143.0 million, inpatient
hospitals of $73.0 million, nursing facilities of $44.0 million, and Intermediate Care Facilities
for the Mentally Retarded (ICF/MRs) of $25.0 million. New Jersey also projects an overall
reimbursement rate increase of 7 percent, a decline in utilization of 3 percent and eligibility
growth of 3 percent.
The growth in enrollment in New Jersey's Garden State GHP, and the phase-in of other
managed care plans, explains a 181-percent increase in GHP costs. By FY 1996, 57 percent
of New Jersey's Medicaid eligible population will be enrolled in managed care. The State
also forecasts reimbursement rate growth of 5 percent for nursing facilities and ICF/MRs.
Utilization in those services is expected to grow 3 percent and almost 10 percent,
respectively.
A modest 3-percent growth in eligibility is also estimated. While pregnant women and
disabled populations are forecast to rise 8 and 10 percent, New Jersey projects minimal
growth in non-disabled children as a result of new welfare restrictions.
34
422
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
GEORGIA TOTAL: +$172 Million, +7%
MAP: +$170 Million, +8%
ADM: +$ 2 Million, +3%
Approximately 74 percent of Georgia's estimated MAP growth between FY 1995 and
FY 19% is reflected in the following table.
Dollar Growth
Percent
On
millions')
Growth
Physician Services
38
22
Inpatient Hospitals
27
16
Outpatient Hospitals
19
11
DSH Payments
18
11
Part B Premiums
9
5
Prescribed Drugs
16
9
Total $127
Most of Georgia's expected growth between FY 1995 and FY 1996 is due to a 4-percent
increase in both utilization and eligibles. Although no change in overall reimbursement rates
are forecast for FY 1996, the State does project a 3-percent price increase for physicians'
services and inpatient hospitals. No rate increases for the remaining categories are expected.
With the exception of a 2-percent growth in eligibles for outpatient hospitals as well as
prescribed drugs, Georgia projects no increases in the remaining categories cited above. The
number of non-disabled children are expected to rise 6 percent representing 66 percent of
the eligible growth in FY 1995.
35
423
EXPLANATION OF CHANGES IN STATE ESTIMATES
FY 1995 - FY 1996
MASSACHUSETTS TOTAL;
MAP
ADM
+$147 Million, +6%
+$143 Million, +6%
+$4 Million, +6%
Massachusetts projects a 6-percent growth in FY 1996, which is lower than experienced in
FY 1994 or projected in FY 1995. An 8-percent increase in expenditures for most private
providers is anticipated, while costs for most public providers will remain static.
Increases in nursing facilities and inpatient hospitals comprise 55 percent of the total growth.
Costs for HCBWs will rise 26 percent as the State plans to expand their waiver for the
developmentally disabled. The State forecasts a decline of nearly $3.0 million for DSH
payments. Also, costs for public ICFA^Rs are expected to decrease $27.0 miUion due to the
closing of one facility in FY 1996.
ILLINOIS TOTAL
MAP
ADM
+$141 Million, +5%
+$141 Million, +5%
+$ 0 Million, +0%
Illinois derived its FY 19% estimate by applying an across-the-board increase of almost
5 percent to its FY 1995 MAP estimate. This growth rate reflects the Chicago area
consumer price index for medical care.
36
424
STATE TABLES
ESTIMATES OF GRANT AWARDS
(Dollars in thousands)
FY 94
FY 95
FY%
Obligations
Estimate
Estimate
Alabama
$1,279,514
$ 1,340,765
$1,419,557
Alaska
177,513
178,215
183,780
American Samoa
2,140
2,240
2,350
Arizona
1,066,023
1,224,007
1,335,309
Arkansas
821,638
888,073
901,629
California
7,500,256
10,182,756
9,726,846
Colorado
644,842
820,604
749,803
Connecticut
1,164,813
1,324,933
1,425,338
Delaware
152,378
181,682
202,559
Dist. of Columbia
373,756
433,640
438,192
Florida
2,920,144
3,697,015
4,117,899
Georgia
2,055,881
2,301,771
2,473,153
Guam
3,685
3,870
4,060
Hawaii
245,066
284,933
289,395
Idaho
231,618
256,152
280,232
Illinois
2,724,779
3,134,551
3,275,735
Indiana
1,645,334
1,907,589
1,882,221
Iowa
694,387
764,257
827,949
Kansas
599,967
597,811
643,638
Kentucky
1,310,018
1,401,726
1,518,554
Louisiana
3,078,988
3,041,488
3,270,652
Maine
604,372
627,446
648,857
Maryland
1,176,037
1,422,208
1,546,831
Massachusetts
2,151,763
2,388,623
2,535,391
Mass. (Blind)
40,077
44,969
45,867
Michigan
2,858,157
3,159,681
3,401,975
Minnesota
1,388,700
1,565,910
1,688,827
Mississippi
1,068,532
1,156,991
1,214,371
Missouri
1,573,280
1,677,302
1,737,409
Montana
274,936
260,079
283,603
37
425
STATE TABLES
ESTIMATES OF GRANT AWARDS
(Dollars in thousands)
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
N. Mariana Islands
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Virgin Islands
Washington
West Virginia
Wisconsin
Wyoming
Subtotal
Survey & Certification
Fraud Control Units
Adjustments
Total Obligations
FY 94
FY 95
FY 96
Obligations
Estimate
Estimate
$ 421,313
$ 436,182
$ 472,305
192,318
227,103
229,806
490,406
358,656
296,534
2,448,318
2,572,191
2,746,128
510,447
567,828
636,688
10,614,685
13,144,633
14,768,833
2,090,306
2,445,832
2,772,985
199,060
205,329
214,569
1,108
1,160
1,220
3,472,896
3,865,120
4,261,438
760,897
817,677
899,372
747,704
901,428
1,009,994
3,947,465
4,290,400
4,017,928
116,500
122,200
128,200
440,083
488,363
485,459
1,331,358
1,538,569
1,375,325
203,399
232,544
255,420
2,000,352
2,426,550
2,252,095
5,548,396
6,127,688
6,648,343
414,098
442,365
491,118
186,253
199,618
209,594
955,793
1,095,394
1,206,585
3,838
4,030
4,230
1,443,806
1,624,258
1,653,722
936,059
956,575
1,060,563
1,474,056
1,507,608
1,566,474
96,227
114.350
112.628
$80,875,735
$92,984,938
$97,849,538
125,292
146,600
154,000
61,852
79,000
79,000
210.411
-4.772.178
-2,105,338
$81,273,290
$88,438,360
$95,977,200
38
426
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
PAYMENTS TO HEALTH CARE TRUST FUNDS
Fiscal Year 1996 Budget Page
Appropriation language 1
Language analysis 2
Amounts available for obligation 3
Summary of changes 4
Budget authority by activity 5
Budget authority by object 6
Authorizing legislation 7
Appropriations history table 8
Justification;
A. Account summary 9
B. General statement 10
C. Activities:
1. Federal Payment for Supplementary Medical Insurance 11
2. Hospital Insurance for the Uninsured 16
3. Hospital Insurance for Uninsured Federal Annuitants 19
4. Program Management Administrative Expenses 20
5. Quinquennial Adjustment for Military Service Credits 22
427
HEALTH CARE nNANCING ADMIWSTRATION
Payments to Health Care Trust Funds
Appropriation Language
For payment to the Federal Hospital Insurance and the Federal Supplementary Medical
Insurance Trust Funds, as provided under sections 217(g), 229(b), and 1844 of the Social
Security Act, sections 103(c) and 111(d) of the Social Security Amendments of 1965,
section 278(d) of Public Law 97-248, and for administrative expenses incurred pursuant to
section 201(g) of the Social Security Act, [$37,546,758,000] $63,313,000,000. (Department of
Health and Human Services Appropriations Act, 1995.)
428
PAYMENTS TO HEALTH CARE TRUST FUNDS
Language Analysis
Language Provision Explanation
As provided under sections 217(g), Funding is requested for the quinquennial
229(b) ... adjustment for military service credits, to
be paid on December 29, 1995.
429
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE HNANCING ADMINISTRATION
PAYMENTS TO HEALTH CARE TRUST FUNDS
Amounts Available for Obligation
1994
1995
1996
Actual
Appropriation
Estimate
Appropriation:
Annual $45,731,440,000
$37,546,758,000
$63,313,000,000
Lapse 6,772,047,000
Anticipated SMI shortfall
(non-add)
[6,613,000,000]
Payback of SMI shortfall
(including interest)
(non-add)
[6,737,000,000]
Total
obligations $38,959,393,000
$37,546,758,000
$63,313,000,000
The 19% estimate of $63,313.0 million is $25,766.2 million more than the FY 1995
appropriation. A large portion of this dramatic increase is due to an anticipated shortfall
in the Federal Contribution for SMI in FY 1995. Obligations are projected to exceed the
FY 1995 appropriation by $6,613.0 million. The FY 19% estimate includes $6,737.0 -lillion
to make up for the FY 1995 shortfall with interest.
In addition, a shortfall is expected in the program management administrative expenses
activity in FY 1995 as a result of the final reconciliation of FY 1994. This shortfall will be
passed through to FY 19% and will increase the request for that year. The justifications for
these two activities provide more detail on the differences between expenditures and
amounts appropriated.
The FY 19% estimate also includes $625.0 million for an adjustment made once every five
years to military service credits. This quinquennial adjustment is to be paid to the Hospital
Insurance Trust Fund on December 29, 1995.
430
PAYMENTS TO HEALTH CARE TRUST FUNDS
Summary of Changes
1995 Appropriation
1996 Estimate
Net Change
$37,546,758,000
63.3 13.000.000
+$25,766,242,000
Changes:
1995 Current
Estimate Base
Budget Authority
1996
Change
From Base
1. Federal Payment for
Supplementary Medical
Insurance
2. Hospital Insurance for
the Uninsured
3. Hospital Insurance for
Uninsured Federal
Annuitants
4. Program Management
Administrative
Expenses
5. Quinquennial Adjustment
$36,955,000,000
406,000,000
56,000,000
129,758,000
+$25,167,000,000
-48,000,000
+7,000,000
+ 15,242,000
+625.000.000
Net Change
$37,546,758,000
+$25,766,242,000
431
PAYMENTS TO HEALTH CARE TRUST FUNDS
Budget Authority bv Activity
(Dollars in thousands)
1994
1995
1996
Supplementary
Medical Insurance
Actual
$45,097,000
Appropriation
$36,955,000
Estimate
$62,122,000
Hospital Insurance
for the Uninsured
458,000
406,000
358,000
Hospital Insurance
for Uninsured
Federal Annuitants
48,000
56,000
63,000
Program Management
Administrative
Expenses
128,440
129,758
145,000
Quinquennial Adjustment
625.000
Total Budget
Authority
$45,731,440
$37,546,758
$63,313,000
432
PAYMENTS TO HEALTH CARE TRUST FUNDS
Budget Authority by Object
1995
Appropriation
19%
Estimate
Increase
or
Decrease
Grants, Subsidies,
and Contributions
$36,955,000,000
$62,122,000,000
+$25,167,000,000
Insurance claims
and indemnities
462,000,000
1,046,000,000
+584,000,000
Other Services
129,758.000
145.000.000
+ 15,242,000
Total Budget Authority
by object
$37,546,758,000 $63,313,000,000 +$25,766,242,000
433
PAYMENTS TO THE HEALTH CARE TRUST FUNDS
Authorizing Legislation
1995
1996
1996
Amount
Amount
Budget
Authorized
Authorized
Estimate
Payments to Health
Care Trust Funds
(sections 201(g),
217(g), 229(b) and 1844
of the Social
Security Act,
sections 103(c) and
111(d) of the Social
Security Amendments
of 1965, and
section 278(d) of
Public Law 97-248)
Indefinite
Indefinite
$63,313,000,000
Total Budget
Authority
$63,313,000,000
434
PAYMENTS TO HEALTH CARE TRUST FUIVDS
Appropriations History Table
Budget
Estimate House Senate
Year to Congress Allowance Allowance Appropriation
1987 20,357,000,000 20,826,000,000 20,826,000,000 20,826,000,000
1988 26,958,000,000 25,893,000,000 25,364,000,000 25,893,000,000'
1989 32,100,000,000 31,227,000,000 31,227,000,000 31,227,000,000
1990 36,338,500,000 36,338,500,000 36,338,500,000 36,338,500,000
1991 37,056,000,000 37,056,000,000 35,335,000,000 35,335,000,000
1992 39,401,083,000 39,421,485,000 39,401,083,000 39,421,485,000
1993 43,201,713,000 43,963,192,000 45,962,862,000 45,962,862,000
1994 45,731,440,090 45,731,440,000 45,731,440,000 45,731,440,000
1995 37,546,758,000 37,546,758,000 37,546,758,000 37,546,758,000
1996 63,313,000,000
Appropriation column represents continuing resolution funding level for entire year.
8
.435
JUSTinCATION
PAYMENTS TO HEALTH CARE TRUST FUNDS
Account Summary
Increase
1995
1996
or
Appropriation
Estimate
Decrease
Supplementary
Medical
Insurance $36,955,000,000 $62,122,000,000 $25,167,000,000
Hospital
Insurance for
the Uninsured 406,000,000 358,000,000 -48,000,000
Hospital Insurance
for Uninsured Federal
Annuitants 56,000,000 63,000,000 +7,000,000
Program Management
Administrative
Expenses 129,758,000 145,000,000 +15,242,000
Quinquennial Adjustment for
Military Service Credits 625.000.000 +625.000.000
Total Budget
Authority' $37,546,758,000 $63,313,000,000 +$25,766,242,000
' A permanent indefinite appropriation of general funds for Self-Employment Contribution Act
(SECA) tax credits and taxation of Social Security benefits is made through this account. Due to the
permanent indefinite appropriation of these credits, this request does not include funding for this activity
and the amount of the credits is not reflected in this toul. SECA credits are estimated at S2.0 million for
FY 1996; the Federal payments for taxation of benefits are estimated to be $4,268.0 million in FY 1996.
436
GENERAL STATEMENT
This appropriation estimate includes five general fund Payments to Health Care Trust
Funds. Four of the five payments, totaling $1,191.0 million, are to the Federal Hospital
Insurance (HI) Trust Fund. The fifth payment, in the amount of $62,122.0 million, is to the
Federal Supplementary Medical Insurance (SMI) Trust Fund.
The payment to the SMI Trust Fund is the Federal match of premiums paid by or for
individuals voluntarily enrolled in SMI (Part B) of Medicare. Two payments in this account
compensate the HI Trust Fund for the benefit and administrative costs of two uninsured
groups: persons aged 65 years and above who were grandfathered into the program at its
inception and Federal annuitants grandfathered into the program after 1982. A third
payment to the HI Trust Fund finances administrative expenses previously financed by a
general fund appropriation to HCFA's Program Management account. In addition to
funding current year costs, the three payments to the HI Trust Fund also include
adjustments for differences between amounts previously appropriated and actual program
costs. On December 29, 1995, an adjustment-made once every five years-to military service
credits made previously will be transferred to the HI Trust Fund.
10
437
1. FEDERAL PAYMENT FOR SUPPLEMENTARY MEDICAL INSURANCE
Authorizing Legislation - section 1844 of the Social Security Act
FY 1995
FY 1996
Estimate
Estimate
Increase
Total
Total
or
Obligations
Obligations
Decrease
$36,955,000,000 $62,122,000,000 +$25,167,000,000
PURPOSE AND METHOD OF OPERATIONS
The Social Security Act provides a voluntary Supplementary Medical Insurance (SMI) plan for
which most persons aged 65 and above are eligible. Two groups under age 65 may also qualify
for Medicare SMI (Part B) services. Disabled individuals entitled to Social Security or Railroad
Retirement benefits for at least 24 months may enroll in the program. Most individuals who
begin treatment for chronic renal disease may also enroll, either immediately after beginning
treatment or after a three-month waiting periou, depending on treatment modality.
Medical insurance benefits and administrative expenses are financed by monthly premiums paid
by enrollees and matched with a substantial Federal Contribution. Prior to the Social Securi.y
Amendments of 1983, the premium and the Federal Contribution were promulgated each
December by the Secretary of Health and Human Services for the 12-month period beginning
July 1. As a result of the 1983 Amendments, the premium is now on a calendar year (CY)
basis with promulgation in September for the 12-month period beginning January 1. Annual
financing is based on an actuarial determination of the amount required to finance the incurred
costs of the program each year and maintain an adequate trust fund reserve.
At the beginning of the SMI program, the premium was set at 50 lercent of estimated incurred
costs. This premium amount is called the monthly actuarial rate. With the benefit years
beginning after July 1973, however. Congress mandated that the premium be equal to the lesser
of either half of the estimated average monthly incurred costs for aged enrollees or the
previous year's premium, increased by a percentage equal to the previous year's Social Security
cash benefit cost-of-living adjustment (COLA).
Since the rate of increase in SMI benefits exceeded the COLA during the period from FY 1973
to FY 1982, the percentage of incurred costs financed through enrollee premiums declined to
less than 25 percent. To prevent further erosion of the premium's contribution to SMI
financing. Congress mandated that monthly premiums be established at 25 percent of estimated
incurred costs for the aged beginning July 1, 1983, through the Tax Equity and Fiscal
Responsibihty Act of 1982 (P.L. 97-248). Congress extended this provision for subsequent
benefit years through the Deficit Reduction Act of 1984 (P.L. 98-369), the Consolidated
Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), and the Omnibus Budget
Reconciliation Acts of 1987 and 1989 (P.L. 100-203 and P.L. 101-239).
11
438
The Omnibus Budget Reconciliation Act of 1990 (OBRA 90) set specific monthly premium
amounts for five calendar years beginning in 1991, based on projections of 25 percent of
program costs at the time of passage. The monthly premium for calendar year 1995, the last
year for which the premium is specified, is $46.10. Because benefit outlays have grown more
slowly than anticipated at the time of the OBRA 90 projections, under current law, the
premium will cover 31.5 percent of the program's estimated incurred costs for the aged in
CY 1995.
However, the Omnibus Budget Reconciliation Act of 1993 (OBRA 93) provides that, for
1996-1998, the premium will again be based on the pre-OBRA 90 rate-setting methodology.
That is, the premium will be set annually to cover 25 percent of program costs for aged
beneficiaries. This creates an anomaly in CY 1996 whereby the monthly SMI premium will
actually decrease $2.60, to $43.50 under current law estimates. This decrease in the monthly
premium will account for $1.1 billion of the increase in the Federal Contribution for SMI
in CY 1996.
Effective beginning in calendar year 1999, the Administration proposes the permanent
extension of the 25 percent Part B premium provision.
Barring Congressional action, in 1999 and subsequent years the Part B premium would
increase by the percentage of the Social Security cash benefit COLA. Given the SMI
program experience from 1973 to 1982 under this methodology, and historical annual
benefits growth which has consistently outpaced the SSA COLA, a return to this premium-
setting methodology would lead to erosion of the premium's share of SMI financing below
the 25 percent leVel.
Funding levels for the past five fiscal years were as follows:
1991 $34,730,000,000
1992 $38,684,000,000
1993 $45,478,000,000
1994 $38,352,431,000
1995 appropriation $36,955,000,000
1995 current estimate . . . $36,955,000,000
RATIONALE FOR THE BUDGET ESTIMATE
The estimate of $62,122.0 million for FY 1996 SMI benefit outlays is $25,167.0 million more
than the FY 1995 appropriation. This dramatic increase is primarily the result of four
factors, one involving 1995 funding, the remaining three related to the FY 1996 estimate.
12
439
First, the FY 1995 base of $36,955.0 million is artificially low due to an anticipated shortfall
of $6,613.0 million. The FY 1995 appropriation was based on FY 1995 President's Budget
estimates, which were revised upward in subsequent re-estimates of the program. The SMI
Trust Fund will be drawn down to cover FY 1995 obligations in excess of the appropriation,
but must be repaid in FY 1996, with an adjustment for interest lost. The FY 19% estimate
includes $6,737.0 million to repay the anticipated FY 1995 shortfall, including a
$124.0 million interest adjustment.
The second major factor driving the increase in the FY 1996 Federal Contribution for SMI
is continued growth in program outlays due to medical service price inflation, increased
utilization of medical services, and demographic growth in the beneficiary pool.
A third factor is the sunset of the OBRA 90 premium provision. The prospectively
determined premiums for calendar years 1991 through 1995-fixed amounts set by OBRA 90
based on projections of 25 percent of program costs-have increased faster than the actuarial
rate. This is due in part to legislation such as OBRA 93 which mandated cuts in benefit
outlays. Thus, in CY 1995, the monthly premium represents 31.5 percent of monthly
program costs for an aged beneficiary.
Beginning in CY 1996, when the OBRA 93 premium provision becomes effective, the
monthly premium will again be set annually at 25 percent of program costs for aged
beneficiaries. To offset the loss of income to the SMI Trust Fund when the beneficiary
share reverts to 25 percent, the general revenues must make up the difference. In other
words, the Federal share will increase 6.5 percent, from an unusually low 68.5 percent of
estimated program costs in 1995, to the "normal" 75 percent level in 1996.
Finally, a technical change in the calculations used to estimate the Federal Contribution to
SMI accounts for a large portion of the increase from FY 1995 to FY 1996. Statute requires
a contingency margin sufficient to cover a moderate degree of variation between actual and
projected costs. Previously, actuarial proje*.rions indicated that the contingency margin had
grown too large. To compensate, significant negative adjustments were used to lower the
"actuarial rate" or estimate of monthly program costs per beneficiary. Current projections
support a substantially higher contingency margin, resulting in a higher actuarial rate. The
higher income requirements necessary to accommodate these estimates produce a higher
monthly premium and a corresponding increase in the Federal Contribution for SMI.
13
440
Summary of Changes from Previous Estimate
for Supplementary Medical Insurance
The following tables for aged and disabled Part B beneficiaries show the average monthly
cost per beneficiary, including the share represented by the enroUee's monthly premium and
the portion borne by the Federal government. The tables compare the change between the
FY 1995 President's Budget estimates ~ the basis for the FY 1995 appropriation ~ and the
current estimates.
The beneficiary share of monthly program costs decreases for both aged and disabled
enrollees from FY 1995 to FY 1996. OBRA 90 set the 1995 premium at $46.10 based on
projections of 25 percent of program costs for the aged at the time of passage. OBRA 93
provides that for 1996-1998, the premium will be set annually to cover 25 percent of
program costs for aged beneficiaries.
Aged
Previous
Estimate '
Current
Estimate
Change
CY1995
Average monthly cost
per enrollee
Average premium
$129.80
-46.10
$83.70
$146.20
-46.10
$100.10
$16.40
Average Federal payment
per enrollee
$16.40
Beneficiary share of monthly cost
35.5%
31.5%
-4.0%
CY19%
Average monthly cost
per enrollee
Average premium
Average Federal payment
per enrollee
$171.60
-42.90
$128.70
$173.80
-43.50
$130.30
$2.20
-.60
$1.60
Beneficiary share of monthly cost
25.0%
25.0%
„
Enrollees (in thousands)
FY 1995
FY 1996
31,697
32,000
31,734
32,065
+37
+65
* Previous estimates are from the FY 199S President's Budget.
14
441
Summary of Changes from Previous Estimate
for Supplementary Medical Insurance
Disabled
Previous
Current
Estimate '
Estimate
Change
CY1995
Average monthly cost
per enroUee
$159.40
$211.60
$52.20
Average premium
-46.10
-46.10
—
Average Federal payment
per enrollee
$113.30
$165.50
$52.20
Beneficiary share of monthly cost
28.9%
21.8%
-7.1%
CY 1996
Average monthly cost
per enrollee
$194.00
$206.80
$12.80
Average premium
-42.90
-43.50
-.60
Average Federal payment
per enrollee
$151.10
$163.30
$12.20
Beneficiary share of monthly cost
22.1%
21.0%
-1.1%
EnroUees (in thousands)
FY 1995
3,954
3,885
■69
FY 19%
4,244
4,143
-101
' Previous estimates are from the FY 199S President's Budget
15
442
2. HOSPITAL INSURANCE FOR THE UNINSURED
Authorizing Legislation - sections 103(c) and 111(d) of the Social Security Amendments
of 1965
FY 1995
Estimate
Budget
Authority
FY 19%
Estimate
Budget
Authority
Increase
or
Decrease
$406,000,000
$358,000,000
-$48,000,000
PURPOSE AND METHOD OF OPERATIONS
The Social Security Act provides hospital insurance coverage for most individuals age 65 and
above that pays for the costs of hospital and related post-hospital services, subject to certain
deductibles and coinsurance requirements. Coverage extends to all persons age 65 and
above entitled to Social Security or Railroad Retirement benefits. When Medicare (Part A)
was first implemented, Congress also provided hospital insurance coverage to people who
were already age 65 and above and were not insured under the Social Security or Railroad
Retirement programs. Congress took this action because most of these people had an
insufficient opportunity to obtain program coverage. Hospital insurance benefits and
administrative costs for persons on the Social Security or Railroad Retirement rolls are
financed by a payroll tax on employees, employers, and self-employed persons. The cost of
providing benefits to this aged uninsured group is financed through this appropriation from
general revenues.
For uninsured persons who attained age 65 before 1968, no wage credit under Social
Security is required for this Federally-funded coverage. For men who attained age 65 after
1%7 and before 1975 (before 1974 for women), wage credits on a sliding scale are required
for Federally-funded entitlement. For men who attained 65 after 1974 (after 1973 for
women), the requirements for entitlement to hospital insurance benefits are identical to the
requirements for Social Security or Railroad Retirement benefits. Thus, a gradually
decreasing number of uninsured persons are eligible for hospital insurance benefits financed
from general revenues.
Uninsured aged individuals who cannot meet these wage credit requirements also can obtain
hospital insurance protection, but must pay a monthly premium. The full monthly premium
rate is estimated at $261 for CY 19%.
16
443
Funding levels for the past five fiscal years were as follows:
1991 $559,000,000
1992 $584,000,000
1993 $328,000,000
1994 $458,000,000
1995 $406,000,000
RATIONALE FOR THE BUDGET ESTIMATE
The FY 1996 estimate is $358,000,000.
The estimate is comprised of:
1. FY 1996 Requirements
a. Benefit payments
b. Administrative costs
Total
$247,000,000
3.000.000
$250,000,000
2. Adjustments
FY 1995 benefits and interest costs
FY 1994 benefits and interest costs
FY 1993 benefits and interest costs
FY 1992 benefits and interest costs
FY 1991 benefits and interest costs
+34,984,000
+40,225,000
+36,837,000
-3,458,000
-588,000
Total Adjustments
Total FY 1996 request
+ 108,000,000
+358,000,000
More recent data on the Medicare costs of these beneficiaries lead to both a higher FY 1995
requirement, relative to the prior year's estimate, and to a substantial upward adjustment
in earlier years' benefits. Relative to the FY 1995 estimate of $406.0 million (including
adjustments), estimated costs for this beneficiary group for FY 1996 have decreased to
$378.0 million.
17
444
Benefit Payments
Benefit payments for FY 1996 are estimated at $247.0 million, a decrease of $27.0 million
below the comparable FY 1995 level of $274.0 million. This decrease occurs because
increases in the cost and utilization of covered services for this uninsured group were more
than offset by the decrease in the size of the group. The number of individuals in this group
will continue to decline from an estimated average of 89,000 in FY 1995 to an estimated
average of 66,000 in FY 1996.
Administrative Gasts
Administrative costs for the hospital insurance program for the uninsured groups are
included in the justifications for HCFA, SSA, and other agencies' administrative expenses
estimates. The agencies allocate administrative costs for the uninsured groups based on the
ratio of benefit payments for the uninsured to total hospital insurance benefit payments for
the aged. Estimated FY 1996 administrative costs for this group are $3.0 million.
/
18
445
3. HOSPITAL INSURANCE FOR UNINSURED FEDERAL ANNUITANTS
Authorizing Legislation
- section 278
(d) of Public Law 97-248
FY 1995
Estimate
Budget
Authority
FY 1996
Estimate
Budget
Authority
Increase
or
Decrease
$56,000,000
$63,000,000
+$7,000,000
PURPOSE AND METHOD OF OPERATIONS
The Tax Equity and Fiscal ResponsibOity Act of 1982 (P.L. 97-248) extended Medicare
coverage to Federal employees. Federal wages earned after December 31, 1982, are
counted toward quarters of coverage needed to establish Medicare eligibility. Persons who
were employed by the Federal government prior to 1983 and during January 1983 can
receive credit toward eligibility for noncontributory quarters worked in the Federal
government.
P.L. 97-248 authorized an appropriation to the Federal Hospital Insurance Trust Fund to
cover benefit costs of these individuals, associated administrative costs, and an interest
payment putting the trust fund in the same position at the end of the fiscal year as it would
have been if transitional coverage had not been created.
Funding levels for the past five fiscal years were as foUows:
1991 $46,000,000
1992 $37,000,003
1993 $39,000,000
1994 $48,000,000
1995 $56,000,000
RATIONALE FOR THE BUDGET ESTIMATE
The estimated amount for this activity is $63.0 million, an increase of $7.0 million from the
FY 1995 estimate. Nominal administrative costs are included in this amount. The number
of eligible annuitants in this group was 25,000 in FY 1995 and will decrease to 24,000 in
FY 1996.
19
446
4. PROGRAM MANAGEMENT ADMINISTRATIVE EXPENSES
Authorizing Legislation - section 201(g) of the Social Security Act
FY 1995 FY 1996
Estimate Estimate Increase
Budget Budget or
Authority Authority Decrease
$129,758,000 $145,000,000 +$15,242,000
PURPOSE AND METHOD OF OPERATIONS
Beginning in FY 1992, HCFA funds all Program Management activities from a single trust
fund limitation, similar to the Social Security Administration's Limitation on Administrative
Expenses, which authorizes administrative funding for four trust funds and a general fund
program. HCFA's Program Management appropriation language prior to FY 1992 set two
distinct limitations on obligations: trust fund and general fund. HCFA's inability to make
adjustments between the two limitations contributed to the Office of Inspector General's
recommendation that HCFA's cost allocation system be cited for a material non-
conformance under section 4 of the Federal Managers Financial Integrity Act of 1982.
Under the current funding mechanism, the Federal Hospital Insurance (HI) Trust Fund
advances the general fund share of HCFA administrative costs as outlays occur. Funds
appropriated through this activity are then paid back to the HI Trust Fund on March 31 of
each year. Then, 18 months after the close of the fiscal year, a final adjustment, including
interest, is made to ensure that the HI Trust Fund is maintained whole. Thus, the FY 1995
estimate includes the final reconciliation for FY 1993. A final reconciliation for the amount
appropriated for FY 1996 will not occur until March 31, 1997.
Funding levels for the past five fiscal years were included in HCFA's Program Management
account as follows:
1991 $100,367,000
1992 $116,485,000
1993 $117,862,000
1994 $128,440,000
1995 $129,758,000
20
447
RATIONALE FOR THE BUDGET ESTIMATE
The FY 19% estimate is $145,000,000
The estimate is comprised of:
1. FY 1996 Requirements $139,000,000
2. Shortfall carried forward from 1995
including interest adjustment +6.000,000
3. Total FY 1996 Estimate $145,000,000
This FY 1996 appropriation estimate for Payments to Health Care Trust Funds includes an
estimate of $139.0 million for the general fund share of HCFA's Program Management
expenses. FY 1996 needs of $139.0 million are based on current law estimates for the
general fund share of administrative costs and are discussed in greater detail in the Program
Management section of this Justification. The amount appropriated for this general fund
share will be transferred to the HI Trust Fund on March 29, 1996, (the last business day in
March) from the Payments to Health Care Trust Funds appropriation. The actual general
fund share will be determined, after the close of the fiscal year, during FY 1997.
Reconciliation of FY 1996 will occur on March 31, 1998, or March 31, 1997, if the final cost
allocation and determination of interest due has been made by that date.
The FY 1996 estimate includes an adjustment of $6.0 million, which represents the estimated
shortfall for FY 1995, adjusted for interest.
21
448
5. QUINQUENNIAL ADJUSTME>4T FOR MILITARY SERVICE CREDITS
Authorizing Legislation - section 217(g) and 229(b) of the Social Security Act.
FY 1995
Estimate
Budget
Authority
FY 1996
Estimate
Budget
Authority
$625,000,000
Increase
or
Decrease
+$625,000,000
PURPQSE AND METHQD QF QPERATIQNS
The 1946 Social Security Amendments authorized the payments of benefits to veterans of
World War II and their survivors. These payments were based upon noncontributory wage
credits of $160 for each month that the veteran was active in the military. Subsequent
amendments extended the period for which noncontributory wage credits were granted
through December 1956. The Servicemen's and Veteran's Survivors Benefit Act of 1956
ended this practice and required contributions based on military service wages beginning
January 1957.
Prior to the Social Security Amendments of 1983, reimbursement was provided to the
HI Trust Fund from the general fund of the Treasury. This reimbursement was to finance
the additional costs incurred by paying benefits which are based on periods of military
service for which no contributions were made. The Secretary of Health and Human Services
was instructed to determine by September 1965 (and each fifth September afterwards,
ending 2010) the amount of -eimbursement in equal annual installments necessary to place
the trust fund in the same position on September 30, 2015, that it would have been if
noncontributory military service credits (quinquennial adjustments) had not been provided.
The Social Security Amendments of 1983 modified this provision. First, it stipulated that
a lump sum amount be transferred from the genera! revenues to the HI Trust Fund for the
excess of the actuarial present value of past and future benefits over any amounts previously
transferred for such benefits. Second, the fund was to be credited with an estimate of the
combined employer-employee taxes on wage credits for service between 1965 and 1983. The
Amendments provided for an adjustment to the initial estimate in 1985 and every five years
thereafter. On May 20, 1983, $3,456.0 million was transferred from Treasury into the
HI Trust Fund for these purposes. After 1983, annual appropriations are authorized for the
current HI taxes on noncontributory wage credits. The last quinquennial adjustment was on
December 31, 1990, in fiscal year 1991.
22
449
DETERMINATION OF THE ADJUSTMENT TO BF. MADE DECEMBER 31. 1995
The $625.0 million requested for this activity in FY 1996 is based on preliminary actuarial
estimates. The final determination will be as part of preparing The 1995 Annual Report of
the Board of Trustees of the Federal Hospital Insurance Thist Fund in April 1995. A final
determination, including interest adjustments reflecting mid-session review economic
assumptions will be prepared in June 1995.
23
450
DEPARTMENT OF HEALTH AND HUMAN SERVICEST
HEALTH CARE FINANCING ADMINISTRATION
PROGRAM MANAGEMENT
Fiscal Year 1996 Budget Page
Appropriation language 1
Language analysis 2
Amounts available for obligation 3
Summary of changes 4
Budget authority by activity 5
Budget authority by object 6
Significant items in House and Senate
Appropriations Committee reports 15
Authorizing legislation 28
Appropriations history table 29
451
Justification:
A. Account summary y
B. General statement 31
C. Activities:
1. Research, Demonstrations and Evaluation 33
2. Medicare Contractors 41
3. State Certification 65
4. Clinical Laboratory Improvement Amendments of 1988 (CLIA) 79
5. Administrative Costs 85
452
HEALTH CARE HNANCING ADMINL^TRATION
Appropriation Language
Program Management
For carrying out, except as otherwise provided, titles XI, XVIII, and XIX of the Social
Security Act, title XIII of the Public Health Service Act, the Qinical Laboratories
Improvement Amendments of 1988, section 4360 of Public Law 101-508, and section 4005(e)
of Public Law 100-203, not to exceed [$2,207,135,000] $2,253,794,000, together with all funds
collected in accordance with section 353 of the Public Health Service Act, the latter funds
to remain available until expended; the [$2,207,135,000] $2,253,794,000 to be transferred to
this appropriation as authorized by section 201(g) of the Social Security Act, from the
Federal Hospital Insurance and the Federal Supplementary Medical Insurance Trust Funds:
Provided, That all funds derived in accordance with 31 U.S.C. 9701 from organizations
established under title XIII of the Public Health Service Act are to be credited to and
available for carrying out 'he purposes of this appropriation.
1
453
Language Analysis
Language Provision
Explanation
For carrying out, except as otherwise
provided, titles XI, XVIII, and XIX of the
Social Security Act, title XIII of the Public
Health Service Act, the Clinicai
Laboratories Improvement Amendments
of 1988, section 4360 of Public Law 101-
508, and section 4005(e) of Public Law
100-203, not to exceed $2,253,794,000,
together with all funds collected in
accordance with section 353 of the Public
Health Service Act, the latter funds to
remain available until expended;
Provides funding for the administration of
the Medicare and Medicaid programs and
total funding for the Clinical Laboratories
Improvement Act (CLIA) program. The
CLIA program is funded solely from user
fees collected and these collections are
available to be carried over from year to
year.
the $2,253,794,000 to be transferred to this
appropriation as authorized by section
201(g) of the Social Security Act, from the
Federal Hospital Insurance and the
Federal Supplementary Medical Insurance
Trust Funds:
Funding for the administration of the
Medicare and Medicaid programs is
transferred from the HI and SMI Trust
Funds. The HI Trust Fund will be
reimbursed for the Federal Funds
allocation of these costs through an
appropriation in the Payments to the
Health Care Trust Funds account.
Provided, That all funds derived in
accordance with 31 U.S.C. 9701 from
organizations established under title XIII
of the Pubhc Health Service Act are to be
credited to and available for carrying out
the purposes of this appropriation.
Authorizes the crediting of HMO user fee
collections to the Program Management
account.
454
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
Program Management
Amounts Available for Obligation
1994 1995
Actual Appropriation
Appropriation 1/ — r-
Proposed supplemental
Appropriation 2/ —
Offsetting collections from
Non-Federal sources:
HMO User Fees 3/ $363,000 $124,000
CLIA User Fees 3/ 31,232,000 45,060,000
Subtotal, Non-Federal $31,595,000 $45,184,000
Receipts and reimbursements
from Trust funds:
Trust funds transfer 2,057,144,000 2,077,377,000
HI Federal funds
Limitauon 133.830.000 129.758.000
Subtotal, receipts $2,190,974,000 $2,207,135,000
Unobligated balance start of yr. 10,388,000 19. 192,000
Unobligated balance end of yr.. (19,192,000) (19,192,000)
Unobligated balance lapsing (28,658,000) —
Total obligations $2,185,107,000 $2,252,319,000
1995 Current
Estimate
— ($20,000,000)
$124,000
45.800.000
$45,924,000
1996
Estimate
$128,000
45.400.000
$45,528,000
2.068,986.000 2,108.794.000
129.758.000
52,198,744,000
19.192,000
(19,192.000)
145.000.000
$2,253,794,000
19.192.000
(19,192.000)
$2,224,668,000 $2,299,322,000
1/ Federal Funds appropriations are not requested in Program Management for FY 1996. Appropriations requested in the Payments to the
Health Care Trust Funds account will reimburse the HI Trust Fund for the estimated Program Management Costa.
2/ The FY I99S appropriation level for Research activitiy was $20.4 million more than the Administration's request. The Current estimate reflecu
a proposed negative supplemental of $20.0 million that reduces the difference between the request for FY 1995 and the appropriation.
3/ Resources to fund the Administrative Cost activity are offset by the collection of HMO user fees under the User Charge Statute
(31 U.S.C. 9701). The resources to fund CLIA activities are offset by the collection of CLIA user fees under the Public Health Service
Act, Tide XIII, section 3S3
455
PROGRAM MANAGEMENT
Summary of Changes
1995 Appropriation $2,252,319,000
1995 Appropriation Reductions 7,651,000
1995 Appropriation (Adjusted) 2,244,668,000
1995 Proposed Supplemental (20,000,000>
1995 Current Estimate 2,224,668,000
1996 Estimate 2,299,322,000
Net Change $74,654,000
1995 Current Estimate Base Change from Base
Increases: FTE Budget Authority FTE Budget Authority
A. Built-in
1 . Annualization of
FY 1995 Pay Raise $1,946,000
2. FY 1996 Pay Raise 4,476,000
3. Increase of 16 FTEs 4,063 18 918,000
4. Increase m Personnel Benefits 8,982,000
5. Additional day of Pay 1,011,000
6. Within Grades 3,057,000
7. Other Payroll Increases 4,619,000
8. Space Rencal 3,436,000
9. Other Services 18,565,000
Subtotal $47,060,000
B. Program
1. Research 46,226,000 1,774,000
- Rural Grants/Health Networks.... 1,737,000 263,000
- Current Bene Survey 9,920,000 80,000
- Proposed Supplemental (20,000,000) 20,000,000
2. Medicare Contractors 1,609,671,000 21,429,000
3. State Certification 145,800,000 16,300,000
4. Administrative Costs
-HCFA ON-LINE 0 10,000,000
Subtotal $69,846,000
Total Increases 18 $116,906,000
Decreases:
A. Built-in
1. Postage (1,500,000)
Subtotal ($1,500,000)
B. Program
1. Research
- Rural Transition Grants 17,584,000 (17,584,000)
- EACH/RPCH 3,500,000 (3,500,000)
- Info Counseling 10,036,000 (5,536,000)
2. Administrative Costs
- Single Site (12,100,000)
- Data Systems (1,632,000)
4. CLIA 66 45,800,000 0 (400,000)
Subtoul ($40,752,000)
Total Decreases ($42,252,000)
Net Change 18 $74,654,000
456
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457
PROGRAM MANAGEMENT
RESEARCH
1995
AoDrooriation
1995 Current
Estimate
1996
Estimate
Increase or
Decrease
Consulting Services
$2,808,000
$2,808,000
$1,000,000
($1,808,000)
Other Services
25,832,000
25,832,000
47,000,000
21,168,000
Grants, Subsidies,
& Contributions
60,363,000
60,363,000
16,500,000
(43,863,000)
Proposed supplemental
—
(20.000.000)
$69,003,000
20.000.000
Total budget authority
by object
$89,003,000
$64,500,000
($4,503,000)
458
Printing and
Reproduction
Other Services
Total budget authority
by object
PROGRAM MANAGEMENT
MEDICARE CONTRACTORS
Budget Authority by Object
1995 1995 Current 1996 Increase or
Appropriation Estimate Estimate Decrease
$2,000,000 $2,000,000 $1,800,000 ($200,000)
1.613.700.000 1.607.671.000 1.629.300.000 21.629.000
$1,615,700,000 $1,609,671,000 $1,631,100,000 $21,429,000
459
PROGRAM MANAGEMENT
STATE CERTIFICATION
Budget Authority by Object
1995 1995 Current 1996 Increase or
Appropriation Estimate Estimate Decrease
Consulting Services
Other Services
Total budget authority
by object
$4,000,000
141.800.000
$4,000,000
141.800.000
$12,200,000
149.900.000
$8,200,000
8.100.000
$145,800,000 $145,800,000 $162,100,000 $16,300,000
460
PROGRAM MANAGEMENT
CLIA
Budget AutfaOTJtv bv Object
Total personnel
compensation
Personnel benefits
1995
1995 Current
1996
Increase or
Appropriation
Estimate
Estimate
Decrease
Total number of full-time
66
66
66
permanent positions
Total compensable work years:
Full-time equivalent
employment
66
66
66
—
Full-time equivalent of
overtime and holiday
0.4
0.4
0.4
—
Average ES salary
—
—
—
—
Average OS grade
12.80
12.80
12.90
0.1
Average OS salary
$51,349
$51,349
$54,933
$3,584
Average salary of ungraded
positions
Personnel compensation:
Full-time permanent
$4,050,000
$4,050,000
$4,261,000
$211,000
$4,050,000 $4,050,000 $4,261,000 $211,000
550.000 550.000 611.000 61,000
461
1995 1995 Current 1996 Increase or
Appropriation Estimate Estimate Decrease
Travel $467,000 $467,000 $707,000 $240,000
Transportation of Things — — — —
Rents, Communications and Utilities:
Rental Payments to GSA — — — —
Communications, Utilities, and
Miscellaneous Charges
530.000
530,000
714,000
184.000
Printing and Reproduction
48.000
48,000
53,000
5.000
Consulting Services
16,729,000
16,729,000
18,863.000
2.134,000
Other Services
23,376.000
23.376,000
20.130.000
(3,246.000)
Supplies and Materials
50,000
50.000
61,000
11.000
Total budget authority
by object
$45,800,000
$45,800,000
$45,400,000
($400,000)
10
462
PROGRAM MANAGEMENT
ADMINISTRATIVE COSTS
Budget Authority by Object
1995
1995 Current
1996
Increase or
Appropriation
Estimate
Estimate
Decrease
Total number of full-time
4,063 *
4,063 •
4,081 *
18
permanent positions
Total compensable work years:
Full-time equivalent
employment
4.063
4,063
4,081
18
Overtime and holiday work year
9
9
9
—
Average ES salary
$107,138
$107,138
$108,754
$1,616
Average OS grade
12.8
12.8
12.8
—
Average OS salary
$51,349
$51,349
$54,355
$3,006
Average salary of ungraded
positions
$27,922
$27,922
$9,300
($18,622)
Personnel compensation:
Full-time permanent
$198,200,000
$198,200,000
$209,143,000
$10,943,000
Other than full-time
permanent
6,259,000
6.259,000
8,044,000
1.785,000
Other personnel
compensation
4.173,000
2.822.000
4,634,000
1,812.000
Total personnel
compensation
$208,632,000
$207,281,000
$221,821,000
$14,540,000
Personnel benefiu
36,084,000
36,084,000
46.553,000
10,469.000
• Does not include 66 CLIA FTEs that will be funded by CLIA uicr fees.
463
1995
ADoroDriation
1995
Cyrrent Estimate
1996
Estimate
Increase or
Decrease
$5,319,000
$5,319,000
$5,000,000
($319,000)
431.000
431,000
418.100
(12.90C)
Travel
Transportation of Things
Rents, Communications and Utilities:
Rental Payments to GSA 28.384,000 27,401,000 30,887,000 3,486,000
Rental Payments to Other — — — —
Communications, Utilities, and
Miscellaneous Charges 13.934,000 13.934,000 6.631.300 (7.302,700)
Printing and ReproducUon 3.665.000 3.665,000 3.516.400 (148,600)
Consulting Services 900.000 900,000 900,000 —
Other Services 1/ 27,720,000 27,844,000 66,227,600 38,383,600
Purchases of Goods and Services
from other Government Accou 10,020.000 9.992,000 8.983,500 (1.008.500)
Operation of GOCOs
—
—
—
—
Supplies and Materials
1.064.000
1.064,000
750.000
(314,000)
Equipment
8,199.000
8.199.000
4.343.300
(3,855.700)
Land & Structures
12.100.000
12,100.000
0
(12,100,000)
Insurance Claims
and Indemnities
180.000
180.000
191.000
11.000
Subtotal budget authority
by object
$356,632,000
$354,394,000
$396,222,200
$41,828,200
Total budget authority
by object
$356,632,000
$354,394,000
$396,222,200
$41,828,200
1/ FY 1996 includes HMO User Fee (S128.000); HCFA On-Line lovestmeot ($10.0 miUion); and ($20.0 raiUkxi) for the
KMkarc Huidbook.
12
464
Administrative Costs*
(Budget Authority)
FY 1995
Current
Estimate
Personnel Compensation:
Full-time permanent (11.1) $202,250
Other than Full-Time Permanent (11.3) 6,259
Other Personnel Compensation (11.5) 2.822
Total Personnel Compensation (11.9) $211,331
Civilian Personnel Benefits (12.1) 36,634
Travel (21.0) 5,786
Transportation of Things (22.0) 431
Rental Payments to Others (23.2) —
Communications, Utilities,
and Miscellaneous Charges (23.3) 14,464
Printing and Reproduction (24.0) 5,713
Consulting Services (25.1) 24,468
Other Services (25.2) 1,826,491
Purchase of Goods & Services from
other Government Accounts (25.3) 9,993
Operation of GOCOs (25.4) 0
Supplies and Materials (26.0) 1.114
Total..... '. $2,136,425
* FY I99S total includes CLIA User Fees of $45.8 miUion, and S4S.4 million for FY 1996
FY 1996
Estimate
Change
$213,404
$11,154
8,044
1,785
4.634
1.812
$226,082
$14,751
47,164
10,530
5,707
(79)
418
(13)
7,345
(7,119)
5,369
(344)
32,964
8,496
1,912,558
86,067
8,984
(1.010)
0
0
811
L3Q3)
$2,247,402
$110,977
13
465
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
FY 1995 House Report 103-553
Survey and Certification
Abuse and Neglect in Nursing Homes
The Committee is concerned by reports
about abuse and neglect in the nation's
nursing homes. TTiere are troubling
indications that nurse aides with records of
crime, patient abuse and theft migrate
across the country and find it relatively
easy to secure employment in nursing
homes where providers fail to conduct
proper screening or lack adequate means
to perform background checks. The
Committee urges HCFA to study the
potential options for improving interstate
sharing of information about abusers,
including the possibility of establishing a
national clearinghouse of abuse informa-
tion to facilitate proper background
checks. The Committee requests that
HCFA prepare a report on this issue prior
to hearings on the 1996 appropriations
request.
HCFA is in the process of gathering
information to recommend whether
Congress should replace the mandate for
State-based nurse aide registries with a
national registry.
HCFA is considering two options. One
option is to continue with a State-based
nurse aide registry. Though not a
panacea, the current statute has been a
good first step toward addressing the
problem of abuse.
The second option would be to v,ieate a
Contiguous States registry. This would
eliminate the movement of nurse aides
from one State to another. However, it
would fail to take into account movement
beyond contiguous State borders.
15
466
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
Research, demonstration, and evaluation
Program for All-inclusive Care for the
Elderly (PACE)
The Committee urges the Department to
expedite the development and approval of
the 15 community-based long-term care
sites (PACE) authorized under the Social
Security Act. These programs are
providing a needed, cost-effective
alternative to institutional care for the frail
elderly.
Currently there are nine operational
PACE demonstration sites. These sites
are located in East Boston, Massachusetts;
Portland, Oregon; Bronx, New York;
Columbia, South Carolina; Milwaukee,
Wisconsin; Denver, Colorado; El Paso,
Texas; Rochester, New York; and
Sacramento, California. Sacramento
became operational in May 1994.
Chicago, which was in the demonstration,
withdrew in April 1994. HCFA has
received an application for a tenth site in
Oakland, California. The application is
being processed, and it is expected that
this site will implement the demonstration
in 1995. In addition to these operational
sites. On Lok Senior Services, which
developed the PACE model, has been
actively working with potential sites in
Detroit, Michigan; Baltimore, Maryland;
Madison, Wisconsin; Seattle, Washington;
and Los Angeles, California. Following a
developmental phase, these additional sites
are expected to seek waivers to participate
as PACE demonstration sites.
16
467
Significant Items in House and Senate
Appropriations Committee Repoits
Item
Action Taken or To Be Taken
FY 1995 Senate Report 103-318
Survey and Certification
Evaluation of Computer Technology
The Committee recommends that up to
$1,000,000 of HCFA/CLIA user fees for
CDC to be used to conduct research
evaluating the effectiveness of computer
and facsimile-based technology as
compared to on-site glass slide testing for
the National Cytology Testing Program.
The National Cytology Testing Program is
required by the Clinical Laboratory
Amendments of 1988, Public Law .00-578.
This study is to be submitted to the
Committee no later than September 1995.
In FY 1994 the Centers for Disease
Control and Prevention (CDC) initiated 3
cooperative agreements to conduct
research evaluating the feasibility of using
computer images in lieu of glass slides for
proficiency testing in cytology. In FY 1995
CDC awarded a contract for a national
study to compare referenced glass slides
with computer-based cytology proficiency
testing methods. The cooperative
agreements will be concluded in FT 1995.
The estimated completion time for the
contract is 2 years.
Certifying Room Size
The Committee is concerned that scarce
dollars are being wasted in survey and
certification of nursing homes for
room-size requirements, particularly in
annual inspections and recertification of
existing facilities that were deemed to
meet the standards when originally
constructed and licensed. No concrete
evidence exists that health and safety of
residents is contingent upon a room of a
particular size without regard to the
condition of the resident, and the burden
imposed on owners seeking variances to
room-size requirements is immense. The
Committee directs HCFA to make widely
As promulgated through the regulatory
process current regulations at 42 CFR
483.70(d)(3) state that:
HCFA, or in the case of a nursing facility
the survey agency, may permit variations
in requirements specified in paragraphs
(d)(l)(i) and (ii) of this section relating to
rooms in individual cases when the facility
demonstrates in writing that the
variations—
(i) Are in accordance with the special
needs of the residents; and
17
468
Signiflcant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
available immediately the specific criteria
utilized for granting variances to room-size
requirements and encourages States and
HCFA to accept a prior-year variance as
documentation of no adverse impact on
patient health and safety for rooms in
existing facilities in which the need of the
residents have not changed since the last
annual inspection.
Research, demonstration, and evaluation
Multiyear plan
The Committee directs HCFA to prepare
a multiyear plan for investing in and
achieving the development of
(ii) Will not adversely affect residents'
health and safety.
The nursing home reform requirements in
OBRA 87 mandated that the variation in
room size must be in accordance with the
special needs of the residents and must
not adversely affect the health or safety of
resic^ents. In addition, reasonable facility
hardship as a basis for granting a variation
for Intermediate Care Facilities (ICFs)
that became Nursing Facilities (NFs) was
deleted as a basis for granting a variation
for all NFs and Skilled Nursing Facilities.
However, even without this change the
NFs also had to demonstrate that "the
waiver serves the particular needs of the
residents and does not adversely affect
their health and safety."
Since the special needs of residents may
change periodically, or different residents
may be transferred into a room that has
been granted a variation, the variation
must be reviewed and renewed during
each annual survey to assure that the
special needs of residents have not
changed since the variation was first
approved.
As part of HCFA's plan to develop risk
adjustment methodologies for children,
five projects were awarded in FY 1994
18
469
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
methodologies for risk adjustment,
reinsurance, and carve-outs based on a
pediatric population. This research
agenda should include consultation with
managed care plans, State Medicaid
programs, and providers, including
children's hospitals, experienced
specifically in serving children with the
most challenging health care needs. The
research agenda also should plan for and
disseminate the results of regular surveys
of States' current methodologies for
adjusting for pediatric care populations
under Medicaid managed care.
Nurse Practitioner Services
The Committee again reiterates its interest
in research projects which address the
issue of effectively utilizing nurse
practitioner care services. The Committee
remains especially interested in exploring
the availability of pediatric and family
nurse practitioner care under the various
State Medicaid programs, as authorized
under the Federal Medicaid statute and
recommends that HCFA work
collaboratively with nurse-run clinics and
nursing schools in this endeavor.
that address risk adjustment for the under-
65 population, including children. HCFA
will be analyzing the results of these
studies as they are completed over the
next 3 years.
HCFA awarded a cooperative agreement
to the Research Triangle Institute in
September 1994 to study the availability of
nurse practitioners in providing services to
the Medicaid population, as well as to
Medicare beneficiaries. This 1-year study
will provide information on health care
services provided by nurse practitioners
who are and are not providing services to
the Medicaid and Medicare population;
the financial arrangements used to
reimburse them for their services; the
autonomy of their practices; and the
environment in which they practice.
HCFA FY 1995 general grants solicitation
expresses HCFA's continued interest in
proposals that study the effective use of
pediatric and family nurse practitioners in
rendering care to vulnerable populations.
19
470
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
Ventilator Dependent Unit Demonstration
The Committee is encouraged by the
positive report on the resuhs, thus far, of
the HCFA project, "Demonstration
Projects With Respect to Chronic
Ventilator-Dependent Units in Hospitals".
... A recent independent evaluation of
the project concluded that continued
monitoring of this treatment of ventilator
dependent patients could demonstrate
conclusively whether the projects are cost
effective as compared with other forms of
treatment. Therefore, the Committee
directs that the demonstration projects be
extended for an additional 3 years.
Medicare Contractors
HCFA believes that payment for services
rendered in ventilator dependent units in
hospitals can be accommodated within the
existing definition of services provided and
paid for under the regular Medicare
program. HCFA has been working with
Temple University to examine alternative
payment mechanisms that already ex'st
within the Medicare program with the
objective of identifying a permanent
payment solution. HCFA and the
hospitals prefer to avoid the temporary
solution waivers provide.
Payment Safeguard Methods Used by
Private Insurers
The Committee is concerned that HCFA
has not adopted payment safeguard
methods that have been effectively used by
private insurers. HCFA should explore
the advantages of incorporating such
methods in the Medicare Program. The
Committee expects to have ongoing
discussions with HCFA on this subject.
HCFA has adopted numerous activities
which place HCFA at the forefront of
Medicare Secondary Payer activities.
HCFA has implemented both prepayment
and postpayment activities to prevent and
recover improper payments. Like private
insurers, we conduct prepayment and
postpayment review, and develop and
disseminate to providers medical policy
that addresses problem areas. We differ
from private insurers by allowing our
Medicare contractors to conduct provider
onsite postpayment compliance audits
used when patterns of inappropriate
billing are detected.
20
I]
471
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
Improving Program Management
The Committee is concerned that 10
percent of Medicare Program dollars are
lost to waste, fraud, and abuse, according
to the testimony of experts. The
Committee thereby directs the Health
Care Financing Administration to intensify
its efforts to eliminate waste, fraud, and
abuse in the Medicare Program, and to
continually enhance claims processing to
achieve greater efficiency. The Committee
recognizes that such improvements can be
attained through various initiatives, but,
believes that an effective strategy must
include, at a minimum, a streamlined
claims process; an adequate investment in
payment safeguards; incentives to prevent
erroneous Medicare payments;
reimbursement policies that preclude
excessive costs for durable medical
equipment; and upgrading the automated
claims process.
Incentives to Prevent Medicare
Overpayments
The Committee strongly urges HCFA to
consider revising carrier performance
measures to focus more on the outcome of
medical review activities. The Committee
also believes it is important that HCFA
document the savings that can be achieved
from increased medical review investments
compared with other spending priorities.
HCFA continues to invest in payment
safeguard activities. In FY 1995, HCFA
anticipates spending $414.6 million which
will generate $6,319.9 million in savings, a
return on investment of 15:1. In FY 1996,
HCFA will continue to invest in payment
safeguard activities with special emphasis
placed on: paying claims correctly the first
time; utilizing data to trigger medical
review or fraud investigations, to identify
patterns and trends, to measure
effectiveness of corrective actions;
establishing and enhancing multi-
component coordination and cooperation
with law enforcement agencies, State
Medicaid agencies. State survey and
certification agencies, and private
insurance companies; and soliciting and
supporting provider communities "nd
beneficiary involvement in fraud and abuse
prevention and detection.
Medicare has revised and continues to
refine its process for evaluating
contractors. The new process focuses on
outcome not process. In 1995. we plan to
involve the Office of the Inspector
General in the evaluation program.
21
472
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Talien or To Be Talien
Medicare Transaction System (MTS)
The Committee strongly urges HCFA to
consider the recommendations contained
in GAO's January 1994 report entitled
"Medicare: New Claims Processing
System Benefits and Acquisition Risks".
To ensure that MTS supports Medicare
Program improvements and health care
reforms, th"; report call" " »■ HCFA to use
a strategic planning process that analyzes
Medicare business functions, planned
program improvements, and potential
system improvements. In May 1994, GAO
issued an executive guide, entitled
"Improving Mission Performance Through
Strategic Information Management
Technology." The guide identifies
important practices that agencies should
use to manage information resources. The
Committee believes HCFA should also
evaluate these practices and implement
them as appropriate.
National Uniform Billing, Claims and Data
System
The Committee directs that HCFA
continue its development of nationally
acceptable, standardized claims. The
Committee also directs that HCFA
establish milestones and a time-frame for
nationwide implementation of a
standardized claims process. The
milestones should include semi-annual
reporting on the progress of
implementation and the costs and benefits
of standardized claims.
The MTS Executive Committee which
includes the HCFA Administrator, Deputy
Administrator, Associate Administrators,
and Bureau Directors continues to meet
on a quarterly basis to review the progress
of the MTS project and provide guidance
and direction to the MTS project
Management Team.
HCFA continues the development of
nationally acceptable standardized claims,
as well as associated administrative paper
and electronic transactions such as
remittance advices. We are working with
the American National Standards Institute,
the National Uniform Billing Committee,
and other national organizations in the
development of standards by consensus.
We have obtained plan$ with timetables
from Medicare contractors to assure an
22
473
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Tal(en or To Be Taken
orderly migration to standard formats by
July 1996. Contractors are required to
report at least semiannually with respect
to their progress.
Claims for Unallowable Costs and Penalties
The Departments of Labor, Health and
Human Services, and Education have
experienced problems with contractors and
grantees who repeatedly make claims for
reimbursement for costs that are
unallowable. Consequently, the
Committee has recommended that
contractors and grantees certify that they
will not claim costs that have been
determined earlier to be unallowable.
Additionally should a contractor be
convicted of filing such fraudulent claims,
the conviction will be a felony, punishable
by fines and/or imprisonment.
Cost of Durable Medical Equipment
The Committee has been concerned about
inflated prices and reimbursements for
durable medical equipment. Prices for
such equipment should be reasonable: that
is, reflecting cost plus a fair profit margin,
and considering, among other things, the
price decreases that accompany maturing
technologies. The Committee urges the
Secretary to give prompt and full
consideration to adjusting reimbursements
for durable medical equipment, including
those items governed by a fee schedule,
when fees are determined to be excessive.
HCFA has considered the
recommendation of the Committee
■ egarding contractor certifications. HCFA
is currently discussing whether to include
the certification as a contractual issue or
to require its inclusion when contractors
submit expenditure reports. We agree
with the Committee's intent.
HCFA is currently in the process of
applying inherent reasonableness authority
to oxygen. Oxygen represents
approximately one half of all durable
medical equipment payments. In addition,
public law 103-432 of the 1994 Social
Security Act Amendments requires that
HCFA determine whether payments for
Transcutaneous Electrical Nerve
Stimulator (TENS) devices and Decubitus
Care equipment are inherently reasonable.
HCFA will be looking into these items as
well as other durable medical equipment
23
474
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
In accordance with section 1834(a)(10)(B)
of the Social Security Act, the Secretary
should determine when the payment
amounts for durable medical equipment
are not inherently reasonable, and limit
the amount of reimbursement in such
cases.
items in 1995. HCFA has suggested that
Congress reduce the burdensome
requirements that are required to apply
inherent reasonableness.
Fe. lend Administration
Data Processing Needs
The Committee recommends that
$6,632,000 be restored over the House
Allowance, to the Federal administration
account for the replacement of HCFA's
aging mainframe computer and mass
storage devices to meet its critical data
processing needs.
HCFA has recently purchased an IBM
ES/9000 Model 832 mainframe computer
and ancillary equipment. The processor
will be installed in the spring of 1995 at
the new single site facihty and will
facilitate bridging of HCFA Data Center
ADP operations to the new location. This
system will provide 168 MIPS of
mainframe processing capacity, and is
equipped with 768 MB of processor
storage, 512 MB of expanded storage, and
128 high-speed channels to which HCFA's
Direct Access Storage Devices (DASD),
tape, and other peripheral devices will be
attached.
Data Capacity Alternatives
The Committee also recommends that in
order to improve the availability of
computer capacity, HCFA should consider
several capacity management alternatives,
including data base optimization, adjusting
scheduling, and remote processing.
HCFA recently contracted technical staff
from a private contractor to evaluate
HCFA's capacity planning methodologies.
The contractor found that HCFA's
methodology to predict MIPS
requirements is reasonable. HCFA staff
analyze historical production processing
jobs on a continual basis in order to
24
475
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taicen or To Be Taken
Health Care Information Infrastructure
The Committee urges HCFA to develop a
health care information infrastructure.
Health care is an information business and
the existence of high-speed data networks
in health care is needed to bring our
health system into the 1990's. Last year
and in fiscal year 1993, the Committee
directed HCFA to fund pilot projects for
the electronic data interchange of health
care information. These projects have not
taken place. The Committee expects
HCFA to initiate these projects in fiscal
year 1995.
maximize data center utilization. The user
community is also surveyed to determine
new initiatives and projects requiring
future resources. Central Processing Unit
(CPU) workload requirements are
monitored to determine trends in peak
hours of usage. Adjustments are made to
schedule jobs during off-peak hours in an
effort to balance CPU usage. Software
such as PC SAS and dBASE II is utilized
to download mainframe data to be
processed at the PC level. HCFA also
maintains intra/interagency agreements
with the Social Security Administration's
National Computer Center and the Public
Health Service's Parklawn Computer
Center to utilize their mainframe
computers for remote processing capabiUty
when necessary.
Major initiatives HCFA has developed as
steps toward building a health care
information infrastructure include HCFA's
software development initiative, Clinical
Data Abstraction Center (CDAC)
performance, and National Provider
Identifier/National Provider File. The
software development initiative provides
software development resources to support
a wide range of HCFA functions, program
requirements, and strategic initiatives.
Examples of areas supported include
enrollment, national claims history,
program operations, and administrative
systems. CDAC performance is a contract
25
476
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
Data Bank
The Committee directs the Health Care
Financing Administration to spend no
funds for imposing or collecting fines
associated with the Medicare/Medicaid
data bank and forbids the use of
appropriated funds for collecting
information for the data bank. The
Department of Health and Human
Services has proposed an 18-month delay
in the implementation of the data bank.
which will be monitored to ensure receipt
of deliverables, reliable, timely, and
standard clinical tlata abstraction, and
efficient and effective CD AC performance.
The National Provider Identifier/National
Provider File project will develop a
national numbering scheme and
enumeration system that will be used by
HCFA and other Federal agencies (and
possibly by private organizations) for
enumerating health care providers. In
addition, HCFA is currently considering
other projects designed to enhance and
improve health care information
infrastructure, such as HCFA On-Line,
which will enable HCFA to develop its
capacity to communicate more effectively
with customers. HCFA On-Line is a
communications strategy designed to
provide HCFA and HCFA's partners and
customers with the tools and resources
necessary for effective interaction.
HCFA concurs with the Committee's
directive not to collect information and
impose or collect fines associated with the
Medicare/Medicaid data bank.
26
477
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
Amounts of Bonuses for Employees
This is intended to limit agencies, such as
the Social Security Administration, which
currently are paying bonuses of
1.4 percent of salary costs to more than
70 percent of all employees, to no more
than 1 percent of salary costs and not to
exceed the Government-wide average of
37 percent of employees.
HCFA has limited bonuses to a level that
conforms to the stated restrictions.
478
PROGRAM MANAGEMENT
Authorizing Legisladon
1995 Amount 1995 1996 Amount 1996 Budget
Authorized Appropriation 1/ Authorized Estimate 1/
Program Management:
1. Research:
a) Social Security
Act, Title XI,
- Section 1110 Indefinite — Indefinite —
- Section 1115 2/... $2,200,000 $2,200,000 $2,200,000 —
b) P.L. 92-603,
Section 222 Indefinite — Indefinite —
2. Medicare Contractors:
Social Security Act,
Sections 1816 & 1842.. Indefinite — Indefinite —
3. State Certification:
Social Security Act,
Title XVIII, Section
1864 Indefinite _ _ _
4. CLIA88:
Section 353, Public
Heri'.t*: Service Act Indefinite — — —
5. Administrative Costs:
Reorganization Act
of 1953 Indefinite — Indefinite —
Total appropriation $2,200,000 — —
Total appropriation
against definite authority. $2,200,000 — —
1/ Federal Fund appropriations are not requested in FY 1996. Appropriations requests of $129.8 million for FY 1995, and
$145.0 million for FY 1996 in the Payments to the Health Care Trust Funds account will reimburse the HI Trust fund for
the estimated Federal funds allocation of HCFA's Program Management costs.
2/ The total authorization for Section 1 1 15 is $4.0 million. HCFA's portion of this amount is $2.2 million.
28
Year
479
PROGRAM MANAGEMENT
Appropriations History Table
Budget
Estimate
to Congress
House
Allowance
Senate
Allowance
Appropriation
1987
Trust Fund Transfer
Supplemental
1988
Trust Fund Transfer
1989
Trust Fund Transfer
Reduction
1990
Trust Fund Transfer
Sequester
1991
Trust Fund Transfer
1992 2/
Trust Fund Transfer
1993
Trust Fund Transfer
Reduction
Transfer
1994
Trust Fund Transfer
Reduction
1995
Trust Fund Transfer
Reduction
Proposed Supplemental
1996
Trust Fund Transfer
$84,533,000
1,128,477,000
10,000,000
105,750,000
1,397,580,000
95,246,000
1,775,556,000
102,908,000
1,901,172,000
90,079,000
1,813.971,000
1,891,027,000
2,006,389,000
2,254,783,000
2,191,800,000
$2,253,794,000
$84,533,000
1,306,494,000
102,580,000
1,446,578,000
93,817,000
1,769,919,000
101,908,000
1,992,159,000
104,966,000
2,026,638,000
2,282,055,000
1,985,497,000
2,172,598,000
2,183,985,000
$85,396,000
1,276,170,000
102,580,000
1,396,628,000
94,417,000
1,835,519,000
(1,133)
102,908,000
1,921,172,000
91,053,000
1,901,888,000
1,982,901,000
2,165,062,000
2,192,414,000
2,207,237,000
$85,396,000
1,273,520,000 1/
98,211,000
1,368,825,000 1/
93,284,000
1,803,317,000
101,722,000
1,870,172,000
(26,197,000)
102,919,000
1,980,237,000
2,274,055,000
2.179,900,000
(28,272,872)
(1,000,000) 3/
2,189,960,000
(2,643,000)
2,207,135,000
(8,391,000)
(20,000,000) 4/
1/ Includes SIOS.O million provided through PX. 99-272 for payment safeguard activities, of which $4.5 million was deferred
by the FY 1988 Continuing Resolution.
V Funds requested for FY 1992's appropriation in the Payments to the Health Care Trust Funds account, will reimburse the
HI Trust Fund for the estimated Federal Funds allocation of HCFA's Program Management costs.
3/ Transfer provided funds to the Food and Drug Administration to implement the Mammography Quality Screening Act,
P.L. 102-539.
4/ The FY 1995 appropriatioa level was S20.4 million above the Administrolioa's request. The current eatiniate reflects a
negative supplemental request of S20.0 million that reduces the difference between the request for FY 1995 and the
^ipropnation .
29
480
JUSTIFICATION
PROGRAM MANAGEMENT
Account Suminaiy
1995 1995 Current
Appropriation 1/ Estimate 3/
1996
Estimate
Increase or
Decrease
Research — — — —
(Obligations) ($89,003,000) ($89,003,000) ($64,500,000) ($24,503,000)
Medicare Contractors. . — — — —
(Obligations) (1.615,700.000) (1.609,671,000) (1.631.100.000) 21,429.000
State Certification — — — —
(Obligations) (145,800.000) (145,800,000) (162,100,000) 16,300,000
CLIA _ _ _ _
(Obligations) (45,060.000) (45.800.000) (45.400.000) (400.000)
Administrative Costs... — — — —
(Obligations) 2/ (356,756.000) (354,394,000) (396,222,000) 41,828,000
Proposed Supplemental. — — — —
(ObUgations) 3/ ^^^^ (-20.000.00^ ' ^ 20.000.000
Total Budget Authority. _ _ _ _
(Total Obligations) ($2,252,319,000) ($2,224,668,000) ($2,299,322,000) $74,654,000
1/ Federal Fundi appropriationf are not rcqueited for FY 1995 and FY 1996. AppropriatkMU requeated in the PaymenU to Health Care Tnia
fundi account will reimburae the HI truit fund for the ««fim.t««i Federal fundi allocated for HCFA'i Program Managemeot coati.
2/ Oblig«iaaiindiideHMOuaerfeecoUectk>ae«iinaleaofS124,000iaFY 199S aad SI2S,000 in FY 1996.
3/ The FY 1995 appropriation level for Reiearch activity wai S20.4 million more than the Adminiitratioa'i requeit. The curreot eaHmitB refle
negative suppleroenlal of S20.0 million that reducei the difTereoce bumcui the requeit for FY 1995 and the appropriarion.
30
481
GENERAL STATEMENT
The Health Care Financing Administration (HCFA) was established in 1977 to bring
together, under the auspices of one agency, the management of two major Federal
programs: Medicare and Medicaid. The mission of HCFA is to assure health care security
for beneficiaries.
For FY 1996, the HCFA Program Management appropriation estimate includes the
following activities, which are integral to the accomplishment of the agency mission:
• Research. Demonstrations, and Evaluation projects which are designed to
improve the organization, delivery, quality, and financing of health care services.
• Medicare Contractors, which process Medicare claims, conduct payment
safeguard activities, and provide information to beneficiaries and providers on
reimbursement, coverage, eligibility, and other program requirements.
• State Certification which ensures that institutions and agencies providing health
care services to Medicare and Medicaid beneficiaries meet Federal health, safety,
and program standards.
• Laboratory Inspections, which ensures all laboratories that test human specimens
for health purposes, including physicians' offices, meet Federal health, safety, and
quality standards.
• Administrative Costs, which include personnel and other operating costs of the
agency.
The President's appropriation request of $2.3 billion for this account represents current law
requirements. No proposed law amounts are included. The Administration will propose for
later transmittal the following legislative proposals:
► Create a new program to provide discretionary grants that will help offset the costs
of Medicaid emergency medical services for undocumented immigrants, on the
budgets of State and local governments.
► Allow Medicare recertification surveys of home health agencies on a statewide
average interval of 24 months.
31
482
1. RESEARCH. DEMONSTRATIONS. AND EVALUATION
Authorizing Legislation - Social Security Act, Sections 1110, 1115, 1875 and 1881(a); Social
Security Amendments of 1967, Section 402; Social Security Amendments of 1972,
Section 222.
FY 1995 Increase
FY 1994 Current FY 19% or
Actual Estimate Estimate Decrease
Rural Health Care-
Transition grants
State Rural Health
Network Reform
EACH/RFCH
Information Counseling
and Assistance (ICA) grants
Medicare Current Beneficiary
Survey (MCBS)
Basic research
Proposed supplemental'
Total obligations
$21,065,000 $17,584,000 $ -- ($17,584,000)
1,617,000 1,737,000 2,000,000 263,000
4,608,000 3,500,000 -- (3,500,000)
9,874,000 10,036,000 4,500,000 (5,536,000)
9,920,000 10,000,000
80,000
43.397.000 46,226,000 48.000.000 1,774,000
($20.000.000) $20.000.000
$80,561,000 $69,003,000 $64,500,000 ($4,503,000)
PURPOSE AND METHOD OF OPERATIONS
The budget reflects the primary research, demonstrations, and evaluation goals of HCFA
and the Administration, which are to:
► ensure that Medicare and Medicaid beneficiaries, including vulnerable populations, have
access to high-quality health care;
► increase health service delivery options for consumers;
'The FY 1995 appropriation level v^as S20.4 million more than the Administration's request. The
current estimate reflects a proposed negative supplemental of S20.0 million that reduces the difference
between the request for FY 1995 and the appropriation. For additional information, see the Supplemental
Chapter.
33
483
► ensure existing Medicare payment systems for hospitals, physicians, and outpatient
services provide appropriate levels of payments to providers;
► increase understanding of the performance of the Medicare and Medicaid programs to
determine the necessity for further policy reforms;
► better understand how health care services should be delivered to assure that all
Americans have access to affordable quality health care while containing health care
spending and growth; and
► better understand the trends and factors affecting the cost, accessibility, and quality of
subacute and long-term care services under Medicare and Medicaid.
This research agenda supports HCFA's goals to: (1) continue to provide leadership in the
continuing evolution of the health care system; (2) ensure that its programs respond to
health care needs of all beneficiaries; (3) promote improved health status for beneficiaries;
and (4) promote more cost-effective health care.
Funding levels for the last Ave fiscal years:
Rural
Rural
Heahh
Health
Care
Network
Fiscal
Basic
Trans.
EACH/
ICA
Reform
Year
Research
Grants
RPCH
Grants
Grants
1991
$36,957,000
$24,052,000
$9,759,000
$
$
1992
36,244,299
22,813,467
7,322,234
10,000,000
~
1993
35,711,000
22,679,000
~
9,920,000
-
1994
43,397,000
21,065,000
4,608,000
9,874,000
1,617,000
1995
56,146,000'
17,584,000
3,500,000
10,036,000
1,737,000
'includes S9.9 million funding for Medicare Current Beneficiary Survey (MCBS).
34
484
Research Budget by Program Areas
Fiscal Years 1994-1996
(Dollars)
PROGRAM AREAS
FY 1994
FY 1995
FY 1996
Rural Health Care Transition Grants
State Rural Health Network Reform
EACH/RPCH
Information Counseling and Assistance (ICA)
Medicare Current Beneficiary Survey (MCBS)
$21,065,000
1,617,000
4,608,000
9,874,000
$17,584,000
1,737,000
3300,000
10,036,000
9,920,000
$
2,000,000
4300,000
10,000,000
Subtotal
$37,164,000
$42,777,000
$16300,000
Basic Research Activity:
1. Monitoring and Evaluating H.S. Performance
a. New
b. Continuations
$7,838,000
3,393,000
4,445,000
$5322,000
1,400,000
3,922,000
$11,152,000
5,050,000
6,102,000
2. Improving H.C. Financing and E>cliveiy Mech.
a. New
lb. Continuations
17,724,000
9,411,000
8313,000
14308,000
6,000,000
8308,000
11,867,000
1300,000
10367,000 1
3. The Future of Medicare
a. New
b. Continuations
1,003,000
828,000
175,000
3,843,000
2,100,000
1,743,000
5,419,000
2,000,000
3,419,000
4. Meeting the Needs of Vulnerable Populations
a. New
b. Continuations
15,014,000
9,433,000
5,581,000
21,499,000
15,000,000
6,499,000
16,412,000
3300,000
12,912,000
5. Info, to Imp. Consumer Choice & Health Status
a. New
b. Continuations
1,818,000
1380,000
438,000
1,054,000
500,000
554,000
3,150,000
2300,000
650,000
Basic Research Activity
1 a. New
b. Continuations
24,445,000
18,952,000
25,000,000
21,226,000
14350,000
33,450,000
Subtoul. Basic Research Activitv
$43397.000
$46,226,000
$48,000,000
Total, Research, Demonstrations, and Evaluation
$80,561,000
$89,003,000
$64300,000
35
I
485
RATIONALE FOR BUDGET ESTIMATE
The FY 19% estimate for funding HCFA's Research, Demonstrations, and Evaluation
(RD<iE) activities is $64.5 million. This includes $2 million for Rural Health Network
Reform, $4.5 million for the Health Insurance Information, Counseling and Assistance
Grants, $10 million for the Medicare Current Beneficiary Survey, and $48 million for the
basic RD&E activities.
HCFA estimates spending $48 million for RD&E activities that provide information to the
Administrator, the Secretary, the Office of Management and Budget, the Congress, and
other interested parties to enable them to make informed and rational decisions regarding
HCFA program, policy, and budget matters affecting the Medicare and Medicaid programs.
This amount includes $33.5 milhon for continuation of RD&E activities and $14.6 million
for start-up of new projects that support Congressional mandates and HCFA's and the
Department's priority initiatives. Current estimates for FY 1996 are that HCFA will spend
$13.2 million for Congressionally mandated projects.
State Rural Health Network Reform Initiative
The State Rural Health Network Reform Initiative is a grant program to provide funds to
States to encourage innovations in rural health flnancing and delivery systems. The initiative
is designed to enable States to address rural health issues within the context of
comprehensive statewide health reform. HCFA awarded funds in FY 1994 to the States of
Florida, Minnesota, Mississippi, Nebraska, North Carolina, and Washington to support the
planning, development and implementation of new financing and delivery arrangements that
enhance access to health care services and maintain a viable delivery system for rural
residents. The six awardees proposed projects that address HCFA's primary policy interests
for this program, including: a clear understanding of the characteristics of the State's rural
communities and their health care needs; development of the necessary infrastructure to
support viable long-term solutions for rural communities; integration of the rural reform
project with broader comprehensive health reform initiatives within the State; an explanation
of the financing of the plan and how it addresses care and coverage for the iminsured; an
emphasis on public health and primary care, and the integration of these activities with other
services; and a description of the steps toward program implementation. These projects are
in the early developmental stages.
Health Insurance Information. Counseling, and Assistance (ICA) Grants
The ICA program strengthens the capability of States to provide Medicare beneficiaries with
information, counseling, and assistance on adequate and appropriate health insurance
coverage. Funding will support ICA activities related to Medicare, Medicaid, Medicare
supplemental policies, long-term care insurance, and other health insurance benefits.
36
486
Medicare Current Beneficiary Survey (MCBS)
MCBS is a continuous, multipurpose survey of a representative sample of the Medicare
population intended to aid HCFA in monitoring and evaluating the Medicare program. The
survey is designed to provide comprehensive and timely information on the Medicare
population's use of health care services and total reimbursements for those services
distributed by sources of payment. Data from the MCBS enable HCFA to monitor the
financial effects of changes in the Medicare program, to develop reliable and current
information on the use and cost of services not covered by Medicare (such as prescription
drugs and long-term care), and to obtain information on the sources of payment for costs
of services not assumed by Medicare.
Basic Research Activity
1. Monitoring and Evaluating Health System Performance
There is a need for the development, design, and testing of systems to monitor and
evaluate the performance of the health care system. Special emphasis will be placed
on a comprehensive monitoring and evaluation plan for HCFA programs and the
development of model systems for use by Federal and/or State entities. A number
of critical dimensions need to be included in the monitoring and evaluation system
to understand, on an ongoing basis, how well the nation is faring in terms of access
to care, qualit}', efficiency, and costs. Techniques also need to be developed to
address the large volumes of data associated with monitoring and evaluation efforts.
2. Improving Health Care Financing and Delivery Mechanisms
Substantial research is needed to improve current health financing systems and to
develop new payment and cost containment systems. Growing costs in both the
Medicare and Medicaid programs require that efforts continue to develop the next
generation of financing and delivery systems to improve efficiency and cost
effectiveness of health care.
37
487
The Future of Medicare
Over the past decade, many of Medicare's research and demonstration projects that
were aimed at reforming the program have concentrated on payment reform. The
most notable examples were the development of prospective payment for hospitals
and the physician payment reform efforts. However, the basic Medicare program
both in terms of the delivery system and the benefit package has remained
unchanged for 25 years. During that time, State Medicaid programs and major
insurers concentrated on such activities as the design of new delivery systems, the use
of their market power to set prices, the establishment of more efficient provider
networks, and the use of alternative benefit packages and greater use of managed
care products.
While HCFA will continue to work on basic program refinements, HCFA must
continue to develop the Medicare program and modernize it to parallel changes in
the health insurance market, to better meet the diverse and changing needs of the
growing elderly and disabled populations.
4. Meeting the Needs of Vulnerable Populations
HCFA's research and demonstration projects continue to focus on ways of meeting
the health care needs of vulnerable f>opulations, focusing these efforts on issues of
access, delivery systems, and financing. Vulnerable populations include minorities,
the frail elderly, low income persons, high-risk pregnant women and their infants and
children, underserved individuals (including urban inner city, rural, migrant workers,
refugees, and frontier residents), as well as individuals who require long-term care.
This research agenda will focus on three topic areas: the assessment of access to
health care; the building of service systems that are responsive to special
populations; and the financing of services provided to vulnerable populations.
5. Information to Improve Q)nsumer Choice and Health Status
The use of information and HCFA data to improve the ability of consumers to make
more informed health care choices, either in the health plans they select or in the
services they use, is part of a long-term commitment by HCFA to change and
improve communication of information to HCFA beneficijiries. Development of an
information system to support consumer choice could also be applied to provide
health plans and health care providers with more information on consumer
preferences and needs. In addition, information systems could be instrumental in
meeting HCFA's goals to better understanding beneficiaries health and information
needs and improving their health status.
38
488
Congressional Mandates
HCFA estimates that during FY 1996, $13.2 million will be spent on projects and studies
mandated by Congress. A breakout by priority area of the Congressionally mandated
activities follows:
Monitoring and Evaluating Health System Performance $4.7 million
Improving Health Care Financing and Delivery Mechanisms $6.5 million
The Future of Medicare ~
Meeting the Needs of Vulnerable Populations $2.0 million
Information to Improve Consumer Choice and Health Status ~
Total $13.2 milUon
39
489
2. MEDICARE CONTRACTORS
Authorizing Legislation - Social Security Act, Title XVIII, Sections 1816 and 1842,
42 U.S.C. 1395.
FY 1995 Increase
FY 1994 Current FY 1996 or
Actual Estimate Estimate Decrease
Total
Obligations $1,589,620,000 $1,609,671,000 $1,631,100,000 $21,429,000
PURPOSE AND METHOD OF OPERATIONS
In FY 19%, Medicare will cover 37.5 million beneficiaries, who will generate an estimated
822.0 million claims. Medicare contractors discharge the government's responsibility for
paying Medicare beneficiaries and providers in a timely, accurate, and fiscally responsible
manner. In general, fiscal intermediaries are responsible for payment to providers of
services under Part A of the Medicare program. Both fiscal intermediaries and carriers are
responsible for adjudicating claims and making payments to beneficiaries and providers
under Pari B of the Medicare program. In addition to paying submitted claims, fiscal
intermediaries and carriers act as a link to HCFA programs by responding to provider and
beneficiary inquiries and appeals. Fiscal intermediaries and carriers also take actions to
safeguard the fiscal integrity of the trust funds.
HCFA will continue to implement policies designed to control costs through changes in
payment methodology and to control over-utilization and detect fraud. HCFA is responsible
for monitoring all Medicare contractor activities, reviewing contractor performance in paying
claims, serving Medicare beneficiaries, and assuring the fiscal integrity of the Medicare Tnist
Funds.
The cost for the Medicare contractors' portion of administering the Medicare program is
estimated to be $1,631.1 million in FY 1996.
Medicare Contractor funding levels for the past five fiscal years were:
Year Funding Level Conmient
(Includes $83,000,000 release of contingency.)
(Includes $76,180,000 release of contingency.)
(Contingency funds not available.)
(Contingency funds not available.)
(Contingency funds not available.)
41
1991
$1,494,721,000
1992
$1,524,426,000
1993
$1,555,554,000
1994
$1,589,620,000
1995
$1,609,671,000
490
MEDICARE CONTTRACTOR BUDGET
FY 19%
(Dollars in millions)
FY 1995
Current
Estimate
FY 1996
Estimate
Increase
or
Decrease
Payment Safeguards
Medical Review
$ 114.9
$ 115.0
$ 0.1
Benefit Integrity
39.1
34.9
(4.2)
Audit and Provider Settlement
147.3
148.0
0.7
Medicare Secondary Payer
113.3
98.4 •
am
Total Payment Safeguards
414.6
396.3
(18.3)
Productivity Investments
47.4
71.6
24.2
Claims Processing
Bill/Claims Payment
829.6
854.1
24.5
Reimbursement
44.6
35.5
(9.1)
Printing
2.0
1.8
(0.2)
Total Claims Processing 1/
876.2
891.4
15.2
Beneficiary & Provider Services
Hearings
86.8
84.0
(2.8)
Beneficiary Communications
126.1
137.2
11.1
Provider Education
31.4
23.5
(7.9)
Total Beneficiary
& Provider Services
244.3
244.7
0.4
Participating Physicians
25.1
25.0
(0.1)
Contractor Contract Support
2.1
2.1
0.0
TOTAL OPERATING BUDGET
$1,609.7
iL631.1
$21.4
1/ In the FY 1995, Congress appropriated S396.3 million for payment safeguard activities.
42
491
Major Program Initiatives
Over the past several years, HCFA has implemented an incremental strategy designed to
standardize and consolidate Medicare claims processing and also reduce administrative costs.
As part of this ongoing effort, HCFA instituted a series of initiatives which have successfuUy
reduced costs and promoted greater consistency in claims processing. However, in an
atmosphere of increasing demands and changing legislative and regulatory initiatives, the
Medicare program is becoming more complex and changes are more commonplace.
Coupled with administrative budget reductions, HCFA must continue to make improvements
to better meet these demands.
In FY 1996, HCFA will continue to work with the design contractor on the analysis, design,
development, validation, transition, and maintenance of a Medicare Transaction System
(MTS). The MTS will integrate, standardize, and generally improve the efficiency with
which Medicare claims are processed. The new system will shorten the implementation time
for legislative and administrative changes related to claims processing, improve HCFA's
program evaluation capabilities, and create a claims processing environment where
administrative costs are maintained at the lowest prassible level, claims are processed in a
consistent manner, and contractor conformity is assured.
The MTS will be a fully automated, consolidated Part A and Part B claims processing system
designed, ultimately, to replace the varied claims processing systems currently used by the
Medicare contractors. HCFA will own and control the MTS, but the system will be
contractor maintained and operated. MTS will take advantage of and foster uniform claims
submission requirements, including standardization of electronic submission formats, coding
conventions, and claims documentation. MTS will allow national medical review edits to be
applied consistently, while allowing fiscal intermediaries and carriers to maintain control over
local medical review and other activities. The MTS will also greatly enhance HCFA's ability
to control and monitor benefit expenditures.
Many of the efforts included in this budget estimate will facilitate a smooth transition to the
MTS environment. We are strongly emphasizing standardization (especially within the area
of Productivity Investments) so that the claims processing function will easily transfer to the
MTS. This budget submission contains the funding levels that will allow us to proceed with
the MTS initiative.
Other Major Initiatives
The FY 19% budget estimate includes funding associated with HCFA's ambitious goals to
standardize and automate claims processing. HCFA continues to promote the submission
of electronic media claims (EMC) since use of EMC is the largest contributor to contractor
unit cost efficiencies. No savings are included in this budget since the level of EMC
activities is not expected to expand significantly beyond that projected in the FY 1995
budget. Use of American National Standards Institute standards wiU enable EMC billers
43
492
to use standard formats for billing and communicating with Medicare and non-Medicare
health payers in the United States. We plan to standardize the communications systems for
electronic billers to accommodate billers that communicate with more than one contractor.
In addition, we plan to consolidate costly shared claims processing arrangements to achieve
maximum productivity and operational savings. The FY 1996 estimates include savings of
$13.5 million which are derived from incremental workload savings and productivity savings.
In addition, HCFA is also continuing focused medical reviews (FMR) as a means of
streamlining and improving the medical review process. FMR involves an analysis of
national data furnished by HCFA as well as review of internal billing utilization and payment
data. Through FMR, contractors (both intermediaries and carriers) will identify aberrancies
from national or contractor data, review medical records, and initiate appropriate corrective
actions. These actions will include prepayment and postpayment review of bills, conducting
educational contacts, developing and revising local medical review policies, identifying and
recouping overpayments, and referring cases to the Benefit Integrity staff.
Contractors will evaluate quarterly the results of FMR to determine its effectiveness.
Factors in gauging effectiveness include:
number of claims reviewed,
dollars derived versus review costs,
volume of claims/charges denied in proportion to claims suspended,
specificity of criteria in relation to identified problem(s),
demonstrated change in behavior,
impact of education as a deterrent in relation to review costs, and
the presence of more costly problems identified in data analysis that need
higher priority than existing criteria.
HCFA will also use this database of results to define acceptable contractor medical review
performance and to measure the relationship between contractor educational programs and
changes in provider practice patterns.
Based on FMR activities and claims experience, intermediaries and carriers will develop
local medical review policies. They will utilize input from Peer Review Organizations/carrier
policy exchanges, carrier advisory committees, national carrier medical director meetings and
workgroups, and the national medical review policy clearinghouse.
44
493
In FY 1995, HCFA implemented new procedures for reviewing provider cost reports, which
expanded onsite examination of provider records where it is likely that improper cost were
claimed. The new procedures include a "limited desk review" program and a "focused
review" initiative. These procedures will continue throughout FY 1996. The limited desk
review program enables intermediaries to identify claims on provider cost reports. These
claims pose limited risk to the program, using a minimal amount of resources. In effect,
limited desk reviews allow a significant number of provider cost reports to be reviewed and
settled at an o- frail reduced cost.
Focused reviews direct intermediaries to review certain provider records pertaining to a
limited number of pre-selected/high risk reimbursement issues. In most instances, focused
reviews enable HCFA to reduce the risk of improper payments at a large number of
providers that would not otherwise be audited. Focused reviews are expected to generate
a significant amount of program savings at a relatively low cost, which will allow HCFA to
maintain approximately the same level of savings return with a constant level of funding.
Legislative Proposals
The Administration will propose legislation that will improve HCFA's contracting flexibility.
By allowing HCFA increased flexibility, we can improve the cost effectiveness of the
Medicare Contractor budget.
494
RATIONALE FOR THE BUDGET REQUEST
I. Payment Safeguards -- $396.3 million
Payment Safeguard functions include conducting medical review of claims to determine
whether services are medically necessary and constitute an appropriate level of care,
deterring and detecting Medicare fraud, auditing provider cost reports, and assuring that
Medicare acts as a secondary payer when a beneficiary has primary coverage through other
insurance.
► Medical Review/Utilization Review TMR/UR) - $115.0 million
These activities serve to guard against inappropriate benefit payments by ensuring
that the medical care provided is covered by Medicare, and is necessary and
appropriate. Specifically, our contractors are required to work with the medical
community to develop clear medical review policy and communicate that policy to the
providers. Moreover, we also emphasize the need for systematic and ongoing analysis
of claims data to focus prepayment and postpayment medical review. To meet this
requirement, intermediaries and carriers currently analyze local and national data to
identify practice patterns, trends, and aberrancies which may reflect areas of potential
abuse, inappropriate care, and over-utilization. This data-driven approach allows us
to target and direct our efforts to our greatest risk of inappropriate program
payment. Medical review activities are expected to yield a return on investment
(ROI) of 10:1. HCFA expects about $1,117 billion in savings from our medical
review expenditures.
• Fiscal Intermediary Medical Review - $33.1 million
Fiscal intermediary medical review v.i" focuc ^t. preventing inappropriate
billing through provider education and on targeting reviews on providers who
fail to change inappropriate behavior. Funding is requested to identify areas
of abuse and over-utilization, and to prevent payment for services which are
not covered under the Medicare program. This will be accomplished through
analysis of national and local data. Reviews will be targeted where they will
be most effective in protecting the program.
Intermediaries will continue to improve efficiency through increased
acceptance of electronically submitted medical documentation, increased use
of technologically advanced software, and refinement of screens for data
analysis and identification of noncovered services. Intermediaries will continue
to analyze local and national data for practice patterns and trends to identify
and target review where there are aberrancies and areas of potential abuse or
over-utilization. This targeting principle will assist in developing local medical
review policies which will address problem areas or trends in new
46
495
technologies. The local medical review policies will be developed in
coordination with health professionals in the community, carriers, and Peer
Review Organizations. These jointly developed policies will be disseminated
to providers. Education will be furnished to providers when problems are
identified.
In addition to educating aberrant providers who need to change inappropriate
behavior, intermediaries need to provide ongoing education through training
sessions, participate in consumer and provider organization meetings, and
make presentations to consumer groups.
The data analysis that will drive prepayment medical review will also drive the
selection of providers for postpayment audit. Through data analysis and/or
prepayment review, a provider may be identified as billing the program for
noncovered services. When there are a large number of claims involved which
would make it impractical to review 100 percent of the claims in question, or
where there is evidence of possible fraud or abuse, the provider will be
selected for postpayment audit (Comprehensive Medical Review -- CMR).
The CMR involves selection of a statistically valid sample of claims
representing the universe in question. Overpayments resulting from the
sample review will be projected to the universe of claims represented by the
sample. This process is an administratively and cost-effective means of
recovering inappropriate Medicare payments from providers.
Data system enhancements necessary to increase medical review effectiveness
include increased automated review systems, increased electronic submission
of Medicare documentation, and improvements in data analysis software. The
purpose of system enhancements will be to increase the effectix ness of
medical review.
The terms of legal settlements dictate that all beneficiary billings for services
not requiring Medicare payment (demand bills) in skilled nursing facilities be
reviewed. A percentage of all other beneficiary demand bills will also be
reviewed. It is anticipated that the volume of demand bills will increase as
State Medicaid agencies intensify efforts to obtain Medicare payment for
dually-eligible beneficiaries. Coordination with Medicaid agencies and
provider education will be needed to ensure that Medicare is accurately billed.
In total, HCFA expects to save $297.9 million m program dollars as a result
of intermediary medical review activities, with an ROI of 9:1.
47
496
• Carrier Medical Review - $81.9 million
A total of $81.9 million is requested to fund Carrier Medical Review activities
in FY 1996. The projected savings of $819.0 million will provide an overall
ROI of 10:1.
Carrier Medical Review identifies areas of abuse and over-utilization and
prevents Medicare payment for medically unnecessary or noncovered services.
Carriers will utilize computerized methods of analyzing utilization,
epidemiologic, and demographic data to detect trends in provider activities
and the deUvery of health care. This will be accomplished through
prepayment and postpayment analysis of Medicare Part B claims. In FY 1996,
carriers will perform prepayment review on 4.6 percent of all claims.
Postpayment review will consist of CMRs on 2.7 per 1,000 providers.
In FY 19%, HCFA will continue to support the medical review activities of
the four Durable Medical Equipment Regional Carriers (DMERCs). The
DMERC prepayment review level will be 9 percent and postpayment reviews
will be done through CMRs at a rate of 5 providers per 1,000. The DMERCs
will conduct prepayment and postpayment review of Durable Medical
Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) claims to identify
areas of potential abuse and over-utilization and to prevent payment for
noncovered services. Utilizing statistical data provided by the Statistical
Analysis DMERC (SADMERC), the DMERCs will conduct CMRs on 5
suppliers per 1,000 in their region. The SADMERC will conduct CMRs on
S suppUers per 1,000 nationally.
The DMERCs will identify aberrancies from an analysis of national and local
databases. The DMERCs will initiate corrective action for overpayment
recoupment, target supplier claims for services most frequently billed, and
continue to revise regional medical review policies and screens for the Office
of Inspector General (OIG) referral. This targeting principle will assist in
developing regional medical review policies to address identified problem
areas or trends in new technologies. In addition to educating suppliers,
DMERCs need to educate the referring/ordering physicians responsible for
prescribing DMEPOS items and include them in the medical policy
development process.
Benefit Integrity - $34.9 million
HCFA will continue to detect and deter Medicare fraud activities through concerted
efforts with OIG, the Federal Bureau of Investigation, Medicaid Fraud Control Units,
the Department of Justice, and other HCFA partners. With the development of
Medicare fi'aud units at each contractor and our expanded focused reviews, we are
48
497
strengthening our ability to identify areas of abu-.e and over-utilization. HCFA
continues to improve and expand fraud detection through the use of statistical
analysis on billing practices.
HCFA will continue programs to safeguard Medicare trust funds through the early
detection of fraud and through other initiatives aimed at preventing fraud. Emphasis
will continue on identifying and correcting existing aberrant behavior, identifying
potential future occurrences, and identifying program weaknesses that seem to make
it easy to defraud Medicare.
As in FY 1995, HCFA will continue to improve the quality of referrals to OIG by
increasing its fraud detection capabilities through expanded data analysis and
improvements in fraud detection by the carriers and intermediaries. To aid this
effort, HCFA will have in place a fraud detection investigation database which will
contain information on currently active investigations of emerging fraud.
In addition, the National Claims History Database continues to be available to focus
postpayment review on practitioneio and suppliers who appear to be billing
fraudulently or who are misrepresenting to Medicare the services or items they are
furnishing.
HCFA continues to improve the efficiency of the Medicare fraud units with the
processing of all regioni.! Durable Medical Equipment (DME) claims in separately
funded DME regional fraud units. The DME Medicare fraud units will concentrate
on their broad payment safeguard functions and on working together as a single force
to deal with suppliers that bill nationally. HCFA will also begin to expand the
Medicare fraud focus at fiscal intermediaries to include a concentration on Home
Health Agencies -nd Skilled Nursing Facilities.
In FY 1996, Medicare carriers will focus their activities on medical laboratory,
radiology, anesthesia, physician services, and ambulance claims. The carriers will
upgrade their fraud detection capabilities by making better use of available databases
and expanded relationships with other fraud detection organizations.
To make beneficiaries more informed consumers, HCFA will continue its beneficiary
outreach program through close cooperation with beneficiary groups and national
publications. HCFA will continue to work with its contractors to refine data analysis
capabilities and to evaluate the effectiveness of contractors and methodologies for
detecting fraud. HCFA will evaluate contractor staff training needs and provide or
make arrangements for the necessary training.
49
498
Audit and Provider Settlement - $148.0 million
The audit of provider cost reports represents HCFA's primary instrument to help
assure the integrity of Part A Medicare payments. Funding priorities are directed
towards the use of limited desk reviews where low cost/low utilization providers are
involved, and the application of a greater number of onsite focused reviews to expand
the overall examination of high cost/high reimbursement issues. HCFA expects to
realize $1.6 billion in program savings, while the FY 1996 funding level increases by
$700,000. The expected ROI is 11:1.
In FY 1996, budget estimates allow for a relatively constant level of reviews and
audits for all types of providers even though an ever-increasing number of providers
require both desk review and settlement. Full desk reviews and field audits are
directed towards high cost/high utilization providers and past poor performers.
Contractors will retain a knowledgeable audit staff and provide training in accordance
with Government Auditing Standards.
Contractors will also respond to provider appeals by conducting Intermediary
Hearings and by filing position papers and attending hearings at the Provider
Reimbursement Review Board (PRRB); reopen and revise prior period settlements
based upon provider requests, as well as PRRB and HCFA directives; and, resolve
problems identified on provider cost reports.
The following table illustrates recent intermediary savings and current projections of
savings resulting fi-om audit activities.
Number
Audit
of
Focused
Savings
Years
Providers
Audits
Reviews
rmillions')
1991
30,364
5,229
.
$1,700
1992
29,490
2,736
-
$974
1993
29,900
2,907
-
$1,711
1994
29,950
2,574
-
$1,117
1995
30,950
2,866
2,592
$1,788
1996
31,493
2,501
2,407
$1,628
SO
499
Medicare Secondary Paver (MSP) - $98.4 million
Our continuing MSP program is designed to identify situations where other insurers
are the primary payer, to pay all claims correctly the first time, and to recover
Medicare dollars in instances where overpayments have occurred. HCFA aggressively
pursues the identification of secondary payer situations through the collection and
matching of beneficiary-specific health care data through the Internal Revenue
Service, Social Security Administration, and HCFA (IRS/SSA/HCFA) data match.
In addition, our use of the Initial Enrollment Questionnaire is an important part of
our commitment to capturing vital health care coverage data on beneficiaries and
their spouses at the time of Medicare enrollment and before any claims are filed. In
FY 1996, the MSP efforts will be funded at a level of $98.4 million. This level of
MSP activity will yield savings of approximately $2.5 billion in Part A and $950,300
in Part B, for a total of approximately $3.4 bilUon in program savings in FY 19%.
The ROI will be 58:1 for Part A, 17:1 for Part B, and 35:1 overall.
HCFA will continue to support litigation to recover funds from organizations not
complying with the MSP provisions. HCFA's priorities will be:
• Data Matches - $22.8 million
IRS/SSA/HCFA Data Match - $21.2 million
In FY 1996, HCFA plans to enhance the IRS/SSA/HCFA data match. The
IRS/SSA/HCFA data match for calendar years 1993 and 1994 will occur in FY
1996. This data match will achieve approximately $400.0 million of the
projected $3.4 billion in MSP savings.
Information derived from the data match will be entered on the Common
Working File (CWF) system through the Recovery Tracking System. Once
this information is entered on the CWF, contractors will be able to identify
MSP situations prior to paying claims, thereby improving contractor efficiency
and performance. Contractors will require $21.2 million to seek recoveries
including funding for the designated contractor who will contact employers in
order to identify working aged individuals based on IRS records matched by
SSA.
Other Data Matches - $1.6 million
In addition to the IRS/SSA/HCFA data match, data matches with other
Federal and State agencies (beyond the current IRS/SSA match mandated by
OBRA 89) will be executed so that potential mistaken paymentsituations can
51
500
be avoided and prior mistaken payments recovered and tracked. HCFA
anticipates some insurers, third party administrators and employers will begin
a voluntary data match with HCFA. This should reduce their administrative
costs as well as HCFA's.
Initial Enrollment Questionnaire CIEQ') - $3.6 million
HCFA is sending all potential beneficiaries a questionnaire three months prior
to their entitlement to Medicare. This questionnaire requests information on
any other health insurance the individual may be entitled to after becoming
eligible to Medicare. The lEQ contractor will load the information on the
CWF. Medicare contractors should then have information on other coverage
before any claims are filed.
Ongoing MSP Activities - $70.0 million
TTie cost of ingoing MSP activities will increase as claims volume increases.
More reliable information on the CWF, as a result of data matches, the lEQ,
and past litigation activity saves program dollars but increases administrative
expenditures for inquiries and processing more appeals. The $70.0 million
includes $7.2 million for MSP inquiries.
Litigation - $2.0 million
HCFA will litigate additional cases of noncompliance with MSP provisions in
FY 19%.
52
501
PAYMENT SAFEGUARD
ADMINISTRATIVE COSTS AND BENEFIT SAVINGS
(Dollars in Millions)
FY 1995
FY 19%
Cost
Savings
ROT
Cbst
Savings
ROI
MRAJR
Part A
$ 36.9
$ 297.9
8:1
$ 33.1
S 297.9
9:1
Part B
78.0
819.0
11:1
81.9
819.0
10:1
Subtotal
114.9
1,116.9
10:1
115.0
LI 16.9
10:1
Benefits
Integrity 1/
39.1
29.5
Audit
147.3
1,787.7
12:1
148.0
1,628.0
11:1
MSP
Part A
47.4
2,465.0
52:1
42.5
2,465.0
58:1
Part B
65.9
950.3
14:1
55.9
950.3
17:1
Subtotal
113.3
3,415.3
30:1
98.4
3,415.3
35:1
Ibtal
$414.6
$6^19.9 15:1
$390.9
$6,160.2 16:1
y The implications of the changes in scope and nature of activities make it diCBcult to quantify
savings for benefit integrity.
53
502
II. Productivity Investments - $71.6 million
As we move into the next era of heSlth care which emphsisizes constant assessment of our
programs, greater importance will be placed on the exchange of information with our
customers and partners. Without improvements, HCFA will not be able to capture the large
volume system demands necessary to serve the increase in customers. With the challenge
of setting the national standard comes the responsibility of responding to the needs of the
customers we serve. Therefore, HCFA is taking aggressive steps to implement investment
strategies which are designed to improve the administration of the Medicare program. The
projects we are requesting funding for in FY 19% are as follows:
► Contractor Transitions - $28.5 million
Based on historical trends, we anticipate the number of contractor transitions will
increase substantially. An increase in the number of contractor transitions began in
FY 1994, and HCFA believes this trend will continue through FY 1996. HCFA must
assist these contractors and the relocation of their Medicare claims workloads so that
their separation from the program will not cause disruption. The total funding level
for FY 1996 is $28.5 million, an increase of $23.5 million over the FY 1995 level.
► Medicare Transaction System - $20.2 milUon
The MTS will be a major advancement in the processing of claims and collecting of
related information. Although HCFA will own and control the MTS, it will be
contractor operated. The system is being designed to integrate, standardize, and
significantly improve the efficiency of processing Medicare claims. This restructuring
and consolidation of the Medicare claims process is a HCFA initiative that has been
endorsed by the Secretary, the Office of Management and Budget, the General
Services Administration, the General Accounting Office (GAO), and has received
Congressional support. Today's systems are fragmented, old, non-responsive, and
costly. MTS is being designed to re-engineer these systems and will result in one
modem, more responsive, less costly, flexible state-of-the-art platform that will carry
HCFA into the 21st century.
HCFA began design of the MTS in FY 1994. The FY 1996 request reflects an
increase of $8.4 million. The total level of $20.2 million includes funding for CWF
host conversions and local contractor conversions to MTS, preparatory activities for
MTS operating sites, the MTS Provider File, MTS operating site startup and
telecommunications startup, and MTS local contractor system termination.
54
503
Administrative Simplification - $17.5 million
Simplification involves standardization of the contractor systems for the processing of
claims and related provider and beneficiary activities. Contractor systems for
interfacing with the MTS will be standardized and made more efficient with the state-
of-the-art telecommunications and information systems technologies. In addition, the
numerous payment transactions between providers and MTS will be standardized.
HCFA will continue to promote the adoption of national standards for all payment
transactions, replace certain other routine processes with electronic transactions and
provide technical support to providers converting to electronic processing.
The Electronic Data Interchange (EDI) initiative will transfer all Medicare
telecommunications formats to American National Standards Institute (ANSI)
formats. The standardized Medicare formats will provide a foundation for
implementation of the MTS. Additional standards are still under development by
ANSI and will be implemented by the Medicare contractors when completed. These
include standards for: National Provider Identifier, CWF Task Directives, and the
Elimination of Local EMC Formats.
HCE\s EDI initiatives are a key component of the Agency's strategy to reduce
administrative costs and standardize contractor operations through the migration to
a totally electronic claims processing and payment environment. The substitution of
electronic transactions for paper transactions facilitates the transition to the MTS by
standardizing system inputs and outputs and reduces total Medicare expenditures by
decreasing the burden on physicians and providers. HCR\ will continue its aggressive
efforts to use EMC since EMC results in lower claims processing unit costs. HCE\
will further promote shared claims processing arrangements, in which several
contractors use identical claims processing software that is maintained by a single
entity.
In order to promote efficiency among contractors, HCE\ continues to encourage the
enhancement and use of identical software for claims processing. The request for
administrative simplification is $17.5 million in FY 1996.
Improve Beneficiary and Provider Services - $3.2 million
HCFA is dedicated to serving its customers and working with its partners. The
following initiatives are important components of an overall plan to achieve HCFA's
service goals.
55
504
• Beneficiary/Provider Survey - $1.2 million
Information gathered through the Beneficiary and Provider Survey allows
HCFA to develop customer satisfaction indices and ensure high quaUty carrier
and intermediary performance.
• Appeals Process Simplification - $1.0 million
HCFA will focus its efforts on streamlining the Medicare appeals process
through pilot testing of new approaches to optimize the process.
• Combined Part A and Part B Explanation of Medicare Benefits - $1.0 million
HCFA is committed to making the Medicare program easier to understand
and use. We plan to combine the necessary claims information that is
currently furnished to beneficiaries on three separate notices on an all-inclusive
benefit statement.
National Provider Identification - $2.2 million
In preparation of MTS, we will assign a National Provider Identifier to all health care
providers. This initiative will allow HCFA to standardize Medicare and Medicaid
provider enumeration data and provide our health care industry partners with
standard enumeration capabilities.
56
505
FY 1996 FISCAL INTERMEDIARIES AND CARRIERS
PRODUCTIVITY INVESTMENTS
Fiscal Intermediaries Amount Requested
Contractor Transitions $9,100,000
Medicare Transaction System 6,400,000
Administrative Simplification 5,600,000
Improve Beneficiary and Provider Services 1,000,000
National Provider Identification . 700.000
Total Fiscal Intermediaries $22,800,000
Carriers
Contractor Transitions $19,400,000
Medicare Transaction System 13,800,000
Administrative Simplification 11,900,000
Improve Beneficiary and Provider Services 2,200,000
National Provider Identification 1.500.000
Ibtal Carriers $48,800,000
TOTAL ALL CONTRACTORS $71,600,000
57
506
III. Claims Processing -- $891.4 million
Claims processing functions include the cost associated with paying Part A and Part B
claims, including: electronic data processing, contractor personnel cost, postage, printing,
etc. Claims processing funding accounts for approximately 55 percent of the money
requested in Medicare contractors.
► Claims Payment - $854.1 million
Contractors must accurately determine beneficiary eligibility, coverage, and payment
amounts for every Medicare claim received, and pay claims in a timely manner.
HCFA calculates unit costs for claims processing using the following factors:
inflation, claims volume, postage rates, and operating efficiencies. Savings generated
during processing are also incorporated into the unit cost calculations for claims
processing.
Claims payment includes $37.0 million for other ongoii.g costs such as: CWF (host
and maintenance). Data Communications (including FTS-2000), DME regionalization
support activities, Unique Physician Identification Number initiatives, administrative
support of HCFA projects and GAO special studies, administrative support of OIG
audits and other activities, funding for Blue Cross and Blue Shield association, and
administrative cost settlements.
Calculations of Workload and Unit Cost
A statistical forecasting analysis of the latest available actual workload data was used
to develop projections. For FY 19%, HCFA projects an average workload growth
of 4.7 percent - 8.8 percent for Part A and 3.9 percent for Part B. The inflation rate
assumed is 3.2 percent.
For the Medicare contractors, the bottom line unit cost is derived as follows:
Numerator: Ongoing costs for bills/claims payment, appeals, inquiry (carrier),
MR, MSP (except Datamatch), Benefits Integrity (except Networking),
Provider Education and Training (carrier). Participating Physician (carrier),
Reimbursement (intermediary).
Denominator: Carrier claims or intermediary bills.
The following graph illustrates that in FY 19%, Medicare contractors will process an
estimated 822.0 million claims, 140.6 million Part A and 681.4 Part B claims. This
represents a 4.7 percent increase over the number of claims processed in FY 1995.
58
507
CLAIMS PROCESSING
WofWoad in Milliom
wni
655.6
681.4
615.1
1
"
600
574.9 ^
5J62
400
200
101.1
109.6
120.6
129.2
140.6
1
1
1
1
'
FY 1992
FY 1993
FY 1994 FY 1995
FY 1996
PartA PartB
The following table shows the bottom line unit cost, the line 1 unit cost, and workload data
for contractors. Historical data is provided for FY 1992 through FY 1994, as well as
projections for FY 1995 and FY 19%.
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508
Bottom line Unit Costs, for Cost Contracts
IN CURRENT DOLLARS
FY 1992
FY 1993
FY 1994
FY 1995
FY 1996
Part A $2.78
Part B $1.71
$2.61
$1.60
$2.45
$1.52
$2.45
$l.t8
$2.29
$1.47
IN CONSTANT 1988 DOLLARS
Part A $2.33
Part B $1.43
$2.12
$1.30
$1.95
$1.21
$1.91
$1.15
$1.74
$1.12
Line 1 Unit Costs
Oaims Processing Only
IN CURRENT DOLLARS
Part A
PartB
$1.60 $1.50
$1.05 $0.96
$1.40 $1.40
$0.89 $0.87
$1.45
$0.90
IN CONSTANT 1988 DOLLARS
Part A
PartB
$1.34 $1.22
$0.88 $0.78
$1.11 $1.09
$0.71 $0.68
$1.10
$0.68
Wnrklnad In MiUions
FY 1992
FY 1993
FY 1994
Receipts
Processed
Part A Part B
101.2 546.1
101.1 546.8
FY 1995
Part A Part B
110.3 573.2
109.6 574.9
FY 19%
Part A
121.1
120.6
PartB
612.7
615.1
Receipts
Processed
Part A Part B
129.2 655.6
129.2 655.6
Part A Part B
140.6 681.4
140.6 681.4
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509
► Reimbursement - $35.5 million
The funding level for Medicare provider reimbursement will decrease by $9.1 million
in FY 1996, to $35.5 million. Provider reimbursement services include establishing
and adjusting interim rates, collecting provider overpayments, and providing
consultative services to providers for maintaining their accounting systems.
► Printiiig <:i.8 million
In the interest of maintaining standard formats and high quality in entitlement and
report forms, HCFA supplies beneficiary enrollment and provider cost reporting
forms. The use of these forms is essential to beneficiary notification and efficient
contractor operations. In FY 1996, HCFA will print 50 million of these forms, a
decrease of 15 million forms from FY 1995.
IV. Beneficiary and Provider Services - $244.7 million
Beneficiary and provider services functions include conducting hearings and reconsiderations
to determine the proper payment amount, improving beneficiary and provider
communication, and administration of provider education and training activities.
► Hearings and Reconsiderations - $84 million
Beneficiaries, providers, physicians, and suppliers are entitled by law to appeal
payment determinations made by Medicare contractors through reconsiderations,
formal reviews, or hearings. HCFA projects that Part B reviews and hearings
workloads for FY 1996 are not expected to exceed FY 1995 levels, while workload
for Part A reconsiderations and hearings is anticipated to have a moderate increase.
Contractors are expected to control and respond to requests for appeal and to
control receipt of Administrative Law Judge hearing requests.
HCFA continues to maintain efficiencies achieved in prior years through the use of
shorter decision letters and the experimental use of the telephone to conduct reviews
and reconsiderations.
► Beneficiary/Provider Communications - $137.2 million
The Medicare contractors are the links for the beneficiaries and providers to the
Medicare program. HCFA, in concert with the contractors, continues to strive
towards offering the most effective and efficient service to beneficiaries and providers
and continues to expand their awareness and understanding of the Medicare
program.
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510
As part of HCFA's productivity investments, we are revising aU benefit notices into
a single, easy to read summary format. Carriers will begin using the new notice
format in FY 1996. Beneficiary and provider feedback will be used to modify the
format, as necessary, to ensure maximum beneficiary comprehension. HCFA and its
contractors will conduct extensive outreach to ensure a smooth transition to the new
format.
HCFA will expand its Carrier Customer Service Plan initiative, including:
• tone/clarity self assessment,
• initiatives to improve service to blind, deaf, zmd disabled beneficiaries,
• an automated inquiries analysis program,
• improvements to the internal review process,
• partnerships with local beneficiary counseling emd assistance organizations,
• the expansion of Beneficiary Advisory Committees, and
• initiatives designed to improve service to Spanish-speaking individuals.
Also, carriers use Audio Response Units (ARUs) as the initial contact for providers,
and a beneficiary ARU script is offered to all carriers. In FY 1996, carriers will
expand the use of ARUs. The ARUs will provide improved service, accuracy, and
consistency through the use of expanded standardized scripts and equipment
enhancements.
In FY 19%, carriers will receive an estimated 40 million inquiries by telephone, in
writing, or through direct contact. This is an increase of 1 percent over the current
FY 1995 projection of 39.6 million inquiries.
Provider Education and Training - $23.5 million
Increasing numbers of practitioners and suppliers who provide health care services
rely on information gained through communications with carriers about Medicare
program provisions. In answer to this need, HCFA has fostered interaction between
health care providers and carriers to promote efficient, economic claims activities.
These include:
• conununications with physicians and suppliers;
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511
• education of providers to eliminate the submission of erroneous or under-
documented claims;
• distribution of newsletters to all providers detailing changes in coverage,
payment, or billing policy;
• maintenance of speaker bureaus that consist of coverage, payment, and billing
experts who are on call to assist new practitioners or those unfamiliar with the
Medicare program;
• maintenance of a professional ombudsman to coordinate carrier educational
program;
• regularly scheduled education for carrier staff members to ensure compliance
with legislative and policy changes affecting the coding and submission of
claims; and
• educational activities on limiting charge targeted for non-participating
physicians. Limiting charge educational activities are essential to minimize the
operational impact of changes in the way violations are monitored. Provider
education on limiting charges is prominently emphasized in all forms of
carriers communications and personal contacts with non-participating
physicians (such as newsletters, bulletins, seminars and workshops).
V. Administration of the Medicare Participating Physician and Supplier - $25.0 million
The goal of this initiative is to reduce the impact of escalating medical costs on beneficiaries
by increasing the participation rates of physicians and suppliers. Carriers mus* perform
several activities as part of participation programs, including:
► annual participation enrollment;
► distribution of the Medicare Participating Physician/Supplier Directories;
► upgrade and maintain direct electronic media claim lines for participants; and
► monitor and enforce the program requirements for participants and non-participants,
which includes the comprehensive limiting charge compliance program.
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512
VI. Contractor Contract Support -- $2.1 million
Contractor Contract Support activities include Health Maintenance Organization (HMO)
audits and system support activities. The contracts listed below are necessary in preserving
the integrity of the Medicare Trust Funds.
► HMO audits - $1.9 million
In FY 1995, HCFA initiated the HMO provider audit program which includes HMOs,
Competitive Medical Plans (CMPs), and Health Care Prepayment Plans (HCPPs).
Cost reports filed by HMOs, CMPs, and HCPPs are audited to protect the integrity
of the Medicare Trust Fund and to assure voluntary compliance with Medicare
regulations. The HMO audit program will be expanded in FY 1996 based on the
success of the program in FY 1995.
► Systems Support Activities - $200.000
To assure that Medicare claims are processed systematically and uniformly according
to the law and regulations, HCFA uses a computer software program referred to as
the Grouper. The Grouper is an automated classification algorithm that determines
the Diagnostic Related Groups from data elements reported by the hospital.
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513
3. STATE CERTIFICATION
Authorizing Legislation - Social Security Act, Title XVIII, Section 1864.
FY 1995
Increase
FY 1994
Current
FY 1996
or
Actual
Estimate
Estimate
Decrease
Direct Survey $138,968,000 $141,800,000 $149,900,000 $8,100,000
Support Contracts 6.694.000 4.000.000 12.200.000 8.200.000
Total Obligations $145,662,000 $145,800,000 $162,100,000 $16,300,000
PURPOSE AND METHOD OF OPERATIONS
The State Certification program ensures that institutions and agencies providing health care
services to Medicare and Medicaid beneficiaries meet Federal health, safety, and program
standards.
The State Certification progran. began in 1966 and initially covered only hospital inspections.
Since then Medicare and Medicaid coverage has expanded to include numerous other types
of providers and suppliers. In addition to the expansion in the number of Medicare and
Medicaid providers and suppliers. Congress has continually increased HCFA's responsibilities
with respect to the extent of Federal oversight required, and expanded HCFA's
responsibilities beyond .he traditional boundaries of Medicare and Medicaid.
As a result of continued legislation, expansion in the number and types of participating
providers and suppliers, as well as expansion of our responsibilities, is expected to continue
in the future. These factors will challenge Federal and State governments to become
increasingly more diligent and efficient to ensure that providers and suppliers meet
prescribed health quality and safety requirements. As part of this process, HCFA is
committed to identifying those providers and suppliers that are not in compliance with health
and safety standards and to ensuring that necessary corrections are made.
An annual agreement, budget, and work plan are negotiated with each State survey agency
to perform onsite inspections in accordance with explicit Departmental regulations and
HCFA instructions. HCFA-trained State specialists conduct onsite surveys of providers and
suppliers to determine compliance with Federal requirements.
Onsite survey teams include State survey agency personnel with backgrounds in a variety of
disciplines. Historically, more than one-third of all surveyors have been registered nurses.
Other surveyor specialists include sanitarians, life safety code specialists, dieticians, medical
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514
technologists, and a host of other disciplines, from speech therapists to social workers. The
actual composition of a survey team depends on the type of facility being surveyed and any
annotated trends of deficiencies in particular areas based on previous surveys. The amount
of time the survey team spends at a facility depends on the size of the facility, the scope of
services provided, and the number of deficiencies found.
A typical team surveying a nursing facility consists of three to four surveyors: a registered
nurse, a dietician and/or pharmacist, and a life safety code specialist and/or social worker.
It takes approximately four days to complete a survey at a nursing facility. However, for a
smaller facility, the team may consist of only two surveyors, a registered nurse and perhaps
a dietician, and the survey may take only two days.
The Omnibus Budget Reconciliation Act of 1987 (OBRA 87) expanded and strengthened
HCFA's enforcement responsibilities in nursing homes and home health agencies. Standard
surveys of these providers must be conducted on an average of once per year. When
standard surveys identify instances of substandard care, extended surveys must be conducted.
Sanctions such as a denial of payment for new admissions, temporary management, or civil
monetary penalties can be imposed for up to six months to ensure that these facilities come
back into program compliance quickly.
If the surveyors find that any provider or supplier has deficiencies that do not jeopardize
patient/resident health or safety, they develop a plan of correction, and make followup visits
ensuring that deficiencies are corrected in a timely manner. In addition, statutorily-
mandated, enhanced enforcement activities are sometimes imposed. The majority of
providers and suppliers correct the cited deficiencies, thus permitting continued program
participation.
If the noncompliance with program requirements poses an immediate and serious threat to
patient/resident health or safety, HCFA will move to immediate termination. Also, as a last
resort, HCFA will terminate from program participation those providers and suppliers that
refuse or fail to make the needed corrections. For the three-year period FY 1992 through
FY 1994, there were 2,373 voluntary terminations and 241 involuntary terminations.
Voluntary terminations often include providers and suppliers that withdraw from program
participation rather than face expulsion. In addition, HCFA sends several hundred
termination notices to providers and suppliers each year who manage to correct problems
in time to avoid termination. Through our aggressive enforcement efforts, providers make
the corrections needed to ensure quahty care. We will continue strong enforcement in the
future to ensure that providers correct problems, and to eliminate substandard providers and
suppliers from the program.
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515
TERMINATIONS
FY 1992
FY 1993
FY 1994
Vol.
Invol.
Total
Vol.
Invol.
Total
Vol.
Invol.
Total
SNFs
64
31
95
48
18
66
54
21
75
NFS
234
26
260
78
10
88
64
13
77
ICFs/MR
122
20
142
156
26
182
93
20
113
Hospitals
96
4
100
125
9
134
85
1
86
HHAs
129
3
132
138
9
147
155
7
162
Hospices
12
0
12
10
0
10
12
1
13
OPTs/SPs
86
1
87
83
2
85
85
0
85
CORFs
14
0
14
15
0
15
13
1
14
X-Ray
17
1
18
17
1
18
10
0
10
ESRD
15
2
17
31
0
31
21
6
27
RHCs
96
2
98
61
2
63
76
2
78
ASCs
20
1
21
19
1
20
19
0
19
TOTAL
905
91
996
781
78
859
687
72
759
(Note: Voluntary terminations include mergers, closures, and voluntary withdrawals.)
To ensure that States are conducting surveys in accordance with explicit criteria and
instructions, a pool of Federal surveyors performs random monitoring surveys. Such
surveyors are strategically distributed among HCFA's 10 regional offices to ensure that each
office has a wide variety of surveyor disciplines on staff, such as nurses, dieticians, and
developmental disability specialists. We provide survey results to States as part of an
aggressive evaluation program. Federal surveyors also provide the technical assistance to
implement any recommended improvements to the survey process.
Funding for the State Certification program during the last five years has been as follows:
1991 $142,750,000
1992 $149,445,000
1993 $144,980,443
1994 $145,662,000
1995 $145,800,000
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516
FY 1996
MEDICARE STATE CERTIFICATION
Direct Survey Budget Estimates
Universe
New
FY 1996
Recert
Recert
Total
Facility Type
Start of Year
Facilities
Universe
Coverage
Surveys
Surveys
SNF XVIII
1.169
96
1,265
100%
1,169
1,265
SNF XVIII/XIX
11,866
664
12,530
100%
11,866
12,530
Non-Accredited
Hosp 1,454
15
1,469
20%
291
306
Accredited Hospital 5,190
0
5,190
5%
266
266
HHA
7,987
378
8,365
100%
7,987
8,365
ESRD
2.8S0
158
3,008
20%
570
728
Hospice
1,795
181
1,976
20%
359
540
Other
6,869
568
7,437
20%
1,374
1,942
Total
39,180
2,060
41,240
23,882 25,942
Facility Type
Surveys
Unit Cost
Budget
SNF XVIII
1,265
$13,250
$16,761,250
SNF XVIII/XIX
12,530
$13,250
$83,011,250
Hospital
572
$8,620
$4,928,916
HHA
8,365
$4,568
$38,210,914
ESRD
728
$1,862
$1,355,536
Hospice
540
$935
$504,900
Other
1,942
$941
$1,827,234
Subtotal
25,942
$146,600,000
Other Direct CosU
$3,300,000
Total Direct Survey Costs
$149,900,000
Reflects Medicare's 50 percent share. Other 50 percent funded by Medicaid.
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517
RATIONALE FOR THE BUDGET ESTIMATE
The FY 1996 estimate for direct survey activities and related contracts to support and
improve the survey process is $162.1 million. This includes $149.9 million for survey
activities, an increase of $8.1 million over the FY 1995 Appropriation, and $12.2 million for
support contracts, $8.2 million more than the FY 1995 level of funding.
Direct Survey Activities
The vast majority of the funds required for survey activities, $142.4 million or 95 percent of
the total survey activity budget, are earmarked to fulfill statutory mandates to survey all
initial providers, all nursing facilities, all home health agencies, and investigate all allegations
of patient dumping in FY 1996. The $142.4 million will provide funding for the following
statutory activities:
► Initial inspections of more than 2,000 facilities expected to request Medicare program
participation during FY 1996 (initial surveys to determine compliance are conducted
almost immediately upon receipt of an application for program participation).
► OBRA 87 mandated that HCFA conduct recertification surveys on nursing facilities
and home health agencies (HHA) on an average of once per year - a coverage level
of 100 percent.
► State survey agencies are required to investigate all allegations of patient dumping.
Using actual numbers of investigations through mid-FY 1993 as a base, HCFA
estimates that there could be approximately 1,000 investigations of dumping
complaints in FY 1996.
The remaining $7.5 million in direct Federal survey activities will provide funding for
validation of accredited hospitals and recertification surveys for all other facility types which
are discretionary. HCFA will conduct recertification surveys on 20 percent of these facility
types, which include:
► non-accredited hospitals,
► non-accredited psychiatric hospitals,
► End-Stage Renal Disease facilities,
► hospices,
► "others," such as ambulatory surgery centers, rural health clinics, outpatient
therapies, comprehensive outpatient rehabiUtation facilities, portable x-ray
providers, organ procurement organizations, etc.
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518
The direct survey estimates also provide for the following ongoing direct survey-related
activities and items that are essential to maintain the surveys throughout the year:
► printing of the survey report forms used by State surveyors to document their findings
during the survey and followup processes;
► printing of the survey and certification manual issuances and transmittals for HCFA
regional offices and for State survey agencies, and training packets each surveyor
must have to conduct surveys and follow-up activities;
► satellite transmission time to conduct the training courses necessary to ensure that
surveyors perform surveys in a consistent and uniform manner nationwide; and
► rental of the phone lines (the Value Added Network) that transmit survey agency
findings to the HCFA data base.
Survey Flexibility
The increase in survey costs can be directly attributed to the increased number of mandatory
surveys required by OBRA 87. The number of nursing facilities and HHAs has increased
dramatically in past years. We expect this trend to continue into the future. We do not,
however, expect the funding for this activity to increase in future years to keep up with the
increase in costs. Therefore, the Administration will propose legislation that will give HCFA
the flexibility to target the HHAs that should be surveyed on an annual basis. By allowing
HCFA the flexibility to target those HHAs most prone to deficiencies, we can ensure the
quality of care provided by HHAs and continue our quality oversight activities in other
facOity types without further increases in our survey activity budget.
Unit Cost Budget Methodology
HCFA develops cost projections for survey and certification workloads by means of the unit
cost budget methodology. Through this methodology, funds are allocated to the States'
survey agencies based on survey time and survey coverage level parameters. HCFA has
established, and pays States based on, strict payment guidelines regarding the length of the
different surveys for the various provider types and the incidence of resurveying providers
already participating in the Medicare and/or Medicaid programs.
Recognizing the need to maximize available Federal resources for the survey and
certification program, HCFA convened a workgroup to scrutinize the elements which
comprise the budget methodology. This workgroup, comprised of staff of HCFA's central
and regional Offices and of State survey agencies, has made great strides over the past year
in refining the variables which comprise the unit cost budget methodology as well as
recommending additional options for improvement.
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519
The budget workgroup has conducted an analysis of State expenditure patterns as compared
to workload and survey time parameters in an effort to identify high cost States and factors
attributable to variances in State costs.
The budget workgroup has accepted two independent variables in the unit cost budget
calculations: State-mandated civil service pay rates and survey travel requirements. State-
mandated civil service pay rates, incorporating a range of surveyor disciplines, were collected
from each State and consolidated into a database of State salaries. Statistical survey travel
data, collected from the On-line Survey and Certification Reporting System (OSCAR), will
be utilized to determine acceptable travel variances for each State.
In addition, the budget workgroup established a database combining State costs with State
survey data, from which unit cost calculations may be tabulated and State spending patterns
may be closely monitored. The efforts of the workgroup over the past year, and its focus
on the unit cost budget methodology, has led to a decrease in the projected cost for each
facility type. For example, the unit cost for a dually participating skilled nursing facility has
decreased from $14,793 in FY 1994 to $13,250 in FY 1996. During the FY 1996 budget
process, the workgroup will continue in its effox is to develop sound and efficient national
survey times by collecting and applying data on optimal time parameters for each survey
element as derived from the pilot tests of the revised long-term care survey process.
Support Contract Activities
Medicare Survey and Certification support contracts address four different areas:
► Redesign of the Survey Process
► Psychiatric Hospitals
► Training
► Program Evaluation and Oversight
Support contracts to be funded in FY 1996, at a level of $12.2 million, are as follows:
Redesign of the Survey Process and Infrastructure: $7.7 million
HCFA is dedicated to transforming our current process oriented survey to one that focuses
on performance indicators and outcome measures. As the number of facilities continues to
climb and resources for oversight diminish, HCFA must be able to better focus our efforts.
The Agency will need to target facilities and to make efficient use of our time in facilities.
Support contract investments are needed to develop the expertise needed to bring this new
data driven survey process to fruition. Data from each facility type will be collected and
organized into databases.
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520
This data gathering and analysis will enable HCFA to determine what types and categories
of facilities need the most oversight. The Agency will ascertain the level of care in a given
facility much quicker by looking at the quality indicators as determined by the resident
assessment tools. This will allow us to remedy situations of poor care faster by examining
trends in outcome measures and recommend specific protocols to eliminate the problems.
► Nursing Home Database ($2.7 million)
OBRA 87 requires that facilities collect resident assessment information for each
nursing home resident. The minimum data set (MDS) is the screening tool which
captures much of that clinical information. When the facility computerizes the MDS,
the information can be used by the facility to identify quality of care indicators, which
could signal potential care problems. The quality indicators can be used by States
as part of the survey process to monitor potential problems related to the care
provided in nursing homes and by the nursing homes to identify and improve
performance. HCFA published a Notice of Proposed Rule-Making in 1992 that
requires nursing homes to encode the MDS in machine readable format and transmit
data as required by HCFA. HCFA plans to have States transmit reports to facilities.
In order for States to be able to accept data in this way, it is necessary that they
develop and implement an infrastructure that allows for collection and use of MDS
data for quality assurance and survey functions of nursing home resident information.
This contract is needed to enable the States to computerize their MDS operations
in order to "feed into" the national MDS database.
► Development/Maintenance of MDS National Database ($860,000)
Technical assistance is necessary to develop system and data transmission
specifications as well as provide programming support for the construction of the
national database. There is also a need for software development of derivativi.
nursing home quality indicators and State analytical packages. The national MDS
database initiative will begin in FY 1995 and is central to our efforts to refine the
long-term care survey process. An MDS data-driven survey process would enable
more efficient use of survey resources as well as a more objective assessment of the
quality of care provided to nursing home residents.
► Develop MDS and Evaluate for Intermediate Care Facilities for the Mentally
Retarded (ICF/MRs) ($430,000)
A consultant contract will be necessary in FY 1996 to test and validate the
effectiveness of proposed quality indicators for beneficiaries in ICFs/MR and home
and community based waiver services. The quality indicators must be quantifiable
and included in the minimum data set that will be the basis for new quality assurance
activities. The database will contain information for quaUty indicators which will
enable us to identify providers that should be targeted for oversight.
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521
Assessment Tool for Home Health Agencies (HHAs) ($650,000)
A contract is required to revise the assessment tool for HHAs. Section 1891
(c)(1)(C) of the Social Security Act (the Act) requires that a HHA standard survey
include, among other things, the use of a standardized, reproducible assessment
instrument. The modification of the HHA Conditions of Participation (42CFR Part
484) and the standard survey process will require the use of a revised assessment
instrument. The instrument will be used to determine the extent to which the quality
and scope of items and services furnished by the HHA attained and maintained the
highest functional capacity of each HHA patient. This instrument is necessary to
enforce the Act and for the revised Conditions of Participation to ensure integrated
reliability.
Assessment Tool for End-Stage Renal Disease (ESRD) Facilities ($1.5 million)
A contract is needed that allows HCFA to convert existing data from the United
States Renal Data System (USRDS) into effective instruments for use by the State
survey agencies. The USRDS data include medical and epidemiological information
that is central to determining the causes of ESRD and effective care of patients with
ESRD. These instruments will enable us to implement the new outcome-oriented
survey protocol and develop formal contractual relationship between ESRD networks
and HCFA's regional offices.
Refinement of the Uniform Needs Assessment Instrument (UNAI) ($860,000)
The UNAI was developed to assess an individual's needs for post-hospital extended
care services, home health services, and long-term care services of a health-related
or supportive nature. This contract proposal is needed for the development of a
functionally-based mechanism which determines eligibility for services and targets the
type and level of services needed.
Coordination of Clinical Data Sets ($650,000)
Several statutorily-mandated clinical assessment instruments have been developed by
HCFA over the past few years. Although each instrument was developed for a
specific purpose in a specific care setting in accordance with Congressional mandates,
in total, the instruments need to assess the resident over a continuum of care settings
~ the acute hospital, to the home, to a community-based setting other than the home,
and to the nursing home.
The current instruments covering the continuum of care settings are fragmented.
Data collected for one instrument will be collected separately for another, and the
data on one may or may not be available to the personnel in a subsequent care
setting. HCFA proposes a contract to analyze existing assessment instruments,
identify the common and unique data items, and develop one set of core items for
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522
use in all care settings. This assessment would need only to be updated and
enhanced as the individual moves across care settings, providing both continuity and
higher quality of care. A set of core assessment items will also save resources by
reducing duplication and promoting integration of information.
Psychiatric Hospitals: $2.0 million
By statute we are responsible for surveying the psychiatric hospitals. State agencies do not
have the technical expertise or a cost-efficient way to hire the expertise needed to fulfill the
requirements of a psychiatric survey. In addition, there are also approximately 200 State run
psychiatric facilities throughout the country that cannot be surveyed by the State agency.
Therefore the only cost-effective way to survey these facilities is through a support contract.
Psychiatric Hospitals: Special Conditions ($2.0 million)
► A review of survey data from FY 1989 to the presen* reveals that from 70 percent
to 78 percent of all psychiatric hospitals surveyed (by both the State survey agency
and under contract) had deficiencies. Of those hospitals with deficiencies (in
FY 1989-1991), HCFA surveyors found 21 percent to have serious problems resulting
in condition level noncompliance.
A non-consultant contract is needed for the oversight of the two statutory special
conditions of participation in all psychiatric hospitals certified for participation in the
Medicare/Medicaid programs. The contractor will be responsible for providing expert
mental health consultants (including psychiatrists), scheduling and conducting surveys,
and providing technical assistance and consultation to providers, HCFA regional
office staff, and State agencies. The contractor will survey the State-owned and
private hospitals witl. Iiistorical problems, and State agencies will survey the other
privately-owned psychiatric hospitals.
Given the approximately 200 State-owned and operated hospitals, the contract
mechanism resolves two issues: it allows HCFA to access psychiatric clinical
professionals by drawing off a nationwide pool of experts; and it removes the obvious
conflict of interest possibihty which could be construed to occur if the State-owned
hospitals were surveyed by State agency surveyors.
Surveyor Training: $1.1 million
We are obligated by statute, as well as proper program management, to insure that the
surveyors acting on our behalf are well trained. This translates into training for over 5,300
highly educated professionals in 57 different jurisdictions. Turnover in the State agencies
is high and inifial training sessions must be conducted continuously. In addition, Federal
policy and regulations in the health care field change considerably and often. New
regulations pubUshed, such as the survey enforcement regulation, require us to distribute
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detailed and complex information to a large, geographically diverse group of surveyors. We
must look for new vehicles to get training and information to these personnel in order to use
time more efficiently than the time required by traditional classroom settings.
► Training Program for Inspections of Care (loC) Reviewers ($250,000)
States are required by Section 1903(g) of the Social Security Act to conduct annual
loC provided to each recipient who is a resident of an intermediate care facility for
the mentally retarded, psychiatric hospital, or psychiatric residential treatment facility
for individuals under the age of 21. Regulations governing these requirements are
being revised to include an outcome-oriented approach similar to that now employed
in our survey and certification surveys. Reviewers need to be trained in these new
procedures. Development of a state-of-the-art, portable, interactive multi-media
training program for loC will facilitate the training of State loC review team
members for the revised review process in a consistent, cost efficient manner.
► Satellite Training Programs ($200,000)
This contract will afford the use of a satellite to provide training to surveyors from
all of HCFA's regional offices and the State survey agencies simultaneously. A
segment of a survey of a selected provider will be filmed "real time" and telecast via
satellite. Surveyors attending broadcasts at regional office sites will be able to engage
expert surveyors with questions and discussions during the survey. This will reduce
inconsistency in survey results across the country.
► Develop Interactive Videodisc (IVD) Courseware ($300,000)
This contract is needed to provide current and meaningful learning opportunities for
surveyors using the existing hardware available in each State and HCFA regional
office. Since States were encouraged to purchase interactive videodisc equipment,
we must ensure that appropriate courseware is readily available to the surveyors.
The topics will relate to identified training needs of surveyors who survey long-term
care and other facilities. This contract will help ensure the comprehensive training
of State and Federal surveyors.
► Curriculum for Satellite Broadcasts and Instructors' Training ($230,000)
This contract is needed to assist instructors teaching in the surveyor training program
on developing a curriculum that can be presented via satellite. The conventional
methods of curriculum development and training are not applicable for distance
learning. This contract will help ensure the comprehensive training of State and
Federal surveyors, as mandated by OBRA 87.
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► Development of Leanting Experiences ($100,000)
This contract is needed to train our instructors on the use of developmental exercises
that will enhance learning experiences (e.g., role playing, group exercises, etc.). This
contract will help ensure the comprehensive training of State and Federal surveyors,
as mandated by OBRA 87.
► Development of Instructional Aids ($50,000)
This contract is needed to enhance instructors' presentations through the use of
meaningful and illustrative examples. With improved training aids, surveyors will be
better able to comprehend the intent of regulatory requirements and become more
effective in their efforts to ensure that Medicare and Medicaid beneficiaries are
receiving high quality health care. This contract will help ensure the comprehensive
training of State and Federal surveyors, as mandated by OBRA 87.
Program Evaluation and Oversight: $1.4 million
► Evaluate Joint Commission of Accreditation of Healthcare Organizations (JCAHO)
($500,000)
HCFA has concluded that the current validation process, which includes surveying a
sampling of accredited hospitals, is inadequate. HCFA is proposing a reevaluation
of this process in conjunction with the Congress, JCAHO, State agencies, providers
and various professional associations. The end product will be a new, more
comprehensive evaluation process. We anticipate full implementation of this process
by December 1996.
A performance-based validation model will ailuw HCFA to measure the atiudi
effectiveness of the Joint Commission's accreditation effort to ensure beneficiaries
receive the level of care mandated in Medicare Hospital Conditions of Participation.
► Engineering Study: Funds Allocation ($350,000)
This contract will allow the continuation in our efforts to develop a cost-effective
method of allocating survey funds among the States. Currently, the wide divergence
of States' survey cost estimates indicates the existence of inefficiencies. In FY 1995,
we have commissioned a study to derive independent time utilization estimates of the
revised long-term care survey process. We anticipate needing additional analyses
after the States are given time to adapt to the new system, and any revisions to it
thereafter. This study should result in a more rational, fair, and cost-effective method
of allocating scarce survey funds among the States, and is expected to become even
more important as budget resources become increasingly liinited.
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Improve/Enhance On-line Certification and Reporting (OSCAR) System ($260,000)
A contract is needed to update and enhance the OSCAR system. OSCAR is the
mainframe computer system into which State survey agencies enter surveyor
information on all providers and suppliers. Enhancements will include added
capabilities due to changing legislative requirements, addition of new facility types,
and programming for new reports. This will provide for more accurate and complete
repori-rj and forecasting of virtually all facets of the States' survey and certification
activities.
Computer-administered Surveyor Minimum Qualifications Test (SMQT) ($300,000)
This contract is needed to provide a more effective method of administering and
scoring the SMQT and will help ensure the comprehensive training and testing of
State and Federal surveyors, as mandated by OBRA 87.
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4. LABORATORY INSPECTIONS UNDER THE CLINICAL LABORATORY
IMPROVEMENT AMENDMENTS OF 1988
Authorizing Legislation - Public Health Service Act, Title XIII, Section 353.
Increase
FY 1994
FY 1995
FY 1996
or
Actual
Estimate
Estimate
Decrease
$22,428,000
$45,800,000
$45,400,000
($400,000)
($22,428,000)
($45,800,000)
($45,400,000)
$400,000
Obligations
Less User Fees
Budget Authority
PURPOSE AND METHOD OF OPERATIONS
The Clinical Laboratory Improvement Amendments of 1988 (CLIA), P.L. 100-578,
strengthens the quality performance requirements under the Public Health Service Act and
extends these requirements to all laboratories that test human specimens for health
purposes, including those in physicians' offices.
Prior to passage of this legislation, only those laboratories that engaged in interstate
commerce were required to meet the standards established by the Public Health Service,
based on P.L. 90-174, the Clinical Laboratories Improvement Act of 1967 (CLIA 67). A
Memorandum of Understanding (MOU) between the Pubhc Health Service (PHS) and
HCFA transferred the inspection and administrative responsibilities for CLIA 67 laboratories
to HCFA. A more recent MOU between the agencies specifies that HCFA/PHS will be
jointly responsible for developing regulations and for enforcing compUanr^ in all
laboratories, which now must comply with CLIA requirements.
Over 151,000 laboratories are currently registered with the CLIA program. A significant
portion, approximately 44 percent, of registered laboratories are classified as waived
laboratories. A waived laboratory is not subject to an onsite inspection. Of the remaining
laboratories the most frequent category is a "Low Volume A" (LVA) or "A" type facility.
These laboratories perform less than 10,000 tests per year and the majority of these facilities
are physicians' office laboratories (POLs). Other facility types having laboratories that will
require surveys include:
► hospitals,
► nursing facilities,
► independent laboratories,
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end-stage renal disease facilities,
ambulatory surgical centers,
rural health clinics,
insurance laboratories.
Federal, State, city, and county laboratories.
User Fees
The CLIA laboratory program is funded by user fees broadly categorized as certificate fees
and program compliance fees. Under the Act, facilities (unless classified as CLIA exempt)
are prohibited from performing laboratory examinations for diagnosis, prevention, treatment
or health assessment without an approved certificate applicable to the procedure or
examination being offered. Laboratories must pay a fee to HCFA for the issuance of a
registration certificate, certificate of waiver, certificate of accreditation, or other certificate.
Laboratories also pay fees to cover the cost of determining program compliance, unless a
certificate of waiver or a certificate of accreditation has been issued. Laboratories covered
by a State licensure program approved by HCFA are not required to hold a certificate.
Washington State has the only state licensure program approved by HCFA to date. HCFA
classifies laboratories covered by approved State licensure programs as State-exempt
laboratories.
The Department of Health and Human Services sets fee amounts annually on a calendar
year basis. Laboratories are inspected, and fees assessed and payable, biennially. HCFA
assesses laboratories an additional fee to cover the cost to conduct follow up visits to verify
correction of deficiencies, or to impose sanctions, and/or prepare for and attend
Administrative Law Judge hearings. The additional fee is based on the actual resources and
time necessary to perform the activities.
Survey Cycles
HCFA estimates that approximately 151,000 laboratories will comprise CLIA's registered
laboratory population. HCFA has entered into contracts with individual State survey
agencies to survey laboratories on HCFA's behalf. CLIA laboratories are surveyed on a
two-year cycle except for the various waived and ejfempt laboratories.
Activities as part of the survey process include:
► determining laboratory compliance with CLIA quality standards,
► conducting foUowup visits and complaint investigations,
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► imposing sanctions when warranted,
► verifying information found on the laboratory application submissions, and
► ensuring that the laboratory has enrolled and successfully participates in an
approved proficiency testing (PT) program.
HCFA regional office staff conduct Federal monitoring surveys of CLIA laboratories
inspected by State survey agencies on a sample basis. Laboratories participating as a result
of accreditation by organizations approved by HCFA and laboratories operating in a State
whose licensure program has been approved by HCFA are subject to Federal validation
surveys and complaint surveys.
PHS/HCFA Implementation
HCFA has overall responsibility for the management of the CLIA program. In addition,
HCFA assesses, collects, and distributes laboi atory user fees authorized by CLIA as the sole
source of program funding and also enforces comphance.
The Centers for Disease Control and Prevention (CDC) provides technical, scientific, and
related support services. HCFA reimburses CDC for the reasonable costs of performing the
agreed upon activities.
CDC assists HCFA in the development of quality standards and has completed 112,000 test
categorizations. CDC also facilitates the initial review process for accrediting programs
developed by non-profit organizations for deemed status and States for exemption, and
evaluates proposed PT programs to determine their effectiveness in carrying out the PT
requirements. HCFA a^^proves these programs.
HCFA and the Food and Drug Administration (FDA) are developing a separate agreement
covering joint responsibilities for blood banks. The FDA will conduct the surveys of blood
banks to ensure they meet the CLIA requirements and to prevent duplicate surveys. HCFA
enforces the requirements and will provide funds to the FDA to pay for the CLIA portion
of blood bank surveys.
CLIA Regulations
Final CLIA regulations were published and became effective in 1992. These included four
major rules: Recognition of Accreditation and State Licensure Programs; Enforcement;
User Fee; and Laboratory Standards.
The Laboratory Standards rule included a comment period. Approximately 73,000
comments were received from 16,000 sources. Based on the preliminary review of
comments, a revision to the rule was published on January 19, 1993. Included in the revision
were: an addition to the waived test category, and a new testing and certificate category,
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physician-performed microscopy procedures (PPMP). The revised regulation also incl'.ided
a comment period and approximately 1,100 comments have been received and catalogued
in preparation for a final revision.
A final rule with comment was also published on December 6, 1994, that extends certain
effective dates in the previous regulations. These date extensions are necessary due to the
limited number and scope of currently operating cytology FT programs, resource constraints
that have delayed the quality control reviews of test systems, and the inability of many
laboratory directors to complete certification requirements within the time period originally
specified. The final regulation will be published in late 1995.
There are four other rulemaking efforts concerning CLIA which are under development.
► Interim CLIA Regulation. This regulation will include the expansion of PPMP
providers and procedures and grandfather certain persormel requirements.
► Criteria for Categorization of Accurate and Precise Technology f APTI Tests. This
proposed rule will contain the new category of accurate and precise technology tests.
► Criteria for Categorization of Waived Tests. This proposed rule will contain revised
criteria for the categorization of waived tests.
► Accreditation Organizations and State Licensure Programs. This regulation will
address "partial CLIA exemption" and other miscellaneous issues not addressed in
the prior rule.
Deemed status allows professional organizations to determine and certify that individual
laboratories comply vkith the CLIA regulations. Deemed status has been granted to the
Commission on Office Laboratory Accreditation, American Society for Histocompatibility
and Immunogenetics, and the Joint Commission on Accreditadon of Healthcare
Organizations as accrediting organizations. The State of Washington has been granted
exempt status. All laboratories within the State of Washington are exempt from CLIA. As
accreditation programs or other State licensure programs are recognized, HCFA prepares
and publishes a notice in the Federal Register to announce these decisions. In addition to
the above rules, CDC also issued four notices concerning Categorization of Test Systems.
Each notice included a comment period. A final comprehensive notice including all test
categorizations will be published at a later date.
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RATIONALE FOR THE BUDGET ESTIMATE
The CLIA budget development methodology uses assumptions about the CLIA laboratory
population, the levels of State agency survey performance and workloads, and survey costs.
HCFA determines national survey workloads by adjusting the total laboratory population to
exclude waiver laboratories, laboratories issued certificates of microscopy. State exempt
laboratories, and accredited laboratories.
HCFA sets the annual national survey workload at approximately 50 percent of the
laboratories to be inspected in a cycle. Workloads for each cycle include a sample review
of the 18,600 accredited laboratories, surveys of 40,000 non-accredited laboratories, and
complaint/followup surveys to non-accredited laboratories. Final regulations containing the
waived and accurate and precise technology criteria may affect the number of laboratories
subject to HCFA survey.
HCFA continues to reduce budget estimates for the CLIA program. The primary reason
for the lower estimates is that the number of laboratories registered as waived or accredited
has been much higher than previously expected. The size of laboratories is also smaller than
anticipated. This change in the distribution of laboratories by size and type has caused the
anticipated revenue from certificate fees to drop. In addition, the projected number of
surveys has dropped accordingly and compliance fee revenue decreased.
The CLL^ program is funded solely from user fee revenues. While revenue is considerably
lower than previously estimated, costs have been reduced to ensure a positive cash flow in
the CLIA account.
HCFA and PHS have reduced Federal administration costs. The agencies have streamlined
administrative activities resulting in the need for fewer FTEs than originally anticipated. We
have limited the travel and equipment costs needed to administer the program. By achieving
efficiencies in the inspection process, HCFA has substantially cut compliance activity costs.
The CLIA program has evolved from the original projections of the scope and complexity
of the program. The partners have remained focused on the mission to improve the
accuracy of tests administered in our nation's laboratories, thereby improving health care for
all. HCFA and PHS have reevaluated the program, procedures, responsibilities, and time
lines to continually achieve more efficiencies. By maintaining flexibility and being result-
oriented, the program has been successfully implemented as each of the agencies have
responded to changing conditions.
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5. ADMINISTRATIVE COSTS
Authorizing Legislation - Reorganization Act of 1953.
FY 1994
Actual
FY 1995
Current
Estimate
FY 1996
Estimate
Increase
or
Decrease
Total Obligations
Data Systems
Medicare Handbook
On-Line Investment
$316,436,000
30,400,000
$322,762,000
31,632,000
$336,222,000
30,000,000
20,000,000
10.000.000
$396,222,000
$13,460,000
(1,632,000)
20,000,000
10.000.000
Total
$346,836,000
$354,394,000
$41,828,000
lotal FlEs
4,119
4,129
4,147
+ 18
PURPOSE AND METHOD OF OPERATIONS
The Administrative Costs budget provides funds for the staff and operations of the Health
Care Financing Administration (HCFA) so that it can carry out its mission of assuring health
care security for all beneficiaries. First and foremost, HCFA staff work to provide quality
services to the people we serve and our business partners. In FY 1996, HCFA will continue
ongoing efforts and undertake additional initiatives to:
► Continue strategic planning for FY 1996 to better serve our customers and partners;
► Continue to streamline internal processes and eliminate barriers to efficiency;
► Continue to maintain HCFA's databases in order to have the nation's most
comprehensive repository of health care information;
► Continue to develop the Medicare Transaction System which will improve further the
efficiency with which HCFA processes Medicare claims;
► Enhance beneficiary choice by expanding the participation of managed care programs
in Medicare as a cost-effective alternative to the traditional form of fee-for-service
health care;
► Improve beneficiary access to quality health care in all sectors of State Medicaid
programs;
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532
► Promote awareness and understanding of HCFA's programs by enhancing beneficiary
educational efforts and increasing outreach activities with professional, provider, and
business organizations; and,
► Reduce Medicare and Medicaid program costs through a more prudent program of
increased fiscal reviews, third party oversight, and secondary payer activities.
Funds to support the Administrative Costs budget are transferred from the Federal Hospital
Insurance (HI) and the Federal Supplementary Medical Insurance (SMI) Trust Funds. Since
FY 1992, the HI trust fund has been reimbursed for the federal funds share of HCFA's
administrative expenses through the Payments to Health Care Trust Fund appropriation.
Funding for the Administrative Costs program during the last five years has been as follows:
Funding
FTE
Year Level
Level
19Q1 $305,808,000
4,027
1992 $331,145,000
4,272
1993 $330,718,000
4,236
1994 $346,836,000
4,119
1995 $354,394,000
4,129
RATIONALE FOR THE BUDGET ESTIMATE
The FY 1996 budget estimate for Administrative Costs is $396.2 million in obligational
authority. This estimate includes $30.0 million to maintain our current level of data systems
support and infrastructure while allowing some flexibility to assess how our data systems can
be more responsive to customers and partners; explore enhanced capabilities in the areas
of modeling and forecasting health care expenditures; and pursue activities such as
expanding capabilities to advance improvement in the quality of patient care and to identify
payment and billing errors. Moreover, this estimate includes only those funds required to
enable HCFA to carry out its mission effectively and efficiently. This funding level will
support a functional workforce (personnel compensation, rents, postage, telephone costs,
transportation, travel, supplies, and training), maintain critical funding for data systems, and
enter into essential contracts for program review and analyses. In addition, this estimate
includes $20.0 million to print and distribute Medicare handbooks to approximately
37.5 million beneficiaries, and $10.0 million for the HCFA On-Line investment proposal.
As HCFA encounters expanding program requirements with a minimal workforce, the
Agency must address human resource challenges and look for innovative ways to accomplish
Agency goals. Moreover, HCFA is committed to the empowerment of its workforce and
continuous quality improvement to better serve customers, as outlined in the Agency's
strategic plan.
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HCFA's strategic plan identifies Agency priorities and outlines seven landmark strategic
planning goals that promote concepts that include understanding and responding to customer
needs; creating a culture that values individuals, total quality, diversity and teamwork;
enhancing data systems; ensuring HCFA employees have appropriate information, tools and
competencies; and reforming the human resources management programs to manage change
successfully and promote innovation. HCFA will also continue to streamline the Agency's
administrative activities and focus on accomplishing only the highest priority tasks and
reduce resources for less essential activities.
HCFA has already undertaken significant steps towards streamlining the Agency'^
administrative activities in an effort to respond to both a reduced fiscal environment and a
limited FTE level. HCFA has reorganized its internal structure in order to realize the
maximum benefit of our resources. HCFA has made significant strides in automation of
travel functions and of the time and attendance system. In addition, paperless approaches
to other administrative processes have shown significant savings.
HCFA. recognizes the need for accurate projections in our administrative costs. In
recognition of that need, HCFA has undertpV^n a concerted effort to analyze historical
patterns and to establish more accurate projections for administrative expenditures. HCFA's
senior staff met to establish Agency wide spending guidelines and developed the FY 1995
operating plan. HCFA also carefully scrutinized expected expenditures in each object class
for FY 1996. As a result of these efforts, the projection for specific object class estimates
has changed, in some cases significantly, from our previous projections of FY 1995 levels.
Personnel Compensation and Benefits
The FY 1996 budget estimate includes $268.4 million to support 4,147 FTEs. Major
increases from the FY 1995 estimate include $1.9 million for annualization of the 2.6 percent
FY 1995 average locality and general pay increase; $4.5 million for the FY 1996 2.4 percent
general and locality pay raise; and $3.1 million for employee within-grade increases.
HCFA's share of President Clinton's Executive Order on reducing federal personnel is a
decrease of 168 FTEs from our FY 1992 FTE ceiling level of 4,272 with at least 10 percent
of the reductions coming from GS/GM-14 and above levels. This reduction is partially offset
in FY 1996 by the transfer of 43 FTEs to HCFA due to the Office of the Secretary's
regional restructuring. Consequently, HCFA must achieve an FTE level of 4,147 by
FY 19%.
Travel
The FY 1996 budget estimate reflects $5.0 million to fund a number of travel requirements,
including survey and certification activities, onsite visits for Medicare contractor audits, and
oversite visits. This amount reflects a $319,000 decrease below the FY 1995 budget request.
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534
Transportation of Things
The FY 1996 budget estimate includes $418,100 for transportation of things. This amount
includes funding for the Agency's government vehicles, parcel post, moving employee
belongings in permanent change of duty station transfers, and for the physical movement of
furniture and supplies. The estimated amount reflects a reduction of $12,900 below the
FY 1995 estimate.
Rents. Communications, and Utilities
The FY 1996 budget estimate for rent, communications, and utilities is $37.5 million. This
includes $30.9 million to fund space rental for HCFA's new Single Site facility, HCFA's 10
regional offices, and the Washington, D.C. buildings. This category reflects a total rental
increase of $3.5 million above the FY 1995 estimate due to projected increases in space
rental rates.
The emaining $6.6 million funds communications and utility costs. This amount includes
$3.5 million for postage, $2.4 million for local telephone costs, and $716,300 for data
communication line charges.
Printing
The FY 1996 budget estimate includes $3.5 million for printing. This amount provides
funding for printing of brochures that assist beneficiaries in selecting health care plans; lock-
in notices that inform beneficiaries of their initial enrollment in managed care programs;
various Medicare/Medicaid guides, the Federal Register, Congressional Record materials, and
other printed forms and manuals. This amount reflects a decrease from the FY 1995 budget
estimate of $148,600. HCFA will continue to utilize technological advances (e.g., sending
materials in electronic formats to the Government Printing Office) to maximize savings and
streamline our current printing activities.
Consulting Services
The budget estimate reflects $900,000 for consulting services. This amount is the same as
the FY 1995 funding level estimate.
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535
Other Services
The FY 1996 budget estimate includes $56.2 million for Other Services. This amount
includes $20.0 million for printing and postage costs necessary to distribute a Medicare
Handbook to every (approximately 37.5 million) beneficiary. This activity has not been done
for more than 8 years. Providing beneficiaries with adequate information to make informed
health care choices is a top priority of the Agency. Moreover, it is clear from customer
feedback and communication with HCFA's partners that the Medicare Handbook is an
indispensable source of program information for beneficiaries.
The remaining funding for Other Services includes data systems contracts and other
contracts that enhance HCFA's ability to carry out its program objectives effectively and
efficiently.
Ongoing activities funded by other contracts includes but are not limited to, contracts such
as technical assistance to Health Maintenance Organizations; the Medicare Hotline required
by section 4361 of the 1990 Omnibus Budget Reconciliation Act (OBRA); beneficiary and
minority outreach/communication programs; the Practicing Physicians Advisory Counsel
(PPAC) contract required by section 4112 OBRA 1990; contracts designed to detect
fraud/abuse and build quality in the Medicaid program; contracts that meet statutory
requirements to provide transfer of asset data for Medicaid eligibility purposes; contracts
that allow HCFA to provide leadership in the exchange and timely dissemination of
information to other Federal agencies, States, providers, and the health research community;
and contracts that provide for Medicare HMO/CMP reconsiderations, community rate
assessments, and other financial management requirements to assure managed care plans
are efficient, effective, and of high quality.
Other funding requirements include general facilities activities that support the daily
operation of HCFA's headquarters and regional offices. This includes building alterations
and repairs, legal advertisements, medicalAicalth services, job orders, machine repairs, guard
contracts, mailroom services, the Baltimore/D.C. shuttle, and contract training costs.
Data Systems
The FY 1996 budget estimate includes $30.0 million to fund HCFA's ongoing data systems
requirements. This amount is distributed among the appropriate budget categories above,
and reflects an increase of $5.0 million above the FY 1995 budget estimate.
HCFA is heavily dependent on its data systems in order to administer the Medicare and
Medicaid programs and to provide the most effective and efficient service to customers and
beneficiaries. The dynamic nature of HCFA's workload requires the Agency to reevaluate
constantly and update its database management systems in order to maintain and administer
the Nation's largest and most complete source of health care information.
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536
The databases contain information on health care utilization for over 70 million people,
including a wide range of hospital and physician services, delivery arrangements, and
consumer demographics. Additionally, demand for data from HCFA has increased
tremendously as potential users both inside and outside government have become aware of
these available databases. HCFA's data systems form the analytic backbone of modeling
and forecasting capability for major legislative changes, policy initiatives, budgeting, and
program improvements.
Moreover, HCFA's data systems require funding to assure 24 hour (7 days per week)
uninterrupted service at the HCFA Data Center to support massive processing requirements
for the Medicare and Medicaid programs; together with the necessary maintenance and
enhancement of 80 automated data systems in the areas of enrollment, claims history,
program operations and administration.
Purchase of Goods and Services from Government Accounts
The FY 1996 budget estimate reflects $9.0 million for interagency agreements which includes
$5.1 million in mandatory funding for the Office of the Secretary's Working Capital Fund.
Also included is $1.4 million for HCFA's interagency agreements which support activities
such as the Medicaid eligibility quality control system. The remaining funding of $2.5 million
supports FTS 2000 voice/data services. This estimate reflects a decrease of $1.0 million from
the FY 1995 level.
Supplies and Materials
The FY 1996 budget estimate includes $750,000 for general office supplies and materials for
HCFA's central office buildings and 10 regional offices. This amount reflects a decrease of
$314,000 from the FY 1995 level.
Equipment
The FY 1996 budget estimate includes $4.3 million for equipment. This funding level is
$3.9 million below FY 1995 and provides funding to support data systems equipment,
furniture, copiers, regional office equipment, and replacement of miscellaneous items. The
majority of the decrease is attributable to funding for an upgraded mainframe computer
included in the FY 1995 estimate.
Insurance Claims and Indemnities
The FY 1996 budget estimate includes $191,000 for claims under the Equal Access to Justice
Act. This includes payments for attorney fees, settlement costs, and other expenses related
to litigation against the Agency's programs. This amount reflects an increase from the
FY 1995 budget estimate of $11,000 for inflation.
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537
HCFA On-Line
The FY 1996 budget estimate reflects $10.0 million for expenses associated with the start-up
costs of HCFA On-LJne, a major communications enhancement initiative. HCFA On-Line
is designed to improve customer service, which is perceived as a significant weakness of this
Agency that serves 70 million Medicare and Medicaid beneficiaries and their families. The
activities envisioned will assist beneficiaries to make better informed choices while helping
to hold down program expenditures for certain costly and unnecessary treatments. It is also
a key element in HCFA's effort to implement its strategic plan and to improve the Agency's
responsiveness to customer needs.
Conceptually, the initiative will proceed through three general stages. First, HCFA needs
to listen to its customers and study their information needs systematically. Then HCFA
needs to build the capacity to meet those identified needs. And finally, HCFA will
implement the new communications systems and refine them to meet changing
circumstances. The ultimate goal is to allow HCFA to provide information not only about
program benefits and procedures but also about treatment options, disease prevention and
health promotion strategies, choice of treatment setting, provider quality data, the availability
of managed care, Medigap insurance options, and other health-related topics. And, this
information must be provided through accessible and user-friendly pathways, including an
interactive 1-800 telephone system, on-line access through Internet, cable access
programming, and CD ROM technology.
During FY 1996, the following start-up activities are plaimed:
► 'Top Ten List" - HCFA will begin to capture in an automated fashion information
about the most common questions and inquiries from beneficiaries and other
customers. This wiU necessitate changes in automated systems and other processes
at the contractors, at HCFA's regional offices, and in HCFA's central office.
► Listening/market research - HCFA will conduct market research to assess customer
knowledge, needs, values, and attitudes regarding health information. Techniques will
include surveys, focus groups, conferences, and enhanced partnerships with other
organizations serving beneficiaries, including State agencies.
► Re-engineering HCFA's data systems - HCFA will begin to establish a new separate
database environment for customers to faciUtate access to information. This includes
developing an internal data platform, building a separate and partitioned data area,
developing application systems to transform data into useful information, and
strengthening and expanding telecommunications channels.
91
538
► Dissemination of existing data - HCFA will develop and begin to implement a plan
for disseminating information already in nearly usable form, such as practice guideline
information, treatment option and health promotion information, and certain provider
data such as participating physician status.
This first year of HCFA On-Line activities will take the first steps toward: improved
customer satisfaction and quality of care, more effective use of program dollars, and
improved outreach to vulnerable populations. HCFA believes that well-informed
beneficiaries plus enhanced decision-making options will yield healthier beneficiaries. HCFA
On-Line was designed to serve this end.
92
539
Detail Of FuU-Time Equivalent Employment (FTE)
1994
COMPONENT Actual
Office of the Administrator 17
Medicaid Bureau 195
Provider Reimbursement Review Board 35
Executive Secretariat 25
Office of Legistative &
Inter-Govemmental Affairs 53
Office of Managed Care 132
Equal Employment Opportunity Staff 14
Associate Administrator,
Customer Relations & Communications 60 60
Associate Administrator,
Operations & Resource Management 3,010 3,042
Associate Administrator, Policy 578 56 1
FTE Reductions (54)* 10
Total, HCFA 4,119 4,129
1995
1996
Estimate
Estimate
15
15
196
196
35
35
21
21
58
58
126
126
15
15
60
3,042
561
18 **
4,147
* This decrease/increase is reflected in the component estimate totals.
** This increase is not reflected in the component estimate totals.
Average GS/GM Grade
1991 12.6
1992 12.6
1993 12.8
1994 12.8
1995 12.8
1996 12.8
93
540
Program Administration
Detail of Positions 1 /
1994
Actual
Executive level I
Executive level II
Executive level III
Executive level IV 1
Executive level V
Subtotal 1
Total - Exec. Lev. Sal $115,700
ES-6
ES-5 8
ES-4 9
ES-3 5
ES-2 8
ES-1 \4_
Subtotal 44
Total - ES Salary $4,448,900
GS-14/15 504
GS-13 1,235
GS-12 983
GS-11 170
GS-10 0
GS-9 282
GS-8 30
GS-7 218
GS-6 178
GS-5 183
GS-4..., 21
GS-3 7
GS-2 2
GS-1 0_
Subtotal 3,813
Total full-time equivalent
employment, end of year 4,082
Full-time equivalent (FTE)
usage 4,119
1/ Salary data above is base pay only
FY 1992
Average ES level 2.8
Average ES salary $98,785
Average GS/GM grade 12.6
Average GS/GM salary $45,336
1995
Estimate
1
$115,700
EXHIBIT P
1996
Request
1
$115,700
8
8
9
9
5
5
8
8
13
13
43
43
$4,387,571
$4,479,929
530
530
1,279
1,297
1,018
1,032
176
178
0
0
292
296
31
31
226
229
184
187
189
192
22
22
7
7
2
2
0
0
3,956
4,003
4,226
4,286
4,129
4,147
FY 1993
FY 1994
2.8
2.8
$103,500
$104,726
12.8
12.8
$49,513
$50,060
94
541
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
HEALTH MAINTENANCE ORGANIZATION
LOAN AND LOAN GUARANTEE FUND
Fiscal Year 1996 Budget Page
Appropriation language 1
Language analysis 2
Amounts available for obligation 3
Justification;
A. General statement 5
B. Rationale for the budget estimate 5
542
HEALTH CARE FINANCING ADMINISTRATION
Health Maintenance Organization Loan and Loan Guarantee Fund
Appropriation Language
To carry out subsections (d) and (e) of section 1308 of the Public Health Service Act,
[$15,000,000 together with] any amounts received by the Secretary in connection with loans
and loan guarantees under title XIII of the Public Health Service Act, to be available
without fiscal year limitation for the payment of outstanding obligations. During fiscal year
[1995] 1996, no commitments for direct loans or loan guarantees shall be made.
543
HEALTH MAINTENANCE ORGANIZATION
LOAN AND LOAN GUARANTEE FUND
Language Analysis
Language Provision
Explanation
For carrying out subsections (d) and (e) of
section 1308 of the Public Health Service
Act, any amounts received by the
Secretary in connection with loans and
loan guarantees under title XIII of the
Public Health Service Act, to be available
without fiscal year limitation for the
payment of outstanding obligations.
Appropriates receipts of the fund for the
payment of obligations, i.e. prepayment
premiums and interest subsidies.
During fiscal year 1996, no commitments
for direct loans or loan guarantees shall be
made.
This provision prohibits the issuance of
additional direct loans or loan guarantees
from being made to Health Maintenance
Organizations from the Health
Maintenance Organization Loan and Loan
Guarantee Fund.
544
HEALTH MAINTENANCE ORGANIZATION
LOAN AND LOAN GUARANTEE FUND
Amounts Available for Obligation
1995
1994
Current
1996
Actual
Estimate
Estimate
$
$15,000,000
$
Appropriation
Authority to borrow _ .. _
Offsetting collections from
Federal sources -
Non-Federal sources:
Guarantee Loan Program
Offsetting collections 9,648,000 6,300,000 4,001,000
Interest paid FFB (2,998,000) (2,600,000) (1,200,000)
Prepayment penalties - (3,000,000)
Discount on sale of (293) - ~
bond to FFB
Redemption of debt (5,577,000) (15,120,000) (2,607,000)
Unobligated balance start 8,594,000 9,374,000 9,954,000
of year
Unobligated balance end of 9.374.000 9.954.000 10.148.000
year
Total obligations $3,291,000 $5,600,000 $1,200,000
545
GENERAL STATEME^r^
The Health Maintenance Organization (HMO) Loan and Loan Guarantee Fund served as a
mechanism to provide working capital to HMOs in their initial operating periods when financial
deficits were expected. Direct loans were made to HMOs from the Fund. These loans were then
sold, with guarantees, to the Federal Financing Bank (FFB). The Fund also guaranteed the
repayment of loans made by private lenders to HMOs.
PURPOSE AND METHOD OF OPERATIONS
Goal 2 of the Strategic Plan Budget discusses the Health Care Financing Administration's (HCFA)
desire to ensure that the Medicare and Medicaid beneficiaries receive high quality, coordinated
heahh care. Since HCFA was becoming increasingly more responsible for coordinated care, the
Public Health Service's HMO program was transferred to HCFA in 1985. Included in this transfer
was the HMO Loan and Loan Guarantee Fund.
The HMO Loan Fund is now dormant. The last loan commitments were made in 1983. In its
period of active operation, the fund operated as a revolving fund. Direct loans to HMOs were
sold, with a guarantee, to the FFB. The FFB purchase proceeds were then used as capital for
additional direct loans. At the end of FY 1994, the Fund had a face value of $15.8 million.
Currently, HCFA collects principal and interest payments from HMO borrowers, and in turn pays
the FFB. When loans are prepaid, HCFA rarely collects a prepayment penalty because most of
the loan agreements do not have a prepayment penalty clause. However, when HCFA repays the
loan to the FFB, a prepayment penalty applies. A shortfall is consequently created, and HCFA
cannot immediately repay the loan to the FFB at the time that it is paid to HCFA. Shortfalls are
also increased because HCFA continues to pay FFB loan interest on these loans after payoff and
because there are defaults on loans guaranteed by HCF/ .
RATIONALE FOR THE BUDGET ESTIMATE
There is no appropriation request in FY 1996. The current fund balance should be adequate to
cover principal payments, interest charges, and prepayment penalties throughout FY 1996.
Funding levels for the last five fiscal years follows:
Fiscal Year Amount
1991
1992
—
1993
$13,800,000
1994
~
1995
$15,000,000
546
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE HNANCING ADMINISTRATION
PROGRAM MANAGEMENT
SUPPLEMENTAL
Fiscal Year 1996 Budget Page
Appropriation language 1
Language analysis 2
Amounts available for obligation 3
Summar, of changes 4
Budget authority by activity 5
Budget authority by object 6
Justiflcation:
A. General statement 7
B. Rationale for the budget estimate 7
547
HEALTH CARE FINANCING ADMINISTRATION
PROGRAM MANAGEMENT
SUPPLEMENTAL
Appropriation Language
Funds made available under this heading in Public Law 103-333 are reduced from
$2,207,135,000 to $2,187,135,000, andfamds transferred to this account as authorized by
section 201(g) of the Social Security Act are reduced to the same amount.
548
PROGRAM MANAGEMENT
SUPPLEMENTAL
Language Analysis
Language Provision Explanation
Funds made available under this heading This supplemental request would reduce
in Public Law 103-333 are reduced from the 1995 level for Health Care Financing
$2,207,135,000 to $2,187,135,000, and Administration research by $20 million,
funds transferred to this account as the amount by which the appropriation
authorized by section 201(g) of the Social exceeded the President's budget request.
Security Act are reduced to the same This revised amount will fund HCFA's
amount. highest priorities.
549
DEPARTMENT OF HEALTH AND HUMAN SERVICES
HEALTH CARE FINANCING ADMINISTRATION
PROGRAM MANAGEMENT
SUPPLEMENTAL
Amounts Available for Obligation
1994 1995 1995 Current
Actual Appropriation Estimate
Appropriation 1/ — — —
Proposed Supplemental
Appropriation 2/ — — ($20,000,000)
Offsetting collections from
non-Federal Sources:
HMO User Fees 3/ $363,000 $124,000 $124,000
CLIA User Fees 3/ 31,232,000 45,060,000 45,800,000
Subtotal, Non-Federal $31,595,000 $45,184,000 $45,924,000
Receipts and reimbursements
from Trust Funds:
- Trust Funds Transfer 2,057,144,000 2.077,377,000 2,068,986,000
HI Federal Funds
Limitation 133.830.000 129.758.000 129.758.000
Subtotal. Receipts $2,190,974,000 $2,207,135,000 $2,198,744,000
UnobUgated balance start of yr. 10,388,000 19,192,000 19,192,000
Unobligated balance end of yr.. (19,192,000) (19,192,000) (19,192,000)
Unobligated balance lapsing (28 ,658 ,000) — —
Total Obligations $2,185,107,000 $2,252,319,000 $2,224,668,000
1996
Estimate
$128,000
45,400,000
$45,528,000
2,114,719,000
139.075.000
$2,253,794,000
19.192,000
(19,192,000)
$2,299,322,000
1/ Federal Funds appropriations are not requested in Program Management for FY 1996. Appropriations requested in the Payments to the Health
CAre Trust Funds account will reimburse the HI Trust Fund for the estimated Program Management Costs.
2/ The FY 1995 appropriation level for Research activity was S20.4 million more than the Administration's request. The current estimate reflects a
proposed negative supplemental of S20.0 million that reduces the diiTerencc between the request for FY 1995 and the appropriiUion.
3/ Resources to fund the Administrative Cost activity are offset by the collection of HMO user fees under the User Charge Statute (31.1J.S.C. 9701).
The resources to fund CLlA activities are offset by the collection of CLIA user fees under the Public Health Service Act. Title Xm, Section 353.
550
PROGRAM MANAGEMENT
SUPPLEMENTAL
Summary of Changes
1995 Appropriation , $2,252,319,000
1995 Appropriation Reductions 7,651,000
1995 Appropriation (Adjusted) 2,244,668,000
199S Proposed Supplemental (20,000,000)
1995 Current Estimate 2,224.668,000
1996 Estimate 2,299,322,000
Net Change $74,654,000
1995 Current Estimate Base Change from Base
Increases: FTE Budget Authority fTE Budget Authority
A. Built-in
1 . Annualization of
FY 1995 Pay Raise $1,946,000
2. FY 1996 Pay Raise 4,476,000
3. Increase of 16 FTEs 4,063 18 918,000
4. Increase in Personnel Benefits 8,982,CXX)
5. Additional day of Pay 1,011,000
6. Within Grades 3,057,000
7. Other Pa. to!'. Increases 4,619,000
8. Space Rental 3,486,000
9. Other Sei-vices 18,565,000
Subtotal $47,060,000
B. Program
1. Research 46,226,000 $1,774,000
-Rural Grants/Health Networks.... 1,737,000 263,000
- Current Bene Survey 9,920,000 80,000
- Proposed Supplemental (20,000,000) 20,000,000
2. Medicare Contractors 1,609,671,000 21,429,000
3. Slate Certification 145,800,000 16,300,000
4. Administrative Costs
-HCFA ON-LINE 0 10,000,000
Subtotal $69,846,000
Total Increases 18 $116,906,000
Decreases:
A. Built-m
I. Postage (1,500,000)
Subtotal ($1,500,000)
B. Program
1. Research
- Rural Transition Grants 17,584,000 ($17,584,000)
-EACH/RPCH 3,500,000 (3,500,000)
- Info Counseling 10,036,000 (5,536,000)
2. Admmistrative Costs
- Smgle Site (12,100.000)
- Data Systems (1,632,000)
4. CLIA 66 45.800.000 0 (400.000)
Subtotal ($40,752,000)
Total Decreases ($42,252,000)
Net Change 18 $74,654,000
551
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552
PROGRAM MANAGEMENT
SUPPLEMENTAL
Budget Authority by Object
199S
Appropriation
PROGRAM MANAGEMENT
Grants, Subsidies,
& Contributions
Proposed Supplemental
$60,363,000
Total Budget Authority
by Object
$60,363,000
1995 Current
Estimate
1996
Estimate
Increase
or
Decrease
$60,363,000 $16,500,000 ($43,863,000)
(20.000.000) — 20.000.000
$40,363,000 $16,500,000 ($23,863,000)
553
PROGRAM MANAGEMENT
SUPPLEMENTAL
GENERAL STATEMENT
This supplemental request would reduce the FY 1995 level for HCFA Research, Demonstrations,
and Evaluation by $20 million, the amount by which the appropriation exceeded the President's
budget request. The revised amount for HCFA Research, Demonstrations, and Evaluation is
sufGcient to fund existing requirements.
RATIONALE FOR THE BUDGET ESTIMATE
This supplemental request proposes to achieve the $20.0 million reduction by reducing funding
for the Essential Access Community Hospital (EACH) and Rural Primary Care Hospital (RPCH)
program by $3.0 million, and the Rural Health Care Transition Grant (RHCTG) program by
$17.0 million in FY 1995.
The EACH/RPCH program is now operational with enhanced program payment to participating
EACHs. Because so many hospitals are now forming networks, even without participating in the
program, grants to hospitals are no longer necessary.
The RHCTG program has achieved its objectives. The RHCTG program was the starting point
to assist small rural hospitals to improve their financial position. Much has changed since
enactment of the RHCTG program in OBRA 1987. Rural hospitals have received substantial
increases in Medicare program payments. Thus, individual rural hospitals receive sufficient funds
from regular Medicare payments to carry out projects similar to those funded under the RHCTG
program.
I
Tuesday, March 28, 1995.
SOCIAL SECURITY ADMINISTRATION
WITNESSES
SfflRLEY S. CHATER, COMMISSIONER OF SOCIAL SECURITY
LAWRENCE H. THOMPSON, PRINCIPAL DEPUTY COMMISSIONER OF
SOCIAL SECURITY
JOHN R DYER, DEPUTY COMMISSIONER FOR FINANCE, ASSESSMENT
AND MANAGEMENT
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
DHHS
Mr. Porter. The subcommittee will come to order.
We continue our hearings on the Department of Health and
Human Services with the Social Security Administration, which
won't be a part of the Department of Health and Human Services
much longer, just a few more days. The next time, Mrs. Chater,
that you are here, you will be part of the "and related agencies"
in our title.
We very much welcome you and appreciate your coming to tes-
tify. If you would introduce the people at the table with you and
then proceed any way you wish.
Ms. Chater. Thank you.
I would like you to meet, to my farther right, Dennis Williams,
the Deputy Assistant Secretary for Budget, at his last meeting with
us, and John Dyer, our Deputy Commissioner for Finance, Assess-
ment and Management, and to my left is Larry Thompson, the
Principal Deputy Commissioner of Social Security.
THE SOCIAL SECURITY ADMINISTRATION'S FY 1996 BUDGET REQUEST
I am pleased to join you today to present the Social Security Ad-
ministration's fiscal year 1996 appropriation request. Obviously I
have full written testimony that discusses this request in detail,
and I will submit that testimony for the record with your approval.
This is a budget that I wholeheartedly support, and I say that
because it embodies a vision of the kind of high-quality service the
Social Security Administration can and should provide during this
especially challenging period in our history.
The budget supports our efforts to deal with escalating public
service demands, both today and in the future, and it also serves
as a plan for the future, and it is guided by our strategic planning
document, by our general business plan, and by the agency's
streamlining plan.
It invests in automation, and it invests in disability programs.
And it also shapes an independent agency that we hope will work
better and cost less.
So in fiscal year 1996, with this budget request, SSA will pay
benefits to approximately 48 million people, handle over 6 million
(555)
556
new benefit claims, process 16 million requests for Social Security
number cards, and post 235 million annual earnings items for cov-
ered workers.
LIMITATION ON ADMINISTRATIVE EXPENSES REQUEST
So first I would like to focus on our Limitation on Administrative
Expense budget request for $6,188 billion. This account provides
funding for employee salaries and benefits, for computer and tele-
phone systems, for space and supplies, and for the important cus-
tomer service improvement initiatives that I am going to discuss.
It amounts to less than 2 percent of benefit payments, which
total approximately $370 billion. We are intent on administering
these multi-billion dollar programs as efficiently as possible. Our
request supports our three agency goals for the future. The first,
my intent to rebuild public confidence in the Social Security pro-
gram; the second objective for us is to maintain and provide world-
class service to our customers; and thirdly to provide an environ-
ment for SSA employees which provides them with the tools to
move forward in the next few years.
It also supports the careful multi-year business planning ap-
proach which we have set forth in our business plan. This is a com-
bination of streamlining, of reengineering our processes and auto-
mating what we do.
We think this approach will permit us to maintain current serv-
ice levels overall while applying some of the resources we save to
improve or expand our activities.
We have two priorities, Mr. Chairman. The first is automation,
and the second is our disability program. And I would like to spend
a moment just talking about each of those.
AUTOMATION INVESTMENT FUNDING
Our automation investment request is $357 million to continue
our five-year $1.1 billion investment in projects that include, most
importantly, our Intelligent Workstation and Local Area Network
initiative.
Last year this committee provided us with $130 million for auto-
mation investment funding. Our final enactment level for fiscal
year 1995 was reduced to $88 million. So this year's request of
$357 million includes funding to help us literally catch up and to
stay on track with our five-year automation plan.
This investment is absolutely critical to the long-term improve-
ments that we want to make in disability claims processing. It is
also vital in making virtually all of our business processes more ef-
ficient, consistent with our business plan.
The advanced technology, I cannot emphasize enough, is abso-
lutely required if we are expected to streamline our administrative
operations and take care of our customers.
I simply cannot overemphasize the key value of this investment.
It is as a result of our utilization of technology that we will be able
to maintain and, in some areas, improve our performance. I see
this automation as a key enabler to our entire business planning
approach. And without access to this funding, we will simply not
be able to meet the public or the congressional expectations for
service delivery.
557
Finally, I would say that our field studies have shown that we
will gain at least two dollars in greater productivity and efficiency
for every dollar that we spend on automation.
DISABILITY INVESTMENT FUNDING
Next, I would like to talk about the disability investment fund.
And I would thank you for last year providing us with $320 million
to improve disability case processing. And as a result, I am pleased
to say that these funds enabled us to process an additional 448,000
disability claims during this year.
Our budget request before you for disability is $534 million. This
investment continues to show tangible results in dealing with a 56
percent increase in incoming disability claims over the past five
years.
With our investment in disability and strong cooperation from
the States and from our employee unions, we can turn negative
trends into positive ones. We will reduce average processing times
on initial claims by more than a third, from 97 days in 1994 to 62
days in fiscal year 1996.
The disability fund also helps us protect the integrity of the pro-
grams we administer by ensuring that benefits are only awarded
to those who are eligible by law to receive them. We establish this
assurance by doing continuing disability reviews for those who re-
ceive benefits. And we plan to increase to — over 400,000 — the num-
ber of continuing disability reviews next year.
This, I would tell you, is more than double last year's efforts, and
also for the first time in agency history we are going to dedicate
a minimum funding level to do continuing disability reviews.
I feel that we need this to protect the integrity of the program
and to assure the public that we are spending money wisely, which
in turn will help, I believe, to rebuild public confidence.
Now, based on the recommendations issued last year by our dis-
ability reengineering team, we are moving aggressively to imple-
ment our long-range redesign of our disability process. When com-
pleted, this initiative will ensure swift, efficient disability decision,
making and processing on a continuing basis.
OTHER INITIATIVES
Some other initiatives, briefly, other aspects of our budget, Mr.
Chairman, demonstrate an agency that takes the principles of cost
efficiency and high quality customer service very seriously. For ex-
ample, we are streamlining the agency by reducing unnecessary
layers of management and redirecting staff to direct customer serv-
ice.
Second, we will be providing approximately 9 million Personal
Earnings and Benefit Estimate Statements this year. By the year
2000 we will have sent more than 140 million statements over this
six-year period.
We believe that this is a very important public education effort
that helps people better understand Social Security and it enables
them to plan for their retirement.
We are also working hard to improve our 800 number. We are
employing the latest telephone technology, including automated
558
self-service options in some locations and other customer-oriented
features.
So to conclude, Mr. Chairman, I am pleased to support this budg-
et because of its high-quality public service emphasis, and this
budget provides that service in a very cost-effective manner.
I would hope that this appropriation request be approved in its
entirety so that we can meet the needs of our beneficiaries today
and make critical investments for the future.
Thank you, and of course I will be pleased to answer your ques-
tions.
[The prepared statement and biography of Shirley Chater follow:]
559
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Statement by the Commissioner of Social Security
on
Fiscal Year 1996 Appropriations Requests
Mr. Chairman and members of the Committee, I am pleased to be here today to
present the fiscal year (FY) 1996 appropriation requests of the Social Security
Administration (SSA). Our budget is one which invests in the needs of our nation's
elderly and disabled citizens while protecting the interests of America's taxpayers.
It supports our efforts to deal with today's escalating public service demands, to
plan for the future, to provide effective stewardship of the Social Security program
and trust funds, and to shape an independent agency that will work better and cost
less.
In this budget you will see how SSA is:
► Investing in automation to improve customer service and increase
productivity, to do more with less;
► Investing in our disability programs to reduce the time it takes applicants to
receive decisions for claims and appeals and to increase our eligibility
reviews; and
► Streamlining SSA's workforce while targeting resources to challenges such
as preparing to issue millions of Personal Earnings and Benefit Estimate
Statements.
SSA's Overall FY 1996 Budget
SSA's total budget for FY 1996 includes outlays of $384 billion. More than
90 percent of this budget will be paid out in the Old-Age, Survivors and Disability
Insurance (OASDI) benefits that make up the self-financed Social Security
program. In FY 1996 we expect to make payments of $303 billion to 38 million
OASI beneficiaries and $44 billion to 6 million Dl beneficiaries. These trust fund
benefit payments are permanently appropriated and therefore not part of the
budget requests before the Committee, which cover overall program administration
and our general-fund-financed programs. The general fund programs include the
Supplemental Security Income (SSI) Program request for $25.9 billion, as well as
$.7 billion for the black lung program administered by SSA. The remainder of the
outlays are comprised primarily of SSA's administrative expenses and payments to
the Railroad Board.
The responsibility for administering programs of this magnitude is enormous and is
guided by the Agency Strategic Plan, supplemented by SSA's General Business
Plan and SSA's Streamlining Plan.
SSA's FY 1996 Limitation on Administrative Expenses Request
Now, I would like to focus on the discretionary spending request before this
Committee~the Limitation on Administrative Expenses (LAE) account. The
560
overall request was developed within the framework of the Agency Strategic Plan
and SSA's General Business Plan and SSA's Streamlining Plan, which provide a
vision for SSA's efforts to deal with increasing workloads in a cost effective and
efficient manner. I want to address this request first and foremost, because of its
impact on the quality of service we provide to the Amencan public. This account
provides funding for investments in the future, employee salaries and benefits, our
computer and telephone systems, for space and supplies, and for many of our
customer service improvement initiatives. Let me reiterate, however, that we take
seriously our responsibility to spend each dollar wisely.
Our FY 1996 LAE request for $6,188 billion includes two critically-needed
investments-for automation and our disability programs-as well as the funding
required to continue meeting the challenges of our day-to-day operations. The
request amounts to 1 .6 percent of total benefit payments.
Automation Investment Funding
We are continuing our critical investments in automation. Our budget includes
$357 million to continue our five-year, $1.1 billion investment in the Intelligent
Workstation/Local Area Network project and other state-of-the-art initiatives.
This investment is instrumental to our long-term improvements in disability claims
processing. In conjunction with our process reengineering efforts, it will make
virtually all of our business processes more efficient, streamline administrative
operations and enhance customer service.
We know that this investment is worthwhile. Field studies have shown us that we
will gain at least two dollars in greater productivity and efficiency for every one
dollar we invest in technology.
Disabilitv Investment Funding
This budget request includes $534 million for our disability investment fund. We
are using disability investment funding to turn negative trends into positive ones.
We are reducing pending workloads that had been significantly growing due to a
56-percent increase in incoming disability claims over the past 5 years. We expect
to bring our initial claims pending in the Disability Determination Services down
from 552,000 in FY 1994 to about 304,000 in FY 1996.
With our investments in disability, and with strong cooperation from the States and
our employee unions, we will reduce processing times on initial claims by more
than a third-from 97 days in FY 1994 to 62 days in FY 1996.
Our disability investment will also enhance our stewardship of the program and the
trust funds, by providing resources to increase-to over 400,000~the number of
continuing disability reviews of those persons currently receiving disability benefits.
This more than doubles last year's level of effort. For the first time in our history,
we will set a minimum funding level dedicated to continuing disability reviews.
561
This Administration is determined that taxpayer-financed disability program dollars
should be going only to those who are truly entitled.
But our disability investment does more than simply apply additional resources to
process additional workloads. Our request also includes $20 million to begin
implementing the long-range redesign of our disability process. Once complete,
this reengineering initiative will assure swift, efficient disability decisionmaking and
processing on a continuing basis.
Other Initiatives
At the same time, we are shaping an agency that will be able to respond to future
demands-an agency that will work better and cost less. Some examples of these
initiatives include:
► A streamlining plan that gives greater support and empowerment to
employees who directly serve the public, while reducing unnecessary layers
of management. Our plan cuts supervisor-to-employee ratios by
50 percent, increases the proportion of employees who work in direct
customer service positions and transfers functions from headquarters to
field offices.
► An effort to send Personal Earnings and Benefit Estimate Statements, or
PEBES, to millions of Americans. This public education effort is designed
to provide all working Americans with a financial statement of their earnings
as well as an estimate of their Social Security benefits.
o In FY 1996, we will provide approximately 9 million statements. By
the year 2000, we will have sent more than 140 million over the
preceding 6 year period. We are, in fact, accelerating the processing
schedules required by law, to manage more smoothly this large
workload requirement.
► Implementation of Public Law 103-296, separating SSA from the
Department of Health and Human Services (HHS) on March 31, 1995. The
estimates contained in the FY 1996 budget request do not reflect the
necessary transfer of resources to SSA from HHS. This transfer will be
outlined in a budget amendment to be submitted later this year. The budget
amendment is not anticipated to result in a net increase or decrease in
budgetary resources required for SSA or HHS.
Other FY 1996 Appropriation Requests
Now that I've highlighted the key points of our primary administrative account, I'd
like to turn to a brief summation of our other appropriation requests before this
Committee.
562
$32.6 million for Payments to Social Security Trust Funds. This request
will serve to reimburse the Social Security trust funds for the costs of certain
benefits and administrative expenses properly charged to Federal funds.
$665.4 million for Special Benefits for Disabled Coal Miners. These
funds cover benefit payments and administrative expenses for that portion
of the black lung program administered by SSA.
$25.9 billion for the Supplemental Security Income (SSI) Program. This
request includes SSI benefits and reimbursement to the Social Security trust
funds for the administrative cost of the SSI program. This budget request
will allow us to fund the referral and monitoring contracts that are the key to
our commitment to encourage substance abusers to seek treatment and
become self-supporting.
Conclusion
As I mentioned earlier, we will accomplish all of the initiatives just discussed while
holding our administrative costs to 1 .6 percent of our total budget. This means that
more than 98 cents of every dollar in the Social Security budget will go back to the
American people in the form of benefits.
But while our administrative costs remain low, the amount of work we process in
our day-to-day operations remains high. In FY 1996, among other responsibilities,
we will:
► Pay benefits to approximately 48 million people;
► Handle over 6 million new benefit claims;
► Process 16 million requests for Social Security number cards; and
► Post 235 million annual earnings items for covered workers.
These are exciting times for all of us at the Social Security Administration as we
confront the challenges before us as an independent agency. 1 am satisfied that
our LAE budget request of $6,188 billion addresses today's challenges, while also
investing in the future for a more efficient SSA to provide the improved service our
customers deserve in the years to come.
Further, this budget demonstrates the Administration's solid commitment to the
Social Security program, to the agency, and, most importantly, to those people
whose well-being depends upon Social Security, while ensuring that each dollar
requested is spent wisely.
I will be pleased to answer any questions you may have.
563
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Statement by the Commissioner of Social Security
on
Payments to Social Security Trust Funds
The fiscal year (FY) 1996 appropriation request for Payments to Social
Security Trust Funds totals $32,641,000 and covers four general fund
payments to the Social Security trust funds.
Special Payments for Certain Uninsured Persons
The request before this Committee includes $4,541,000 in FY 1996 to
reimburse the Old-Age and Survivors Insurance Trust Fund for special
benefits paid during FY 1994 to certain uninsured persons aged 72 years
and over. The payments are made to individuals who did not have a
chance to work long enough under Social Security to become insured.
These beneficiaries, a declining population, were not eligible for regular
monthly Social Security benefits, primarily because they retired before
enactment of the Social Security Act or before their occupations were
covered under Social Security.
The FY 1996 request for Special Payments to Certain Uninsured Persons is
$2,453,000 less than the FY 1995 appropriation. The population receiving
special payments is a closed group of very aged persons which declines
annually. As of September 30, 1994, 1,600 persons were receiving benefits
chargeable to the general funds under this provision as compared to 2,500
a year earlier.
Reimbursement for Pension Reform Administrative Costs
Included in this request is a payment of $1,100,000 in FY 1996 to reimburse
the Old-Age and Survivors Insurance Trust Fund for the cost of
administering pension reform responsibilities assigned to the Social Security
Administration under P.L. 93-406, the Pension Reform Act. The
reimbursement is for the cost of furnishing information on deferred vested
pension rights to pension plan participants or their survivors.
The request for FY 1996 reflects the ongoing level of activity for pension
reform. The request for FY 1996 is the same as the FY 1995 appropriation.
Unneqotiated Checks
Also included in this request is a payment of $17,000,000 in FY 1996 to
reimburse the trust funds for the value of interest on benefit checks that
remain uncashed after 6 months. This payment is authorized by section
152 of the Social Security amendments of 1983 (P.L. 98-21).
564
The request for 1996 is the same as the FY 1995 appropriation. This
amount reflects the ongoing level of activity and represents the value of
interest for unnegotiated OASDI benefit checks. Beginning
October 1, 1989, Social Security checks, like other Federal government
checks, are negotiable for only 12 months from their date of issue under the
provisions of the Competitive Equality Banking Act of 1987 (P.L. 100-86).
The value of these checks is credited directly to the trust funds from the
general funds when the checks are cancelled. This account funds interest
on the amount of unnegotiated checks that remain uncashed after 6 months,
to cover the period until the check is cashed, or until the value of the checks
is credited directly to the trust funds.
Coal Industry Retiree Health Benefits
The purpose of this payment is to reimburse the Federal Old-Age and
Survivors and Federal Disability Insurance Trust Funds for work carried out
under Section 18141 of the Energy Policy Act of 1992 (P.L. 102-486) which
established the "Coal Industry Retiree Health Benefit Act (CIRHBA) of
1992." Under the provisions of this Act, SSA determines which existing coal
mine operators are responsible for paying health benefit premiums for
certain retirees. SSA also processes appeals from coal mine operators
who believe the assignments were incorrectly made. SSA's costs for
administering CIRHBA activities are properly chargeable to Federal funds.
SSA initially funds these activities through its Limitation on Administrative
Expenses (LAE) account, with subsequent reimbursement to the Social
Security trust funds for actual costs incurred. Effective with the FY 1994
appropriation, this reimbursement can be made in a later year than the
expense was incurred.
In FY 1996, SSA is requesting a payment of $10,000,000 to reimburse the
trust funds for anticipated costs in FY 1995 and FY 1996. These funds are
to remain available until expended. Congress appropriated an initial
$10,000,000 for this purpose in FY 1993.
565
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Statement by the Commissioner of Social Security
on
Special Benefits for Disabled Coal Miners
The fiscal year (FY) 1996 appropriation request for Special Benefits for
Disabled Coal Miners totals $485,396,000 and is financed from general
revenues. The request is in addition to the $180,000,000 vyhich Congress
provided last year as an FY 1996 advance appropriation to fund first quarter
benefit payments. This brings the total FY 1996 appropriation to
$665,396,000. It includes $660,215,000 for FY 1995 benefit payments and
$5,181,000 for administrative costs. The request also contains an advance
appropriation of $170,000,000 for the first quarter of FY 1997. It does not
include reimbursable work done for the Department of Labor, which is
budgeted for by that agency.
Program Authorization
The black lung program is authorized by title IV of the Federal Mine Safety
and Health Act of 1977, which provides for payment of monthly cash
benefits to coal miners who are totally disabled because of pneumoconiosis,
commonly referred to as black lung disease, and to widows and certain
other dependents of miners who were entitled to these benefits or whose
deaths were related to this disease.
Responsibility for Administration
Claims of miners filed from December 30, 1969 through June 30, 1973, and
claims of their survivors filed within 6 months after the death of the miner or
widow are processed by SSA. SSA pays benefits and maintains the
beneficiary rolls for the lifetime of all persons who filed with SSA during its
jurisdiction.
Since June 30, 1973 SSA has continued to take miners' claims--but as an
agent of the Department of Labor, which is responsible for adjudication and
payment of these claims and which budgets for the benefit payments and
administrative costs of the program. Costs incurred by SSA in taking these
claims are reimbursed by the Department of Labor.
The beneficiary rolls for which SSA has responsibility will continue to decline
because of the death of miners and the death or remarriage of widows. At
the midpoint of FY 1996, an estimated 138,000 beneficiaries will be
receiving monthly benefits. This is a decrease of 12,000 from the estimated
150,000 beneficiaries who will be receiving payments at the midpoint of
FY 1995.
566
Explanation of Change
The FY 1996 request for benefit payments is $660,21 5, 000--a net reduction
of $52,478,000 from the amount in the FY 1995 appropriation. The year-to-
year decrease is due primarily to the continuing decline in the beneficiary
population. This reduction will be partially offset by an estimated cost-of-
living adjustment of 2.2 percent in January of 1996.
Our budget request of $5,181,000 for FY 1996 black lung administrative
expenses is the same as the amount in the FY 1995 appropriation. Actual
obligations will be based on costs as determined by SSA's cost allocation
system through measurement of black lung workloads and an appropriate
share of SSA's total overhead.
Advance Appropriation
The budget request includes an advance appropriation of $170,000,000 for the
first quarter of FY 1997. This request ensures that benefit payments will
continue without interruption into the next fiscal year.
567
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Statement by the Commissioner of Social Security
on
Supplemental Security Income
The Supplemental Security Income (SSI) appropriation provides funds for
direct cash assistance to eligible aged, blind and disabled recipients to help
finance their basic needs. The appropriation request for fiscal year (FY)
1996 is $18,802,555,000 in addition to the $7,060,000,000 already
appropriated for the first quarter of FY 1996, bringing the total appropriation
to $25,862,555,000. This includes $23,548,636,000 for Federal benefits to
aged, blind and disabled recipients; $176,400,000 for beneficiary
rehabilitation services; $2,130,819,000 for payment to the trust funds and
$6,700,000 for research and demonstration projects.
We are also requesting an advance appropriation of $9,260,000,000 for the
first quarter of FY 1997 to ensure that benefits will continue without
interruption into the next fiscal year.
Federal Benefit Payments
The SSI program ensures a minimum monthly level of income to eligible
aged, blind and disabled individuals. An individual's income, resources and
living arrangements are evaluated in computing the actual amount of SSI
payment. SSI benefits are delivered through monthly benefit payments.
The average number of Federal SSI recipients is expected to increase
about 5.3 percent from 6,133,000 in FY 1995 to 6,457,000 in FY 1996 due
primarily to an increase in the number of blind and disabled SSI recipients.
The FY 1996 request for Federal benefit payments is $23,548,636,000
which is $1,887,103,000 less than the FY 1995 appropriation. This
decrease is due to several reasons. First, we expect to have
$1,695,364,000 carried over from FY 1995 because we re-estimated the
number of recipients based on slower growth in FY 1994. Second, the
FY 1995 appropriation included funds for 12 monthly benefit payments while
the FY 1996 request includes funds for 11. This is because the regular
monthly payment for October 1, 1995 will be made at the end of
September 1995, since the payment date falls on a non-banking day.
Additionally, we expect further savings from Public Law 103-152, the
Unemployment Compensation Amendments of 1993 that extended the
period for which a sponsor's income is deemed to an alien's income from 3
to 5 years. These reductions are partially offset by increases due to the
growth in the number of recipients and the estimated cost-of-living
adjustment of 3.1 percent in January 1996.
568
Beneficiary Services
This activity provides funds for two purposes: for reimbursement to State
vocational rehabilitation agencies for cost-beneficial rehabilitations of SSI
recipients; and for contracts with governmental and private agencies to refer
SSI recipients with drug or alcohol dependency to treatment programs and
to monitor their participation in those programs. For FY 1996 we are
requesting $176,400,000 for this activity: $34,400,000 for vocational
rehabilitation and $142,000,000 for drug addict and alcoholic (DA&A)
referral and monitoring. SSA now has contracts or agreements with public
and private vendors in 49 States and the District of Columbia to help
alcoholics and addicts find treatment and to monitor their progress during
treatment. We are continuing to work on obtaining a contract in Oregon.
On August 15, 1994 President Clinton signed into law P.L. 103-296, the
Social Security Independence and Program Improvements Act of 1994.
This law extends the referral and monitoring program to title II drug addicts
and alcoholics. Because the referral and monitoring contracts currently in
place do not provide for the significantly larger numbers of DA&A recipients
that the expansion will involve, Federal procurement rules require SSA to
recompete and award new contracts. SSA has published its request for
proposals and expects to award these contracts later this year.
Payments to the Trust Funds
The SSI and Social Security programs are administered on an integrated
basis for purposes of economy and efficiency. The Social Security Act
authorizes advances from the Social Security trust funds to pay the
administrative costs of the SSI program through the Limitation on
Administrative Expenses account. The advances are fully repaid from the
SSI appropriation by the end of the subsequent fiscal year. SSA maintains
a detailed cost allocation system, which has been audited by the General
Accounting Office, to ensure that the trust funds are made whole (with
interest, if appropriate) for the administrative expenses of the SSI program.
The FY 1996 request is for $2,130,819,000, the estimate of the SSI
program's share of SSA's administrative expenses in FY 1996. This
request is $257,443,000 less than the FY 1995 request because additional
funds were provided in FY 1995 to make the trust funds whole for prior year
SSI costs.
569
Research and Demonstration Projects
This activity funds title II and title XVI research and demonstration projects
authorized by sections 1110 and 1115 of the Social Security Act. The
FY 1996 request for this activity is $6,700,000, which will be used to study
general income security for various groups of the general population and to
identify and investigate the underlying causes of the recent growth in the
title II and title XVI disability programs. Additionally, $3,000,000 in
unobligated funds will be carried over from FY 1995 to FY 1996 for a total of
$9,700,000. This request does not include additional funds for outreach
demonstration authority.
For FY 1996 and beyond we plan to use unobligated carryover funding
authority for Project NetWork, SSA's first major return-to-work
demonstration. The project has been underway since FY 1992. The first
model~the case manager project-was completed in FY 1994. The
remaining three models will be completed in FY 1995, and the project
evaluation will be completed in FY 1997.
Advance Appropriation
The budget request includes an advance appropriation of $9,260,000,000
for the first quarter of FY 1997. This request, which includes funds to pay
4 months of benefits in the first quarter of FY 1997, ensures that benefit
payments will continue without interruption into the next fiscal year. As
January 1, 1997 is a legal public holiday, the benefit checks will be paid in
December 1996 under section 708(a) of the Social Security Act.
570
DEPARTMENT OF HEALTH AND HUMAN RESOURCES
Statement by the Commissioner of Social Security
on
Limitation on Administrative Expenses
The Limitation on Administrative Expenses (LAE) is a request for authority
to spend up to $6,188,200,000 in fiscal year (FY) 1996. Included within this
total is funding for SSA's current operations and for continued investments
in automation and disability workload processing. Resources to be
transferred from HNS to SSA pursuant to the establishment of SSA as an
independent agency per Public Law 103-296 will be addressed by the
Administration in an amendment to the President's budget request.
The LAE request provides roughly $5,297 million for current operating
expenses, which include administration of the old-age and survivors and
disability insurance (OASDI) programs, the Supplemental Security Income
program for the aged, blind and disabled. Medicare work performed by SSA
and certain other work. For reasons of economy and efficiency, SSA has
integrated administration of both trust fund and some non-trust fund
programs. The Social Security Act authorizes payment of SSI and certain
other non-trust fund administrative expenses from this account, with full
reimbursement from general funds in other accounts.
This budget request includes $534 million in disability investment funding
which, when combined with our current operating budget, will enable us to
meet our budgeted disability and hearings workload processing projections.
In addition, we will set a minimum funding level dedicated to continuing
disability reviews (CDRs). The budget proposes to dramatically increase
the CDRs processed from 152,000 in FY 1994 to 431,000 in FY 1996.
We are continuing our critical investments in technology. The LAE request
also includes $357 million in no-year automation investment funding to
continue the $1.1 billion, five-year (through FY 1998) investment in
automation to support all of our workloads, including disability.
Included in our FY 1996 request are:
$4,312 million for maintaining salaries and expenses;
• $222 million for maintaining current operating expenses and
near-term investments related to automated data
processing/telecommunications;
• $1,297 million for current operations of State Disability
Determination Services (DDS); and
$357 million to continue the establishment of a state-of-the-art
computing network.
571
SSA's overall FY 1996 LAE request Includes a $648 million increase, a
12 percent increase from the FY 1995 appropriation.
• Over 40 percent of the increase is requested to continue SSA's
$1.1 billion five-year investment in automation.
This critical investment will enable SSA to improve the
effectiveness, efficiency and economy of its operations and
service to the public, while dealing with major workload
increases projected for the turn of the century without
substantial increases in workyears.
Most of the balance of the increase is requested to support
SSA's efforts to address the rapid four-year growth in the
number of disability cases.
• This will enable SSA to reduce by one-third the number of
days people will have to wait for initial disability claims to be
processed, and will allow SSA to more than double its FY 1994
level of effort for processing CDKs.
Federal Salaries and Expenses
The budget request for this element of the LAE account is driven primarily
by the cost associated with supporting the staffing levels needed to process
projected disability workloads. SSA relies on a mix of full-time equivalents
(FTEs) and overtime to achieve its total workyears. In addition to the
63,652 FTEs that will be funded from this account for FY 1996, SSA plans
to use 2,720 workyears of overtime.
State Disability Determination Services
The budget request includes $1,297,042,000 for current operating expenses
for State DDS in FY 1996.
SSA estimates that more than 2.7 million initial disability claims will be sent
to the DDS in FY 1996 for processing. This represents a 56 percent
increase over the number of claims received as recently as FY 1990. The
backlog of initial disability claims waiting to be worked in the State agencies
is projected to be 304,000 at the end of FY 1996, a decrease of about
250,000 cases over the FY 1994 pending level.
The funding necessary to provide support to the State agencies increases
by about $97 million in FY 1996. This change is a result of the net effect of
572
various factors, including mandatory salary and medical cost increases, an
increase in workyears and an increase in DDS disability investment funding.
This level of funding will enable the DDSs to process about 2.8 million initial
disability claims and about 4.1 million total cases in FY 1996.
Information Technoloqv Systems
The LAE budget request includes $222 million for FY 1996 for lease and
purchase of automated data processing and telecommunications hardware
and software, and for contractual services (excluding SSA personnel costs).
This is referred to as the Information Technology Systems, or ITS, budget.
The amount requested for FY 1996 represents an increase of $6 million
over the FY 1995 funding level provided.
Most of these funds will be used for ongoing operations and maintenance
activities required for continuation of current services.
Automation Investment Funding
The budget request includes the critical investment of an additional
$357 million in no-year automation investment funding. This funding
provides for the intelligent workstation/local area network (IWS/LAN) project
and for interactive software essential to the service improvements and cost
reductions envisioned in the Agency's strategic plan. The IWS/I_AN will
replace the Agency's aging network of computer terminals, as they reach
the end of their useful lives.
Conclusion
This budget request for the LAE-$6,188,200,000-provides the funding
required to enable SSA to:
► Continue serving the American public effectively and efficiently,
► Address disability backlogs and move fon/vard on longer-term
plans for reengineering the disability process, and
► Prepare for serving larger numbers of people effectively and
efficiently in the future through automation investment funding.
573
SHIRLEY S. CHATER
Commissioner of Social Seciuity
Shirley Sears Chater became Commissioner of Social Security
on October 8, 1993. She was nominated by President Clinton on
November 15, 1994 to lead the Social Security Administration when
it becomes an independent agency on March 31, 1995.
Commissioner Chater brings a lifetime of leadership and
public service experience to a position that has been frequently
described as one of the most conplex and challenging in the
federal government. She heads an agency that delivers benefits
each month to over 48 million people. She is responsible for the
actions of approximately 65,000 employees who, among other
responsibilities, serve the needs of 24 million visitors each
year to SSA's 1,300 field offices and answer almost 64 million
phone calls annually on the agency's toll-free telephone lines.
In addition to ensuring that SSA does its work accurately
and efficiently. Commissioner Chater has established three goals
to guide the agency into the future. She has pledged to rebuild
public confidence in Social Security, to provide world-class
service to the public, and to provide a nurturing environment for
Social Security Administration employees to better enable and
inspire them to provide extraordinary service.
Significant steps have been taken to achieve those goals. A
comprehensive plan has been developed to enhance the public's
knowledge of and confidence in Social Security. Agency processes
and procedures are being reengineered in order to provide service
more efficiently and in less time. SSA employees are being
provided with the tools and physical resources they need to do
their jobs in world-class fashion, and a greater proportion of
agency employees are being deployed into direct customer service
positions .
Commissioner Chater, in meetings with citizens throughout
the United States, has maintained the pledge she made during her
confirmation hearing to be an "active and ardent" advocate for
Social Security and the people who depend upon Social Security
for assistance. She will continue to be a vigorous advocate for
the progreun as Commissioner of an independent SSA.
Commissioner Chater caune to SSA from Texas Woman's
University, an institution she led as its president for seven
years. Her work at TWU won widespread praise from state
governmental leaders and education officials. She initiated a
restructuring of the university that streeunlined operations,
increased student services and allowed an increase in student
enrollment of more than 40 percent with no corresponding increase
in budget .
574
Her work at the university caught the attention of Texas
Governor Ann Richards, who appointed Dr. Chater in 1991 to chair
the state's Health Policy Task Force, a panel charged with
developing options that would result in dependable, accessible
and affordable health care for every Texas family. Many of that
task force's recommendations, including immunization and
insurance reform, are today incorporated in Texas law.
Commissioner Chater served as an associate with the American
Council on Education, Division of Academic Affairs and
Institutional Relations in 1983-84 and as senior associate of the
Association of Governing Boards of Universities and Colleges from
1984 to 1986. She was vice chancellor for academic affairs' at
the University of California-San Francisco from 1977 to 1982,
becoming the first woman to hold such a high level administrative
position in the California higher education system. She held
faculty appointments from 1972 to 1986 in the Department of
Social and Behavioral Sciences, School of Nursing, at the
University of California-San Francisco and in the School of
Education at the University of California-Berkeley.
Commissioner Chater, who is a native of Pennsylvania,
received her B.S. degree in nursing from the University of
Pennsylvania. She has an M.S. degree from the University of
California-San Francisco, also in nursing. She earned a Ph.D in
education from the University of California-Berkeley. She also
has a certificate from the Massachusetts Institute of Technology,
Sloan School of Management.
Among her honors. Commissioner Chater has been elected to
the Institute of Medicine of the National Academy of Sciences.
She is a member of the National Association of Public
Administrators and the National Academy of Social Insurance.
575
LINKING FUNDING TO PRODUCTIVITY AND SERVICE IMPROVEMENTS
Mr. Porter. Dr. Chater, thank you for your good testimony. I be-
lieve that you and the Social Security Administration and the sub-
committee are on the same wavelength on these things, but I want
to tell you where at least I am coming from, and what my approach
is on Social Security, before we begin.
I believe that all government agencies must be reevaluated this
year to determine where they are succeeding and failing, where
they can improve operations, and where efficiencies in savings can
be achieved. I understand that the Social Security Administration
has been ahead of the rest of the Federal Government in some of
these areas. FTEs have declined by 14,000 while caseloads have in-
creased, so we know you have achieved some productivity in-
creases.
But our fiscal situation govemmentwide has not improved. Pub-
lic debt continues to grow and I understand the Social Security Ad-
ministration has tremendous needs, and we certainly are going to
consider your request for $6.2 billion in administrative funding, in-
cluding $900 million in special initiatives.
But where we provide new funding, it is my intention that we
do it with specific links to productivity and service improvements.
Where productivity improves, we expect long-term savings.
I want to have a contract with you to improve service delivery
at the Social Security Administration. We are going to consider
your request, and I am inclined to give you the benefit of the doubt.
But I want you to know that every dollar increase we provide to
you is a dollar coming out of the Pell Grant program or the vaccine
program or Head Start or some other deserving social welfare pro-
gram.
If I am going to take the responsibility for making that decision
and the subcommittee is going to take its responsibility for making
a decision like that, I want your personal assurance that your
budget increases will result in real, long-term savings, both dollars
and FTEs, and real improvements in service.
I would like you, for this purpose, to submit for the record two
charts, covering the years 1994 through 2002, for two budgets, and
we will give you a copy of this. The first at the level of your re-
quest, and the second at the level of your request minus $300 mil-
lion, which would still provide a $348 million increase for 1996.
These charts should use the same out-year assumptions outlined
in the budget request. It should represent your personal commit-
ment regarding the following measures: initial disability claim
processing time, disability claim processing time through final
hearing, number of initial disability decisions overturned, average
busy rate to the 800 number, average time holding for the 800
number, number of initial disability determinations pending, num-
ber of disability hearings pending, total FTEs, disability claims
processed, disability hearings processed, number of CDRs proc-
essed, number of personal earnings statements processed, percent-
age of supervisory staff, level of field office automation and integra-
tion.
I think if we can have that information, it would help us greatly
in our determinations of your budget request.
576
SENATE RESCISSION OF AUTOMATION FUNDING
The Senate rescinded $88 million in funding previously appro-
priated for the automation initiative. The report accompanying the
rescission indicated that the Social Security Administration had a
large carryover in funding from the 1994 initiative.
How much carryover does the Social Security Administration
have from 1994 for automation?
Ms. Chater. I will turn to Mr. Dyer for the specific number, but
I would tell you that while we show funds unexpended, we don't
have funds that are uncommitted. We have the contracts on the
street and fully expect to utilize the funding that we have for the
automation process.
Mr. Dyer, do you want to speak to the numbers?
Mr. Dyer. Mr. Chairman, we have had $308 million appropriated
to date in the 1994 and 1995 appropriations. As the Commissioner
said, we have almost $300 million of it now committed with con-
tracts that we have on the street. We also have to have money set
aside for the site preparation, to install all the equipment, the lead
times, the training. So we in essence have a plan that lays out how
we would use all the funds.
We have slipped a little bit, but as the committee will recall, you
asked us a year ago to not proceed until ihe Office of Technology
Assessment, the Greneral Accounting Office and everybody thought
that our overall plan made sense, and we worked with them and
are proceeding accordingly.
RATIO OF COMPUTERS TO STAFF
Mr. Porter. Dr. Chater, the Senate report also indicated that
the Social Security Administration intends to purchase more termi-
nals for many offices than it has personnel in those offices. Is that
accurate?
Ms. Chater. Yes, it is, for reasons that are twofold. First, we
purchased some computers for training laboratories. In certain
places we have many computers set up just so we can bring in our
employees for training, and obviously it is more efficient to keep
those in a classroom setting, and they are used quite steadily for
new and ongoing training programs.
The second piece of that, however, is the request for computers
to be placed in a service area in our field offices for something that
we refer to as front-end interviewing.
That has a lot to do with the safety of our employees. In other
words, the offices are constructed in such a way that when clients
come in to file for benefits, they are interviewed in a designated
area as opposed to a particular person's desk. This we feel gives us
some safety because frequently the people who are coming in to file
claims have some disagreements, sometimes, with Social Security,
particularly directed to the people who are taking the claims.
So our belief is that we need computers for that particular area
to provide for safety and efficiency.
CONSIDERING SOFTWARE NEEDS IN CONTRACTING FOR HARDWARE
Mr. Porter. Dr. Chater, the Senate report also indicated con-
cerns that the Social Security Administration has not adequately
577
considered its software needs in contracting for the delivery of
hardware. Is that a fair assessment, and why?
Ms. Chater. I suppose it depends upon what you are thinking
about in relation to software. But I can tell from talking to our peo-
ple in systems in Baltimore, we have many software programs lit-
erally ready to go, waiting for the IWS/LAN computers to be pur-
chased so we can actually make full use of the software that we
have already prepared.
MODIFICATIONS TO AUTOMATION PLAN
Mr. Porter. Dr. Chater, the Senate report indicated that the
agency's automation plan has not been modified to incorporate the
agency's new business process reengineering initiative and its gen-
eral business plan. Is that accurate, and what specific modifica-
tions has the SSA made to its automation initiative to support and
integrate these other critical initiatives?
Ms. Chater. Last year you asked for a business plan, and we
have now prepared this particular business plan for you, and in
that business plan we indicate not only the reengineering proposal
about disability, but we indicate in the general business plan some
of the other business processes that we plan to restructure, rede-
sign, examine very carefully, and we are continuing to examine
them as time goes by.
We have to look at the automation request as an enabling act.
In other words, it is kind of a chicken and egg situation. You can't
do the reengineering proposal fully unless we have in place the au-
tomation that would enable us to put that new process in place.
So, yes, we have considered carefully some of those processes,
tying them very specifically to what we will do with the new tech-
nology. For others, we will use the technology as an enabler to
work out the plans for implementation.
IMPACT OF PROPOSED SENATE RESCISSION
Mr. Porter. Can you provide for the record an assessment of the
impact of the Senate rescission if it were to be enacted into law?
Ms. Chater. Yes, of course.
[The information follows:]
578
IMPACT OF SENATE RESCISSION
The proposed rescission of $88 million eliminates all
second year funding for SSA' s multi-year automation
investment. This reduction will cause a deterioration in
service to Social Security customers by not allowing for
the purchase of new computer equipment as existing
equipment wears out and customer demands increase . The
funds proposed for the rescission are already programmed
to support contract awards for the minimum quantity of
computers (30,000) supported by the House Committee and
the General Accounting Office.
The funds proposed for rescission are essential this
year if the Social Security Administration is to begin
building the platform upon which our reengineered claims
processes will operate, allowing Social Security to
streamline even with a projected increase in caseload.
The impact of this rescission will mean additional delays
in processing of disability claims. Automation is also
necessary to allow Social Security to do additional
continuing disability reviews and to answer the telephones
more quickly. Without automation. Social Security will
not be able to achieve the staff reductions that Congress
has asked of all federal agencies in the next several
years .
Our service improvements are premised on national
implementation of the Intelligent Workstations/Local Area
Networks (IWS/LAN) initiative, which will provide an
integrated network of intelligent workstations for SSA' s
64,000 employees and the State Disability Determination
Services' 14,000 employees, as well as related technology
investments .
A rescission of $88 million will make it virtually
impossible to continue the current project schedule and
award contracts as currently advertised. Such rescission-
driven disruptions will compromise planned automation
savings and delay achievement of SSA' s streamlining goals.
A rescission will also increase AIF funding
requirements in FY 1996 to minimize program disruption but
would still create significant delays in installations.
Specifically, it would become necessary for SSA to
withdraw the current solicitations for a minimum of 30,000
computers will reduce that minimum to about 16,000. This
could increase costs and would significantly delay the
award schedule. SSA needs to retain all current
appropriations to proceed on schedule with automation
implementation to avoid a sharp deterioration in service
as the current terminals wear out and customer service
demands increase. This initiative is critical for SSA to
579
obtain workyear savings required to process growing
workloads, to improve service and to meet its streamlining
goals.
Moreover, if SSA were to receive no further funding
for the AIF beyond that provided through FY 1994, service
improvements based on automation will be severely limited.
A total of $220 million for the entire project will permit
installation of only 16,000 IWS/LAN workstations, covering
less than a third of our field offices. We will not be
able to establish the technology infrastructure necessary
to support improved work processes for the disability
program, and our most promising long-term solution to the
pressing problem of disability workloads, the
reengineering of the disability process, will collapse.
580
PROPOSAL FOR AGREEMENT ON GREATER EFFICIENCIES
Mr. Porter. And would you also provide for the record a re-
sponse to my proposal for a contract on greater efficiencies?
Ms. Chater. I would be so happy to do that, Mr. Porter, because
there is nothing that you mentioned that we are not doing. That
is two negatives, but that should make a positive.
[The information follows:]
581
PLAN FOR LONG-TERM EFFICIENCIES
I welcome the opportunity, Mr. Chairman, to submit the two
tables you requested. The first (Table 1) , summarizes key workload
and performance measures under our plans to produce long-term savings
and improvements in service with the budget increase I requested.
SSA' s budget is driven by our Strategic and General Business plans .
As part of our pleuining and budgeting process we have made projections
through fiscal year 1999 which we have included in Table 1 and which
we update annually. I have attached a page, excerpted from our
General Business plcin (a full copy of the plan was provided to the
Committee previously) , which outlines the need for investment in our
automation infrastructure now, not only to maintain, but to improve
service without requiring significcint budget increases in the future.
As the teible shows, vinless SSA quickly cheinges the way it operates, it
will need an additional 12,000 FTEs (and a total administrative budget
of $7 billion in FY 1999) merely to deliver FY 1995 service levels.
As shown in Table 1, approval of the full FY 1996 budget plan
will enable SSA to turn the tide on disability backlogs and strengthen
payment integrity by increasing continuing disability reviews. We
will process more than 2.8 million initial claims, reduce the average
time a disability applicant must wait for an initial decision to an
acceptable 62 days, and conduct 431,000 continuing disability reviews.
SSA also expects to make inroads into its hearings backlogs . However
I must be candid, Mr. Chairman, that some slippage in the range of
50,000 to 100,000 hearings processed may occur in our hearings
performance projections. This is because our anticipated hearings
productivity improvements are materializing slower than planned, due
to the time involved with Icibor negotiations and modifying
regulations. SSA also plans to begin to generate millions of Personal
Earnings and Benefit Estimate Statements at a cost of $6.1 million in
FY 1996, move toward attaining world class levels of nation-wide
telephone service and begin installation of a state-of-the-art
computer system to replace our current inventory of amtiquated
hardware and software.
Table 2 shows the consequences of a $300 million reduction from
our budget plan. We would need to limit the reduction applied to
automation investment to $77 million, leaving $280 million of our
request for new automation investment funds. This is the minimum
required in FY 1996 to avoid serious procurement delays or cost
increases, provided previously-appropriated automation funds remain
available. (Enactment of the Senate-passed $88 million rescission for
FY 1995 would cause major disruptions in the project schedule even if
the rescinded funds were restored in FY 1996.)
Our customers cannot afford the consequences of ciny serious
delays in funding this project. A $77 million reduction from our
request before the Committee for fiscal year 1996 would mean an
additional $77 million needed early in FY 1997. We must complete the
automation investment on schedule. It is critical to replace aging
terminals and amtiquated systems architecture timely or face
deterioration in delivery of basic services such as taking claims.
Moreover, as recognized in our General Business Plan, to avoid the
need for future budget increases for growing workloads euid needed
582
service improvements, SSA must invest now in changing the ways it does
business. Delay will not only prevent attaining productivity
improvements in the near term, but also will defer the service and
productivity gains we are counting on from initiatives such as the
reengineered disability process, which are dependent upon the IWS/LAN
infrastructure .
To achieve the remainder of the $300 million reduction, we would
reduce the disability investment by $223 million. Table 2 shows that
in FY 1996 initial disability claims processing times and pendings
will return to FY 1994 levels, rather than improve as planned in the
budget. By FY 1999, applicants for disability will wait about 200
days for a decision on their initial claim and disability pendings
will have almost quadrupled. Hearings backlogs and processing times
will stagnate, as people who file for reconsiderations and appeals
will wait yet another 300 days before they get a decision on their
claim. The alternative to reducing disability would be cutbacks in
our payment safeguard activities such as overpayment detections and
collections. We considered, but did not select this option, since
every $1 invested in overpayment detections and collections returns $7
to $8 to the government. Additionally, we considered reducing the
number of CDRs we plan to conduct. Present plans call for an increase
of 156,000 CDRs and $68 million from FY 1995 to FY 1996, in an effort
to reduce the 1.3 million cases already pending review and meet
Congressional mandates. Our decision to continue with our current
plans was influenced by this backlog of CDR cases, the Congressional
mandate to begin to conduct CDRs on the SSI population, as well as the
return of $4 in program savings for every $1 in administrative costs
devoted to conducting Title II CDRs.
In summary, approval of SSA's $6.2 billion administrative budget
request will permit us to turn around our disability backlogs, as well
as continue our automation investment to keep up with growing
workloads and improve service without future budget increases.
583
Part VI
Conclusion
Staffing Requirements
With the continuing growth in SSA't workloads (e.g., increasing numbere of disability
claims), coupled with mandated staff reductions, along with new statutory responsibilities
(increased CDRs, PEBES and DA& A worldoada), SSA must change the ways in which it
does business. If SSA continues to work in the same ways that it does today, it would
need to increase its workforce by as many as 12,0(X) additional full-time equivalents
(FTEs) simply to keep up with workload growth. But SSA recognizes that there are
alternatives to a "business as luual" approach to deal with these growing workloads.
These alternatives are contained in SSA's three key strategies: streamlining,
reengineering and automation/continuous improvement By taking full advantage of
these three approaches, SSA can deliver services more effectively and efficiently. And it
can do so, by current estimates, with some 4,600 fewer FTEs than are currently in place.
eSTIMATES OP SSA'S PTI NEIDS |
Addmenai
PTb
Told
PTb
SSA FTB in FY 1995
65.000
Additional FTB needed In FY 1999 to keep up wHti wofldoad
growtti, wttti no change in tt>e way SSA does businen
8.000
Additional FTEs needed in FY 1999 to deliver improved services,
witti no change in tt>e v*ay SSA does business ar^ no
productivity growth
4.000
Total FTEs needed in FY 1999 If no chanoe m the v^ay SSA does
business
77.000
Total FTEs needed as a result of automation/continuous
innprovement. reengineering and streamlining
40.500
584
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586
Mr. Porter. Mr. Miller.
DIRECT DEPOSIT OF BENEFIT CHECKS
Mr. Miller. We had a chance to meet yesterday in my office, so
I don't really have very much to ask today. As I said yesterday, I
have the largest number, according to some studies, of senior citi-
zens in the country.
As a new Member of this committee, I'd like to know what por-
tion of people get direct deposit now?
Ms. Chater. It is over 50 percent.
SOCIAL security NUMBER FRAUD
Mr. Miller. So it has been growing slowly. I remembered that
you always stayed out of the banks back home on the 2nd or 3rd
of the month, whatever day the checks arrived. I assume it is not
as big an issue today. But it is slowly developing.
I meant to ask you this yesterday, but you hear about the issue
of people getting more than one Social Security number, people
that can qualify for welfare or something else. How easy is it to do
that, and is that a problem?
Ms. Chater. It is always a problem, it is always a potential prob-
lem, I should say. But we have many safeguards in place to assure
that people receive only one Social Security number. And those
vary from requesting identifying material in order to get a Social
Security number at any time, to a personal interview in certain sit-
uations.
For example, we have in place a project called enumeration at
birth, where new-borne babies with the cooperation of the hospital,
apply for a Social Security number if their parents so decide. That
enables us to give most people a number at birth, which helps pre-
vent, obviously, giving that same number to someone else later.
We also have a procedure in place whereby if somebody would
come to us who is 18 years of age or older and asks for an original
Social Security number, we would be quite suspicious. I mean, how
can you get along in the United States these days without a Social
Security number?
So we require a personal interview and identification material.
We check that identification material, for example, to be very, very
sure that this person hasn't had a number in the past.
Mr. Miller. I know from going through the debate last week on
welfare and the debate on going after deadbeat dads across State
lines and what the Federal role in that is. But once in a while you
hear about the problem of more than one Social Security number.
Is that not much of a problem any more?
Mr. Thompson. About 25 years ago it could have been a problem.
But the procedures have been in place now for almost 25 years, to
crosscheck. Of course, you can always have a phony number, but
these are our procedures, and many welfare — most welfare people
do double-check with us to verify numbers. And so if you made one
up and tried to get benefits they should catch you before you get
any benefits.
Mr. Miller. That is all, Mr. Chairman. I had a lot of my ques-
tions answered yesterday, and you asked a lot of good questions
today.
587
Mr. Porter. Oh, I have pages of questions.
Mr. Miller. You are the expert.
DISABILITY REDESIGN PROCESS
Mr. Porter. Dr. Chater, the disabiUty redesign process you de-
scribe calls for an assessment of an individual's functional ability
and reliance on standardized functional assessment instruments.
What progress has the Social Security Administration made in
this area, and how has the agency involved the private sector in
this process, including insurance payers and the medical commu-
nity? And what has been the comment of the private sector on it?
Ms. Chater. We would like very much to have the most objective
tool for making the assessment of one's ability to function. And to-
ward that end, in our reengineering proposal, we have a task team
currently assigned to work on that very issue that you raise.
We made contacts with both public and private research agencies
in the country to see if they might help us do this. The person who
is heading up our reengineering disability project has been in touch
with some of the private sector folks to talk about this.
Larry, do you wish to expand at all?
Mr. Thompson. This is the longest-term piece of that whole
reengineering. This will take us four or five years to develop. So
it is a research project, and indeed some of the research money we
are asking for, we envision helping to support this.
We have been in touch with the Health Insurance Association of
America, and they are very excited and they want to work with us,
and we will want to work with them, to develop this, because they
think this could be a breakthrough and help them refine their defi-
nition of disability also.
So working with the researchers, as the Commissioner said, with
the research community and the health insurers, we are putting to-
gether a plan now. But to repeat, this is the long-term piece of the
redesign.
JUSTIFICATION FOR INVESTMENT REQUESTS
Mr. Porter. The justification of the 1996 request requests al-
most $900 million for the disability and automation initiatives,
nearly half a billion more than Congress provided in fiscal year
1995.
At a time when budgets are declining rapidly — ^for example, this
subcommittee already passed an almost $6 billion rescission for
1995 — how can we justify this kind of increase for one agency
alone?
Ms. Chater. Well, the justification for the increase really goes
back to customer service, how can we provide this service to people
who need these benefits in the most efficient and cost-effective way.
I see our request as a preventive measure, to prevent us from
having to ask for additional resources in the future. For example,
if we can automate and streamline and redesign and restructure
our agency the way we have planned to through our strategic plan
and our business plan, we will do so with fewer FTEs by the year
2000.
588
If we don't have these additional funds to do what we plan to do,
we will come to you and say it will take us 77,000 employees in-
stead of the 60,000 that we will have through our plan.
So I see it as a preventive measure for moving us into the future.
ERGONOMIC FURNITURE
Mr. Porter. Dr. Chater, the agency maintains a budget for infor-
mation technology systems for ongoing needs. The request for the
automation initiative is in addition to the $211 million provided by
Congress for ITS in 1995, and the $222 million request by SSA for
ITS in 1996.
The automation request includes $98 million for ergonomic fur-
niture in 1996, and $294 million over the life of the initiative. This
furniture costs nearly three times what the Social Security Admin-
istration is estimating for computer purchases under the automa-
tion initiative.
Why is the furniture so costly and why aren't you requesting the
furniture under the regular ITS budget?
Ms. Chater. I suspect when we use the word furniture, one con-
jures up in one's mind comfortable sofas and pillows, et cetera, and
that is not the case. I wish we didn't have to talk about furniture,
and I wish we could talk about an environment for work instead.
We are talking about an environment that is electrically adjusted
to take care of some of the health and safety needs that come with
working with a computer.
I would like to have Mr. Dyer talk to you about that, because he
does it so well.
Mr. Dyer. The furniture that we are proposing to purchase is,
I guess in common language, called systems furniture, but we are
talking about the partitions which we need when our employees
meet with the customer for privacy. There is a lot of phone noise
and other things in the office, so it is simply a privacy barrier.
The rest of the furniture is a work surface area that can be ad-
justed automatically and, of course, the chair. We are purchasing
ergonomic furniture which fits what the experts tell us is what is
needed now.
What we are finding in our data, Mr. Chairman, is that more
and more of our employees are coming down with carpal tunnel
syndrome, which is wrist deterioration, as well as neck and back
trouble. We have seen a doubling in the workers' compensation
costs in this area.
We are trying to move to state-of-the-art furniture which is
moveable, so that employees can change their position throughout
the day, can move the desktop and chair up and down and all
around.
If you go back to the 1980s, our employees spent less than 10
percent of their time keyboarding. We expect that 75 percent of
their time on average soon will be spent keying in data. If we don't
give them the kind of furniture that gives them privacy, a place to
work, furniture that is adjustable so they won't have physical prob-
lems, we don't meet their health and safety requirements. And we
know they will be heavy users of this equipment.
589
COST OF ERGONOMIC FURNITURE
Mr. Porter. Is it correct this furniture costs up to three times
what you estimate for computer purchases?
Mr. Dyer. Sure. A httle over $5,000, for the walls and desk and
work surface, while the computer PCs run about $2,000 apiece.
Mr. Porter. Why aren't you requesting this furniture under the
regular ITS budget?
Mr. Dyer. I want to come back to the point the Commissioner
made and the Clinton Administration made when they proposed
the idea of the automation investment fund. They saw the need for
us to put in a whole new hardware, software, new system out there
to replace the dying, expiring equipment we have right now, and
they said, "Look, we need to do this in a whole package. We have
got to put a workstation in so it has the right support for the em-
ployees and houses the kind of equipment we have."
If you look at our offices about half of our desks are conventional
furniture, which I think provide a total work surface of about 19
square feet. And when you start to add PCs, terminals, hardware
and equipment, it fills up very fast and you need that kind of space
to do the job in.
So it is a whole package. Our view is that we cannot be installing
the PCs unless we put in the right furniture for the employees to
work at.
Mr. Thompson. Excuse me, Mr. Chairman, the automation in-
vestment fund is no-year money while the ITS budget expires. So
in this environment where it has been a little uncertain as to
whether to let the contracts, if the money had been sitting in the
ITS budget and the contracts had slipped a couple of months,
money would have expired and we wouldn't have been able to use
it.
So the uncertainty over contracting is compensated for by using
no-year money in just that one part of the budget.
Mr. Dyer. If I could comment to answer your question on the
ITS budget, if you look at the breakout, about half of the $220 mil-
lion or so is for phone bills and replacing telephones. Another good
chunk of it, about 30 percent of it, goes to maintain the
mainframes in Baltimore, which house the central database where
we store our data continuously. The rest of the ITS budget goes for
minor adjustments in systems across the agency, and when you
look at the billions we have invested in systems, this is a very
small amount to maintain it.
The ITS budget has been level for the last four years, a little
over $200 million, as we just use the money to pay phone bills and
maintain equipment.
STATUS OF AUTOMATION FUNDING
Mr. Porter. Dr. Thompson, staff advises me that the automation
money is also one-year money.
Mr. Thompson. No.
Mr. Porter. Is that not correct?
Mr. Dyer. Mr. Chairman, the $308 million you have appro-
priated to date is no-year money for automation funds. ITS is one-
year money. There is a little bit of money in the ITS budget that
590
shows up. It is carried over. About four or five years ago we got
some no-year money back in our — excuse me, it was about 10 or
12 years ago, and there is a little bit of no-year money that carries
over a couple of million that has just about been obligated.
Mr. Thompson. The disability investment fund is one-year
money.
DISABILITY CLAIMS PROCESSING TIME
Mr. Porter. Congress last year provided $400 million for the dis-
ability initiative. The 1994 initial disability claims processing time
was 97 days, a little over three months. What is the estimated ini-
tial claims processing time for 1995?
Ms. Chater. We are going to take it down in 1996 to 62 days,
and we will be hitting 74 days in 1995.
Mr. Porter. What are you going to go to in 1996?
Ms. Chater. Sixty-two days.
Mr. Porter. And what is your long-term projection on that?
Ms. Chater. Well, for the long-term projection we really feel that
two months is an appropriate time, so we moved very quickly to
achieve our objective.
FUNDING for UNION ACTIVITIES
Mr. Porter. Dr. Chater, the budget justification indicates that
the Social Security Administration spent $9.1 million in salaries
and other expenses, including travel, for 145 FTEs who performed
union activities full time.
How much will the agency spend on such activities in 1995 and
how much is included in the 1996 budget for such activities?
Ms. Chater. We have estimated to spend about the same
amount in 1996 that we spent in 1995.
Now, that may increase slightly because we have included a
great deal of employee representation on our reengineering pro-
posal task teams. And as more people from the unions serve on our
reengineering proposal teams, we will obviously spend more money
on travel to bring them into Baltimore to attend these meetings.
PART-TIME UNION REPRESENTATIVES
Mr. Porter. How many FTEs are paid to work part-time on
union activities and what share of the LAE does that represent?
Ms. Chater. If someone works 50 percent, they are included in
the 145 figure that you have before you. If someone works 10, 20
percent, I don't have that available for you today.
Mr. Porter. Can you provide it for the record?
Ms. Chater. Yes, of course we will provide it for the record.
[The information follows:]
Number of Employees Working Part-Time on Union Activities
There are 145 SSA employees who spend 50 percent or more of their time on
union activities. Included in this number are some employees who spend 100 per-
cent of their time on official union activities.
Employees at most SSA installations including Regional Offices, Field Offices,
Teleservice Centers, Hearing Offices, Program Service Centers, and Data Oper-
ations Centers are represented by at least one employee per installation who is
elected to serve as the union representative. Depending on the extent of labor man-
agement activities in an installation, the time an employee elected as the local of-
591
fice's union representative devotes to union activities can range from almost none
to almost half.
The $9.1 million reported for total union expenses in FY 1994 includes the fund-
ing to cover expenses for all employees who devote time to union activities, includ-
ing those who spend less than 50 percent of their time on union work.
IMPACT OF RESTRICTION ON FUNDING UNION ACTIVITIES
Mr. Porter. What would be the impact of a legislative limitation
preventing the expenditure of agency funds for such activities?
Ms. Chater. I am sorry.
Mr. Porter. What if we said you couldn't spend money in that
way?
Ms. Chater. For our union partnership?
Mr. Porter. Yes.
Mr. Thompson. Union representation.
Ms. Chater. We would of course not be able to have the union
representation on our reengineering teams. We would not be able
to bring them in for our partnership meetings. SSA has signed an
agreement with our unions. We have a partnership. We meet on a
very regular basis, share communications with them, have them
understand what is going on.
We would like to think that involving the employees in the deci-
sion-making activities, involving them in consultation about what
we are going to do, involving them at the front end, will help us
do some of the things that we need to do.
Mr. Porter. And what would be the effect if the unions weren't
involved and you had no money expended for that purpose?
Mr. Thompson. This is all part of the whole Federal labor rela-
tions operation. And we are not the only agency that does this. And
I think you are asking a question which really gets at what would
be the effect of fundamentally changing the way that the manage-
ment-union relationship — or how unions operate in the Federal sec-
tor, which I am not sure we are prepared to really go into in-depth
right now. We can look into that and work with you on that.
Basically this is the way that Federal labor unions finance au-
thorized activities. They get a certain block of official paid time.
Mr. Porter. I am aware of that.
Mr. Thompson. This is how the union represents its members
and how it functions.
HISTORICAL TABLE OF SSI DISABILITY CLAIMS ESTIMATES
Mr. Porter. Can you provide a 10-year historical table indicat-
ing the agency's estimate of SSI disability claims contained in the
budget justification as compared to the actual number of claims? In
other words, how accurate were your estimates?
Ms. Chater. Yes.
[The information follows:]
592
SSI INITIAL BLIND/DISABLED CLAIMS RECEIPT ESTIMATES
(in millions)
President's
Budget
Estimate
Operating
Budget
Estimate
Actual
Receipts
FY 1985
0.9
1.0
1.1
FY 1986
1.0
1.3
1.2
FY 1987
1.2
1.2
1.1
FY 1988
1.3
1.1
1.2
FY 1989
1.2
1.1
1.1
FY 1990
1.1
1.1
1.2
FY 1991
1.1
1.3
1.4
FY 1992
1.3
1.7
1.7
FY 1993
1.7
2.0
2.0
FY 1994
2.3
2.2
2.0
FY 1995
2.4
2.0
~
FY 1996
2.1
—
Note: The numbers represent initial blind and disabled
SSI claims filed in SSA field offices. They do not
include the Zebley court case claims.
593
LIST OF PENDING COURT CASES
Mr. Porter. Page 114 of the justification states that it does not
"Contain resources for processing the potentially large workloads
which could result from other court decisions still under litigation."
Can you provide a list of such pending litigation and the esti-
mated dollar impact of the number of new cases that could result
from adverse legal decisions?
Ms. Chater. Yes, we can provide that for you.
[The information follows:]
Implementation of Litigation
SSA will process a substantial court case workload in FY 1995 and FY 1996. Re-
sources for other potentially large court cases are not included generally because
they are not close enough to resolution to predict either the outcome or the various
factors which may determine the resources needed to process the cases or the af-
fected budget years should final resolution result in increased resource needs for
SSA.
The cost of court cases can be affected dramatically by several factors determined
by the court, such as:
the class definition,
the period covered by the court ruling (folders for older cases may require re-
construction),
the extent to which prior disability decisions may have to be reopened and
readjudicated,
the development required to determine other entitlement factors (such as in-
come and resources in the cases of Supplemental Security Income recipients),
and
the extent of efforts required by the court order to locate potential class mem-
bers.
A list of class actions which SSA is currently defending includes:
Adamson, et aU (CO, KS, NM, OK, UT, WY)
Andre, et al. (Nationwide)
Anderson, et al. (TX)
Balzi and Brogan, et al. (NY)
Basso, et al. (AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam)
Bentley, et al. (FL)
Carmack, et al. (KY)
Cray ton, et al. (AL)
Dannemiller, et al. (OR)
Day, et al.' (OH)
Dixon, et al. (NY)
Dugas, et al. (LA)
Ford, et al. (Nationwide)
Goodnight, et al. (UT)
Grant, et al. (PA)
Horenstein, et al. (OH, MI, KY, TN)
Kendrick, et al. (NY)
Kittredge, et al. (VT)
Lerew, et al. (Nationwide)
Manchaca, et al. (TX)
Newman, et al. (CA)
Olson, et al. (NV)
Reynolds, et al. (D.C.)
Robinson, et al. (NY)
Small, etaU (IL)
Singleton, et al. (AL, FL, GA)
Sorrenson, et al. (OR)
S.P., et al. (NY)
Titus, et al. (lA)
Wolfe, et al. (CA)
The number of new cases and related costs will depend upon the final legal out-
come of these cases.
* Parties have reached a tentative agreement subject to appropriate approval.
594
Historical Table on CDRS
Mr. Porter. Can you provide a 10-year table, 1986 to 1995, dis-
playing the number of CDRs required under the law, the actual or
projected number performed, the pending backlog and the cost of
performing them?
Ms. Chater. Yes, sir.
[The information follows:]
595
TEN YEAR TABLE OF
CONTINUING DISABILITY REVIEW (CDR) DATA
The Social Security Act generally requires SSA to
review the continuing eligibility of non-permanently
disabled individuals at least once every 3 years and the
continuing eligibility of permanently disabled individuals
at times determined to be appropriate to see if they
continue to be disabled.
Periodic Review CDRs Completed and Pending Cases
Fiscal Years 1986 - 1995
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995 Estimate
1/ less than 100,000
Note: From 1986-1993 only full medical CDRs
completed by DDSs are counted. Beginning in 1993,
SSA started counting as CDRs cases in which decisions
were made not to do full medical CDRs after reviewing
information from SSA' s records and responses to CDR
mailers. The Social Security Independence and
Programs Improvements Act of 1994 requires that in
each of fiscal years 1996, 1997, and 1998, SSA
perform CDRs for a minimum of 100,000 SSI recipients
and one-third of all childhood SSI recipients who
attain age 18.
Costs
Generally, for every 100,000 CDR mailers:
o About 50 percent (50,000) require full
medical review;
o About $50 million (about $500 per case) and
about 250 SSA workyears and about 3 00 DDS
workyears would be needed to process
Total CDRs
Pending
Completed
Cases
(thousand)
(millions)
48
1/
206
1/
354
1/
367
1/
195
.3
73
.7
73
.9
48
1.2
86
1.3
194
1.5
596
100,000 CDR mailers, including related
hearings and appeal costs.
NOTE: The actual cost of 100,000 CDR mailers will
depend on the classification of CDRs selected for
review. Medical improvement expected (MIE) and^
medical improvement possible (MIP) mailer responses
generate a higher percentage requiring full medical
review than medical improvement not expected (MINE)
cases. SSI cases may require a higher percentage of
full medical reviews.
597
EMPLOYEE BUYOUTS
Mr. Porter. The budget justification notes that over 1,200 FTEs
recently received buyouts. What was the average grade of these
buyouts and what is the average grade of FTEs newly hired or
transferred to fill these positions and other vacant positions?
Ms. Chater. It is true that 1,200 employees accepted the buyout
option, and it is also true that I used that as a management tool,
inviting people at senior levels to take advantage of the buyout, be-
cause it fit with our own streamlining plan to reduce the layers of
bureaucracy and also it is our long-term aim to move people into
direct service functions.
So to say it another way, I would like fewer people in central ad-
ministration and more people in the field offices giving service to
customers. So the average, I think, from grade 13 up
Mr. Porter. That is the average
Ms. Chater. I can tell you very specifically. At grade 12, we had
46 percent. Grade 13, 18 percent. Grade 14, 10 percent. And 3 per-
cent above that.
Mr. Thompson. These FTEs were not replaced, Mr. Chairman.
Mr. Porter. Has the SSI claims process been fully automated?
If not, when will it be fully automated?
Ms. Chater. It has been fully automated, sir.
ADMINISTRATIVE COSTS ASSOCIATED WITH PEBES
Mr. Porter. Page 101 of the budget justification indicates the
Social Security Administration tends to process 3-to-4 million
PEBES, personal earnings statements, in addition to those man-
dated by law. What is the administrative cost associated with this
initiative?
Mr. Dyer. In FY 1994 it was about 223 work years, an additional
$8 million.
SAVINGS ASSOCIATED WITH IWS/LAN
Mr. Porter. On page 104 of the justification it is indicated that
IWS/LAN will automate many tasks now performed manually.
What is the FTE savings associated with this automation?
Mr. Dyer. It is about 2,000 work years. We estimate your return
on investment is two dollars for every dollar you invest.
Mr. Thompson. That is just from the administrative tasks, 2,000
works years.
RESEARCH AND DEMONSTRATION PROJECTS
Mr. Porter. The budget requests over $6 million for research
and demonstration projects. It also indicates that $3 million was
carried over from 1994.
Why isn't the budget recommending termination of the $3 million
carryover for deficit reduction and why are these demonstrations
necessary?
Ms. Chater. Some of the demonstrations that we have in place
are the kind that take longer than one year to see some results.
For example, we are working with the Department of Health and
Human Services on a project to look at monitoring drug addicts
and alcoholics in a particular setting, in a particular way. It takes
598
more than a year to see how those results will come out, so that
is one reason.
IWS/LAN INSTALLATIONS
Mr. Porter. How many offices received the LAN in 1994 and
how m2iny will receive the LAN in 1995, with and without the Sen-
ate rescission, and in 1996?
Ms. Chater. We have 1,300 field offices in Social Security now,
and fewer than 200 of those have received the LAN — the IWS/LAN
at the moment. For 1996, by the end of 1996 we would have
equipped about 500 offices.
Mr. Porter. And that assumes that there isn't a Senate rescis-
sion?
Ms. Chater. That is correct.
Mr. Porter. And if there is a Senate rescission?
Ms. Chater. We will have about 500 fewer.
Mr. Porter. Or 300 fewer, I guess.
Ms. Chater. Yes.
FUNDING LEVEL FOR UNNEGOTIATED CHECKS
Mr. Porter. Why has the funding level for unnegotiated checks
varied so dramatically in recent years?
Mr. Dyer. Mr. Chairman, it has to do with fluctuation in interest
rates as well as lags between the actual dates of reimbursements
for unnegotiated checks and the dates of the corresponding outlays.
Mr. Porter. Please provide a five-year table, 1991 to 1995, indi-
cating the budget request projection for unnegotiated checks and
the actual payment. Can you do that? You can do that.
Mr. Dyer. Yes.
[The information follows:]
599
FIVE YEAR TABLE
UNNEGOTIATED CHECKS
The following table shows budget authority versus
outlays (as well as the interest rate ranges) for interest
on unnegotiated checks issued from the Old-age and
Survivors Insurance (OASI) and Disability Insurance (DI)
Trust Funds .
Fiscal Year
($ in Thousands)
1991
1992
1993
1994
1995
Budaet
Authority
OASI
17,000
17,000
17,000
14,000
14,000
DI
3,000
3,000
3,000
3,000
3,000
Total
20,000
20,000
20,000
17,000
17,000
(Est)
Outlays
OASI
(75, 129)
17,511
10,978
6,588
14, 000
DI
(6.906)
2,489
3,090
1,497
3,000
Total
(82,035)
20,000
14,068
8,085
17,000
Interest
(Est)
Rate
8.0-
8.125-
6.875-
5.875-
5.625-
Range
9.125%
8.875%
8.25%
7.0%
7.375%
FY 1991 - The negative outlays resulted from several
years' worth of checks cashed late- -after already
having been credited back to the trust funds.
FY 1993 & FY 1994 - Outlays were lower than expected
due to:
o the decline in interest rates between FY 1992
and FY 1994 and
lags between the accrual dates of reimbursements
for interest on unnegotiated checks and the
dates of the corresponding outlays.
600
CHANGING DISABILITY DETERMINATION CRITERIA
Mr. Porter. The GAO recently recommended that Social Secu-
rity Administration employ medical listing criteria rather than in-
dividualized functional assessments to determine disability claims
for children. Can this change be made administratively? Does it re-
quire legislation? And what is the SSA response to this rec-
ommendation?
Ms. Chater. Yes, we could work on this, and yes, it would re-
quire legislation if we were to look at the individual functional as-
sessment and substitute a refined medical listing. But it depends
on how we interpret the law in terms of what one can actually do,
that is, functionally.
Mr. Thompson. The House has voted to eliminate the individual
functional assessment, in effect returning the statute more towards
where it was before the Supreme Court decision.
Mr. Porter. Mr. Miller.
SIZE OF traditional SOCIAL SECURITY PROGRAMS
Mr. Miller. A couple of clarifications. Social Security is off the
table in our whole debate on balancing the budget. If the Social Se-
curity Administration only had to do the traditional Social Security
function of payments for over 65, what size agency would it be?
Ms. Chater. If it only implemented and administered the Social
Security program?
Mr. Miller. That is what most people perceive as Social Secu-
rity, which is the over 65.
Ms. Chater. One-third of our administrative budget is devoted
to the SSI program. So we are talking about $2 billion less than
the $6.1 billion that we are asking for.
Mr. Miller. How about the other programs? If you only had to
do the traditional Social Security? Is it half of it?
Mr. Thompson. It is roughly two-thirds for the non-SSI pro-
grams.
IMPACT OF WELFARE REFORM PROPOSAL
Mr. Miller. Under the welfare plan passed last week, there
were SSI changes. I am sure you are familiar with them. What im-
pact would they have on your agency?
Ms. Chater. Well, obviously it will depend upon how the ideas
are in fact implemented, and what role Social Security would play.
For example, if some of these programs went to the States and So-
cial Security were out of the business of implementing the SSI pro-
gram altogether, that is one scenario.
But if we were called upon to do some of the medical determina-
tions for disability, obviously that would — we would continue to
incur administrative expenses, and it is not clear to me that we
would save any administrative money at all, because we would be
doing the reviews, we would be available for appeals and so on.
MAGNITUDE OF BENEFIT OUTLAYS
Mr. Miller. Let me go back to that first question I asked. I am
new at this, I am still learning some things. I am not a sophisti-
cated questioner like Mr. Porter. Approximately a third of the
601
budget, as far as administrative cost, covers what most people per-
ceive as Social Security. Of the totsil budget, how much of the total
outflow represents pa3nnents to recipients?
Ms. Chater. It is about 1 percent.
Mr. Miller. One percent of the money going out goes for SSI or
disability?
Ms. Chater. For administrative costs.
Mr. Miller. I am talking about the total payment out of the
whole fund. The checks that people receive, how much money goes
out? They always talk about the number as the heavy half number.
Administratively you spend so much more money on a small
amount than in any business.
Mr. Thompson. The Social Security program is — cash payments,
is about 91 percent of everything we spend.
Mr. Miller. That is traditional Social Security?
Mr. Thompson. Traditional. That includes disability. But that is
what you pay for with your payroll tax.
MAGNITUDE OF SSI PROGRAM
Mr. Miller. How about SSI?
Mr. Thompson. SSI is about 6 percent of the total that we ex-
pend, 6.6 percent.
Mr. Miller. But administratively it is a much higher percentage.
Mr. Thompson. Yes, it is more expensive per person to run a
means-tested program by a great deal. So the retirement program
costs us about seven-tenths of 1 percent of benefits.
In other words, we get a dollar for the retirement program; 99.3
cents or so goes to benefits and seven-tenths of a cent goes for ad-
ministration. Disability is more expensive, so the disability insur-
ance program, it probably costs us almost three cents out of each
dollar to administer.
SSI is even more expensive because you have to spend all that
time establishing whether you have bank accounts and assets and
so forth. So that tends to run closer to 6 or 7 percent of benefit pay-
ments. And also the benefit levels are a little lower, so both the
costs are higher and the benefits aren't quite as high.
GROWTH in disability PROGRAMS
Mr. Miller. Why has disability and SSI been growing so rap-
idly?
Mr. Thompson. Disability and SSI? SSI has a disability program,
as well as a program for the aged. And then there is the payroll-
tax-financed disability program. The two of them have the same
definition of disability, £ind you can file a claim with us for either
program and it is processed in the same way. So a lot of times we
talk about how many claims we processed, 2 million disability
claims. We have lumped them all together.
So some of them are pa5n*oll-taxed disability insurance, some are
SSI, because they are processed the same way. But in terms of
looking at how the programs have fared over the past five years,
they do look different. The actual classic disability insurance pro-
gram for workers who have pretty decent wage records, worked a
long time, hasn't really grown very much. It has drifted up just
slightly but it hasn't grown a whole lot.
602
There has been growth in the payroll-tax disability insurance
program more among workers who haven't had quite as good a
wage record. They have had enough to be insured but they haven't
had quite as good a wage record. That seems to be associated with
the economic activity, a decline in the early part of this decade in
economic activity.
And you remember the decline was disproportionately better jobs
being shrunk by corporations that were downsizing, and offset in
part by not-so-good jobs in the service sector, and what happened
was a lot of people who were in the better jobs in the larger cor-
porations, who had some sort of impairment, decided to come in
and file for benefits when they found it difficult to find alternative
work.
Now, when you come
Mr. Miller. Is that partly because of a change in definitions?
Mr. Thompson. Yes, there was some updating of the medical
mental listings in the late 1980s, which probably has had — it was
intended to have the effect of bringing in the latest thinking in
terms of the mental listings. It was in fact done at the behest of
the Congress. And the best thinking is that that in fact has pro-
duced more allowances than otherwise would have been the case.
Finally, the SSI program is where it has grown the most, and a
chunk of that has been among children, which is an issue that the
House at least has dealt with in the last month or so. And the rest
of it does seem to be associated with increases in poverty and with
mental — again, mental cases.
Now, there is one other phenomenon here that is worthy of note
in the disability insurance program, and that is that the number
of beneficiaries has been growing because they are living longer. So
even though we may put on the same number of people each year,
we are putting on people that are a little bit younger and perhaps
because of medical improvements people on the rolls live longer,
and that means the rolls begin to grow because there are fewer
people leaving the rolls through death.
Mr. Miller. I know Mr. Dickey, who is not here, knows about
the crazy check issue. There was a "60 Minutes" story about that.
I guess our legislation that passed the House should address that
to some extent.
Mr. Thompson. To a quite substantial extent, yes.
Mr. Miller. Thank you.
fluctuation in disability claims estimates
Mr. Porter. Thank you, Mr. Miller.
Let me go back to the disability claims. The 1995 appropriation
was $248 million below your request. Despite this reduction, which
was principally out of the automation account, the number of dis-
ability claims pending in 1995 is expected to decline from a level
of 1.263 million under your original budget to under 600,000, ac-
cording to the tables which we were sent last week. The average
processing time declined from 154 days to 74 days.
How do you explain the large fluctuation in the 1995 case esti-
mates?
Mr. Dyer. It is a combination of three things. One, we have re-
vised our projections of the number of claims coming in the door.
603
In the last year we noticed the trend, and we have adjusted our
estimates — we were seeing a trend of about 10 to 12 percent. We
have lowered our estimates to about a 2 percent growth rate.
The second thing is that we did receive more funds than we had
requested for disability, and we applied those to case processing.
And thirdly, as the Commissioner indicated, between the
reengineering and short-term disability initiatives, we expect a con-
tinuation of productivity improvements. So it is all those factors
working, which account for why it is dropping lower than we pro-
jected before.
IMPACT OF LEGISLATIVE LIMITATION ON USE OF IFAS
Mr. Porter. What impact would a legislative limitation on the
use of IFAs have on program administration?
Ms. Chater. We are not sure. It depends, I suppose, on whether
children with individual functional assessments, that is, people,
children who were coded, for example, in our records, and given
benefits based on IFA, if those children were taken off the records,
some would obviously come back to refile for disability because
they could be physically disabled.
So we are not sure. You see, what happens in the office, if some-
one taking the claim recognizes that this child coming in to file for
disability qualifies under an IFA, they may have coded that child
as IFA without determining that the child could be physically dis-
abled as well.
So we need to think about what kind of work SSA will have to
do in order to sort that out.
CHRONIC fatigue SYNDROME
Mr. Porter. The January 1995 SSA report to Congress on chron-
ic fatigue syndrome provided one page of original information at-
tached to the Deputy of Health and Human Services chronic fa-
tigue syndrome interagency coordinating committee report from
April 1994. The document is already in the subcommittee's posses-
sion.
Could you provide a more detailed report of the Social Security
Administration's efforts to serve persons with chronic fatigue syn-
drome?
Ms. Chater. Yes, sir.
[The information follows:]
604
CHRONIC FATIGUE SYNDROME
Individuals who allege disability on the basis of CFS
are handled in like manner to any applicant for
disability. CFS claims are evaluated on a case-by-case
basis using the totality of evidence available, including
both objective physical and mental findings and subjective
symptoms, and evaluating the clinical course of the
disorder from the onset of the illness.
One difficulty in evaluating disability claims
involving CFS is the need to document a medically
determinable impairment, which by statute must result from
anatomical, physiological, or psychological abnormalities
which are demonstrable my medically acceptable clinical
and laboratory diagnostic techniques. Often, CFS claims
contain a wide variety of symptoms; however, the medical
community has, so far, not identified clinical and
laboratory findings that confirm the existence of CFS.
SSA assists individuals with CFS in documenting a
medically determinable impairment by developing for
available medical and other evidence and by purchasing
consultative examinations when appropriate. The
impairments seen in this syndrome often overlap with those
seen in other disorders (particularly neurological and
psychological problems) and, therefore, adjudicators have
been instructed to give careful attention to these
particular manifestations in accordance with SSA's usual
disability development procedures.
SSA has specific policy guidelines addressing the
adjudication of CFS claims in the Program Operations
Manual System, which is available to all field offices.
Additionally, SSA published informational material in
February 1993 for all disability adjudicators which
reemphasizes and clarifies our policy for the processing
of CFS claims. It points out that CFS may be a disabling
condition and specifically identifies the types of medical
development which are appropriate to properly document a
CFS case.
The material explains in detail the potential
physical and/or mental difficulties which may be
encountered by persons with CFS, and specifies the type of
case development which should be pursued in order to
comprehensively document these problems so that claims
adjudication can proceed efficiently and accurately.
SSA staff will be pleased to meet with Committee
staff to discuss this issue in more specific detail.
605
CHRONIC FATIGUE SYNDROME SURVEILLANCE PROJECT
Mr. Porter. The SSA report on CFS provides limited informa-
tion regarding the SSA surveillance project on chronic fatigue syn-
drome.
Could you explain how the surveillance project is being used to
examine "obstacles to benefits" for persons with chronic fatigue
syndrome?
Ms. Chater. Yes, we have sent out to our offices increased guide-
lines for looking at chronic fatigue syndrome. As you well know,
this is not at the moment a specifically isolated diagnostic category.
And yet we recognize it as a very important medical condition.
And so part of what we have done in addition to keeping abreast
of the changes, some of which are as recent as a month ago, re-
ported from some research in the newspapers, in addition to that
we on a regular basis send instructions to our claims representa-
tives in the field to be sure that they are taking this syndrome into
account.
CDR BACKLOG
Mr. Porter. What is the estimated backlog of CDR cases?
Ms. Chater. We estimate that we have about 1.4, 1.5 million
CDR backlogs.
CDR case classifications
Mr. Porter. Can you provide for the record a list of the number
of CDR cases classified as medical improvement not expected, med-
ical improvement expected, or medical improvement possible?
Ms. Chater. Yes, we can do that.
[The information follows:]
List of Continuing Disability Review (CDR) Cases by Classification
SSA schedules cases for review based on the beneficiary's impairment and age at
the time of the last medical determination. Based on these factors, beneficiaries
with disabilities are placed into one of three medical review categories which deter-
mine when the reviews should take place:
Medical improvement is not expected (MINE) — Under this category the first
review is set for 5-7 years (This category includes such impairments as severe
mental retardation or paraplegia.)
Medical improvement is expected (MIE) — Under this category the first review
is scheduled for 6-18 months after the date of the disability determination.
Medical improvement is possible (MIP), but cannot be predicted — Under this
category the first review is set for 3 years.
The CDRs in SSA's 1.3 million pending cases as of 1994 are classified as follows:
approximately 300,000 are Medical Improvement Not Expected (MINE),
approximately 200,000 are Medical Improvement Expected (MIE), and
approximately 800,000 Medical Improvement Possible (MIP).
TIMETABLE FOR REDUCING CDR BACKLOG
Mr. Porter. And can you also provide a timetable indicating the
agency's plan to reduce the backlog by classification?
Ms. Chater. Yes.
[The information follows:]
606
TIMETABLE FOR REDUCING PERIODIC REVIEW CDR PENDING CASES
Processing additional periodic review CDRs responds
to the National Performance Review recommendations and is
essential for enhancing program integrity and rebuilding
public confidence in Social Security. As shown in the
table below, the FY 1996 budget request reflects
processing 184,000 title II periodic review CDRs in FY
1995, doubling our FY 1994 level of effort, and increasing
the number to 234,000 in FY 1996 and eventually to 384,000
by FY 1999. Consistent with recent legislation we also
will complete 116,000 CDRs on the Supplemental Security
Income caseload beginning in FY 1996. SSA also initiates
CDRs each year triggered by work activity of disabled
beneficiaries. These "work CDRs" are reflected in the
table below.
SSA's FY 1996 CDR Estimates (In Thousands)
1995
1996
1997
1998
1999
Title II Periodic
Review CDRs 1/
Title XVI CDRs
184
10
234
116
284
116
334
116
384
116
Total Periodic Reviews
194
350
400
450
500
Work CDRs
77
81
85
89
93
Total CDRs
271
431
485
539
593
1/ About 50% of Title II CDRs require full medical review.
Approximately 400,000 to 500,000 title II and title
XVI periodic review CDRs required by law will come due
during FY 1996. However, SSA's budget request before this
committee does not include resources to process all of
these cases, or to reduce the pending CDR cases from prior
years .
As a general rule of thumb, approximately $50 million
and 250 Federal workyears and 300 State Disability
Determination Services workyears would be needed to
process an additional 100,000 CDR mailers, including
appellate actions. Actual costs will depend on our
capacity to hire and train sufficient staff to process the
increased workload, the number of cases to be processed,
and the mix of cases to be processed (cases in which it is
determined that medical improvement is expected or
possible generate higher costs per case than those cases
in which medical improvement is not expected) .
607
Mr. Porter. Mr. Riggs.
Mr. Riggs. Mr. Chairman, I need a couple of more minutes be-
fore formulating any questions. Thank you.
TRUST FUND COST OF CDR BACKLOG
Mr. Porter. I still have a good number.
Has the Social Security Administration estimated the loss of dol-
lars to the trust fund as a result of the CDR backlogs?
Ms. Chater. Well, the estimate from my folks say it is $1.4 bil-
lion, and that is an estimate.
Mr. Thompson. That is an estimate of how much more money
would be in the trust fund in 1997 if we — it is a couple of years
out of date, but it is an estimate of the cumulative impact of the
shortfall in the late 1980s and early 1990s of not doing CDRs.
Mr. Porter. And how recent is this estimate?
Mr. Thompson. I think it is about a year and a half ago.
Mr. Porter. Are you about to make
Mr. Thompson. We can update it.
Mr. Porter. Can you provide that for the record for us, please.
[The information follows:]
Trust Fund Impact of Not Performing CDRs
In "The Report of the National Performance Review" by Vice President Al Gore
in September 1993, SSA's Office of the Actuary estimated SSA's failure to conduct
the required number of CDRs during flscal years 1990 through 1993 cost the trust
funds $1.4 billion by 1997. In an updated estimate prepared by SSA's Office of the
Actuary on April 4, 1995, the loss of dollars to the Trust Funds from not performing
CDRs timely in fiscal year 1990 through 1995 is estimated to be $2.3 billion by FY
1999. A copy of the April 4, 1995 memorandum is attached.
608
HEMORAin>UM April 4, 1993
HtOM: James R. McLaughlin S3BS
Office of the Actuary
SI7BJECT: Estimated OASDI and Medicare Financial Effects Resulting
From Not Performing Continuing Disability Reviews on a 3 -Year
Cycle- -IHFORMATION
Section 221(i) of the Social Secixrity Act generally requires the Social
Security Administration to review th^ continuing eligibility of disabled
beneficiaries at least every 3 years. Uhere a finding has been made that a
disability is permanent, such reviews are to be made at such times as the
Secretary determines to be appropriate. Because of the backlog of new
applications for Disability Insurance (DI) benefits as veil as budgetary
constraints, continuing disability reviews (CDRs) are presently not being
performed at the times the cases were diaried for review. As a consequence,
the backlog of CDR cases beyond the scheduled diary date has grown
substantially .
The attached table 1 shows the estimated combined number of DI medical
improvement expected (MIE) reviews and medical improvement possible (MIP)
reviews that SSA would have completed if reviews were performed at their
scheduled diary dates in fiscal years 1990-95. Reviews were more or less on
schedule prior to 1990. MIFs are diaried to mature in 3 years while MIEs are
diaried to mature in les^ than 3 years. The majority of backlogged CDRs are
HIPs. These numbers are then compared in the table with the combined DI MIE
and HIP reviews that SSA has actually performed or is expected to perform in
fiscal years 1990-95. We have omitted from consideration here the CDR cases
diaried medical improvement not expected (MINE) as well as MIEs and MIPs aged
58 and over, since few comprehensive medical CDRs are expected to be performed
on these cases.
The estimated financial effect of not performing CDRs (i.e., HIPs and MIEs) at
their scheduled diary dates is presented in the attached table 2. These
estimates are based on Information provided by the Office of Budget, the
Office of Disability, and the Office of the Actuary in the Health Care
Financing Administration. Estimates were originally prepared under various
scenarios of when SSA would "catch up" on the backlogged CDRs. For
siiaplicity, the estimates presented here are based on the assumption that SSA
would not catch up on the backlogged CDRs until 1999 or later. If one
assuned, for example, that the backlogged cases would be done in fiscal years
1996-98, then both (i) the total increase in benefits and (11) the total
reduction in administrative expenses, would be of snaller aagnltude. However,
the order of nagnittide of the total net cost would remain about the same.
609
These estlnates are subject to substantial uncertainty due to:
(1) Incomplete data on the effect of the new CDR selection process ^ich SSA
^ began using in 1993. The new process employs certain statistical
analyses and a new mailer questionnaire to help profile individuals who
have a higher probability of possible recovery. Comprehensive medical
CDRs are performed only in those cases above a certain threshold of
likelihood of medical improvement;
(2) The uncertainty of future cessation rates under the new CDR selection
process ;
(3) The uncertainty of administrative costs under a 3-year cycle and under
the new CDR selection process; and
(4) The uncertainty over the number of cases that would have been rediaried
as MIEs or MIPs after an initial review under a 3 -year cycle.
(5) The uncertainty over when the backlogged CDR cases would eventually be
reviewed.
Vo/««nU ^A_ ^^/W l-*«^.^Ar-
James R. McLaughlin, Ph.D., A.S.A.
Actuary
Attachments :
610
Table I.- •Estimated number of DI continuing disability reviews
(MIE and MIP cases only) in fiscal years 1990-95
(In millions)
Fiscal
Yvn.
If performed at their
ff(?h?dule4 4tary d*?? 1/
Actually performed or
expected to be performed
Net
1990
1991
1992
1993
1994
1995
0.4
.5
.3 2/
.3 3/
.3
-1
0.1
(2/)
(2/)
(2/)
.1
-^
0.3
.4
.2
.2
.2
-J.
Total.
1990-
95
2.0
.5
1.5 V
1/ Represents number of CDRs maturing for review in each year. See
accompanying memorandum for additional information.
2/ Number of reviews less than 50,000.
1/ Reduction in scheduled CDRs reflects November 1991 change in the diary
criteria for CDRs.
^ This number is higher than the backlog of reviews expected at the end of
fiscal year 1993 due to attrition and due to the fact that if cases would
have been reviewed as scheduled, then a second review might have been
performed prior to fiscal year 1996.
Note: Totals may not equal sum of components due to rounding.
Social Security Administration
Office of the Actuary
April 4, 1995
611
Table 2. --Estimated Increases In OASDI and Medicare benefits in fiscal years
1990-99. versus reduced administrative costs, resulting fron not perfoming
CORs at their scheduled diary dates in each of the fiscal years 1990-95
(In billions)
Fiscal
Increase in
Reduction in
Cost (+)
vear
benefits
administrative expenses
or saving? (-)
1990
(1/)
$0.2
-$0.2
1991
$0.1
.4
-.2
1992
.3
.2
(2/)
1993
.4
.2
.1
1994
.4
.2
.3
1995
.5
.1
.4
1996
.5
(3/)
.5
1997
.5
(1/)
.5
1998
.5
(1/)
.5
1999
.ft
(?/)
A
Total ,
1990-99
3.6
1.3
2.3
1/ Increase in benefits of less than $50 million.
2/ Net savings of less than $50 million.
2/ Reduction in administrative expenses of less than $50 million.
Note: Totals may not equal sum of components due to rounding.
Social Security Administration
Office of the Actuary
April 4. 1995
612
FUNCTIONAL ASSESSMENT STANDARDS IN CDR PROCESS
Mr. Porter. Please explain how the new functional assessment
standards will be used in the current and future CDR process. Will
these new standards be used to establish baseline functional capac-
ity for all disability applicants and beneficiaries?
Mr. Thompson. The new standards that we are talking about
that are part of the reengineering functional assessment?
Mr. Porter. Yes.
Mr. Thompson. Again, it is four or five years before we envision
being in a position to institute those. We haven't really addressed
this, but my assumption is that it would be prospective, so that we
would be applying it to people filing after we put it into effect. And
the CDRs would have to be done on the same basis as was in effect
when the individual was first awarded benefits.
We have to, under the statute, we have to show medical improve-
ment and we have to really — I think most people would think it
wouldn't be fair for us to change the rules and then say, "Well, you
were disabled under the old rules but you are not under the new."
You haven't changed medically. It is one thing if you haven't
changed medically — we can have a dialogue about that over the
next few years, but I think that would be our assumption right
now, that it would be prospective.
INTEGRATING NEW TECHNOLOGY INTO DISABILITY PROGRAM
Mr. Porter. Please explain how a new technology will be inte-
grated into the disability program.
Mr. Thompson. We do that constantly. The medical regulations
expire. It depends on the particular regulation, but the regulation
that covers, for instance, the situation that allows us to presume
you are disabled like from cardiovascular diseases expired and a
new version was issued last year, and we estimate that actually
saved us a little bit of money because we made some changes re-
flecting changes in treatment and changes in technology which al-
lowed people today to continue to work when 10 years ago they
wouldn't have been able to work.
So that is a constant process of going through on a regular cycle
and updating the regulations to reflect changes in medical knowl-
edge.
SCHEDULE FOR REENGINEERED DISABILITY PROCESS
Mr. Porter. What is the schedule for fully implementing the dis-
ability reengineering project?
Ms. Chater. We expect to have — it is a five-year project, so we
will have the first cost savings fully implemented by 2001.
IMPACT OF DRUG ADDICT AND ALCOHOLIC LEGISLATIVE CHANGE
Mr. Porter. The House recently passed legislation which would
affect the payment of disability benefits to individuals with alcohol
or drug-related disabilities.
What impact will this legislation, if enacted, have on SSA case-
load, administrative expenses, FTEs, benefit payments, initial de-
termination backlogs, reconsideration backlogs, and hearing back-
logs?
613
Ms. Chater. If the new legislation goes into effect, we estimate,
for example, that many of the people who would be taken off the
rolls because of alcoholism or drug addiction would come back on
the rolls. In other words, people who are listed or coded now as
drug addicts or alcoholics conceivably have another medical diag-
nosis, cirrhosis of the liver or whatever, that would qualify them
for disability payments.
We are estimating now, based on our files, that about 80 percent
of the people who would be removed from the files would come back
on because of a different diagnosis. Of course, the administrative
expenses would still be there to do the reviews, to take care of the
appeals. Presumably there would be an appeal process. So there
may not be as many savings administratively as we would like.
And of course the concomitant program benefit savings may not
be there either if people come back on the rolls.
Mr. Porter. Mr. Riggs.
GROWTH IN DISABILITY CASES
Mr. Riggs. Mr. Chairman, I think you have probably asked every
question I could conceivably have asked. But I would like to follow
up on a couple of the questions you asked and follow up on the con-
versation I had a few weeks ago with the Commissioner and her
able staff.
I just want to make sure that I understand why there has been
such a rapid growth in the number of disability cases. You talk
about a rapid four-year growth. Is that primarily due to the num-
ber of children who have been diagnosed through the IFAs as dis-
abled and therefore eligible for benefits? Or is it more because of
the increase in the number of drug addicts and alcoholics seeking
benefits?
Ms. Chater. Let me address the children first, because you are
absolutely correct, part of the reason for increased growth in the
number of children coming on the SSI rolls was indeed the Su-
preme Court decision commonly referred to as the Zebley decision
and the publicity from the case. This was a decision that caused
SSA to go back to children who had been reviewed for benefits and
denied in the past to re-review them. And something like 400,000
more children came on the rolls because of the reviews and new
claims from those who heard about the Zebley decision. The new
interpretation from the Supreme Court said that there had to be
some measure that assessed the child's function in relation to age-
appropriate behavior.
In other words, they couldn't work, obviously, because they were
children, but the age-appropriate behavior would enable them to
come on disability if it was inappropriate. So that helped increase
the number of children coming on the rolls.
A second reason for the increase in the SSI program in particular
is our update of the criteria for eligibility that had to do with men-
tal impairments. In other words, we sharpened the criteria for
mental impairments. And under those guidelines, more people
qualified for disability.
614
BREAKDOWN BY CATEGORY OF SSI PROGRAM GROWTH
Mr. RiGGS. Would you be able to provide me and the committee
with a breakdown in those different categories?
Ms. Chater. I would be happy to do that.
I can tell you right now, the children accounted in the SSI pro-
gram for 18 percent of the growth. Drug addicts and alcoholics, 2
percent. And aliens, 6 percent.
IMPACT OF WELFARE REFORM ON CHILDHOOD DISABILITY ROLLS
Mr. RiGGS. Going back to the question that the Chairman asked,
given the reforms proposed to the SSI program in the area of chil-
dren through the Personal Responsibility Act in the House welfare
reform package, do you anticipate that should those reforms be-
come law, that there will be a significant decline in the number of
children on the rolls and therefore a cumulative cost savings over
time?
Ms. Chater. We would anticipate that fewer children would be
on the rolls, yes. Now, what we have to wait and see, Mr. Riggs,
is how the implementation of that bill would work out, and what
Social Security's role would be in making the assessments for
which children go off the rolls and which ones might come back on
due to a physical disability as I mentioned before.
LONG-TERM SAVINGS FROM AUTOMATION
Mr. RiGGS. You do allude to it in your testimony, but do you have
specific performance goals for the ongoing automation project with-
in the Social Security Administration? What kind of long-term cost
savings do you project as a result of fully automating the oper-
ations of the Social Security Administration?
Ms. Chater. At the moment we are estimating a two dollar re-
turn for every dollar we spend for automation. And in the long
term, as we are able to use the automation investment for redoing,
reengineering, restructuring, if you will, the other business proc-
esses that we have in place, we will see additional cost savings.
Mr. RiGGS. Will some of those cost savings be realized in the con-
solidation or closing of field offices and reduction of personnel?
Ms. Chater. We are moving people from central offices, from
staff functions, i educing the number of supervisors and actually
moving more people into direct service positions.
Mr. Thompson. Mr. Riggs, it goes the other way around. Con-
gress has enacted, as you Imow, a reduction in Federal employment
of over 272,000 between now and 1999. We have to take our pro
rata share of that. And the automation investment is the tool that
we need in order to serve the American people despite the fact that
we will have to have fewer employees.
So we are not replacing employees with automation. We are
going to have to have fewer employees and we are using automa-
tion to maintain the quality of service.
We do have indicators of our program — of service levels that we
now give and we aspire to give. The automation, of course, is the
platform that allows us to serve the people. It is hard to separate
the automation from the rest of the operation except to say that we
know that we can't achieve those goals, we can't serve the Amer-
615
ican people with the level of employment that is implied by the
272,000 person reduction without that automation.
So that is really the key role that it plays. But we have perform-
ance indicators we would be happy to share with you of many as-
pects of our total agency performance.
PERFORMANCE GOALS
Mr. RiGGS. I would like to see that. I mentioned to the Commis-
sioner, I think it is helpful for those of us who are in a position,
as Appropriators, to make funding decisions to see your specific
measurement criteria and your overall performance go£ils, to gauge
the effectiveness of your internal management operations, and
hopefully help us assess how effective you are being with the
money we are appropriating for administration and for overall pro-
grams. So I would appreciate seeing that information.
[The information follows:]
PROGRESS IN ACHIEVING GOALS AND OBJECTIVES
SSA's budget request is workload driven. SSA has always striven to provide high
quality, responsive service to its customers. Attached is an excerpt from SSA's An-
nual Financial Statement for Fiscal Year 1994 highlighting our progress in achiev-
ing service delivery goals and the commitments SSA made for fiscal year 1994
under the Government Performance and Results Act.
616
SupolcTienisi Fmancul tnd Mtntgement Infonniiion
GOAL: Pro\ide World-Oass Public Service
SSA hu ttwavi ttrivcd lo provide high qutlny. responsi>« service to ucusomert In Septeaber 1991, SSA Bsued U
Agency Straicgic Plan (ASP) to guide ihe agency ffiio (he 21a century vid beyond The ASP outlmed S&A's vision of
the ftjture, defined ns lervice goslj tnd committed SSA to t course of change in hi service delivery •ysem TTie SSA
lerviee delivery vision is to provide our customers wnh Vtorid-class'servKe that is of the highest quality possible
Tbts means we will provide service equt! or superior to that provided anywhere in the comparable public or private
sector There performance measures th«: follow assess the le<«l of serv^e we are currently providing the public
Progress in Achieving Goals and Objectives
This pan of the Supplemental Section ducusses and analyzes trends in SSA 's progress m achieving Ihe full range of
service delivery goals and objectives outlir.ed m the Agency Strategic Plan published in FY 1991 The tatter crosswalk
10 the three broad fundamental goals discussed beginning on page 1-5. Due to systems enhancements, we hai« been
unable to present FY 1994 data for seNvral new performance measures (NA indicates that actual pcrformaace
measures are unavailable for that panKular fiscal period).
• GOAL: Issue SSNs Properly • SSNs allow SSA to maintain the public's lifetime earnings records which, in turn,
determine O ASDI eligibility and benefit amounts It is crucial that the issuance of new and replacement
numbers be prompt and efficient Overall. SSA 's percentage of applicant, notified of their SSNs within the
timeframes set forth in the service objectives a quite high and nearing the Agency goal of 100 percent Requesu
for SSNs are processed tunely. without sacrificing the mtegrity of the numbers issued.
FY 1990 FY 1991 FY 199: FY 1993 FY 1994
* Percent ofapplicants that can be NA NA NA NA 16.6%
notified orally of their SSN vnthin
24 hours of completing an appitcanon
* Percent ofSSN cards issued withui NA NA NA NA 94.6S
S days of completing an application
* Average processing time (days)
* */• of SSNs issued accurately
* RcpfciC4Mi pcrformamc fo> ikt prr«4 JuK in Iwm « (ot I^XK^l (FY «l) nd T/9|.«92 (FY 92)«i4 T/9}4i9)(FY fj)
• COAL: Maiaiain Eaminp Records Properl) • During FY 1994. SSA continued its efforts to improve accuracy
and processing times for boih wages and telf-cmplovment income Employers and payroll processors were
approached through outreach miiiaiivev ncluding special publications to enhance wage repon accuracy. The
IRS'SSA wage reconciliation process continued to be performed on a current basis and additional wages vtere
posted as a resuh. An IRS SSA Policv Hoard continued to study approaches for simpiification of the annual
wage reportuig process In the interim through a wriesofsoftware enhancements, SSA has improved the way M
processes earnuigs data to ckcironic rccofdv. corrects carnuigs amounu and uses eamvip information lo
support Social Security programs
* S of reported earnmp potted FY 1940 FY 1991 FY 1992 FY 1993 FY 1994
accurately to uidividuaU'
earnings records 99 0»» 99 0»'» 99 IS 91.9% 9H»»
* % of AWRs posted wiihm
'— 6 mo*, followmg clow of tax year
— 9mot. fbllowuigcloMefiatyear
* Number of months 10 peti 9t.<
of A WRt for tax year
49
19
1.4
11
10
99 P/.
99 P/.
99 r/.
99 7*/.
NA
69 9»,
706%
706%
134%
62 6»i
96 0^.
96 7%
94 9%
9t.2%
97 9»„
lll-M
617
SSA Anaiul FbukmI Suuimoi for FY I9M
* S ofwir-cmployiMiit ncomc FY I9N FY 1991 FY 1992 FY 1993 FY I99«
posted with in:
— 9mM fcllowin|cloMoriu)cv 79«K TTOH V \% (I.3H 71.2%
— l3mos feUowmtclo«*ofiax)«w I9J% U.IS 94.2% 962% tSI%
* % ofindividMb issued PEBESu
required by liw 1000% 1000% 100 0% 100.0% 1000%
* Percent of Covered Workers
ReceiviniPEBESStsiemcnu 15% I S% 1.7% \ m, 17%
COAL: Pay Beseflls Correctly • The Initial Payment Accuracy Rate* is the measure of accuracy ofthe first
payment made to newly awarded OASl and SSI claimants It is calculated by dividing the amount of payments
made correctly by the total amount thai should have been paid In FY 1993, most OASl errors were attributable
to application-related issues *%.. protective filing month of entitlement, SSI offset, open applications, etc In
SSI. almost 70 percent of the errors in FY 1993 vi>«lv«d the top three error categories, i.e.. unearned income,
earned mcoroc and in-kind support and maintenance Children's cases comprised 24 percent of all SSI awards ui
FY 199} compared lo less than 10 percent only 4 )«ars ago A major bctor n the growth of children's awrards is
the changes in the disability standards resulting from the 2eblev decision.
* lonial payment accuracy rau: FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
— OASl 95 3% 94.1% 91.1% 90 g% NA
— SSI 94.5% 94.1% 93.1% 94 0% NA
The Index of Dollar Accuracy measures the dollar accuraeyof adjudicative decisions over the retrospective,
current and prospective lifetime ofthe payment For OASl, the Index of Dollar Accuracy rate represents total
dollars paid divtded by dollars that should have been paid over the life cycle ofthe award For SSI, it ei^resscs
the relationship of field ofTice processed initial claims and redeterminations dollars paid to dollars that shoukl
have been paid o«er (he ci^ecied life ofthe award or redetermviaiion The lifetime ofthe SSI awird continues
until termination or redeierminalion The perceni of lifeiime dollars paid correctly for OASl initial awards has
remained consiiiently high for (he past (hree years while (he SSI accuracy raie has fluctuaied due to the many
variables which oicreasc the complexny of computing SSI payments.
* %oflifetime dollars from a claims FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
award or redetermination
that IS paid correctly
— OASl
991%
991%
99 g%
991%
NA
— SSI
96 ri
96.2%
951%
96.2%
NA
— Awards
95 6%
95.3%
93.1%
95.3%
NA
— Redeterminations
97 3%
966%
962%
96 r4
NA
The decisional accuracy of disability claims reflects the percentage of accurate determinations issued by (he
State Disability Dctermmaiion ServKes(DDS) The decisional accuracy of disability determinations for Dl and
SSI initial clauns has remained relatively constant for the last 4 years, despite mcreased workloads. Decisions to
allow disability continue to be more accurate than denials.
% of accurate disability
FY 1990
FY 1991
FY 1992
FY 1993
FY 1994
determmainns by Slate agencies
(01 and SSI combined):
— Overall Decisional Average
96 9%
96 7%
96.9%
961%
96 P/.
— Allowances
9g7%
9g|%
9t5%
97 9%
97 7%
— Deniab
956%
95.3%
95 6%
95 9%
963%
111-27
618
Supplemenul Fiitncial tnd Muittemcni InfsnBttwn
94 6S
94.4S
94.7S
94^
94 4%
97.2S
97 2%
97 0%
959%
95 Tt
93.0S
92 4%
929%
9J0%
9JT%
The Ibllownt chtni ilhistrti* the DDS perfennMce Mcuricy for dUability dctcniiinatiMt f trfemiMM
•ccuricy raiM reflect (he estaiKlcd pcrcenttfeiof mrtiaLrccofliidcration ind continuing diubilily review
diubitiiydeiennineiioni (hat do not have to be returned to the DOS for devctopmeat of addamul
documentation or correction of (be disability determinaiioa.
* Performance accuracy FY 1990 FY 1991 FY 199J ?YI993 r
lB«ial Disability Oetenninaiions
— ONcraOAwraie
— Allowances
— Deniab
* Performance Accuracy
Reconsideration Doabiliiy
Determinations:
—• Overall Average
— Allowinces
— Denials
* Performance Accuracy
Continuing Disability Reviews
— Overall Average
— Allowances
— Deniab
The follo»ing Chan reflects net accuracy of initial disability determmations. Net accuracy is the percentage of
correct DOS disability determinations. The net accuracy rate is based on (he net error rate (defined as the
number of corrected deficient cases with changed disability decisions plus the number of deficient cases that are
not corrected within 90 days from the end of the period co\«red by the report) divided by the number of cases
reviewed.
93 6%
93.5%
92 6%
93 6%
92 7%
96 7%
97 J%
97 1%
96.0%
951%
93.0S
92.1%
916%
93.2%
92.3%
97.1%
96.5%
96.7%
96.9%
96 J%
97.4%
96.7%
97.1%
97 1%
96.7%
94 r*
95 3%
94 6%
96 5%
94.1%
Net Accuracy of Initial
FY 1990
FY 1991
FYI99J
FY 1993
FY 1994
Disability Deierminatioiw:
— Overall Average
NA
NA
961%
966%
NA'
— Allowances
NA
NA
914%
97 9%
NA'
— Denials NA NA 95 7% 959% NA'
*N(t toGWKy ■ akulaud ipyfoimtty I aiMilii hUowni ihc cii4 oftkc foal ytir
GOAL: Pay Bcaeflu Wlica Dae • OASI claims processing times have shown consistent improvement. Average
processing tune for initial OASI claims unproved from 16 4 days at FY 1992 to 14 7 days in FY 1994 Continued
enhancements and updates to the modernized claims system are the primary reasons for improvement in the last
two FYs. The processing time for SSI Aged claims increased slightly in FY 1994 from FY 1993 levels This wis a
reverul of improved processing tunc thai had been attained over the last tvM> FYs. SSI Aged proceuuig lone
increased from 16 4 days ui FY 1993 to 17 0 days ui FY 1994 The trauimg associated with the unpicmenution of
a new computer based SSI spplicaiion and clauns development process, which was completed ui FY 1994. may
have contributed to this ncreased processing time.
Following two )ears of deteriorating processing tunes, both disability claims categorvs began to show
unprovcment ui FY 1993 This nnprovemcnt n processing limes for 01 and SSI disability clauns continued in
FY 1994 01 disability processuig tune decreaMd from 17 9 days vi FY 1993 to 16 9 da>« m FY 1994. and SSI
bimd/diubled processuig tune decreased from 1 101 days in FY 1993 to 109 6 days n FY 1994.
111-21
619
SSA Annual Finaocial StMcncai for FY 1994
nri99i
FY 1992
FY 1993
FY 1994
16.7
16.4
13J
14.7
X2
lt.3
164
170
199
916
r9
169
* IniiMl claims proccttiogmcs (in dayi) FY 1990
OASI 164
SSI Aged II.S
Dl 79 1
SSI BImd/Disabtcd 919 I07J 1192 1 10 1 1096
The Aftncy is net yet meetin| the strategic service lct«l ob^ctivcs pertain in| to payin| benefits when due, as
oidicated bythe mformaiion below (the lon|<ran|e objectr«« for each a 100 percent) However, wc have
improtcd in two of the four categories
* SofOASI applications completed FY 1990 FY 1991 FY 1993 FY 1993 FY 1994
before the first regular payment is
due or within 15 days from the
efleciive date of filing, if Uier NA NA lOOS 793% tl 1%
* */t of oiitial SSI Aged claims cither
paid or denied wiihm 14 days of the
effective filing date 60 OS S2eH 3S4S 62 6S 63 JS
SSA continues to receive increasing numbers of Dl initial claims for proceuing This workload has severely
strained SSA resources However, in FY 1993 contingency hinding and large amounts of ovcnanc devcicd to
processing these nitial disability claims resiihed n decreased proceuing times. FY 1994 has produced
continued improNemeni ai processing time for tnhial Dl claims Overall Dl processing time decreased from
91 6 days m FY 1992, to 17 9 days oi FY 1993 In FY 1994. processing tone continued to decrease and dropped to
S6 9days Although the average processing tunc for Dl claims has been showing improvement since FY 1993,
this improvement has not yet been reflected n the percentage of cases processed within the 6 months or 60 days
tone frames as indicated in the ubic below.
* SofinitialDlcUuns processed FY 1990 FY 1991 FY 1992 FY1993 FY 1994
ttothm 6 mos after onset or 60 days of
effectivcfilingdate, whichever IS later NA NA 46 OH 417% 43 4%
SSI disability processing time has shown improvement ai FY 1994 and FY 1993 SSI disability processing tune
decreased from 1 19 2 days in FY 1992 to 1 10 1 days vi FY 1993, and to 109 6 day* m FY 1994 The timely
payment of SSI benefits has not followed a trend of improvement, as has the proccssuig tune The percent of SSI
disability clauns paid timely decreased by 1 .3 percent ni FY 1994 Current uiitiatives ni proceu redesign and
automation should reverse this trend
* %ofinnial SSI disability claims FY 1990 FY 1991 FY 1992 FY1993 FY 1994
either paid or denied wiihui 60 days
of filing date 34.1% 217% 23 3% 24 7% 23 4%
* % of contmuuig monthly
payments made on the
scheduled dclii«ry date.
OASDI
SSI
As the disabilKy clauns process is redesipied, accurate and more effKieni processuigofuiitial claims should
cause a decrease ui the number of reconsiderations filed Hov>cvcr, when a reconsideration is filed, a prompt
reply to the beneficiary is ei^ected In FY 1994, SSA provided more than 30 percent of its reconsideration
decisions and sent notices wiihui 60 days after filoig the reconsideration
999%
99 9%
99 9%
99 9%
99 9%
999%
99 9%
99 9%
999%
99.9%
111-29
620
Suppkmcntat FoiukuI tnd Mtnttcmcnl Informtnon
• Percent of requeai for recon»)d«ritioo FY l»90 FY 1»9I FY I9W FY I»3 FY IW4
of denied diubility clams
completed withm 60 diyt of fUinc NA NA NA NA 37 4%
Proceumi time for hearoip casei mcreaied in FY 1994 u a retuh of sicnificani increaiet in pendin| workloads
Hea/oiirequeit receipts 01 FY 1994 totaled SlM^t. tniocrease of 30.421 over FY 199} OHA hred 202 new
ALJsdurstfFY 1994. and wnh only moderate atiriiion. the ALJ Haffini lev«l nationwide rose from I22jud(cs
on duty m October 1993. to 991 m October 1994. for a net increase of I76jud|es Ahhoujh the productivity of
OHA's ALJsand support staffwas excellent throughout the )«ar. case processui| tone increased steadily during
FY 1994. and stood at 337 day? fof the month of September 1994.
• Average number of day» FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
to process hearings case 212 229 223 231 306
Hearing \evt\ decisions issued within 120 days generally tend to be favorable decisions (hat can be issued
on-the-record without a hearing or additional development of the record OH A introduced a national
systems-generated Kreening profile to identify such cases in October 1994, and the anticipated outcome is an
increase in the number ofdisposmons issued in less than 120 days In addition. OH A eq>ects to ei^and its
prehearing conference and Kreenmg program vnth national implementation m December 1994 However,
because of all-time high receipt levels which caused the pending workload to age. the percenuge of under
120-day hearing dispositions declined to its lowest level in the past five years.
• % of hearinp with decision FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
made and notice sent withn
120 d4)5 after filing date I6«S I3-2S I47H 10 JS 16%
In FY 1994. the trend ofdecreasing processing times for request for review cases continued although at a slower
pace than m the prior )ear The average processing time v»as dov»n 24 dayt from FY 1993. During the )ear. the
Appeals Council emphasised its practice of processing those cases v»hich had been pending for the longest
period of time and transferred cases among branches to balance unequal receipts. At the ume tune the Council
coniinued to implement iireamlinmg initiatives on an ongoing basis. As a resuh of these measures, the
processing time decreased accordmgly
• Average number of days FY 1990 FY 1991 FYI99J FY 1993 FY 1994
to process appeab case 197 239 197 150 126
FY 1994 vi«s the first )ear that the percent of Appeals Council reviev»s that have decisions made and notices sent
vtTthui 90 days after filing for the appeal w%i tracked At the beginning of the fiscal year. 34 2 percent of revievus
vwre processed vnthin this time frame By the fiscal years end. 45 0 percent of all reviews were processed within
90 days The Appeals Council's emphasis on processing the cases pending for the longest period of time along
vnth streamluting initiatives implemented resulted in this improvement As the number of pending aged cases
decreased, a corresponding increase occurred ui the percent of cases processed withui the 90-da) tune frame
• %ofreviews with decisions made FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
and noiKes sent vmthm 90 days
after filmg NA NA NA NA 40 4%
COAL: Provide Prompt, ConrtcoiS Service - An important indicator of courteous servKC is the length of time
visitors spend in field ofTices wtumg for service SSA has established two goals relating to waiting time ui field
offices (I) visitors with prior appointments should wait no longer than 15 minutes for servKe. and C) visitors
without appointments should not wait longer than 60 minutes SSA's new 'customer service pledge* challenges
us to lovtcr the waiting time for visitors with appointments to under 10 muiuies
The higher wailing tones for FY 1994 and FY 1993 are due to a change o« the wtrtoig tone survey form and
methodology at the beguinoigof FY 1993 The data for FY 1993 and later cannot be compared to prior years
111-30
621
SSA Annual FinMcial Sutcmcai for FY 1994
du« to (he changet in ihc wmty methodology The •vcragc waiting tunc for vbiion tmhout appointments for FY
I994dccreaicd by 1.6 minutei or about one percent. The percent of visitors with appoiBimcnu«i4io«crc Men
within IS minutes decreased by .9 percent oi FY 1994
* National Aeld office wanoig tones
Wait lime to firsi contact (m mmyies)
* Vbitors with appoottmcnts
A^rage wait lime (m mmyms}
Percent seen wnhm 15 minutes
Percent seen withm 10 mmuies
' Visitors without appointments
Average wait tune fm minutes}
Percent seen wiihin 60 minutes
Percent seen wiihm }0 m mutes
In addition to providiDg personal lace-lo-face scrvke, SSA offers a single nationwide toll-free number
(l-tOO-SSA-l2l3) weekday! from 7a.m io7pjn in each time zone. Service b available for the
hearing-impaired communiryduruigthe same hours using a telecommunication device. Several services are
available after normal business hours, on weekends and holidays using automated answering equipment In 1994,
SSA tested a new automated service m 1 1 states which provided callers with the location and directions to (he
nearest field office Our goal is to answer each telephone call on (he first try
m99e
FY 1991
FY 1992
FY 1993
FY 1994
10
II
95
12^
13 1
64
65
60
6.7
69
U9S
19 4%
90 3%
IS 9%
110%
NA
NA
NA
NA
13 1%
M9
230
22.1
29 1
275
93.6%
93 1%
92.3%
11-2%
U.1%
NA
71^.
76J%
70 0%
691%
Percent of Calls to
SSA s too number
answered on first try
Overall
Peak Da yi
Regular Dayi
FY 1993 FY 1994
71 0% 61 9%
61.6% 606%
190% 711%
A measure of the effectiveness ofthe 100 number, called ihe access rate, measures the percent of mdividual
callers who successfiilly reach the 100 number For eumple. the access rate on peak days in FY 1994 when call
volumes w«re highest v»as 14 3 percent, meanuig that nearly 15 of every 100 callers who tried to reach the 100
number on peak days in FY 1494 ««cre able lo gei through On regular, or nonpeak days. In FY 1994 ov«r 91 of
every 100 callers were able to reach the WO number within 24 hours of their witial call The decrease m access
rates during FY 1994 was due loa 31 percent increase in the number of calls placed to SSA's 800 number over
FY 1993
% of individuals who successfiilly
access the National 100 number
— Within 5 minutes ofiheir iniiial call*
— On the same dav as their mHial call
tiil.HM »■ mm^ a Mmtt, <m w »>«>«■■■«•> ■
FY 1993 FY 1994
Overall
18 4%
12 2%
Peak Days
799%
77 6%
Regular Day*
94 1%
87 5%
Overall
916%
87 4%
Peak Day*
14 9%
14 3%
Regular Dayt
95 9%
91.9%
SSA conducts an ongoing irrvKe evaluation ofthe national 800 number service The payment accuracy rate
represents the percentage of all calls free of tekvcrwe failures whKh hav« a reasonable potential to improperly
affect payment of or eligibilns to benefitv There are two measures of payment accuracy (i) payment accuracy
based on the universe of alt calls, and Ci payment accuracy based on those calls with the potential (o affec(
payment of or eligibility lo bcneriis The vcrvKe accuracy rate represents the percentage of calls free of major
telescrvice bilures m servxe delivery Ahhough scrvKe errors can cause inconvenience to the public, they do not
III-3I
622
Supplement*! FinucitI ud M«n(|emcni Informaiion
tfTect payment of or eligibility lo benefiu. Accuricy rates on ptfe 111-32 are deriNcd by lervke evaluation of
calls handled byfuH-lnne leleservKC represeniatn*! and SPIICE emplo)«et (benefit auihoriters m Program
ScrvKe Centers wbo answer 100 number calls dunag high volume periods) and therefore are not drectly
comparable to prior periods.
• Portion ofNationalSOO number For 6 Months Eodiag
calU handled accurately >93 M3 3/M
— % of responses leading
to correct payments (all calls) 97.2S* 97.1% 97.0%
— */i of responses leading
to correct payments
(payment-affecting calls) 94.7H 95.7S 9<4S
— S of responses presenting
inconvenience to the public 83 IS* MJS S50%
*}/91 iut prcwnied n Ok FY 199] report difkri ilifhily bccuK < di4 aoi ndudt SPIKIS SPIKl d«u firs bcomt nwUbIc for to
nonthicadmsMtrdi 1993
96 percent of callers to SSA's SCO number rated the SSA teleservice center staff as courteous or xry couneous
and continue to be highly satisfied with the service provided by the tOO number. The satisfaction rate of IS
percent for May 1994 coincided with the higher-than-normal busy rates and queue tunes associated with that
month.
• Hofcallers to SSA's SOO number rating S93 W/93 11/93 02/94 05^
staff courteous or \«ry courteous 97% 98% 96% 99^'4 96%
" % ofcallers to SSA's 800 number rating
service as satisfactory /wry satisfactory 95% 93% 90% 94% l8*/b
The follcwuig tndicaiors from the Office of Inspector General's annual SSA Client Satisfaction Survey suggests
that the public satisfoction with telephone courtesy ratings remain high Visit courtesy and servKe satisfaction
declined indicating that as clients' perceptions of courtesy decline, so do their satisfaction ratmp
• %ofpublic rating SSA staff as FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
courteous or very courteous
— Visit counesy
— Telephone courtesy
" % of public rating SSA service as
good or very good 83% 83% 79% 77% 77%
COAU Ensure lotcgrityOf Paymenu And Records - The measure of the dollar accuracy of the monihlyOASI
payments made ui a year is referred to as the "dollar accuracy of payment outlays " Tbe accuracy raie is
obtained by comparing the total amount of error in the monthly payments (both excess payment and insufficient
payment) to the total payments for the year measured The accuracy ui OASl benefit payments has remamed at
a consistently high level over the past five years
• %ofbenefit payment outlays paid FY 1990 FY 1991 FY 1992 FY 1993 FY 199.
during a FY that is free of error
OASl Dollar Accuracy
— Excess Payments
— Underpayments
87%
85%
87%
84%
87«„
89'/.
87%
89'/,
89%
88*/(
99 8%
998%
99 7*/.
99 9%
NA
99 8%
99 8*/.
99 8%
99 9»'4
NA
III-32
623
SSA Annual FiitiwMl Sutcacat for FY I9M
The doUar accuracy rate ofcontiDuiiii SSI pajmesu mtde in a ytu it the percent of all SSI benefit payment
outla>« paid durni the lucal y«ar chat it free of error The rate repretenu the pcrceat of doilart nncd free from
o^«rpiyineot, ineligibiliiy or underpayment The Ubie below ihowi that dollar accuracy m the SSI program has
remiined relatively (table o«cr the pan 4 yttn.
% of benefit payment outlay* paid
m990
FY 1991
FY 1992
FY 1993
FYI'
durmg a FY that is free of error
SSI Dollar Accuracy
— Exceu Payments
96.5%
96.3%
96 3%
96 0%
NA
— Underpayments
99 0%
98 9%
9«9%
9«7%
NA
The integrity of SSA 's records and payments is also maintained through an overall security program vktiich
controls acceu to SSA 's data bates and refers suspected fraud and abuse cases to the H H S Inspector General
(IG) for intesiigaiion and subsequent prosecution by the Department of Justice DuruigFY 1994. SSA referred
2094 cases to the IG . 2265 cases were pending at year end inchiding those in the hands of the U S Anomey
SSA consistently excels m protecting data from security violations.
• % of business transactions FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
free of security violations 999% 99 9% 99.9% 99 9% 999%
GOAL: lafora The Public Of Their Righa And Reapoatibilltk* - When beneficiaries bil to comply with
reporting requirements, monthly benefits can be affected SSA reviews, on an ongoing basis, OASI
postentitlement (PE) actions and SSI field office redeterminations to identify enors and then assigns
responsibility for error dollars to either SSA or the beneficiary/recipient The table below shows thai m terms of
both OASI payment and case accuracy, the percent of payment enor attributable to public noncompluince with
SSA reporting requirements increased between 1990 and 1992
SSA has now initiated a new review of OASI PE actions to determine the accuracy of reponed events thai affect
payment and eligibility This new measure is being dewloped uicremenialiy The results of the sample review of
each pruicipal PE workload affecting payment are being analyzed and reponed on separately In the SSI
program, several pilot studies of the accuracy of certain PE actions are being completed, and an ongoing PE
review system has been implemented effective October 1994
• % of payment error atuibutable FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
to public noncompliance
with SSA reponuig requirements:
— OASI Payment Accuracy
— Excess payments
— Underpayments
— SSI Payment Accuracy
— Excess payments
— Underpayments
• Percent of payment error cases
anributabk to public noncompliance
with SSA reponmg requirements:
— OASI Case Accuracy
— Excess payments
— Underpayments
65%
67%
78%
82%
NA
9%
13%
19%
21%
NA
7r/i
79%
79%
77%
NA
73%
74%
70%
6r/.
NA
46%
42%
48%
41%
NA
17%
9%
23%
25%
NA
624
Sopplcineaul Flcaadal tad MiMfeacat Uformatloa
Sa Caac Aonracjr
— E«etip<yinc«s
— UnderpayiDems
nri9M
77%
7«%
nmi
74%
74%
rviwi
7J%
70%
rYI9M
7J%
M%
rYI9M
NA
NA
The proponion of people who find nail from SSA ewy or very caiy to uademand ia^rwti iliftiOy in FY 1994
Tofethcr wkh the proportioa who (bd ihe nail aekher eafjr aof hard to nadenuiid. o^«r M percent find the
mail uoderstandabk The proponioo for whcai the null ■ hard or very hard to uader«ta<id has bcca iacreasiog
•omewhat from l3p9ceiuhiFY 1990 to 17 perccai ia FY 1993
* % ofpublic who demonstrate they rY19M FY 1991 nri992 FY 1993 FY 1994
ooderaaad the informatx>n mailed
10 then by SSA (OIC wantj)
— Easy or very easy to oaderaaod 67% 6}% 72% 65% 70%
Progress in Meeting FY 1994 GPRA Performance Goals
Tbc Covcnunem Pcrformaacc and Resuks Ka (GPRA) of 199] aeated pilot projects ioieoded to test the bcncfiu,
lUcAikiess and coas of the pa fui mance measureaMnt and y>al-tettiBf oooceptt cootamed m the GPRA The
following FY 1994 perfonnaacc measure* for the Oisabiliijr miliaiivc ««re developed b; SSA at i parlk^aal ia the
GPRA pilot performance project They esublidi performance foab (Lc . tarfcu) to define the level of performance
to be achieved for FY 1994 SSA selected (he disabiliiy theme because it ii coasisiest with SSA's customer service
foou and need to Kka tarfeu that reflect service delivtry ouoomes.
PUtCXNTOr
ACTUAL ACTUAL GOAL GOALMTT
m99J FY 1994 FY 1994 FY 1994
■ The DtsabOiiyDetermiaatioo Services (DOS) 2JS3.S3S 2.615.a09 2J96.000 100%
•ID procev at lease 2J96,000 iniual disabOity
daiffls in FY 1994. an maease of more than
10.000 daiiH o^cr the niunber proceiMd
■ FY 1993
* The DOS win process at least 3.360,300 total
case* in FY 1994 (iniual claims, reconsiderations,
hearings and continuing disability reviews),
an increase of more than S3.000 case* over
Ihe number processed in FY 1993.
* The DOS will increase the total Dumber of
overall cases processed per work year in FY 1994
to 266 from 261 m FY 1993
* The OH A will process at least 42 1.200 hearinp
in FY 1994. an toaease of more than 46.000
hearinp ov«r the number processed ■ FY 1993.
* TheOHA wtOinaease theDufflberofhearings
processed per direa workyears to 91. or a 2.2%
inaease over the FY 1993 rate of 19 hearinp
pa««rt>«ar.
3.476.663
261
374J0«
3.607.482
272
417J33
3J60JOO
101%
102%
42IJ00
IU-34
625
Mr. RiGGS. Thank you, Mr. Chairman.
Mr. Porter. Thank you, Mr. Riggs.
Dr. Chater, you will be happy to know I have run out of ques-
tions. I do have some more for the record, and request that you an-
swer them for the record.
We very much appreciate your good service to the Social Security
Admmistration and to our country, and your forthright answers to
all our questions today. Thank you for coming to testify.
We will take your budget request under consideration. Thank
you very much.
The subcommittee will stand in recess until 2:00 p.m. this after-
noon.
[The following questions were submitted to be answered for the
record:]
626
HISTORY TABLES
Mr. Porter: Insert in the record at this point the traditional
set of history tables on Social Security programs requested by the
Committee each year. Add to this set a historical table on annual
OASDI trust fund income, outgo, surplus/deficit, and balance.
Mrs. Chater: The information follows.
NUMBER OF BENEFICIARIES, AVERAGE FOR FISCAL YEAR
(in millions)
Program 1990 1991 1992 1993 1994
Old-age and survivors
insurance 35.1 35.6 36.2 36.7 37.0
Disability insurance . 4.2 4.3 4.6 5.0 5.3
Supplemental Security
Income * 4.7 4.9 5.3 5.7 6.1
Disabled Coal Miners 0.2 0.2 0.2 0.2 0.2
* Includes beneficiaries receiving only a federally -administered
State supplement.
627
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629
AVERAGE LEVEL OF PAYMENT
END OF CALENDAR YEAR
(dollars)
Program 1990 1991 1992 1993 199A
OASI
(all retired workers) .$602.56 $629.32 $652.64 $674.06 $697.34
DI
(all disabled workers) $587.23 $609.34 $626.07 $641.67 $661.37
SSI $299.22 $320.53 $358.49 $344.92 $350.54
BL
(includes benefits for
wives and/or
children) $516.87 $537.15 $558.31 $577.30 $587.33
PROCESSING TIMES
Maan Time in Days 12/90 12/91 12/92 12/93 12/94
Claims :
• OASI 15.7 16.1 14.5 14.1 14.0
• DI 83.6 97.5 91.2 86.8 86.0
• SSI Aged .... 22.2 19.7 17.1 17.9 17.0
• SSI Blind and
Disabled .... 98.2 115.1 114.0 110.7 109.0
Time in Days 9/90 9/91 9/92 9/93 9/94
Hearings 214.0 228.0 213.0 263.0 337.0
HEARINGS WORKLOADS
FY 1990 FY 1991 FY 1992 FY 1993 FY 1994
Processed
Closing pending . .
. .296,758 316,508 356,751 374,308 421,129
. .173,180 183,880 218,423 357,564 485,837
630
LAE Appropriation. Lapse, and Unused Contingency Funds
The following table shows total funds appropriated by Congress for
SSA's Limitation on Administrative Expenses account for each of the
last 9 fiscal years (including no -year information technology systems
funds) , the amount of 1-year funds that lapsed, and the amount of
unused contingency reserve funds (whether or not apportioned by the
Office of Management and Budget) :
Total
Apportionment
Unused
FY
Appropriation
Less Obligations ^
Contingency ^
1986
$3,848,443,000
$49,099,704
$89,665,296
1987
$3,840,000,000
$19,527,705
$140,472,295
1988
$3,524,114,000
$16,906,415
$30,963,585
1989
$3,750,113,000
$10,775,963
$0
1990
$3,837,389,000
$21,068,672
$44,870,000
1991
$4,157,309,000
$34,589,000
$12,385,000
1992
$4,550,456,000
$24,691,000
1993
$4,823,101,000
$41,984,434
1994 3
$5,417,335,000
$52,527,000
^ This column represents the lapse of 1-year funds, apportioned but
not obligated.
^ FY 1993 was the last year in which a contingency reserve was
appropriated.
FY 1994 includes the Earthquake supplemental appropriation of
$1,125,000.
631
PAYMENT ERROR RATES
(in percent)
Six-Month
Supplemental
Old- Age &
Period
Security
Survivors
Disability
Ending:
Income
Insurance
Insurance
September 1976
6.3
1/
1/
September 1977
5.2
1/
1/
March 1978
4.6
1/
1/
September 1978
4.6
1/
1/
March 1979
5.0
0.21
1/
September 1979
4.9
0.28
19.3 3/
March 1980
5.0
1/
1/
September 1980
4.9
1/
27.8
March 1981
5.3
0.66
2/
1/
September 1981
4.9
0.40
1/
March 1982
4.8
0.40
1/
September 1982
4.1
0.45
1/
March 1983
4.1
0.49
1/
September 1983
3.6
0.52
1/
September 1984 4/
3.3
0.50
1/
September 1985
3.3
0.48
1/
September 1986
3.9
0.35
1/
September 1987
3.8
0.30
1/
September 1988
3.5
0.20
1/
September 1989
3.4
0.20
1/
September 1990
3.5
0.20
1/
September 1991
3.7
0.20
1/
September 1992
3.7
0.30
1/
September 1993
4.0
0.20
1/
September 1994
1/
1/
1/
1/ Not available. SSA does not compute payment error rates for DI.
2/ Includes 0.3 percent related to ongoing benefit payments; and for
the first time, includes the impact of the annual earnings test (0.3%).
3/ For April 1979 — one month only.
4/ 12-month measuring period effective 1984.
632
Average Monthly Retirement
Benefits at End of Year 1/
Maximum Monthly Retirement
Benefits at End of Year 1/2/
Worker Only
Couple
Worker Only 3/
Couple
Year
1940
$22.10
$36.40
$41.20
$61 .80
1941
22.10
36.30
41.60
62.40
1942
22.50
36.80
42.00
63.00
1943
22.90
37.50
42.40
63.60
1944
23.00
37.90
42.80
64.20
1945
23.50
38.50
43.20
64.80
1946
23.90
39.00
43.60
65.40
1947
24.20
39.60
44.00
66.00
1948
24.60
40.40
44.40
66.00
1949
25.30
14.40
44.80
67.20
1950
42.40
71.70
45.20
67.80
1951
40.30
70.20
68.50
102.70
1952
47.10
81.60
68.50
102.70
1953
48.80
85.00
85.00
127.50
1954
56.50
99.10
85.00
127.50
1955
59.10
103.50
98.50
147.70
1956
59.90
105.90
103.50
155.20
1957
60.90
108.40
108.50
162.70
1958
62.60
111.20
108.50
162.70
1959
68.70
121.60
116.00
174.00
1960
69.90
123.90
119.00
178.50
1961
71.90
126.60
120.00
180.00
1962
72.50
127.90
123.00
184.50
1963
73.20
129.40
125.00
187.50
1964
73.90
130.70
127.00
190.50
1965
80.10
141.50
135.90
203.80
1966
80.60
142.50
135.90
203.80
1967
81.70
144.20
140.00
210.00
1968
95.00
166.30
161.60
242.40
1969
96.60
168.90
167.30
250.00
1970
114.20
198.90
196.40
294.60
1971
127.40
222.30
220.40
330.60
1972
157.10
272.50
269.70
404.60
1973
161.60
276.70
276.40
414.60
1974
183.10
312.30
316.30
474.50
1975
201.60
343.90
360.40
540.60
1976
218.80
373.10
403.10
604.70
1977
236.80
404.40
447.40
671.10
1978
256.60
437.50
489.70
734.60
1979
287.00
488.60
553.30
830.00
1980
333.00
566.60
563.80
980.70
1981
376.70
643.00
752.90
1129.40
1982
408.90
702.50
729.00 4/
1093.00 4/
1983
429.70
742.90
734.00
1101.00
1984
448.20
780.40
728.00
1092.00
1985
465.60
814.20
739.00
1108.00
1986
477.00
832.00
769.00
1153.00
1987
501.00
876.00
822.00
1233.00
1988
524.87
917.00
872.00
1308.00
1989
554.42
968.86
991 .00
1411.00
1990
588.32
1,021.84
1,027.00
1.540.00
1991
614.81
1.066.46
1.088.00
1.633.00
1992
637.91
1.104.96
1.128.00
1 .692.00
1993
659.25
1.139.98
1,147.00
1.720.00
1994
682.47
1.177.96
1.199.00
1.798.00
1/ Prior to 1940 benefits were not paid monthly.
2/ Assumes retirement (age 65) at beginning of year.
3/ For 1962 — 1977. maximum benefits for men and women were different:
amount shown is the higher (women's).
4/ Beginning in 1982. meiximum benefits are less than in 1981 because of
the impact of wage indexing and decoupling under the 1977 amendments.
633
INDIVIDUALS RECEIVING TITLE D BENEFITS
(Monthly Beneftte in Current Payment, End of Calendar Year)
Year Beneficiaries
1940 222,488
1941 433,722
1942 598,342
1943 747.816
1944 954,881
1945 1,288,107
1946 1,642,299
1947 1.978,245
1948 2,314,557
1949 2.742.808
1950 3.477.243
1951 4.378.985
1952 5.025.549
1953 5.981.420
1954 6,886,480
1955 7.960.616
1956 9.128.121
1957 11.128,897
1958 12.430,234
1959 13,703.918
1960 14.844,589
1961 16.494,762
1962 18,053,395
1963 19,035,489
1964 19,799,539
1965 20,866,767
1966 22,767,252
1967 23.704.987
1968 24,560.374
1969 25.314.062
1970 26.228.629
1971 27.291,508
1972 28,476,028
1973 28,868.775
1974 30,852.817
1975 32.084.511
1976 33.020.946
1977 34.077. 142
1978 34.586.343
1979 35.124.495
1980 35.618.840
1981 36,006.371
1982 35.840.411
1983 36,084.823
1984 36.478,971
1985 37,058,353
1986 37.708.225
1987 38.190.192
1988 38.627,022
1989 39.151.370
1990 39.832.130
1991 40.592.173
1992 41.507.201
1993 42.245.719
1994 42,883.470
634
SOCIAL SECURITY TAXES
Tax Rate
Fmi^oyee Taxes 1/
EmfAoyet/
Maximum
Average
Computed Using -
1
Employee
Wages
Annual
Maximum
Avnage
Year Each (%) V
Taxable
Wage
Amount 2/
Amount 2/
1M7
1.0
U.fM
Jl,l37.«
i36M
$11.38
1938
1.0
3.000
1.053.24
30.00
$10.53
1939
1.0
3.000
1.142.36
30.00
$11.42
1940
1.0
3.000
1.195.00
30.00
$11.95
1941
1.0
3.000
1.276.00
30.00
$12.76
1942
1.0
3.000
1.454.28
30.00
$14.54
1943
1.0
3.000
1.713.52
30.00
$17.14
1944
1.0
3.000
1.936.32
30.00
$19.36
1945
1.0
3,000
2.021.40
30.00
$20.21
1946
1.0
3,000
1,891.76
30.00
$18.92
1947
1.0
3,000
2.175.32
30.00
$21.75
1948
1.0
3.000
2.361.64
30.00
$23.62
1949
1.0
3,000
2.483.20
30.00
$24.83
1950
1.5
3.000
2,543.96
45.00
$38.16
1951
1.5
3,600
2,799.16
54.00
$41.99
1952
1.5
3,600
2,973.32
54.00
$44.60
1953
1.5
3,600
3,139.44
54.00
$47.09
1954
2.0
3,600
3,155.64
72.00
$63.11
1955
2.0
4.200
3,301.44
84.00
$66.03
1956
2.0
4.200
3,532.36
84.00
$70.65
1957
2.25
4,200
3,641.72
94.50
$81.94
1958
2.25
4,200
3,673.80
94.50
$82.66
1959
2.5
4.800
3,855.80
120.00
$%.40
1960
3.0
4.800
4,007.12
144.00
$120.21
1961
3.0
4.800
4,086.76
144.00
$122.60
1962
3.125
4.800
4,291.40
150.00
$134.11
1963
3.625
4.800
4,396.64
174.00
$159.38
1964
3.625
4,800
4.576.32
174.00
$165.89
1965
3.625
4,800
4.658.72
174.00
$168.88
1966
4.2
6,600
4.938.36
277.20
$207.41
1967
4.4
6,600
5.213.44
290.40
$229.39
1968
4.4
7,800
5.571.76
343.20
$245.16
1969
4.8
7,800
5,893.76
374.40
$282.90
1970
4.8
7,800
6,186.24
374.40
$296.94
1971
5.2
7,800
6,497.08
405.60
$337.85
1972
5.2
9.000
7,133.80
468.00
$370.96
1973
5.85
10,800
7,580.16
631.80
$443.44
1974
5.85
13.200
8,030.76
772.20
$469.80
1975
5.85
14.100
8.630.92
824.85
$504.91
1976
5.85
15.300
9.226.48
895.05
$539.75
1977
5.85
16,500
9,779.44
965.25
$572.10
1978
6.05
17,700
10,556.03
1,070.85
$638.64
1979
6.13
22,900
11,479.46
1.403.77
$703.69
1980
6.13
25,900
12,513.46
1.587.67
$767.08
1981
6.65
29,700
13.773.10
1.975.05
$915.91
1982
6.7
32,400
14.531.34
2.170.80
$973.60
1983
6.7
35,700
15.239.24
2.391.90
$1,021.03
1984
7.0
37.800
16.135.07
2.646.00 3/
$1,129.45
1985
7.05
39.600
16.822.51
2,791.80
$1,185.99
1986
7.15
42.000
17,321.82
3,003.00
$1,238.51
1987
7.15
43,800
18,426.51
3,131.70
$1,317.50
1988
7.51
45.000
19,334.04
3,379.50
$1,451.99
1989
7.51
48.000
20.099.55
3,604.80
$1,509.48
1990
7.65
51.300
21,027.98
3.924.45
$1,608.64
1991
7.65
53.400 4/
21.811.60
4.085.10
$1,668.59
1992
7.65
55,500 4/
22,935.42
4.245.75
$1,754.56
1993
7.65
57,600 4/
23,132.67
4.406.40
$1,769.65
1994
7.65
60,600 4/
23,804.63
4.635.90
$1,821.05
1995
7.65
61,200 4/
24,541.81
4,681.80
$1,877.45
1996
7.65
63,000 4/
25,570.05
4,819.50
$1,956.11
1997
7.65
64.800 4/
26,619.03
4,957.20
$2,036.36
1998
7.65
67.500 4/
27,708.41
5,163.75
$2,119.69
1999
7.65
70.200 4/
28,890.91
5,370.30
$2,210.15
2000
7.65
73,200 4/
30,060.68
5,599.80
$2,299.64
1/ Excludu Kir-employmcnt.
2/ For Kvcral rcMOoi. employer and employee iharei tre not exactly etpul (e.g., treatment of withholding on tips since
1966.) Numbers shown are for employees. Medicare tax (HI) paid by Federal employees beginning in 1983 is not
included. Medicare tax assessed on income above the OASDI taxable maximum (after 1990) is excluded.
3/ P.L. 98-21 provides (for 1984 only): employee may receive a Ux credit equal to 0.3% of his taxable covered wages.
4/ For 1991 through 1993. the taxable maximum for the Medicare program was higher than the OASDI maximum,
as shown below. All earnings arc subject to Medicare tax beginning with 1994.
1991 125,000
1992 130,200
1993 135.000
635
OPERATIONS OF THE OASI AND DI TRUST FUNDS. COMBINED.
DURING SELECTED CALENDAR YEARS 1960-1994
and
ESTIMATED FUTURE OPERATIONS FOR CALENDAR YEARS 1995-2004
ON THE BASIS OF THE INTERMEDIATE SET OF ASSUMPTIONS
($ in miUions)
Net Funds
Calendar Total Total Increase At End Of
Year Income E3q)enditures In Funds Period
Ifistorical Data:
1960 $12,445 $11,798 $647 $22,613
1965 17,857 19.187 (1,331) 19,841
1970 36,993 33.108 3,886 38,068
1975 67,640 69.184 (1,544) 44,342
1980 119,712 123,550 (3.838) 26,453
1985 203,540 190,628 11,088 i/ 42.163
1986 216.833 201.522 4,698 i/ 46,861
1987 231.039 209.093 21,946 68,807
1988 263.469 222.514 40,955 109,762
1989 289,448 236.242 53,206 162,968
1990 315,443 253,135 62,309 225,277
1991 329,676 274.205 55,471 280,747
1992 342,591 291,865 50.726 331,473
1993 355,578 308,766 46.812 378.285
1994 381,111 323.011 58,100 436,385
Estimates:
1995 405,325 340.058 65.267 501,652
1996 432.608 357.518 75,090 576,742
1997 457,294 375,984 81,310 658,052
1998 482,950 395,644 87,307 745,359
1999 509,358 417,059 92,299 837,659
2000 538,665 440,457 98,208 935,866
2001 570,711 465.473 105,237 1,041,103
2002 605,006 492.809 112,197 1,153,300
2003 641,779 522,266 119,513 1,272.813
2004 680.650 553.774 126.877 1,399,690
1/ Net increases shown reflect interfund borrowing amounts tcfmi from OASI Trust Fund to HI Trust Fund
From 199S Annual R«^it of the Board of Trustees of the OASI and DI Trust Funds (April, 199S).
636
AUTOMATION INVESTMENT FUND
Mr. Porter: The Senate rescinded $88 million in
funding previously appropriated for the automation
initiative. The report accompanying the rescission
indicated that SSA had a large carryover in funding from
1994 for the initiative. Please provide a table showing
carryover from 1994 for automation.
Dr. Chater: The Social Security Administration's
(SSA) multi-year investment for the automation investment
fund (AIF) is critical to improving service. An
intelligent workstation - local area network (IWS/LiAN)
platform is the foundation for SSA's strategy to improve
the quality of service to the American people without
substantial increases in workyears.
Acquisition and installation of the IWS/IAN platform
is scheduled to take place over several years . The
funding was provided as no-year money to protect against
the unpredictability of timing in major systems
procurements, which are particularly prone to procurement
challenges and delays that can shift final awards and
obligations of funds into a subsequent fiscal year.
All of the $3 08 million which has been appropriated
for fiscal years (FYs) 1994 and 1995 has been obligated or
is planned to be obligated/committed in FY 1995.
The following table illustrates our actual and
projected AIF obligations for FYs 1994 and 1995:
AIF Obligations
(Dollars in millions)
Workstations
Computers ....
Erqonomic furniture
Subtotal Workstations
LAN ....
Site preparation
Support /training
Telecom/maintenance
Subtotal ....
Reenqineerinq/ASP .
Total .... 22.0 286.0 193.8 92.2
Note: In June 1994, a contract was advertised in the
Commerce Business Daily for the purchase of computers and
FY 1995
FY 1994
Actual
Plnd
Actual
Estimate
Commitment /Obi iq
0.0
58.0
54.6
3.4
19.0
54.0
19.2
34.8
19.0
112.0
73.8
38.2
0.0
114.0
108.2
5.8
2.0
47.0
3.3
43.7
0.0
4.0
2.8
1.2
1.0
9.0
5.7
3.3
22.0
286.0
193.8
92.2
0.0
0.0
0.0
0.0
637
LANs. SSA plans to obligate $308 million during FYs 1994
and 1995. In FY 1994, $22 million was obligated. Of the
estimated $286 million SSA plans to obligate in FY 199.^,
$193.8 million (67.8 percent) has been committed/
obligated.
Mr. Porter. Dr. Chater, the Senate report also
indicated chat SSA intends to purchase more terminals for
many offices than it has personnel in those offices. Is
that accurate, and if so, why is it justified? (Please
expand on the response given in oral testimony)
Dr. Chater. There are several reasons that SSA needs
more than a one-for-one ratio of personal computers (PCs)
to employees in our field offices.
As I mentioned in my testimony we use the "front -end
interview" approach to service delivery. This is a more
efficient approach to service delivery and is crucial to
the safety and security of our employees. We use this
approach in about half of our offices, mostly in
neighborhoods where there is a high possibility of
disruptive, abusive, or dangerous clients. In these
offices, all interviews with members of the public take
place at workstations in the front of the office, where a
guard and the office manager can monitor and control the
entire area. When employees are not interviewing, each
has a workstation at which to do followup work on claims,
answer phone call and do other "desk work." This part of
the work area is not open to the public, and does not need
to be patrolled by guards in order to ensure safety.
It will cost about $15 million to provide the
additional IWS/LAN equipment for every office which now
uses or wants to use the front -end interview approach.
Without this equipment, offices currently using the
"front -end interview" approach would need to be
reconfigured so that every workstation could be used for
interviewing and additional guard services would be needed
to cover the entire office, at additional significant
administrative cost.
In addition, the use of a reception desk is nearly
universal in our field offices. Employees at the
reception desk not only "direct traffic", but also process
many kinds of quick transactions without referring the
client to a second person (i.e. they take applications for
Social Security numbers, process changes of address, set
up appointments and provide general information) .
Different employees may need to work the reception desk at
different times, depending on the flow of clients. No
matter who is working reception, PCs are needed at the
reception desk- -even though the employee has a PC at his
or her "own" desk.
638
Mr. Porter: Mrs. Chater, the Senate report also
indicated concerns that SSA has not adequately considered
its software needs in contracting for the delivery of
hardware. Is that a fair assessment and why?
Dr. Chater: SSA already has an extensive set of
local application software for use with IWS/LANs that
improves productivity and accuracy. Moreover, the
IWS/LANs will access SSA' s recently modernized mainframe-
based cash-payment program software systems and data
bases. SSA is also developing new software to more fully
exploit the capabilities of the cooperative processing
environment that IWS/LANs make possible.
The first major programmatic system being
specifically designed to exploit this cooperative
processing environment is the Reengineered Disability
System which will support SSA' s reengineered disability
process. Other IWS/LAN-based software is being developed
to automate administrative functions such as time and
attendance. We are making good progress in the software
area and will continue to develop cooperative processing
software that exploits the opportunities provided by
IWS/LANs for improved effectiveness, efficiency and
economy of operations.
Mr. Porter: Mrs. Chater, the Senate report indicated
that the Agency's automation plan has not been modified to
incorporate the Agency's new business process
reengineering initiative and its general business plan.
What specific modification has the SSA made to its
automation initiative to support and integrate these other
critical initiatives?
Dr. Chater: SSA has expanded its initial
implementation of IWS/LANs to include State Disability
Determination Services (DDS) and SSA hearing offices to
support the implementation of a reengineered disability
process. The implementation strategy now gives priority
to offices in States with the largest disability workloads
and to employees who serve the national 800 Number
callers. Overall, the IWS/LAN installation schedule has
been revised based on opportunities for greatest overall
benefit to the public that SSA serves.
Factors considered in formulating the current
installation schedule included the need to (1) replace the
aging national terminal network, (2) support expert
systems to improve the national 800 Number service,
(3) automate administrative workloads to obtain
productivity increases to support growing workloads and
service improvements, (4) support a reengineered
disability process and (5) establish a technology
infrastructure to support the further improvements in
<^
639 ' '
SSA's business processes addressed by the Agency's General
Business Plan.
STANDARDIZED FUNCTIONAL ASSESSMENT
Mr. Porter: Mrs. Chater, the Disability Redesign
process you described calls for "assessment of an
individual's functional ability" and reliance on
standardized functional assessment instruments. What
progress has SSA made in this area, how has the Agency
involved the private sector in this process (including
insurance payers and the medical community) , and what has
been the comment of the private sector?
Dr. Chater: SSA has started a number of efforts to
learn more about the current availability of functional
assessment systems and instruments. Using an outside
contractor, we have benefited from several one-day
seminars in which experts from the medical community
provided their suggestions on how to proceed with our
research. We are in the process of reviewing proposals
submitted by private vendors in response to a request for
proposal (RFP) that would have a contractor identify,
evaluate, and categorize functional assessment instruments
that may be useful in the Social Security disability
adjudication process. The work from this contract should
be finished by the end of 1995.
We have had discussions and a first meeting with the
Health Insurance Association of America (HIAA) Disability
Workgroup to chart joint initiatives. This group has
offered to work with the Agency on developing standardized
requests for medical information and has provided
suggestions for requesting and evaluating medical evidence
from treating sources. We are awaiting information from
the member companies regarding the forms in use and
processes being followed in deciding disability claims,
including their use of functional assessments.
SSA is developing a long-range research plan for the
simplified decision methodology, which includes the
necessary work to construct standardized functional
assessment tools. This research plan will span FYs 1996
through 1998 and includes provisions for developing and
testing proposed changes.
We are continuing to ask for input from external
stakeholders and experts in every phase of the disability
redesign implementation. As we proceed with the
functional assessment development, we will continue
consulting external stakeholders.
The information we have gathered so far and comments
from private sector experts indicate that there are many
640
functional assessment tools/systems currently available.
Most are highly specialized or tailored to specific uses
and may not be transf errable to the Social Security
disability program. Experts also counsel that:
• Functional assessments are not readily available from
treating sources;
• Non-physician health professionals can be trained to
do functional assessments in treating physician
office settings;
• Functional assessment instruments assessing physical
limitations are more readily available than those
assessing mental limitations, but there does exist a
body of instruments to assess cognitive mental
functioning.
While the private sector experts do not believe there
are any readily available techniques that SSA can merely
adopt wholesale, and acknowledge the necessity for multi-
dimensional long-term research, they believe that the use
of the functional assessment tools has the potential to
lead to improved decisionmaking and encourage SSA to
pursue research in this area.
UNION ACTIVITIES
Mr. Porter: Mrs. Chater, the budget justification
indicates that SSA spent $9.1 million in salaries and
other expenses (including travel) for 145 full-time
equivalents (FTE) who performed union activities full
time. How much will the Agency spend on such activities
in 1995, and how much is included in the FY 1996 budget
for such activities?
Dr. Chater: SSA' s labor contracts obligate the
Agency to pay the costs of certain union expenses. In
FY 1994, these included $8.1 million for salaries and
$1 million for other costs such as travel, etc. There are
145 SSA employees who are considered to be involved in
union activities on a full-time basis.
Although we do not specifically budget for these
union activities, we expect that these costs will rise in
FYs 1995 and 1996 due, in part, to partnership activities
resulting from Executive Order 12871 such as involvement
in the Short Term Disability and Reengineering
initiatives, cooperative bargaining activities and joint
union-management committee activities. These costs also
will rise because of the expected salary increases due to
the January pay raises.
641
IMPACT OF LEGISLATIVE LIMIT ON
FUNDING UNION ACTIVITIES
Mr. Porter: What would be the impact of a
legislative limitation preventing the expenditure of
Agency funds for such (i.e. union) activities?
Dr. Chater: There are several considerations in
judging the impact of legislative limitation on agency
expenditures for union activities. In his Executive
Order No. 12871, President Clinton stated that the
involvement of Federal Government employees and their
union representatives is essential to achieving the
National Performance Review's reform objectives. Only by
changing the nature of Federal labor-management relations
so that managers, employees, and their elected
representatives serve as partners will it be possible to
design and implement comprehensive changes necessary to
reform Government .
To SSA, this order has resulted in including union
representatives on our reengineering teams. Since the
membership is located throughout the country in various
field locations, time and travel to attend meetings is a
necessary expenditure. Should limitations on expenditures
for such activities become a reality, we could not have
the active and diverse input we receive in these
endeavors. We would, in fact, be unable to meet the
President's order of establishing partnerships.
In addition, our goal to contribute to the
congressionally mandated reduction in Federal employees
requires that SSA undertake a series of personnel actions
that need to be discussed and negotiated \;ith union
representatives. The impact that the streamlining of the
Agency through changing the ratio of supervisors to
employees, buy-outs and redeployment of staff to field
positions has on SSA' s employees is a serious matter. It
is critical for employee morale and the Agency' s future to
make these changes with the consensus of the unions, thus
their involvement in the decisions is essential.
RESEARCH
Mr. Porter: The budget requests over $6 million for
research and demonstration projects. It also indicates
that $3 million was carried over from 1994. Why doesn't
the budget recommend termination of the $3 million
carryover for deficit reduction, and why are these
demonstrations necessary?
Dr. Chater: The FY 1996 request for research and
demonstrations is $6.7 million compared to $27.7 million
appropriated by Congress last year. Additionally,
642
$3 million in unobligated funds will be carried over from
FY 1995 and obligated in FY 1996. Some of these funds
were appropriated in prior years for multi-year projects.
The $9.7 million will be used primarily for the
continuation of a multi-year research effort into the
underlying causes of the recent growth in the Old Age,
Survivors, and Disability Insurance (OASDI) and the
Supplemental Security Income (SSI) disability programs, as
well as projects designed to address current issues in the
area of income security.
Continuation of research into the growth of the OASDI
and SSI disability programs is a priority for SSA. SSA is
implementing a research plan which will cover the
following broad areas:
Disability incidence in the general population.
Trends in applications for disability benefits.
Trends in allowance rates, and
Duration of disability.
This is a multi-year effort. SSA spent about
$750,000 on this initiative in FY 1994. We will spend
about $4 million in FY 1995 and about $7.3 million in
FY 1996. This is part of our effort to gather data for
the long term aspects of our disability reengineering
initiative .
In FY 1996 we will spend about $2.5 million on other
projects. These include:
• $1.6 million on projects that address current issues
in the general area of income security (projects
covering women's issues, retirement age trends,
employer pensions, etc.),
• $750,000 on the continuation of return to work
demonstration projects, and
• $570,000 on a joint Federal/State demonstration
project in California which establishes a unit of
investigators to develop cases of potential fraud in
the disability application activities of "coaches" or
"middle men", including agents such as interpreters
and medical practitioners.
INDIVIDUALIZED FUNCTIONAL ASSESSMENTS
Mr. Porter: What impact would a legislative
limitation on the use of individualized functional
assessments (IFAs) have on program administration?
Dr. Chater: Limiting the use of IFAs would not
643
necessarily reduce the cost of program administration.
In September 1994, the General Accounting Office
(GAO) looked at the impact of the Supreme Court's Zebley
decision, which mandated the use of IFAs, on the SSI
disability rolls. The GAO found that although the
functional assessment process established by Zebley added
over 80,000 children who had previously been denied
benefits to the disability rolls, this new process only
accounted for about 30 percent of all awards made since
the Zebley decision was implemented. By contrast,
70 percent of all awards went to children whose
impairments were severe enough to qualify on the basis of
SSA' s medical standards alone, without the need for a
functional assessment.
We have concluded from this report that most of the
children who received new awards would have qualified for
them even without the functional assessment process and
therefore, the incentive to apply for disability benefits
still would exist. Furthermore, if legislative
limitations were enacted retroactively, we could expect
affected individuals to refile for benefits adding to our
administrative costs.
CHRONIC FATIGUE SYNDROME (CFS)
Mr. Porter: The SSA report on CFS provides limited
information regarding the SSA surveillance project on CFS.
Please explain how the surveillance project is being used
to examine "obstacles to benefits" for persons with CFS.
Please expand on the oral testimony.
Dr. Chater: SSA initiated a list code for internal
tracking and identification of CFS cases. This serves as
a general method of surveillance of CFS case adjudication
across the country. Data from the list code show that our
guidelines for CFS case development are being applied.
However, these code data do not provide a mechanism for
individual case analysis of CFS claimants and the outcomes
of their discrete claims.
SSA' s regional offices work directly with our Office
of Disability to resolve decisionmaking concerns in
individual CFS claims and we continue to foster this
approach. To the best of our knowledge, there are no
particularized "obstacles to benefits" for persons with
CFS. CFS applicants for disability are handled in the
same manner as any other individual filing for benefits
with non-CFS related impairments.
Mr. Porter: The Senate and House both recommended
that the SSA consider establishing a CFS advisory
committee to review current medical standards and
644
investigate the needs of regional SSA offices with regard
to training and information resource needs. SSA indicated
in its report to Congress that its participation in the
Interagency Coordinating Committee fulfills that
recommendation, a claim that seems counter intuitive.
Please explain how participation in the Interagency
Committee fulfills a recommendation to develop an internal
SSA body to educate regional SSA offices about CFS .
Dr. Chater: One of the missions of the Chronic
Fatigue Syndrome Interagency Coordinating Committee is to
keep abreast of current medical and scientific research
initiatives dealing with CFS and communicate such
information to its participants. The Interagency
Committee also tracks a number of scientific surveillance
initiatives dealing with sample CFS study groups, many of
which are being conducted as sponsored research through
the National Institutes of Health.
The work of reviewing medical standards and research
outcomes dealing with the disorder of CFS is best
conducted via the Interagency Committee. This is more
efficient and avoids duplication of effort for SSA. The
Interagency Committee includes the appropriate expertise
and experience (and, in fact, provides a broader
coordinating role) . This Interagency Committee is
preferable to an SSA-directed advisory committee, which
would have to work in conjunction with the Interagency
Committee to be effective. SSA works closely with the
Interagency Committee to keep informed of any medical and
scientific information which would be of value to SSA in
adjudicating disability claims. To date, there have not
been any breakthroughs in medical standards which would
impact on the work of SSA.
NATIONAL 800 NUMBER SERVICE
Mr. Porter: Please provide the service data on the
800 Number by month for 1990 - present which shows the
calls offered, calls received, and average and peak busy
rates and access rates.
Dr. Chater: The following table shows the
information you requested through February 1995. Please
note that peak day busy rates and access rates prior to
FY 1992 are not readily available.
645
NATIONAL 800 NUMBER SERVICE
FY 1990
CALLS
CALLS
BUSY RATE
ACCESS RATE
OFFERED
RECEIVED
OVERALL PEAK DAYS
OVERALL
PEAK DAYS
OCTOBER
5,783,336
4,022,242
30.5%
NOVEMBER
8,377,082
4,069,698
51.4%
DECEMBER
4,262,190
3,651,119
14.3%
JANUARY
12,626,418
5,321,591
57.9%
FEBRUARY
9,385,965
4,378,590
53.3%
MARCH
6,739,989
4,709,886
30.1%
APRIL
5,351,466
4,563,610
14.7%
MAY
4,946,576
4,383,324
11.4%
JUNE
4,853,934
4,044,465
16.7%
JULY
5,707,218
4,521,147
20.8%
AUGUST
6,736,201
5,072,395
24.7%
SEPTEMBER
6,112,787
4,231,941
30.8%
FY 1991
OCTOBER
9,404,557
4,931,403
47.6%
NOVEMBER
7,227,081
4,377,699
39.4%
DECEMBER
6,072,725
4,004,981
34.0%
JANUARY
9,788,469
5,544,713
43.4%
FEBRUARY
8,808,630
4,577,617
48.0%
MARCH
5,989,694
4,359,199
27.2%
APRIL
5,486,904
4,582,124
16.5%
MAY
5,570,193
4,371,829
21.5%
JUNE
4,897,266
4,061,234
17.1%
JULY
6,040,381
4,739,360
21.5%
AUGUST
6,147,594
4,468,595
27.3%
SEPTEMBER
7,406,942
4,723,111
36.2%
FY 1992
OCTOBER
5,637,306
4,611,297
18.2%
36.4%
95.4%
89.5%
NOVEMBER
5,582,876
4,098,738
26.6%
42.1%
93.2%
88.3%
DECEMBER
6,347,170
4,460,875
29.7%
40.7%
92.0%
88.3%
JANUARY
12,082,555
5,351,121
55.7%
74.4%
80.9%
65.5%
FEBRUARY
7,593,337
4,733,556
37.7%
58.9%
89.3%
79.0%
MARCH
5,823,170
5,078,445
12.8%
23.0%
97.0%
94.0%
APRIL
5,863,665
4,674,683
20.3%
41.6%
95.3%
88.5%
MAY
4,331,252
4,007,909
7.5%
17.4%
97.5%
94.8%
JUNE
4,877,374
4,580,728
6.1%
12.4%
98.1%
96.4%
JULY
6,012,500
4,692,339
22.0%
45.5%
95.0%
87.6%
AUGUST
5,688,175
4,440,004
21.9%
40.0%
94.0%
89.0%
SEPTEMBER
5,491,305
4,566,916
16.8%
34.8%
95.6%
90.5%
646
FY 1993
CALLS
CALLS
BUSY RATE
ACCESS RATE
OFFERED
RECEIVED
OVERALL PEAK DAYS
OVERALL
PEAK DAYS
OCTOBER
5,943,773
4,591,668
22.7%
43.9%
94.1%
87.1%
NOVEMBER
6,605,438
4,473,741
32.3%
44.4%
90.6%
87.1%
DECEMBER
8,297,338
5,252,917
36.7%
57.7%
87.6%
80.2%
JANUARY
10,251,698
5,072,01 1
50.5%
74.5%
84.8%
67.3%
FEBRUARY
9,394,845
5,112,757
45.6%
62.4%
86.6%
77.8%
MARCH
7,051,759
5,399,421
23.4%
41.0%
94.0%
88.7%
APRIL
5,919,324
4,803,558
18.8%
35.3%
95.1%
91.0%
MAY
5,112,111
4,179,379
18.2%
36.8%
95.0%
90.4%
JUNE
5,950,702
4,701,011
21.0%
38.6%
94.0%
88.7%
JULY
5,904,924
4,628,356
21.6%
41.7%
94.0%
88.3%
AUGUST
6,522,342
5,028,335
22.9%
35.8%
93.2%
89.4%
SEPTEMBER
6,511,056
4,685,589
28.0%
FY 1994
46.6%
92.2%
86.0%
OCTOBER
10,314,453
4,842,980
53.0%
66.2%
82.0%
74.7%
NOVEMBER
8,559,905
4,785,919
44.1%
49.1%
85.7%
84.1%
DECEMBER
8,619,668
4,889,378
43.3%
52.0%
86.5%
83.0%
JANUARY
11,449,652
5,645,355
50.7%
50.7%
83.8%
83.8%
FEBRUARY
8.329,321
5,464,426
34.4%
39.9%
90.4%
89.4%
MARCH
8,621,614
6,170,850
28.4%
40.6%
92.1%
88.2%
APRIL
8,767,322
5,528,178
36.9%
45.6%
89.3%
87.0%
MAY
8,657,789
5,392,699
37.7%
49.9%
89.1%
85.0%
JUNE
7,853,721
5,320,551
32.3%
46.8%
91.6%
86.0%
JULY
8,060,214
5,017,368
37.8%
52.4%
85.6%
76.9%
AUGUST
9,869,078
5,753,998
41.7%
47.0%
80.7%
78.6%
SEPTEMBER
9,952,999
5,106,843
48.7%
FY 1995
51.2%
72.0%
71.6%
OCTOBER
9,923,255
5,085,040
48.8%
52.0%
72.3%
70.2%
NOVEMBER
13,228,075
5,085,792
61.6%
63.6%
61.1%
60.5%
DECEMBER
12,026,373
4,595,623
61.8%
60.7%
61.3%
61.7%
JANUARY
12,262,135
6,198,975
49.4%
50.6%
73.1%
72.0%
FEBRUARY
10,937,793
5,684,560
48.0%
49.4%
75.0%
74.3%
NOTE:
Access rates for October 1992 through June 1994 were calculated based on a same-day basis.
Beginning July 1994, 5-niinute access rates are shown.
647
SERVICE DELIVERY GOALS
Mr. Porter: Insert at this point in the record a
summary of the service delivery goals established in the
agency strategic plan and the general business plan and
the current level of service for each goal . Exclude
disability and hearings goals covered under subsequent
questions .
Dr. Chater: SSA is committed to administering our
programs effectively and efficiently to protect and
maintain the Social Security trust funds. To this end, we
have established the following service delivery goals in
our "Customer Service Pledge".
• We will provide service through knowledgeable
employees who will treat our customers with courtesy,
dignity, and respect.
• We will provide our customers with the best estimate
of the time needed to complete their request and
fully explain any delays.
• We will clearly explain our decisions so that our
customers can understand why and how we made them and
what to do if they disagree.
• We will make sure our offices are safe, pleasant, and
our services are accessible.
• We will serve customers who have made an appointment
within 10 minutes of the scheduled time.
► During FY 1994, an estimated 24 million people
visited SSA offices. Customers expect minimal
waits for service in field offices. In FY 1994,
SSA' s performance measures show that 17 percent
of customers with appointments waited more than
10 minutes after their scheduled time.
Prior to September 1994, SSA established a
waiting time goal of a 15-minute wait time for
visitors with appointments. However, our
customer surveys indicated that this was an
unacceptable level of service. In response to
our customers' expectations, we changed this
measure to 10 minutes.
• We will mail new or replacement Social Security cards
within 5 working days of receiving all necessary
information.
► SSA issued 16.1 million new and replacement
Social Security cards in FY 1994. Of these.
648
94.6 percent were issued within 5 days of
receiving all information required.
• When a call is placed to our 800 Nun±)er, our
customers will get through within 5 minutes of the
first try.
► Today we are not able to meet this pledge . In
September 1994, 73.8 percent of our customers
were able to get through to the 800 Number
within 5 minutes on regular days. During our
busiest times, our customers will get a busy
signal much of the time. On peak call days in
September 1994, 71.6 percent got through within
5 minutes.
Prior to July 1994, SSA tracked service to our
customers based on a 24 -hour (same-day) access
rate for callers to our 800 Number. The 24 -hour
access rate was 91.6 percent in June 1994 and
94.0 percent in June 1993.
Currently, all existing measures of service delivery
and overall Agency performance are being reexamined from
the customer-service perspective. This review will lead
to the development of a revised performance management
system for the Agency. Ultimately, SSA plans to establish
a systematic, integrated approach to developing consistent
goals and objectives. The process of performance standard
development and measurement will be one continuous
improvement and refinement focused clearly on our ultimate
customer- -the Amexican public.
DISABILITY WORKLOADS
Mr. Porter: Please provide a five year table on
initial and total disability workloads that includes cases
received, processed, pending, processing times, workyears
and funding levels.
Dr. Chater: The information follows.
649
Initial DDS Disability Claims
(Workloads in Thousands)
1991
1992
1993
1994
A?tV5^1
1995
Estimate
Receipts
Processed
Pending . .
. 1,973
1,849
509
2,242
2,218
533
2,513
2,495
552
2,653
2,652
552
2,666
2,819
399
Processing
(in days)
Time
99
104
97
97
74
Total DDS Disability Claims
(Workloads in Thousands)
1991
Actual
1992
1993
A?tU^^
1994
Actual
1995
Estimate
Receipts . .
Processed . .
Pending . . .
2,668
2,529
693
2,988
2,988
725
3,402
3,368
717
3,685
3,673
729
3,787
3,940
576
Workyears . .
11,738
13,225
13,298
13,267
13,680
Funding Level
(in millions)
$865
$1,034
$1,072
$1,136
$1,200
DISABILITY ALLOWANCE RATES
Mr. Porter: Please provide a 5 year table indicating
the allowance rates for initial disability claims,
reconsiderations, ALJ hearings. Appeals Council reviews
and Court cases.
Dr . Chater -.
The information
follows.
?Y90
FY91
FY92
FX93
FVSi
Initial
39.1
42.1
43.4
38.8
33.7
Re cons i de r a t i on
16.7
17.3
17.0
14.3
12.6
Hearings
62.4
64.9
67.1
66.9
66.6
Appeals Council
5.0
4.7
4.5
3.6
3.0
Court Cases
30.0
32.7
45.6
45.4
16.8
The court case allowance rates reflect the following:
• The universe of cases is different from those
normally handled by SSA because of the extreme length
of time it takes to finally settle a court case.
• In some cases, plaintiffs are allowed to submit
additional evidence which may not have been available
650
when the claim was last adjudicated by SSA.
• The court often sets different standards in
evaluation than those set in the regulatory-
requirements .
• The impact of the Zebley court case is reflected in
the rates from FY 1991-FY 1994.
LEGISLATIVE CHANGES
Mr. Porter: The House recently passed legislation
which would affect the payment of disability benefits to
individuals with alcohol- or drug-related disabilities.
What impact will this legislation, if enacted, have on SSA
caseload, administrative expenses, FTE, benefit payments,
initial determination backlogs, reconsideration backlogs,
and hearing backlogs?
Dr. Chater: This legislation would deny SSI payments
to individuals whose drug addiction or alcoholism
contributes materially to their disability effective
October 1, 1995. The changes would initially remove
approximately 125,000 people from the SSI rolls. Many of
these individuals would be returned to the SSI rolls
because they could qualify on the basis of having other
severe disabilities.
The five-year administrative cost resulting from
removing drug addicts and alcoholics from the SSI rolls is
estimated to be about $69 million and a net increase of
235 Federal FTE. These estimates assume that 90 percent
of the people who are removed from the rolls this coming
October will apply for SSI payments again. Of those who
do reapply about 75-80 percent are expected to be
reinstated because they have some other disability.
We expect five-year program savings of about
$1 billion from this provision. The program savings
estimate also assumes a 75-80 percent reinstatement rate.
Assuming no other changes, the legislation will
increase the SSI initial determinations workload by
110,00-115,000 in FY 1996. It would add about 20,000 SSI
reconsiderations and 6,600 hearings to the existing
workloads .
651
CUSTOMER SERVICE STANDARDS
Mr. Obey: Dr. Chater, last Fall you developed and
made available to the public what you refer to as a
"Customer Service Pledge". This pledge lists very
specific standards for your agency in serving the public:
a. Applications for new Social Security numbers
will be processed within 5 days.
b. Clients will be served within ten minutes of
their scheduled appointment.
c. The public will be able to get through on the
phone within 5 minutes .
d. Disability claims will be decided within 60
days .
Could you tell the Committee whether you are
currently meeting these standards and how they compare to
historic service levels?
Dr. Chater: The Social Security Administration (SSA)
is committed to administering our programs effectively and
efficiently to protect and maintain the Social Security
trust funds. SSA established customer service standards
in its "Customer Service Pledge" published in
September 1994. Some of the performance measures
addressed in the "Customer Service Pledge" are newly
established based on our understanding of what the
customer expects from SSA and historic comparisons are not
yet possible.
The level of service being provided in the four
standards you mentioned are listed below.
• SSA issued 16.1 million new and replacement Social
Security cards in fiscal year (FY) 1994. Of these,
94.6 percent were issued within 5 days of receiving
all information required.
• During FY 1994, an estimated 24 million people
visited SSA offices. Customers expect minimal waits
for service in field offices. In FY 1994, SSA' s
performance measures show that 17 percent of
customers with appointments waited more than
10 minutes after their scheduled time.
Prior to September 1994, SSA targeted a waiting time
goal of a 15-minute wait time for visitors with
appointments. However, our customer surveys
indicated that this was an unacceptable level of
service. In response to our customers' expectations.
652
we changed this measure to 10 minutes. In
September 1994, 10.3 percent of all visitors with
appointments waited more than 15 minutes compared
with the 12.5 percent in September 1993.
• Our 800 Number service is not yet able to meet the
goal we have established. In September 1994,
73 . 8 percent of our customers were able to get
through to the 800 Number within 5 minutes on regular
days. During our busiest times, our customers will
get a busy signal much of the time. On peak days,
71.6 percent got through within 5 minutes.
Prior to July 1994, SSA tracked service to our
customers based on a 24 -hour (same-day) access rate
for caller to our 800 Number. The 24 -hour access
rate was 91.6 percent in June 1994 and 94.0 percent
in June 1993 .
• In FY 1994 and FY 1993, the processing time for
initial disability claims was 97 days. Processing
times have varied from a high in FY 1992 of 104 days
to a low in FY 1988 of 75 days.
DISABILITY CLAIMS IN 1995
Mr. Obey: As you know, the 1995 appropriation was
$248 million below your request. Despite this reduction,
which was principally out of your automation account, the
number of disability claims pending in 1995 is expected to
decline from a level of 1,263,000 under your original
budget to under 600,000 according to the tables which we
were sent last week. Average processing time for new
cases declined from an estimated 154 days to a current
estimate of 74 days. These workload estimates are
critical to this Committee in evaluating your Budget
request. How do you explain the large fluctuation in the
1995 case estimates? Please provide specific quantitative
explanations of the reestimates.
Dr. Chater: There are a combination of reasons for
the difference between the number of cases pending and the
processing times the budget now projects for FY 1995 and
the estimates in the FY 1995 President's Budget presented
in February 1994.
• This Committee provided additional funds for FYs 1994
and 1995 for disability work thereby enabling SSA to
process additional disability cases.
• We have revised our projections of the number of
disability claims receipts. We were seeing a 10 to
12 percent growth in receipts each year. In the last
year, we noticed a new trend which caused us to
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adjust our estimates lower to about a 2 percent
growth rate for FY 1996.
• We have been able to increase productivity (number of
cases processed per workyear) as a result of
automation improvements, reengineering of the
disability process and the short-term disability
initiative .
INCREASE IN THE DISABILITY FUND
Mr. Obey: A 74 day processing time is very near your
goal of 6 0 days. If we are so near your goal, why do we
need a $214 million increase in the disability fund?
Dr. Chater: This budget requests a total of
$534 million for disability investment funding (DIF) in
FY 1996, a $214 million increase over the FY 1995 request.
While the majority of these funds will be used to
process additional disability claims and appellate work,
SSA plans an expanded role for the DIF in FY 1996. To
help ensure the integrity of the disability program, SSA
will apply about $68 million of the DIF to processing an
additional 156,000 continuing disability reviews (CDRs)
above the base level of 275,000 CDRs, for a total of
431,000 CDRs in FY 1996--a dramatic increase over the
number of CDRs processed in FYs 1994 and 1995.
Although we are making progress toward our processing
time goal, we realize that merely applying additional
resources to our disability workloads is not a long-term
solution. As a result, SSA has embarked on a course of
action to completely reengineer the way it delivers
service in the disability claims process. The FY 1996 DIF
will provide $20 million to begin implementing our long-
term plan to dramatically improve quality of service by
reengineering the disability process.
STAFFING REDUCTION
Mr. Obey: I am concerned that the FY 1996 budget
proposes a reduction of 896 full-time equivalents (FTE) .
How does the current staffing request compare to SSA' s
original request to the Department when the FY 1996 budget
was being prepared last fall?
Dr. Chater: Except for technical repricing and
adjustments for government -wide decisions of FTE, the
staffing request for FY 1996 is comparable to the staffing
requests made to the Department of Health and Human
Services and the Office of Management and Budget last
fall. The reduction of 896 FTE shown in SSA' s FY 1996
budget request reflects employment reductions required
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under the provisions of the Federal Workforce
Restructuring Act (Public Law 103-296, the buyout
legislation) as well as SSA's own long range streamlining
plan. The plan calls for reductions in FTE employment
through FY 1999 based on automation, procedural
improvements, and workforce restructuring and delaying
efforts consistent with government -wide streamlining
plans .
NOTCH COMMISSION
Mr. Obey: Last December the Notch Commission issued
its report after spending $1,800,000 to study an issue
which had been studied many times before. They appeared
to put this issue to rest. In your view, was the
Commission useful?
Mrs. Chater: In my view, the Commission was useful
because its review of the issue and published findings
resolved the "notch" issue. The Commission's report
concluded that benefits paid to those in the "notch" years
are equitable and called for no remedial legislation.
TRUST FUND RESERVE AND THE FEDERAL DEFICIT
Mr. Obey: Dr. Chater, there was a lot of discussion
during the debate on the balanced budget amendment on the
role of the social security trust fund surplus in the
deficit equations. Could you review for the Committee the
size of the surplus during each of the last several years
and tell us how these numbers count for deficit purposes?
Dr. Chater: The following table displays the trust
fund reserve and the cumulative reserves shown by calendar
year, including interest earned, in millions:
Calendar
Year
Reserve
Cumulative
1990
$62,309
$225,277
1991
55,471
280,747
1992
50,726
331,473
1993
46,812
378,285
1994
58,100
436,385
1995
*
est .
65,267
501,652
* As stated in the 1995 Trustees Report, 4/3/95.
By law, federal trust fund assets not needed to pay
current benefits and administrative expenses must be
invested in special obligations of the U.S. Treasury. To
the extent that these revenues are available to spend on
other programs, the federal deficit is less.
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COACHING OF CHILDREN
Mr. Dickey: What progress has the SSA made regarding
parents who "coach" their children to act disabled in
order to receive Supplemental Security Income (SSI)
benefits?
Dr. Chater: The Social Security Administration (SSA)
has taken an aggressive posture toward assuring the
integrity of the SSI childhood disability program since
public officials, particularly in the State of Arkansas,
raised issues about parental coaching.
SSA initiated a program to ensure that potential
coaching cases receive thorough evaluation prior to
decision effectuation. Anytime a State Disability
Determination Services (DDS) employee suspects that a
claimant is being coached to appear disabled, the DDS
refers the case for review by a federal specialist and a
federal doctor.
So far, 923 cases have been referred for review
nationwide. Sixty- five cases were allowed by the DDS. In
Arkansas, of the 32 cases referred, three were allowed.
Thus far, the federal review has not uncovered any
incorrect allowances, although some cases are still
pending review.
In addition to the DDS reporting process, SSA has
established 800 numbers in each regional office to which
teachers and other school officials could report cases of
suspected fraud, coaching or similar abuses. We have
received reports of about 25 cases in the Dallas Region,
including four calls from Arkansas. Ten reports were on
children not active in our claims records. Nine cases
were denied. Six of these children were in pay status,
and continuing disability reviews (CDRs) to determine
their continuing eligibility have been started in four of
the cases and are pending in the other two.
Recently, contact was made with the Pine Bluff field
office to see if they were aware of any cases of coaching
or fraud. In addition, the Arkansas DDS gathered all
pending childhood cases from your district for review. A
special team of experienced federal reviewers was sent to
Arkansas to review 50 cases from southeast Arkansas, seven
of which were allowances. No evidence of coaching or
inappropriate allowances was found.
HEARINGS PROCESSING TIME
Mr. Dickey: What is the average time a claimant must
wait for disposition of a hearing case at Social
Security's Office of Hearings and Appeals?
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Dr. Chater: The average processing time for hearings
cases in September 1994 was 337 days. The budget projects
average processing times will be reduced over the next two
years .
PROMPT HEARING DISPOSITIONS
Mr. Dickey: What is being done to pirovide a
disposition of hearings cases as promptly as possible?
Dr. Chater: We are addressing the issue of prompt
disposition of hearings cases through our Short-Term
Disability Project Plan, which has already been
implemented and is scheduled to run through
December, 1996. The plan introduces a number of
management actions which will have a significant impact on
SSA's hearings workloads, including:
• Encouraging applicants who file hearings requests to
assist in obtaining medical evidence of record.
• Enhancing the work of special screening units which
identify cases in which we may be able to reverse the
reconsideration decisions rather than send the cases
to a hearing office.
• Expanding the prehearing conference program, under
which senior staff attorneys screen cases and confer
with claimants and their attorneys to ensure that all
evidence has been collected and the file is complete
before the hearing.
• Providing additional support for the Office of
Hearings and Appeals from within the Agency.
• Providing hearing offices with additional personal
computers, hardware and software to facilitate
preparation of decisions.
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STATUS OF THE SOCIAL SECURITY TRUST FUND
Mr. Stokes: Last year, you indicated that according
to the Social Security Trustees' report, the system would
run out of money by the year 2029. What is the current
state of the nation's Social Security Trust Fund?
Dr. Chater: Under the intermediate assumptions of
the 1995 Trustees' Report, the year of exhaustion of the
combined Social Security Trust Funds (the Old-Age and
Survivors Insurance Trust Fund and the Disability
Insurance Trust Fund) is estimated to be 2030.
The change in the year of exhaustion from 2029 to
2030 results primarily from recent economic and
demographic experience which was more favorable than was
assumed in last year's report.
IMPACT OF BABY BOOMERS ON TRUST FUNDS
Mr. Stokes: The elderly are the fastest growing
segment of the American population. As the baby boomers
move into this phase of life, what impact will this have
on the trust fund?
Dr. Chater: For each of the next 18 years, income to
the Old-Age, Survivors and Disability Insurance (OASDI)
Trust Funds from payroll taxes and income taxes on
benefits is expected to exceed total expenditures based on
the intermediate assumptions of the 1995 Trustees Report.
Starting about 14 years from now, however, OASDI costs as
a percentage of taxable payroll are projected to begin
increasing rapidly as the baby-boom generation reaches
retirement age. In contrast, the program's income from
payroll taxes and income taxes on benefits will represent
a relatively level percentage of taxable payroll.
In the absence of legislation to restore long-range
actuarial balance to the program, the trust funds would
begin to spend interest earned on assets in addition to
tax revenues in 2013; and, beginning in 2020, it would
also be necessary to draw down trust fund assets in order
to meet expenditures. Thus, the trust funds would begin
to decline in 2020 and be exhausted in 2030.
SSI OUTREACH
Mr. Stokes: During the hearing last year, you
informed the Committee that the Agency would be funding a
new wave of outreach demonstration projects targeted to
address the needs of underserved populations. Would you
bring the Committee up-to-date on this outreach
initiative, and those which involve the participation of
community-based organizations?
658
Dr. Chater: In fiscal year (FY) 1994, the Social
Security Administration (SSA) funded 54 new Supplemental
Security Income (SSI) outreach demonstration projects to
test methods of improving access by underserved
populations to the program. These projects are actively
involved in testing several models of outreach which are
the result of the experience we have gained with earlier
demonstration projects. Most of these grantees are
community-based organizations that currently serve the
populations we seek- -organizations that are in a position
to assist their clients through the application process.
Through these cooperative partnerships, we are devising
individualized application processes which make sense for
the population being targeted and which take into
consideration the assistance which the grantee can provide
and the whole range of social service needs of the
individual .
Some grantees provide services to a broad range of
individuals, for example, delivering health care to all
low- income individuals in a community. More often, our
community-based grantees provide more specialized services
to segments of the community, targeting minority
populations- -African Americans, Hispanics, and Native
Americans- -or individuals with specials needs- -the aged,
the homeless, and individuals with AIDS or mental illness.
Most of our other grantees are State, local, and tribal
governments, often working in conjunction with community-
based organizations. Examples of this type of
collaboration include a State Office on Aging working with
community-based Area Agencies on Aging and a county social
services agency working with community mental health
centers .
The outreach models that we are testing include:
• Targeted mailings to OASDI beneficiaries with low
benefit amounts who live in high poverty areas;
• The institutionalization of SSI screening and
application-taking into the intake procedures of
aging network organizations;
• One-stop service for disability applicants where the
medical portion of the disability application is
developed at the beginning of the process by working
with medical providers;
• Outreach targeting ethnic or linguistic minority
populations through organizations that have an
existing relationship with these populations;
• Strike teams to take applications from geographically
or culturally isolated populations; and
659
• Discharge planning technical assistance integrating
the screening and applying for SSI to prevent
homelessness for individuals being discharged from
long-term hospitalization.
As we gather data from the first year of operation of
these 54 projects, we will begin the process of evaluating
their merits.
INDEPENDENT AGENCY AUTHORITY
Mr. Stokes: What major new or expanded authorities
are allowed the Agency in its independent agency status?
Dr. Chater: Independent agency status has expanded
SSA authority in several areas. The Department of Health
and Human Services (HHS) performed various liaison
functions involving regulation development for SSA,
including contact with other HHS operating divisions and
Federal entities, including the Office of Management and
Budget (0MB) and the Office of the Federal Register. SSA
will now deal directly with all other federal
organizations. SSA also will have its own Regulatory
Policy Officer and delegated authority to authorize minor
changes in previously published Federal Register issuances
to correct clerical or other minor errors.
SSA' s new Office of General Counsel (OGC) will assume
all legal advisory and review functions formerly handled
at the HHS level, including providing certification to 0MB
that proposed regulations have been reviewed for relevant
compliances and conformations. A new Office of the
Inspector General will be established within SSA for
program and administrative oversight.
There will be a new Social Security Advisory Board
responsible for reviewing and analyzing:
SSA program effectiveness;
coordination with health security programs; and
major studies of social security issues.
The Board will make recommendations regarding:
improving effectiveness to assure economic
security;
improving coordination with health security
programs ;
policies that will ensure trust fund program
solvency;
quality of public service SSA provides;
policies and regulations for all benefit
programs ;
660
increasing public understanding of the social
security system;
a long-range research and program evaluation
plan; and,
such other matters as the Board determines to be
appropriate .
In addition, the law creating an independent SSA
tightens up the provisions relating to misuse of official
SSA symbols, emblems or names, and strengthens the
Administration's enforcement of the misrepresentation
provisions .
The law also provides for numerous modifications to
the programs SSA administers and establishes the
Commission on Childhood Disability.
Mr. Stokes: How will this enhanced status allow the
Agency to do its job better?
Dr. Chater: Independent agency status and the new or
expanded authorities that come with it will better equip
SSA to meet the many challenges the program now faces.
The increased visibility and greater responsibility
conferred upon us will enable SSA to work more effectively
toward restoring public confidence in the future of the
Social Security programs.
Mr. Stokes: I understand that the agency plans to
submit an amended budget reflecting the separation from
the Department of Health and Human Services. When can we
expect to receive it?
Dr. Chater: The budget amendment for SSA' s FY 1996
request is being prepared to reflect independent agency
status for SSA. We will continue to work with HHS and the
Office of Management and Budget (0MB) throughout April and
early May on the adjustments that both SSA and HHS must
make in their respective budget requests for FY 1996.
Together with HHS and 0MB, we plan to submit FY 1996
budget amendments soon thereafter.
PUBLIC CONFIDENCE
Mr. Stokes: Last year, you indicated that the Agency
would focus on strengthening the public's confidence in
the Agency, and you also indicated that in conjunction
with this emphasis a Social Security Advisory Council
would be established. With respect to these objectives,
what progress have you made since you were here last?
Dr. Chater: During the past year, SSA developed and
started to implement a comprehensive and coordinated plan
for rebuilding public confidence in our Agency and in the
661
programs it administers. The plan outlines a three-tier
confidence-building program for SSA that includes the
following phases: ■
1. Educate the public and SSA employees about the
concept of social insurance, the basic
philosophy/history of SSA, and the basic
philosophy/history of Social Security programs;
2. Outline the options that are necessary to \
maintain and/or improve the programs in their current
form; and,
3 . Generate the public debate that ultimately will
determine what Social Security will look like in the
future.
We have started to implement the first phase of our
confidence-building program. For the past two months, we
have been conducting a series of focus groups across the
country with different age groups - 18 to 25 year olds,
26 to 39 year olds, and 40 to 55 year olds. The purpose
of the focus groups is to determine the public's major
questions and concerns about Social Security and to
determine the public's knowledge of SSA and its programs.
In addition, we have started a series of SSA employee
focus group discussions. As the "ambassadors" of our
agency, SSA employees are our most valuable tool in our
confidence-building efforts.
For the second and third phases of the
confidence-building program, we are waiting for the 1995
Advisory Council on Social Security to release its report .
Last year, I asked the Advisory Council to conduct an
extensive review of the Social Security financing issues
and develop recommendations for restoring the long-range
actuarial balance of the program. The Council will submit
its report later this year.
I look forward to receiving the report and the
recommendations. We must then move forward in a
bipartisan manner to discuss and debate the various
proposals that will strengthen Social Security's long-term
solvency. And, we must engage and involve the American
public in this discussion to hear from the people what
changes they would be willing to accept and support in
their Social Security program.
COLLABORATION WITH THE DEPARTMENT
OF VETERANS AFFAIRS
Mr. Stokes: What collaborative initiatives are
underway with the Department of Veterans Affairs?
662
Dr. Chater: The Department of Veterans Affairs (DVA)
is represented on the Federal Interagency Representative
Payee Discussion Group. Along with representatives from
the Railroad Retirement Board, Office of Personnel
Management, and Alcohol, Drug Abuse and Mental Health
Administration, SSA and DVA discuss representative payee
issues of mutual interest . The group has drafted an
interagency guidebook for representative payees which is
in the clearance process.
Beginning in May 1991, SSA and DVA entered into an
exchange of death records. This information is used to
ensure that benefits are paid correctly. Initially, SSA
provided its file of approximately 48 million death
records to the DVA. Accretions to this file are provided
on a quarterly basis. The DVA provided 15 million
historical death records to SSA and accretions are also
provided on a quarterly basis. The memorandum of
understanding (MOU) between the two agencies stipulates
that both agencies must independently verify the fact and
date of death of any individual for whom the other
supplies a date of death before taking any action
affecting payments on the records of that person.
Since 1991, SSA and DVA have collaborated under an
Interagency Agreement on a joint initiative focused on
homeless disabled veterans. Since August 1991 in New York
City, and November 1991 in Dallas, Texas, SSA and the
State Disability Determination Services (DDS) have
stationed staff on a regular basis at sites where the DVA
provides services to homeless veterans. These staff
members work with DVA clinicians to take and process SSA
benefit applications.
In December 1993, we implemented another model in Los
Angeles, California, which features an experimental
position new to SSA that combines the duties of SSA claims
representative and the DDS examiner. These individuals
work full-time as part of a SSA-DVA team at the VA medical
center, taking and processing applications from homeless
veterans .
We recognize that a significant proportion of these
veterans are dually diagnosed as having a severe mental
impairment as well as a substance abuse disorder and
require both a representative payee and treatment for
substance abuse. The Los Angeles VA medical center has
several highly regarded treatment programs which can
accommodate our mandatory treatment requirement .
This population is traditionally difficult for SSA in
terms of finding appropriate payees. In response, we have
contracted with a local, non-profit, community based
organization which has experience in providing a wide
663
range of services to homeless veterans. Case managers
dedicated to our joint project, working closely with the
project team and with DVA clinicians throughout the
medical center, provide both traditional payee and
intensive case management services for these veterans.
In 1994, SSA entered into another Interagency
Agreement with the DVA' s Northeast Program Evaluation
Center to evaluate our 1994 Supplemental Security Income
(SSI) outreach demonstration projects. The Director of
this facility, who is a psychiatrist as well as a
professional evaluator, is our prime collaborator on the
joint homeless initiative I previously described. His
experience with SSI populations and his professional
background give him a unique perspective, and we are
confident that his evaluation will significantly enhance
our review of the methods third-party organizations can
employ to assist with claims for SSI benefits.
Under this agreement, which will be in effect for at
least 5 years, the DVA will conduct an independent
analysis and evaluation of the 54 projects SSA awarded in
FY 1994. DVA' s mission is to identify and recommend to
SSA the most effective and broadly replicable means of
reaching people who may be eligible for SSI benefits and
to help them through the eligibility determination
process. The major focus of this effort is on ways third-
party organizations can mobilize their specialized
experience, staffs, and other resources to assist their
clients with SSI benefits as just one part of the range of
services they offer.
SSA and DVA also have established an MOU which
encourages interagency sharing of leads for possible
representative payees and other relevant information.
MEDICAL EXAM STUDY
Mr. Stokes: Would you update the Committee on the
Agency's medical exam study, where does it currently
stand, and how are the results expected to be used?
Dr. Chater: The Medical Exam Study (MES) is a
complex project that requires careful design. The first
stage of the design process has been carried out jointly
by SSA and, under contract, by Westat, Inc. (an
employee -owned research firm with substantial experience
in designing and conducting surveys and examinations) .
The original period of performance has been extended from
January 1, 1995, to April 30, 1995, so as to permit
further investigation of issues related to functional
assessment . This was done to respond to the
recommendations of the Disability Process Redesign Team
that the disability determination process be changed to
664
reflect a greater stress on functional definitions of
disability. The MES is expected to collect information
that will be useful in carrying out these recommendations
and assessing their impact. Field work is currently
expected to begin in 1996 under a separate contract to be
awarded in late 1995 or early 1996.
The results are expected to provide reliable and
valid information (little or none currently exists) to
answer the following questions:
• How many persons could be eligible for Social
Security or SSI disability benefits but are not
receiving them because of work or other reasons (that
is, what is the ceiling, or total number, of
potential beneficiaries)?
• How many and what kinds of people would be added to
or excluded from the rolls if eligibility were
redefined to place a greater emphasis on functional
status or other likely criteria?
• What employer accommodations and other factors are
associated with continued work by persons who would
otherwise be eligible for disability benefits?
• How and to what extent can this kind of information
be collected reliably in the future using faster,
simpler, and less demanding data collection
procedures?
REENGINEERING
Mr. Stokes: To what extent has the re-engineered
processing mechanism allowed the agency to reduce caseload
processing time, and to what extent will this allow the
agency to improve service delivery in field offices?
Dr. Chater: The redesign of SSA' s disability process
is a long-term initiative with a project life expected to
run beyond the turn of the century. Two of the key
enablers for implementation of the full disability process
redesign will not be completed before 2000. These key
enablers are research aimed at simplifying SSA' s
disability decision making methodology and development and
installation of the expanded automation required to
streamline the process.
Although SSA is only in the early stages of
developing, testing and implementing the redesigned
disability process, we are moving quickly to implement
those aspects of the new process that can be implemented
in the near- term. We plan to begin the pilot testing and
implementation of a number of the aspects of the
665
redesigned process during the remainder of FY 1995 and
throughout FY 1996.
When fully implemented, we expect that disability
claims processing time under the redesigned process will
be reduced to 60 days for initial decisions and to
225 days for decisions at the hearings level.
DISABILITY CASE BACKLOG
Mr. Stokes: To what extent has the agency been able
to bring the disability caseload under control in general,
and in Ohio?
Dr. Chater: Over the last two years, SSA has
redirected staff and resources to accelerate disability
caseload processing. We were able to process 541,000 more
initial disability decisions than budgeted in FY 1993 and
33 9,000 more than budgeted in FY 1994. As a result, there
were 729,220 total disability cases pending at the end of
FY 1994. By continuing to redirect resources, we estimate
we will reduce the total disability cases pending to
575,720 by the end of FY 1995.
In Ohio, there were 48,750 disability cases pending
at the end of FY 1992; by the end of FY 1994, that number
had been reduced to 39,509 cases pending. As of
February 24, 1995, there were 38,786 disability cases
pending in Ohio.
PROJECT ABLE
Mr. Stokes: What progress do you have to report on
the Agency's Project "ABLE" return to work initiative, and
also, to what extent has the initiative been expanded to
the private sector?
Dr. Chater: Project ABLE is an automated referral
system designed and operated by the Office of Personnel
Management (0PM) in conjunction with SSA, the Department
of Educations 's Rehabilitative Services Administration and
participating State Vocational Rehabilitation Agencies.
Project ABLE began as a pilot program for Social
Security disability beneficiaries residing in Maryland,
Virginia, and the District of Columbia. State vocational
rehabilitation agencies in the pilot region are enrolling
job ready beneficiaries in the Project ABLE data base.
Federal agencies are accessing the ABLE system and finding
qualified candidates. The Project was expanded to field
testing in California, Texas, Illinois and Pennsylvania.
This year, SSA and 0PM have agreed to enhance the
Project ABLE data base to include resume imaging. This
666
feature will allow prospective employers to receive a
client resume by FAX directly from the Project ABLE
database. Another enhancement will automatically give
federal agencies listings of eligible employees from
Project ABLE for all posted job vacancies.
Project ABLE has enrolled 456 clients from the three
pilot states. Fifty-one federal agencies have conducted
691 searches of the Project ABLE data base and 1,824
referrals have been made to those agencies as of
March 1, 1995. While only 12 beneficiaries have been
hired, we believe that Project ABLE's success has been
limited by restricted hiring and downsizing of government
agencies which has occurred throughout this period.
Project ABLE has not yet expanded to the private
sector. SSA is beginning to work with the Department of
Labor (DOL) to list Project ABLE clients in the various
data bases funded by DOL that are principally used by
private sector employers. We are also studying the
operation of "one-stop shopping" employment centers in
selected States to see how portable the ABLE technology is
to that environment.
SSA is pleased that Project ABLE was selected as a
National Performance Review reinvention lab. It is a fine
example of Federal and State agencies collaborating to
give state-of-the-art service to their respective
customers .
AGENCY STRATEGIC PLAN
Mr. Stokes: How is the Agency's Strategic Plan (ASP)
being utilized to improve customer service and to
facilitate the streamlining of operations?
Dr. Chater: The ASP leads to decisions about where
and by whom operational work could be done in the future.
Since the mid 1980' s, SSA has experienced three major
changes: downsizing by over 17,000 employees, the
introduction of major automation tools, and the
establishment of a national toll free telephone service.
These forces have dramatically affected SSA' s operating
components in nearly every area: staffing, workflows, and
procedures .
Automation, a key component in the ASP, has allowed
SSA to continue to deliver a high level of service to the
public by streamlining processes, improving productivity
and by affording opportunities to redistribute work. The
ASP has helped us restructure SSA' s human resources and
facilities to gain the maximum benefits and service
improvements resulting from our ASP- inspired reengineering
efforts during these critical times.
667
The changes which are occurring during the period
covered by the ASP (1991-2005) will continue to create
opportunities to improve service and cost-effectiveness.
The ASP represents an effort to plan for an orderly-
transition as we adjust to changing workloads, automation,
and changing demographics with reengineered workflows.
By examining the characteristics of each major work
activity, the changes we can expect in the future,
analyzing the nature of the public's requirements for that
service and looking at the employee skills that will be
needed, SSA should be able to decide where and how best to
service the public in a cost-effective and cost-efficient
manner.
FRAUD, WASTE AND ABUSE
Mr. Stokes: Would you bring the Committee up-to-date
on the progress the agency has made in controlling and
preventing fraud, waste, and abuse in the SSI program, and
what is the extent of the problem? Are we having much
success?
Dr. Chater: One of SSA' s paramount responsibilities
includes protecting the integrity of our programs and
ensuring payment to the right person, in the right amount,
at the right time. Our comprehensive system of quality
assurance ensures the accuracy of initial payment
decisions, adjudicative decisions on OASDI and SSI claims,
and decisional accuracy of disability claims. Results of
these reviews reflect a consistently high degree of
accuracy in decisionmaking (over 90 percent accuracy in
all areas) . However, SSA is always working to combat
waste, fraud and abuse in all the programs it administers,
including SSI.
SSA has taken an aggressive posture toward assuring
the integrity of the SSI childhood disability program
since some public officials have raised concerns about
parents "coaching" children to act disabled in order to
receive SSI payments. SSA initiated a program to ensure
that potential coaching cases receive a thorough
evaluation prior to decision effectuation. Whenever a DDS
employee suspects a claimant is being coached to appear
disabled, the DDS refers the case for review by a federal
specialist and a federal doctor.
In addition to the DDS reporting process, SSA has
established 800 numbers in each of its regional offices
for teachers and other school officials to report cases of
suspected fraud, coaching or similar abuses.
In another effort to combat fraud in the SSI program,
SSA has undertaken a joint Federal/State demonstration
668
project in California which establishes a unit of
investigators to develop cases of potential fraud in the
disability application activities of "coaches" or "middle
men, " including agents such as interpreters and medical
practitioners .
Our FY 1996 budget plans call for a dramatic increase
in the number of continuing disability reviews (CDRs) the
Agency will conduct--f rom 152,000 in FY 1994 to 431,000 in
FY 1996, including 116,000 CDRs on SSI cases. These
reviews will help ensure that only those who are actually
disabled receive benefits.
The Agency's education campaign to encourage
beneficiaries to have their checks deposited
electronically in their bank accounts reduces the
likelihood that a check will be lost or stolen, while
reducing the administrative costs to the Federal
Government for printing and mailing a paper check.
As an independent agency, SSA' s oversight
responsibilities for uncovering waste, fraud, and abuse
will be expanded. SSA will have its own Office of the
Inspector General (OIG) reporting directly to the
Commissioner .
Finally, SSA is developing a comprehensive strategy
for dealing with fraud problems in all the programs it
administers.
SUPPLEMENTAL SECURITY INCOME
Mr. Stokes: What is the profile of the individuals
receiving Supplemental Security Income?
Dr. Chater: We have not profiled a Supplemental
Security Income (SSI) recipient because of the differences
between those who qualify as aged (age 65 or older) and
those who qualify as blind/disabled (any age) .
The following chart illustrates the characteristics
of an SSI recipient.
6.3 million SSI Recipients
--1.5 million Aged
--4.8 million Blind/Disabled (including 619,400 over
age 65 and 841,500 under age 18)
669
Federal Benefit Rate (1995)
$458/month - Individual $687/month - Couple
Average Payroent (December 1994)
$212 - Aged Recipient $358 - Blind/Disabled
Other Income Sources
Total
Acred
Blind/Disable
;d
Social Securi
■ty
40%
63%
32%
Other Unearned
13%
12%
16%
Earned Income
4%
2%
5%
Demographics
of the SSI
Population
SEX
Female
59%
73%
54%
Male
41%
27%
46%
RACE
White
57%
41%
49%
Black
29%
17%
28%
Other
11%
21%
10%
Unknown
3%
21%
13%
ALIENS
12%
30%
6%
DRUG ADDICT/
ALCOHOLIC
Medicaid Institution
($3 0 Payment Level)
AGE
3%
Under age 18
50 or over
75 and over
80 and over
13%
37%
59?
35?
SUBSTANCE ABUSE INITIATIVE
Mr. Stokes: With respect to SSI recipients who are
drug addicts or alcoholics, would you bring the Committee
up-to-date on the collaborative initiative that is
underway with the Substance Abuse and Mental Health
Services Administration (SAMHSA) ? What is the end goal of
that initiative?
Dr. Chater: In October 1993, the Center for
Substance Abuse Treatment (CSAT) , SAMHSA, and SSA jointly
entered into cooperative agreements with the States of
Michigan and Washington to demonstrate innovative models
670
for providing services to SSI beneficiaries disabled due
to alcohol or drug abuse. These demonstrations are
testing the effectiveness of intensive case management and
the use of organizational representative payees on this
severely-addicted population.
A third grant award was made to the State of Illinois
on March 29, 1995. The State will serve this chronically
addicted population in one of the most seriously impacted
locations in the nation -- East St. Louis, Illinois. The
target population is predominately African-American, a
population not significantly served by the other two
demonstrations .
The end goal of the initiative is to secure the
necessary substance abuse, mental health, and vocational
rehabilitation services to enable individuals disabled due
to drug addiction or alcoholism to return to work or work
for the first time.
The projects in Washington and Michigan are in the
second year of operations. Both feature referral for
treatment, services of a professional payee to handle
benefit payments, and a vocational rehabilitation
component which enables project staff to help the
individual return to work or work for the first time.
Both projects have progressed well in enrolling
participants, assessing treatment needs and making
referrals for treatment. They have also made some
progress in providing vocational rehabilitation services.
While results are preliminary, the State of
Washington is reporting notable success in accessing and
retaining individuals in treatment. Previous national
estimates indicated 8 to 20 percent of SSI clients
received treatment; the first results from Washington show
that about 70 percent of clients received substance abuse,
mental health, or vocational rehabilitation (VR) services
using intensive case management monitoring. It is too
early to determine whether these figures will continue;
however, as of March 1995, about 15 of 172 clients in the
VR component are working, and earning incomes from $400.00
to $800.00 per month.
Michigan has not had positive results. The project
experienced some difficulty in coordinating State and
county government staff functions and has now hired a
private firm to provide the referral, monitoring and
representative payee functions. Because of the need to
restructure the activity, there have been no successful
employment results and minimal successful treatment
results .
671
Additionally, under Public Law 103-296, SSA has been
appropriated funds for demonstration projects to test new
and innovative ways for treating the addictive behavior,
referring drug addicts and alcoholics to treatment, and
monitoring their progress in treatment. SSA is working
closely with SAMHSA to develop these demonstration
projects. We expect to be able to report to Congress on
the results of the demonstrations by December 1, 1997.
IMPLICATIONS OF THE CONTRACT WITH AMERICA
Mr. Stokes: The GOP Contract with America includes
issue ideas that would raise the Social Security earnings
limit, repeal tax provisions with respect to Social
Security benefits, and provide tax incentives for private
long-term care insurance. What are the implications of
the Contract with American on the Social Security
Administration's operations and services provided?
Dr. Chater: My response addresses that portion of
the question dealing with raising the Social Security
earnings limit. The short-range cost of the Contract
proposal is estimated to be approximately $7 billion to
the Social Security and Medicare Trust Funds over the
first five fiscal years. The cost for the first ten years
would be approximately $15 billion.
SSA analysis shows that, by the year 2 000,
approximately 600,000 families would receive additional
benefits under the Contract proposal. However, low-income
families would receive little benefit from this
modification to the retirement earnings test. This is
because their earnings are already below the current law
exempt amount or their earnings are so little above the
exempt amount that they receive very limited gains from
raising the exempt amount.
The net reduction in administrative expenses
resulting from this proposal are estimated to be about
$100 million over the first five fiscal years. The
proposal would exempt many beneficiaries at the lower
earnings levels who are now subject to the earnings test,
thus eliminating the costs associated with administering
the earnings test for those beneficiaries. However, the
higher exempt amounts would also allow more beneficiaries
with higher earnings to work and receive some Social
Security benefits. Currently, these beneficiaries may
choose not to file, or may file for Medicare coverage,
knowing that no Social Security benefits are payable
because of their earnings.
672
WELFARE REFORM
Mr. Stokes: What are the implications of the
overhaul of the welfare system on the Agency's operations
and programs?
Dr. Chater: The program administered by SSA that is
being discussed in the context of welfare reform is
Supplemental Security Income (SSI) . Administrative costs
associated with SSI represent about one-third of SSA' s
total administrative costs. Implications of changes to
the SSI program on SSA administrative costs are difficult
to determine without a clearer understanding than has been
provided to date of who would be responsible for
administering any program changes. For example, the
Personal Responsibility Act as passed by the House calls
for the establishment of block grants to the States to
provide services for some portion of the children with
disabilities who would receive cash benefits under current
law. The effect of such a change would be highly
dependent on SSA' s role in a reconfigured program- -if SSA
continues to be responsible for financing the cost of
determining disability and has a major role in oversight
or monitoring of state programs, the implications are far
different from a situation where SSA' s role is
significantly diminished.
AFFIRMATIVE ACTION
Mr. Stokes: What has been the economic net effect of
affirmative action programs on the employment and wages of
African Americans?
Dr. Chater: We cannot be certain to what extent the
gains we have seen for African Americans are attributable
to affirmative action programs or to other changing
factors in society. In the last six years the average
grade and step for African American employees in SSA has
increased from the GS-6 step 9 to the GS-8 step 1. The
increase in the average grade income for African American
employees went from $22,222 in 1989 dollars, to $25,159 in
1994 dollars.
Mr. Stokes: What has been the economic net effect of
affirmative action programs on the employment and wages of
women?
Dr. Chater: Once again, we cannot be certain to what
extent the gains we have seen for women have been
attributable to our affirmative action programs. In the
last six years the average grade for SSA' s female
employees has gone from the GS-7 step 5 to the
GS-8 step 7. The increase in the average grade income for
673
female employees went from $22,093, in 1989 dollars, to
$30,193, in 1994 dollars.
Mr. Stokes: What has been the impact of affirmative
action on employment opportunities for minorities and
women?
Dr. Chater: Over the last six years, the overall
representation of women in SSA' s work force has remained
stable at about 72.0 percent of all employees. At the
three highest grade levels, the GS-13 through GS-15, the
representation of women increased from 25.0 percent to
36.1 percent.
SSA-wide minority representation has remained stable
at around 36.0 percent. Minority representation at the
GS-13 through GS-15 levels has increased from 14.2 percent
to 19.8 percent over the last six years.
Mr. Stokes: What has been the impact of affirmative
action on the preparation of minorities and women for
careers?
Dr. Chater: Over the past five years the composition
of minorities and women in our internal developmental
programs has reflected the composition of SSA's work
force. These development programs cover employees from
the GS-4 level through Senior Executive Service candidate
programs. The equitable participation of women and
minorities in these programs has been a key factor in the
progress made by these groups .
674
JUSTIFICATION OF THE BUDGET ESTIMATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
FTE Amount Page No.
FY 1996 Appropriations
Payments to Social Security
Trust Funds
FY 1996 Request ... $32,641,000
Special Benefits for Disabled
Coal Miners ^'
FY 1996 Request ... 85 $665,396,000
FY 1997 Advance ... --- $170,000,000
Supplemental Security Income
Program
FY 1996 Request ... --- $25,862,555,000
FY 1997 Advance ... --- $9,260,000,000
Limitation on Administrative
Expenses
FY 1996 Request . . . 63,652 $6,188,200,000
33
61
675
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676
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
Payments to Social Security Trust Funds
FY 1996 Budget Page No.
Appropriation language - 3
Amounts available for obligation 4
Summary of changes 5
Budget authority by activity 6
Budget authority by object 7
Authorizing legislation 8
Appropriation history table ' 9
Justification:
A. General statement 10
B. Special payments for certain uninsured persons (Prouty) . . 12
C. Pension reform 14
D. Unnegotiated checks 15
E. Coal industry retiree health benefits 16
677
SOCIAL SECURITY ADMINISTRATION
Payments to Social Security Trust Funds
For payment to the Federal Old-Age and Survivors Insurance and the
Federal Disability Insurance Trust Funds, as provided under sections 201 (m) ,
22e(g), and 1131(b)(2) of the Social Security Act, [$25,094,000] $22. €41. 000.
In addition, to reimburse these trust funds for administrative expenses
to carry out sections 9704 and 9706 of the Internal Revenue Code of 1986.
$10.000. 000. to remain available until expended. (Department of Health and
Human Services Appropriations Act, 1995) „
(Department of Health and Human Services Appropriation Act, 1995.)
Explanation of Lanouaoe Change
1/ This request is required to transfer $10 million from the general fund
to the Limitation on Administrative Expenses in order for the Social
Security Administration to process non-social security caseworJc under
section 9704 and 9706 of the Internal Revenue Code of 1986, as amended
by section 19141 of the Energy Policy Act of 1992 (Public Law 102-4B6) .
678
Payments to Social Security Trust Funds
&mr.imrB AvaJiaV^T*^ for ohlioation
1995
1994 Current 199»
Actual Estimate Estimate
Appropriation: 178,000 $25,094,000 $32,641,000
Ann^^l Isl 196 000 4,833,000.000 6,683,000.000
Permanent s, tjss, j.:»o, www
Enacted 1.250.000 z^s.
Supplemental .... . .
Subtotal ,
:SropJ?ation . . 55,687.374,000 $4,859,344,000 $6,715,841,000
Unobligated balance,
end of year -669,497
Unobligated balance, ___ ---
lapsing -7,871,p^5 ■
^^bfigations . . . $5,680,826,197 $4,860,013,497 $6,715,641,000
679
Payments to Social Security Trust Funds
Summary of Changes
(Annual Appropriation)
1995 Appropriation $25,094,000
(Obligations) ($25,764,000)
1996 Request 32.641.000
Net change +$7,547,000
(Obligations) ( + $6,877,000)
1995 Current Change
Estimate Base from Base
Increases :
Coal industry retiree health benefits --
these funds to be included in the FY 1996
appropriation request, to remain available
until expended 0 +10,000,000
Total increases +10,000,000
Decreases :
Program:
Special payments for certain uninsured
persons- -Reflects a decreasing
beneficiary population 6,994,000 -2,453,000
Total decreases -2.453.000
Net change +7.547.000
680
Payments to Social Security Trust Funds
Budget Authority by Activity
(Budget Authority in Thousands)
1995
1994
1995
Current
1996
Actual
Appropriation
Estimate
Estimate
Current Authority:
Special payments for certain
xininsured persons .... $10,078
(Obligations) ($10,078)
Pension reform 1,100
(Obligations) (792)
Unnegotiated chec)cs .... 17,000
(Obligations) (9,437)
Coal industry retiree '
health benefits -- -- -- 10,000
(Obligations) (1.323) -- (670) (10.000)
Disaster Relief ' . . . . -- -- 1,250
(Obligations) i^_ -- (1.250) --
$6,994
($6,994)
$6,
($6,
,994
,994)
$4,
($4,
,541
,541)
1,100
(1,100)
1,
(1,
,100
,100)
1,
(1,
,100
,100)
17,000
(17,000)
17,
(17,
,000
,000)
17,
(17,
,000
,000)
Subtotal,
current authority . . . $28,178 $25,094 $26,344 $32,641
(Obligations) ($21,630) ($25,094) ($27,014) ($32,641)
Permanent Authority:
FICA and SECA tax credits . . . $2,777 $11,000 $11,000 $8,000
(Obligations) ($2,777) ($11,000) ($11,000) ($8,000)
Income tax equivalents,
benefits 5,573,000 4,730,000 4,730,000 6,579,000
(Obligations) (5,573,000) (4,730,000) (4,730,000) (6,579,000)
Income tax equivalents
nonresident aliens .... 83,419 92,000 92,000 96,000
(Obligations) (83,419) (92,000) (92,000) (96,000)
Subtotal, permeuient
authority $5,659,196 $4,833,000 $4,833,000 $6,683,000
(Obligations) (S5.659.196) (S4.833.000) ($4,833.000) (S6.683.000)
Total budget authority . . $5,687,374 $4,858,094 $4,859,344 $6,715,641
(Obligations) ($5,680,826) ($4,858,094) ($4,860,014) ($6,715,641)
'The amount appropriated In FY 1996 will remain available until eiqjended to reimburse the
trust funds for the administrative expenses to carry out sections 9704 and 9706 of the Internal
Revenue Code of 1986, as amended by section 19141 of the Energy Policy Act of 1992.
"The amount transferred to FY 1995 no-year funds from the Executive Office of the President
is pursuant to the provisions of P.L. 103-211 for SSA's costs related to damage from the
January 1994 earthquake in Southern California.
681
Payments to Social Security Trust Funds
Budget Authority by Object
1995
Increase
1995
Current
1996
or
ADDroDriation
Estimate
Estimate
Decrease
Insurance claims
and indemnities . .$4,856,994,000 $4,858,244,000 $6, 714, 541, 000 +$1, 857, 547, 000
Other services . . 1. 100. OOP 1, 100, OOP 1. 100. 000 0
Total , budget
authority by
object $4,858,094,000 $4,859,344,000 $6,715,641,000 $1,857,547,000
682
8
Payments to Social Security Trust Funds
Authorizing Legislation
1995 1995 1996 1996
Amount Current Amount Budget
Authorized Estimate Authorized Request
Payments to Social Security Trust
Funds Activity:
1 . Special payments for certain
uninsured persons (Prouty) :
Social Security Act (S.S. Act),
section 228(g) Indefinite $6,994,000 Indefinite $4,541,000
2. Pension reform: S.S. Act,
section 1131(b)(2) Indefinite 1,100,000 Indefinite 1,100,000
3. Unnegotiated chec)cs: S.S. Act,
section 201 (m) ; Social
Security Amendments
of 1983, section 152 .... Indefinite 17,000,000 Indefinite 17,000,000
4 . Coal industry retiree health
benefits: Internal Revenue
Code of 1986, section 9704
and 9706: Energy Policy
act 1992, section 19141 . . Indefinite . -- Indefinite 10,000,000
5. Disaster relief: pursuant
to the provisions of P.L.
103-211 -- $1,250,000
Subtotal , aumual
appropriation -- $26,344,000 -- $32,641,000
6. SECA tax credits: Social
Security Amendments of 1983, Permanent Permanent
section 124(b) Indefinite 11,000,000 Indefinite 8,000,000
7. Income tax equivalents,
benefits : Social Security
Amendments of 1983, Permanent Permanent
section 121 Indefinite 4,730,000,000 Indefinite 6,579,000,000
8. Income tax equivalents,
nonresident aliens:
Social Security
Amendments of 1983, Permanent -- Permanent
section 121 Indefinite 92.000.000 Indefinite 96. 000.000
Total appropriation .... -- $4,859,344,000 -- $6,715,641,000
683
Payments to Social Security Trust Funds
Appropriation History Table
(Annual Appropriation]
1
Fiscal
Budget
Estimate
To Congress
House
Allowance
Senate
Allowance
Appropriation
1987
$500,555,000
$500,555,000
$500,555,000
$500,555,000
1968
$105,298,000
V
$105,298,000
$105,298,000
$105,298,000
1989
$93,631,000
V
$93,631,000
$93,631,000
$93,631,000
1990
$191,96B,000
$191,968,000
$191,968,000
$191,968,000
1991
$46,95B,000
$46,958,000
$46,958,000
$46,958,000
1992
$40,968,000
$40,968,000
$40,968,000
$40,968,000
1993
Supplemental
$35,242,000
$10,000,000
v
$35,242,000
$10,000,000
$35,242,000
$10,000,000
$35,242,000
$10,000,000
1994
$28,178,000
$28,178,000
$28,178,000
$28,178,000
199S
$25,094,000
i.'
$25,094,000
$25,094,000
$25,094,000
1996
$32,641,000
Funds for the Department of Defense (DOD) for military service credits are
included in the DOD appropriation for FY 1988 and subsequent years.
Funds for the Public Health Service, Coast Guard and National Oceanic and
Atmospheric Administration for military service credits are included in the
appropriation for each respective agency in Ti 1989 and subsequent years.
The supplemental recjuest for FY 1993 provided for the reimbursement of the
trust funds for the administrative expenses which are authorized to be
expended from the Limitation on Administrative Expenses account to carry
out the responsibilities assigned to the Secretary of Health and Human
Services under the Internal Revenue Code of 1986, sections 9704 and 9706,
as amended by section 19141 of the Energy Policy Act of 1992.
The FY 1995 appropriation request does not include $1,250,000 in no-year
funds transferred from the Executive Office of the President for SSA's
costs related to damage from the Jcuiuary 1994 earthquake in Southern
California.
684
10
Payments to Social Security Trust Funds
Justification
1995
Estimate
1995
Current
Estimate "
Increase
or
Decrease
impropriation request .
(Obligations)
. $25,094,000
. ($25,094,000)
$26,344,000
($27,014,000)
$1,250,000
(+$1,920,000)
1995
Current
Estimate
1996
Estimate
Increase
or
Decrease
Appropriation request.
(Obligations)
. .$26,344,000
. ($27,014,000)
$32,641,000
($32,641,000)
+$6,297,000
(+$5,627,000)
General Statement
This account includes several Federal fund payments to the Social Security
trust funds for a variety of distinct purposes. Of these payments, three that
are authorized to be appropriated annually are included in this appropriation
request . The purpose of each requested payment is to put the trust funds in
the same financial position they would have been in had they not borne the
cost of certain benefits or administrative expenses which are chargeeible to
Federal funds . The three payments included in this appropriation request are
for special payments to certain uninsured persons, pension reform, cmd
interest on unnegotiated checlcs. Amounts appropriated to this account as
permanent indefinite authority that are not addressed in this justification
include receipts from Federal income taucation of Social Security benefits and
the value of tax credits granted for a portion of SECA taxes. ^'^
The President's appropriation request of $32,641,000 in FY 1996 for this
account represents current law requirements . No proposed law amounts are
included .
A brief description of the payments included in this account as permanent
indefinite appropriations follows. The Social Security Amendments of 1983
provided Federal income tax credits to individuals who paid Federal
Insurance Contribution Act (FICA) or Self -Employment Insurance
Contribution Act (SECA) taxes. The tauc credits are reflected in
individual income tax withholding rates, while an equivalent payment to
the Social Security trust funds is made from the general funds of the
Treasury on an estimated basis. The FICA tax credit applied only to wages
earned in calendar year 1984; small adjustments to prior year amounts too)c
place in FY 1993. The SECA tax credit applies through calendar year 1989.
The estimates for SECA credits are $11 million for FY 1995 auid $8 million
for FY 1996. The amount for FY 1996 represents projections of additional
SECA earnings first reported in FY 1996 for earlier years in which SECA
credits were gremted. These additional reported earnings decline over
time.
The Social Security Amendments of 1983 also provide for taxation of up to
one-half of Social Security benefits in excess of certain income
thresholds. The Omnibus Reconciliation Act of 1993, P.L. 103-66, amended
this provision so that up to 85 percent of benefits could be subject to
taucation. The additional amounts collected from the new taxation
provision will be paid to the Health Insurance Trust Fund,- no additional
income is due the Social Security Trust Funds as a result of the enactment
of this new law.
685
11
The taxes are collected as Federal income taxes, then an equivalent
payment to the Social Security trust funds is made from the general funds
of the Treasury. Transfers of estimated aggregate tax liabilities arising
from Social Security benefits of U.S. citizens are made quarterly euid then
adjusted as actual receipts are known. The estimated income from these
taxes is $4,730 million in FY 1995 and $6,579 million in FY 1996 from U.S.
citizens; taxes imposed on aliens are transferred monthly and will
generate estimated income of $92 million in FY 1995, and $96 million in
FY 1996. The estimates for taxation of benefits reflect normal growth
related to benefit levels.
i-' FY 1995 current estimate includes the $1,250,000 in no-year funds
transferred from the Executive Office of the President for the costs
related to SSA's damage from the January 1994 earthquake in Southern
California.
686
12
Payments to Social Security Trust Funds
Special Payments for Certain Uninsured Persons
Authorizing Legislation: Section 226 (g) of the Social Security Act.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
Budget authority . . . $10,078,000 $6,994,000 $4,541,000 -$2,453,000
Purpose and Method of Operation
The purpose of this payment is to reimburse the Federal Old-Age and Survivors
Insurance (OASI) Trust Fund for the costs of special payments made to certain
persons who were not insured for regular Social Security benefits.
Benefits were authorized in a 1966 amendment to the Social Security Act (the
Prouty amendment) providing for special payments to persons aged 72 and over
who were too elderly to have worked long enough after passage of the Act to be
insured for Social Security benefits. To be eligible under the Prouty
amendment, an individual must have attained age 72 before 196B, or meet
certain minimal insured status requirements if he or she attained age 72 in
1966 or later. In 1994, the benefit amount was $163.40. For individuals
receiving a government pension, payments under a federally-aided public
assistance program or payments under the Supplemental Security Income program,
Prouty benefits are reduced or withheld, as required by law. The number of
persons receiving benefits under the Prouty amendment has been decreasing
gradually as the size of the aged population meeting the eligibility
requirements decreases. As of September 30, 1994, there were 1,600 persons
receiving benefits under this program, as compared to 2,700 on
September 30, 1993.
Section 226 (g) of the Social Security Act, as amended, authorizes an annual
appropriation of Federal funds to reimburse the OASI Trust Fund (with
interest) for special monthly benefits paid during the second preceding fiscal
year to persons with fewer than three quarters of coverage. Special payments
made to persons with three or more quarters of coverage are funded from the
trust funds and not reimbursed from general revenues. Of the total number of
Prouty beneficiaries, approximately 92 percent received benefits based on
fewer thaui three quarters of coverage .
Funding levels for the past 5 years were as follows:
Fiscal
Year Obligations
1991 $25,458,000
1992 $18,668,000
1993 $14,142,000
1994 $10,078,000
1995 (estimate) $6,994,000
687
13
Rationale for the Budget Request
The FY 1996 request is for payment of $4,541,000 to the Federal Old-Age and
Survivors Insurance Trust Fund for program costs incurred in FY 1994. Program
costs include benefit payments actually made, related administrative expenses
for establishing entitlement to such benefits and maintaining the beneficiary
roll, and interest lost to the trust fund. The FY 1996 request is less than
the FY 1995 amount and the FY 1994 amount as a result of the continually
decreasing beneficiary population.
The reimbursement for FY 1994 program costs is composed of:
a. Benefit payments $3,962,000
b. Administrative costs 21,000
c. Interest 558. OOP
Total, FY 1994 program costs . . . $4,541,000
688
14
Payments to Social Security Trust Funds
Pension Reform
Authorizing Legislation: Section 1131(b) (2) of the Social Security Act.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
Budget authority . . . $1,100,000 $1,100,000 $1,100,000 -0-
Purpose and Method of Operation
The purpose of this payment is to reimburse the Federal Old-Age and Survivors
Insurance (OASI) Trust Fund for the cost of certain pension reform activities
chargeable to Federal funds .
The Employee Retirement Income Security Act of 1974, P.L. 93-406 (Pension
Reform Act), established section 1131 of the Social Security Act. This
section requires the Secretary of Health and Humam Services to furnish
information regarding deferred vested pension rights to pension plan
participants (and their dependents or survivors) , either upon request or
automatically upon application for retirement, survivors, or disability
insuramce benefits. The Social Security Administration (SSA) obtains the
necessary information from the Internal Revenue Service.
Section 1131(b) (1) permits the administrative expenses of carrying out this
pension reform wor]c to be funded initially from the OASI Trust Fund through
SSA's limitation on administrative expenses. Section 1131(b)(2) authorizes an
annual appropriation of Federal funds to reimburse the OASI Trust Fund,
including interest as appropriate, for these pension reform administrative
expenses. SSA began to incur pension reform administrative expenses in
FY 1977.
Funding levels for the past 5 years were as follows:
Fiscal
Year Obligations
1991 $1,033,000
1992 $686,000
1993 $861,000
1994 $792,000
1995 (estimate) $1,100,000
Rationale for the Budget Request
SSA's request for FY 1996 is the same as FY 1995. The $1,100,000 in resources
reflects the estimated ongoing level of activity needed to reimburse the OASI
Trust Fund for the cost of carrying out its responsibilities under the Pension
Reform Act .
689
15
Payments to Social Security Trust Funds
Unneqotiated Checks
Authorizing Legislation: Section 201 (m) of the Social Security Act and
Section 152 of P.L. 98-21.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
Budget authority . . . $17,000,000 $17,000,000 $17,000,000 -0-
Purpose and Method of Operation
The purpose of this payment is to reimburse the Federal Old-Age and Survivors
Insurance (OASI) and Disability Insurance (DI) Trust Funds for the value of
interest on benefit checks that remain uncashed after 6 months.
This activity was originally established to reimburse the Trust Funds for
uncashed benefit checks and accrued interest. Beginning October 1, 1989,
Social Security checks, like those issued by other Federal agencies, are
negotiable for only 12 months from their date of issue under the provisions of
the Competitive Equality Banking Act (CEBA) of 1987 (P.L. 100-86) . In the
14th month after issue, the Department of the Treasury prepares a listing of
checks outstanding from each agency, cancels those checks, and refunds the
value of checks cancelled to the authorizing agencies. The value of
unnegotiated checks issued on or after October 1, 1989 will be credited
directly to the trust funds from Treasury's general fund when the checks are
cancelled, pursuant to P.L. 100-86.
Funding levels for the past 5 years were as follows:
Fiscal
Year Obligations
1991 -$9,326,000
1992 $10,685,000
1993 $11,058,000
1994 $9,437,000
1995 (estimate) $17,000,000
Rationale for the Budget Request
The FY 1996 request is for $17,000,000 to reimburse the OASDI Trust Funds for
the value of interest on unnegotiated checks.
FY 1995
Estimate
OASI Trust Fund $14,000,000
DI Trust Fund 3.000. 000
Total $17,000,000
The FY 1996 request is the same as the FY 1995 request. It funds the
estimated ongoing level of activity and represents the value of interest for
unnegotiated OASDI benefit checks. The "Limited Payability" procedure
required by CEBA took effect in October 1989. Under this procedure
unnegotiated checks are now credited directly to the trust funds and do not
pass through the Payments to Social Security Trust Funds account. However,
the interest adjustment must be paid through this account because CEBA made no
provision for it.
690
16
Payments to Social Security Trust Funds
Coal Industry Retiree Health Benefits
Authorizing Legislation:
Sections 9704 and 9706 of the Internal Revenue Code
of 19B6 as amended by section 19141 of the Energy
Policy Act of 1992.
1994
Actual
1995
ADDroDriation
1995
Current
Estimate
Increase
or
Decrease
Budget authority
(Obligations) . . .
'. ! ($1,323,222)
(--)
($669,497)
-0-
(+$669,497)
1995
Current
Estimate
1996
Estimate
Increase
or
Decrease
Budget authority
(Obligations) . . .
. . ($669,497)
$10,000,000
($10,000,000)
$10,000,000
(+$9,330,503)
Purpose and Method of Operation
The purpose of this payment is to reimburse the Federal Old-Age and Survivors
and Federal Disability Insurance Trust Funds for work carried out under
Section 19141 of the Energy Policy Act of 1992 (Public Law 102-486) which
established the "Coal Industry Retiree Health Benefit Act of 1992" (CIRHBA) .
CIRHBA combined two existing United Mine Workers of America pension plans into
a single fund and required that certain existing coal mine operators pay
health benefit premiums for the new combined plan. The law directed the
Secretary of Health euid Human Services to:
• Search the earnings records of the group of retired coal miners covered by
the combined plan;
• Determine which retirees should be assigned to which mine operators;
• Notify the involved mine operators of the names and Social Security numbers
of eligible beneficiaries who have been assigned to them;
• Process appeals from operators who believe that assignments have been made
incorrectly; and
• Compute the premiums based on a formula estiiblished in the Act.
Progress to Date /
SSA has assigned the approximately 80,000 retired miners covered by the
combined plan to coal mine operators, and is in the process of providing
requested earnings records and reviewing the appeals made by coill operators.
Because SSA's costs for administering CIRHBA are properly chargeable to
Federal funds, an FY 1996 appropriation request will be presented to Congress
in the amount of $10 million for the Limitation on Administrative Expenses
(LAE) account to carry out the processing of appeals in FY 1995 and FY 1996.
These expenditures will later be reimbursed from general revenues.
691
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
Special Benefits for DiseOiled Coal Miners
FY 1996 Budget Page No.
Appropriation lamguage 19
Language amalysis 20
Amounts available for obligation 21
Summary of changes 22
Budget authority by activity 23
Budget authority by object 24
Average grade ouid salary 24
Administrative Costs 25
Authorizing legislation 26
Appropriation history table 27
Justification:
A. General statement 28
B. Benefit payments 29
C. Administration 31
692
SOCIAL SECURITY ADMINISTRATION
Special Benefits for Disabled Coal Miners
For carrying out title IV of the Federal Mine Safety and Health Act of
1977, [$527,874,000] $485,396,000, to remain available until expended.
For making, after July 31 of the current fiscal year, benefit payments to
individuals under title IV of the Federal Mine Safety and Health Act of 1977,
for costs incurred in the current fiscal year, such amounts as may be
necessary.
For making benefit payments under title IV of the Federal Mine Safety and
Health Act of 1977 for the first quarter of fiscal year [1996, $180,000,000]
1997, $170,000, 000, to remain available until expended. (Department of Health
and Human Services Appropriations Act, 1995.)
693
Special Benefits for Disabled Coal Miners
Language Analysis
Language Provision
Explanation
"For making, after July 31 of the
current fiscal year, benefit
payments to individuals under
title IV of the Federal Mine Safety
and Health Act of 1977, for costs
incurred in the current fiscal year,
such amounts as may be necessary."
Provides an indefinite appropriation
to finance any shortfall in the
definite appropriation for benefit
costs during the last 2 months of
fiscal year 1996.
"For making benefit payments under
title IV of the Federal Mine Safety
and Health Act of 1977 for the first
quarter of fiscal year [1996,
$180,000,000] 1557, $170,000,000, to
remain available until expended."
Appropriates funds for first quarter
costs of the subsequent fiscal year.
This provision ensures that
beneficiaries will continue to
receive benefits during the first
quarter of FY 1997 in the event of a
temporary funding hiatus .
694
21
Special Benefits for Disabled Coal Miners
Amounts Available for Obligation -'
1995
1994 Current 1996
Actual Estimate Estimate
Appropriation
Annual (definite) $771,181,000 $717,874,000 $665,396,000
Regular appropriation (575,181,000) (527,874,000) (485,396,000)
First quarter advance
appropriation (196,000,000) (190,000,000) (180,000,000)
Indefinite current year
appropriation i^z
Subtotal, adjusted
appropriation $771,181,000 $717,874,000 $665,396,000
Unobligated balance,
start-of-year +1,306,681 +8,092,482 +8,785,482
Unobligated balance,
end-of-year -8,092,482 -8,785,482
Recovery of prior year
obligation zsj: z^^ zjlz
Net obligations $764,395,199 $717,181,000 $674,181,482
1' Excludes funding for work reimbursed by the Department of Labor.
I
I
695
22
Special Benefits for Disabled Coal Miners
Summary of Changes
1995 Current estimate, budget authority $717,874,000
1996 Estimate, budget authority S665. 396. 000
Net Change -$52,478,000
1995 Base
Workyears Budget
(FTEs) Authority
Increases :
A. Built-in:
Benefit payments -- $712,693,000
Full year effect of
2.2% percent increase
effective January 1996 . .
Total increases
Decreases :
Benefit payments -- $712,000,000
a. Reduction in benefit
payments due to a
decrease of 12,000
beneficiaries
b. Decrease in average
benefit amount.
Number of dependents decline
due to terminating events
causing the benefit amount
per check to drop ....
c. New budget authority
requirements decrease
in FY 1996 because the
amount of benefit
payments funded from
other sources (prior
year unobligated
balances) will be
$8,785,482 in FY 1996 . .
Total decreases ....
Net change
Change from Base
Workyears Budget
(FTEs) Authority
+9,307,000
(+9,307,000)
+9.307.000
-$61,785,000
(-52,000,000)
(-1,000,000)
(-8,785,000)
-S61. 785.000
-S52.478.000
696
Special Benefits for Disabled Coal Miners
Budget Authority by Activity
(Budget Authority in Thousands)
1995
1994
1995
Current
1996
Actual
ADoroDriation
Estimate
Estimate
Benefit payments
(Obligations) . . .
$766,000
($760,676)
$712,693
($712,693)
$712,693
($712,000)
$660,215
($669, 000)
Administration . .
5,181
(3.720)
5,181
(5.181)
5,181
(5,181)
$717,874
($717,181)
5,181
(5.181)
$665,396
($674,181)
Total, budget
authority . ,
(Obligations) .
$771,181
($764,396)
$717,874
($717,874)
First quarter advance
appropriation for the
subsequent year . . .
($190,000)
($180,000)
($180,000)
($170,000)
Full-time
equivalents . . .
59
85
85
85
697
Special Benefits for Disabled Coal Miners
Budget Authority by Object -'
1995
Increase
Current
1996
or
Estimate
Estimate
Decrease
Pull-time equivalent of full-time
permanent positions 85 65 0
Full-time equivalent of all
other positions _1 _1 0
Total compensable workyears .... 66 66 0
Average ES salary $107,300 $109,100 +$1,800
Average GS grade 9 9
Average GS salary $37,800 $39,700 +$1,900
Personnel compensation:
Permanent positions • $2,974,269 $2,974,269 $0
Positions other than permanent 128,488 128,488 0
Other personnel compensation . . 111,243 111,243 0
Special personal services
payments 0 0 0
Subtotal, personnel
compensation $3,214,000 $3,214,000 0
Personnel benefits 544,000 544,000 0
Travel and transportation of
persons 12,000 12,000 0
Transportation of things 12,000 12,000 0
Rents, communications and
utilities :
Rent 459,000 459,000 0
Communications, utilities and
miscellaneous charges 433,000 433,000 0
Printing and reproduction 27,000 27,000 0
Other services 344,000 344,000 0
Supplies and materials 69,000 89,000 0
Equipment 36,000 36,000 0
Land and Structures 11,000 11,000 0
Insurance claims and indemnities .. 712. 693. OOP 660. 215, 000 -52. 478. 000
Total, budget authority
by object $717,874,000 $665,396,000 -52,478,000
Obligations ($717,181,000) ($674,181,000) (-43,000,000)
First quarter advance
appropriation for the
subsequent year ($180,000,000) ($170, 000, 000) (-$10, 000, 000)
Excludes fvinding and FTE's for wor)c reimbursed by the Department of Labor.
698
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699
Special Benefits for Disabled Coal Miners
Authorizing Legislation
1995
1995
1996
1996
Amount
Current
Amount
Budget
Authorized
Estimate
Authorized
Request'
Title IV of the
Federal Mine
Safety and
Health Act
of 1977
Indefinite
$717,874,000
Indefinite
$665, 396, 0(
First quarter advance
appropriation for
the subsequent
year
($180,000,000)
($170,000,000)
'Includes an advance appropriation of $180,000,000 enacted in the
Department of Health and Human Services Appropriations Act, 1995
(P.L. 103-333) .
700
Special Benefits for Disabled Coal Miners
Appropriation History Table
Fiscal
Year
Budget
Estimate
to Conqress
House
Allowance
Senate
Allowanipe
Appropriation
1987
$963,437,000
$963,437
000
$963,437,000
$963,437
000
1988
$903,902,000
$915,902
000
$915,902,000
$915,902
000
1969
Indefinite
$878,581,000
$6,755,477
$878,581
000
$878,581,000
$878,581
$17,334
000
193
1990
Sequester
Order
Reduction i'
Indefinite
$859,862,000
$9,637,354
$859,862
000
$859,862,000
$859,862
-$16
• -$15
000
000
000
1991
Indefinite
$841,081,000
$8,651,242
$841,-081
000
$841,081,000
$841,081
000
1992
Indefinite
$820,336,000
$8,784,971
$820,336
000
$820,336,000
$820,336
000
1993
Indefinite
$799,313,000
$430,139
$799,313
000
$799,313,000
$799,313
000
1994
$771,181,000
$771,181
000
$771,181,000
$771,181
000
1995
$717,874,000
$717,874
000
$717,874,000
$717,874
000
1996
$665,396,000
1997
$170,000,000 i
/
i' Departmental action pursuant to section 518 of P.L. 101-166.
i' First quarter advance appropriation request for FY 1997.
701
Special Benefits for Disabled Coal Miners
Justification
1995
Increase
Current
1996
or
Estimate
Estimate
Decrease
Special Benefits for
Disabled Coal Miners:
Budget authority $717,874,000 $665,396,000
(Obligations) ($717,181,000) ($674,181,000)
First c[uarter advance
appropriation for the
subsequent year ($180,000,000) ($170,000,000)
Full-time equivalents ... 85 85
Wor)cyears 86 86
-$52,478,000
(-$43,000,000)
(-$10,000,000)
General Statement
The Social Security Administration (SSA) ma)ces payments of cash benefits to
coal miners who are disabled due to coal worJcers' pneumoconiosis (black lung)
and to their widows and certain other dependents.
SSA is responsible for processing and paying only those claims for miners'
benefits that were filed between December 30, 1969, when the program
originated, and June 30, 1973, when administration of the program was
transferred to the Department of Labor (DOL) . Under arrangements made for the
transition of program administration responsibilities, the beneficiary roll
maintained by SSA also includes those claims for dependent benefits filed by
December 31, 1973, or within 6 months of the death of a miner or widow on the
SSA roll (whichever is later) . Since that time, SSA has continued to ta'ke the
miners' claims as an agent of DOL, smd forward them to DOL for adjudication
and payment. Costs incurred by SSA in taking these claims are reimbursed by
DOL and are not included in this appropriation request.
The appropriation request of $665,396,000 for FY 1996, including $180,000,000
appropriated in advance for the first quarter, represents current law
requirements. The President's budget request also includes $170,000,000 for
the first quarter of FY 1997 for Special Benefits for Disabled Coal Miners.
This request ensures that benefit payments will be made timely, even if
enactment of the FY 1997 appropriation is delayed.
702
Special Benefits for Disabled Coal Miners
Benefit Payments
Authorizing Legislation: Federal Mine Safety and Health Act of 1977, Title IV.
1995
Increase
1994
Current
1996
or
Actual
Estimate
Estimate
Decrease
Budget authority . . . .$766,000,000 $712,693,000 $660,215,000 ($52,478,000)
Obligations ($760, 676, 000) ($712, 000, 000) ($669,000,000) ($43,000,000)
First quarter advance
appropriation for
the subsequent year . ($190, 000, 000) ($180, 000, 000) ($170,000,000) (-$10,000,000)
Purpose and Method of Operation
These funds are used to provide monthly cash benefits for coal miners who are
totally disabled due to pneumoconiosis. The miner's benefit is augmented for
a dependent wife, divorced wife, or children. Cash benefits are also
available for the widows, orphaned children and certain other surviving
dependent family members of miners whose deaths were due to this disease .
A disabled miner or an eligible widow receives a basic benefit amount ($427.40
effective January 1995) . If the disabled miner or eligible widow has
dependents, the benefit increases with the number of dependents--an additional
50 percent for one dependent, 75 percent for two dependents, and 100 percent
for three or more dependents .
A general provision in the FY 1995 president's budget restored the 1994
benefit levels through 1995. In other words, the 1995 budget assumed no Cost-
of Living increase for Black Lung Beneficiaries until Jeuiuary 1996.
The total benefits and average number of beneficiaries paid for the past
5 years is summarized below:
Fiscal
Year
Obligations
1991 $846,104,000
1992 $825,296,000
1993 $802,977,000
1994 $764,396,000
1995 (estimate) . . $717,161,000
Beneficiaries
(Mid- Point
of Year)
206,000
190,000
177,000
162,000
150,000
703
Rationale for the Budget Request
In FY 1996, SSA is requesting $660,215,000 in new budget authority to pay
black lung benefits- -a decrease of $52,478,000 from the current FY 1995
estimate of $712,693,000. As in past years, black lung benefits are
continuing to decrease due to the declining beneficiary roll for SSA's portion
of the program. These changes are as follows:
1. Reduction in the number of beneficiaries (-S52 . 000. 000)
Mainly as a result of the deaths of miners and their widows, and the
remarriage of widows, the number of beneficiaries on the roll will
decline.
Estimated Beneficiaries
(at midpoint of fiscal year)
Miners
Widows -. .
Other dependents
Total 150,000 138,000
2 . Reduction in average benefit payments (-S1 . OOP. OOP)
The average monthly benefit payment for miners and widows includes
payments for other dependents. However, as the number of dependents
decline due to terminating events (e.g., age 18 attainment), the benefit
amount of individual checks drops, thus reducing the overall average
benefit. The average benefit payment decrease is reflected in the table
below:
FY 1995 FY 1996
Miners $590 $589
Widows $439 $439
Children $445 $444
3. Full year effect of 2.2 percent benefit increase effective January 1996
(4-S9.307.000)
The basic benefit rate for a black lung recipient is $436.80 (effective
January 1996) .
4. Use of unobligated balances (-58.785.482)
SSA estimates that there will be a carryover unobligated balance of
$8,785,482 from 1995 to 1996. Therefore, new budget authority
requirements reflect this decrease which is the amount of 1996 benefit
payment obligations to be funded from 1995 unobligated balances.
27,
,000
96,
, POO
27,
,000
23,
,000
91,
,000
24,
,000
704
Special Benefits for Diseibled Coal Miners
Administration
Authorizing Legislation: Federal Mine Safety and Health Act of 1977, Title IV.
Increase
1994
1995
1996
or
Actual
ADProDriation
Estimate
Decrease
Budget authority .... $5,161,000 $5,161,000 $5,161,000
Full-time equivalents . . 59 85 85 0
Workyears 64 86 86 0
Purpose and Method of Operation
For that portion of the black lung (BL) program directly administered by SSA,
the primary objective in FY 1996 is to pay $673,000,000 in benefit payments
accurately and timely, and to process the appellate cases that are awarded.
To achieve these objectives SSA must keep the beneficiary rolls up-to-date by:
reflecting additions to the rolls,
posting deletions which result from the death of a beneficiary or
remarriage of a widow,
posting new addresses, and
responding to beneficiary inquiries.
Funding for the SSA BL program during the last 5 years has been as follows:
Fiscal
Year Obligations FTEs
1991 $3,382,800 69
1992 $3,114,400 63
1993 $3,649,000 63
1994 $3,719,500 59
1995 (estimate) . . $5,181,000 85
Rationale for the Budget Request
The FY 1995 administrative cost estimate is based on the FY 1995 appropriation
of $5,181,000. Actual obligation costs will be based on costs as determined
by SSA's cost allocation system, through measurement of black lung workloads,
and an appropriate share of SSA's total overhead.
Black lung maintenance workloads are expected to increase slightly in FY 1996
as compared with the FY 1995 estimates.
705
32
The following table outlines SSA's estimated workloads and workyear needs for
the BL program:
1995
Current 1996
Estimate Estimate Change
A. Workloads '^**
Black lung
maintenance 64,200 69,700 +5,500
Beneficiaries at midpoint
of the year:
Miners
Widows
Other dependents ....
Total
B. Workvear Requirements
Full-time ecjuivalents ....
Overtime
Total
27,000
96,000
27,000
150,000
23,000
91,000
24.000
138,000
-4,000
-5,000
-3.000
-12,000
85
., ;
86
85
1
86
0
S.
0
706
DEPARTMENT OF HEALTH AKD HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
Supplemental Security Income
FY 1996 Budget Page No.
T^propriation language 35
Language amalysis 36
Amounts availctble for obligation 37
Summary of changes 38
Budget authority by activity 41
Budget authority by object 42
Significant Items 43
Authorizing legislation 46
Appropriation history table 47
Justification :
A. General statement 48
B. Federal benefit payments SO
C. Beneficiary services 54
D. Payment to the trust fiinds cuid
research and demonstration projects 57
707
35
SOCIAL SECURITY ADMINISTRATION
Supplemental Security Income Program
For carrying out titles XI and XVI of the Social Security Act,
section 401 of Public Law 92-603, section 212 of Public Law 93-66, as amended,
and section 405 of Public Law 95-216, including payment to the Social Security
trust funds for administrative expenses incurred pursuant to section 201(g) (1)
of the Social Security Act, [$21,225,101,000] $18,802,555,000, to remain
available until expended: Provided, That any portion of the funds provided to
a State in the current fiscal year and not obligated by the State during that
year shall be returned to the Treasury.
For making, after June 15 of the current fiscal year, benefit payments to
individuals under title XVI of the Social Security Act, for unanticipated
costs incurred for the current fiscal year, such sums as may be necessary.
For carrying out title XVI of the Social Security Act for the first
quarter of fiscal year [1996, $7,060,000,000) 1997, $9,260,000,000, to remain
available xontil expended. (Departmenz of Health and Human Services
Appropriations Act, 1995.)
708
Supplemental Security Income Program
Lanouaqe Analysis
Language Provision
Explanation
"...to remain available until
expended : "
Provides authority to use funds
appropriated but not obligated in
one fiscal year for obligations emd
expenditures in a subsequent year.
"Provided, That any portion of the
funds provided to a State in the
current fiscal year and not
obligated by the State during that
year shall be returned to the
Treasury. "
Ensures that States do not carry
unobligated balances of Federal
fluids into the subsequent fiscal
year. Applies primarily to the
beneficiary services activity.
"For making after June 15 of the
current fiscal year, benefit
payments to individuals under
title XVI of the Social Security Act
for unanticipated costs incurred for
the current fiscal year, such jums
as may be necessary. "
Provides an indefinite appropriation
to finance any shortfall in the
definite appropriation for program
costs during the last months of the
fiscal year.
"For carrying out the Supplemental
Security Income program for the
first quarter of fiscal year [1996,
$7,060,000,000] 1997, $9,260,000,000
to remain available until expended."
Appropriates funds for first quarter
costs of the subsequent fiscal year.
Ensures that beneficiaries will
continue to receive benefits during
the first quarter of FY 1997 in the
event of a temporary funding hiatus .
709
Appropriation
Annual (definite)
Regular
appropriation .
First quarter
advance
appropriation .
Rescission
enacted in
P.L. 103-211 .
Subtotal,
adjusted
budget
authority . .
Supplemental Security Income Program
Amounts Available for Obligation 1'
1995
1994 1995 Current 1996
Actual Appropriation Estimate Estimate
$27,333,775,000 $27,995,101,000 $27,995,101,000 $25,862,555,000
(20,183,775,000) (21,225,101,000) (21,225,101,000) (18,802,555,000)
(7,150,000,000) (6,770,000,000) (6,770,000,000) (7,060,000,000)
-10.909.000 --- --- ---
$27,322,866,000 $27,995,101,000 $27,995,101,000 $25,862,555,000
Unobligated balance,
start-of-year . .
Unobligated balance,
end-of-year . . .
Recovery of prior
year obligations
Total ,
obligations . .
+30,261,000 +658,261,000 +1,277,379,000 +1,698,364,000
-1,277,379,000 -1,698,364,000
+ 387.000 --- --- ---
$26,076,135,000 $28,653,362,000 $27,574,116,000 $27,560,919,000
Excludes the following amounts for reimbursable State supplementation payments:
FY 1994 - $3,385,036,000; FY 1995 - $2,970,000,000; FY 1996 - $2,570,000,000. The
user fees that are collected from the States and deposited in the general fund of
the Treasury for costs resulting from Federal administration of State supplementary
payments are excluded for FY 1994 ($51,509,400), FY 1995 ($121,400,000) and
FY 1996 ($181,500,000) .
710
Supplemental Security Income Program
Summary of Changes
1995 Appropriation (Definite) 527,995,101,000
(Obligations) ($28,653,362,000)
1996 Request $25, B62, 555, 000
(Obligations) (S27. 560. 919, ooo)
Net Change -$2,132,546,000
(Obligations) (-$1,092,443,000)
1995 Base Change from Base
Budget Budget
Authority Authority
Increases :
Built-in:
1. Federal benefit payments .... $25,435,739,000 +$2,390,261,000
a. Net increase of 324,000
^^ in the average number of
SSI recipients, from
6,133,000 in FY 1995 to
6,457,000 in FY 1996 .... (+$1,300,261,000)
b. Annualized effect of
automatic cost-of-living
increase of 2 . 8 percent in
January 1995 and effect of
3 . 1 percent increase in
January 1996 (+$1,090,000,000)
2. Beneficiary Services- -
Expansion of Drug Addicts
and Alcoholics Referral and
Monitoring Services $143,400,000 +$33,000,000
Total Increases +$2,423,261,000
Decreases:
Built-in:
1. Federal benefit payments . . . .
a. Reduction due to Social
Security cost-of-living
adjustments that are counted
as income for concurrent
recipients (affects aOsout 41
percent of the SSI rolls)
$25,435,739,000
-$4,277,364,000
($335,000,000)
711
1995 Base
Budget
Authority
Change from Base
Budget
Authority
Program savings from more
stringent SSI eligibility
requirements applied to
aliens, as prov.ded by P.L.
103-152, the Unemployment
Compensation Amendments of
1993 . The period for which
an alien's income is deemed
to include his or her
sponsor's income was
increased from three years
to five years
Program savings related to
penalties (benefits withheld)
applied to recipients who do
not comply with drug addiction
and/or alcoholism treatment
requirements (provision of
P.L. 103-296, The Social
Security Independence and
Program Improvements Act of
1994)
Retroactive payments to
eligible class members
in the Zebley decision . . .
New budget authority
requirements decrease in
FY 1996 because the amount
of benefit payments funded
from other sources (prior
year unobligated balemces)
will be $1,695,364,000 . . .
One less monthly payment
in FY 1996 (11) compared
to FY 1995 (12) . If a day
on which payments are usually
made falls on a weekend or
holiday, payment is then
advanced to the last
preceding business day. . .
- ($112,000,000)
($10,000,000)
- ($5,000,000)
- ($1,695,364,000)
- ($2,120,000,000)
712
1995 Base
Budget
Authority
Change from Base
Budget
Authority
Program :
2. Research and demonstration
projects
3. Net reduction in Payment to
Social Security Trust Funds
activity related to the
additional funds provided
in FY 1995 to make the
trust funds whole for
prior year SSI costs. . . .
Total Decreases .
Net Change
$27,700,000
$2,386,262,000
-$21,000,000
-$257,443,000
■$4,555,807,000
-$2,132,546,000
713
Supplemental Security Income Program
Budget Authority bv Activity ^'
(Budget authority in thouscuids)
1995
1994
1995
Current
1996
Actual
ADoroDriation
Estimate
Estimate
Federal benefit
payments $25,478,000 $25,435,739 $25,435,739
(Obligations) ($24,232,721) ($26,094,000) ($24,990,000)
(Number of Chk. Pmts)i' (13) (12) (12)
Beneficiary services . . 51,600 143,400 143,400
(Obligations) (49,674) (143,400) (157,478)
Payment to the trust funds and
research emd demonstration projects:
(A) Payment to the
trust funds .... 1,780,566 ' 2,388,262 2,388,262
(Obligations) . . . (1,780,566) (2,388,262) (2,388,262)
(B) Research and
demonstration
projects 12,700 27,700 27,700
(Obligations) . . . (13.174) (27.700) (38.376)
Total , budget
authority $27,322,866 $27,995,101 $27,995,101
(Obligations) ($26,076,135) ($28,653,362) ($27,574,116)
$23,548,636 i
($25,244,000)
(11)
176,400
(176,400)
2,130,819
(2,130,819)
6,700 !
(9.700)
$25,862,555
($27,560,919)
Excludes the following amounts of reimbursable State supplementation payments
administered by SSA: FY 1994 - $3,385,036,000; FY 1995 - $2,970,000,000;
FY 1996 -$2,570,000,000. The user fees that are collected from the States and
deposited in the general fund of the Treasury for costs resulting from Federal
administration of State supplementary payments are excluded for FY 1994
($51,509,400), for FY 1995 ($121,400,000), and for FY 1996 ($181,500,000).
SSA will be using $1,695,364,000 in estimated unobligated carryover funding
authority from FY 1995 to fully cover FY 1996 benefit payment obligations.
The estimates reflect different number of chec)c8 to be received in a given
fiscal year. If a day on which payments are usually made falls on a wee)cend or
holiday, payment is then advanced to the last preceding business day.
SSA will be using $3,000,000 in estimated unobligated carryover funding
authority from FY 1995 to fully cover FY 1996 research and demonstration
program obligations.
714
Supplemental Security Income Program
1995
1995
Current
Estimate
1996
Estimate
Increase
or
Decrease
Advisory and
Assistance . .
(Obligations)
Other services
(Obligations)
$2,900,000
($2,900,000)
$2,556,462,000
($2,556,462,000)
$2
($2
$2,500,000
($2,500,000)
,556,662,000
,581,616,000)
S2,
($2
$1,000,000
($1,000,000)
,312,919,000
,315,919,000)
-$1,500,000
(-$1,500,000)
-$243,943,000
(-$265,697,000)
Grants,
subsidies &
contributions
(Obligations)
Total , budget
authority
by object . .
(Obligations)
$25,435,739,000 $25,435,739,000 $23,548,636,000
(S26. 094. 000. 000) (£24.990.000.000) ( S25 . 244 . OOP ■ 000)
-$1,887, 103,000
(■►S254.000.000)
$27 995,101,000 $27,995,101,000 $25,862,555,000 -$2,132,546,000
($28,653,362,000) ($27,574,116,000) ($27,560,919,000) (-$13,197,000)
715
Supplemental Security Income Program
Significant Items in House and Senate
Appropriations Committee Reports
Item
Action Taken or To Be Taken
199S House Report
Beneficiary Services
The appropriation provides
$143,400,000 for beneficiary
services, including $109,000,000 for
the referral and monitoring of SSI
recipients disabled because of drug
addiction or alcoholism.
The Committee shares the concern of
the Administration and the
authorizing committees cibout drug
addicts and alcoholics collecting
benefits without receiving adequate
treatment for their illness. The
Committee approved an additional
$73,000,000 over the request to
support the referral and monitoring
of all drug addicts and alcoholics
in FY 1995. This funding, along
with improved, uniform referral and
monitoring activities in all States
will allow SSA to implement the
requirements to suspend benefits to
recipients who do not comply with
treatment requirements.
Previously, SSI DA&A recipients were
monitored in only 18 States. During
FY 1994 and FY 1995, SSA expanded
the program so that there are now
referral and monitoring agencies
(RMA's) in 49 States and the
District of Columbia. Public Liaw
(P.L.) 103-296, the Social Security
Independence and Program
Improvements Act of 1994 was signed
on August 15, 1994. The law places
a 36 -month time limit on SSI benefit
payments to SSI recipients for whom
drug addiction or alcoholism (DA&A)
is a contributing factor to the
determination of disability. Since
the law extended the referral and
monitoring program to Disability
Insurance beneficiaries who are
DA&As, SSA must recompete and award
new contracts for their referral and
monitoring. A request for proposals
was published on January 12, 1995.
SSA expects to award new contracts
later this fiscal year. This will
allow SSA to refer for treatment and
monitoring all individuals
identified as DASiA's.
716
1995 Senate Report
Beneficiary Services
The appropriation provides
$143,400,000 for beneficiary
services, including $109,000,000 for
the referral and monitoring of SSI
recipients disabled because of drug
addiction or alcoholism.
The Committee expressed concern that
additional SSI recipients, who are
disabled because of drug addiction
or alcoholism need referral and
monitoring. The Committee approved
an additional $73,000,000 over the
request to support the referral and
monitoring of all SSI recipients who
are drug addicts and alcoholics in
FY 1995. This f landing will allow
SSA to implement the requirements to
suspend benefits to recipients who
do not comply with treatment
requirements .
Previously, SSI DA&A recipients were
monitored in only 18 States. During
FY 1994 and FY 1995, SSA expanded
the program so that there are now
referral and monitoring agencies
(RMA's) in 49 States and the
District of Columbia. Public Law
(P.L.) 103-296, the Social Security
Independence cuid Program
Improvements Act of 1994 was signed
on August 15, 1994. The law places
a 36 -month time limit on SSI benefit
payments to SSI recipients for whom
drug addiction or alcoholism (DAtA)
is a contributing factor to the
determination of dissibility. Since
the law extended the referral and
monitoring program to Disability
Insurance beneficiaries who are
DA&As , SSA must recompete and award
new contracts for their referral and
monitoring. A request for proposals
was published on January 12, 1995.
SSA expects to award new contracts
later this fiscal year. This will
allow SSA to refer for treatment and
monitoring all individuals
identified as DA&A's.
Research and Demonstration Projects
The Committee supports the joint
SSA/SAMSHA demonstration projects
and approved an additional
$10,000,000 for the expansion of the
demonstration project to evaluate
more effective approaches to
monitoring disabled SSI recipients
who are drug addicts or alcoholics.
SSA is currently conducting a
demonstration project with SAMHSA to
test alternative referral and
monitoring methods for disabled SSI
recipients who are drug addicts or
alcoholics. Plans are being
developed for the additional
demonstration projects, and SSA
expects to award new grants later
this year.
The appropriation includes
$5,000,000 for projects to test new
ways to improve customer service.
The Committee approved up to
$4,000,000 for SSA to conduct a
demonstration project to test
alternative ways to handle routine
telephone requests for information,
and up to $1,000,000 to contracting
out routine clerical work, utilizing
community-based organizations who
employ individuals with
disabilities .
SSA is developing plans for projects
to test new ways to improve customer
service. SSA expects to make
contracts awards later this fiscal
year.
717
SSI Outreach
The appropriation provided
$6,000,000 for outreach
demonstration projects. The Senate
Committee approved funding for
grants to public and private
organizations to assist poor
individuals, particularly the
elderly, who are not receiving
benefits for which they are
eligible. These funds target low-
income populations with high levels
of participation in the SSI program,
people with limited access due to
rural location or physical frailty,
and sites such as veterans'
hospitals which efficiently use the
resources of cooperating agencies.
In FY 1995, SSA plans to provide
continuing funding for a number of
FY 1994 projects which were eligible
for multi-year fxmding using the
$6,000,000 Congress included in the
FY 1995 appropriation, plus about
$3,300,000 in unobligated prior year
funds for outreach demonstrations
and oversight.
718
Title XVI of the
Social Security
Act, section 401
of P.L. 92-603,
and section 212
of P.L. 93-66,
as amended, and
section 405 of
P.L. 95-216 . .
Supplemental Security Income Program
Authorizing Legislation
1995
Amount
Authorized
Indefinite
First quarter
advance appropriation
for subsequent
year
1995
Appropriation
$27,995,101,000
($7,060,000,000)
1996
Amount
Authorized
1996
Budget
Reguest l^
Indefinite $25,862,555,000
($9,260,000,000)
li Includes am advance appropriation of $7,060,000,000 enacted in the Department of
Health emd Human Services Appropriations Act, 1995 (P.L. 103-333) Supplemental
Security Income Program
719
Appropriation History Table
Fiscal
Year
Budget
Estimate
to Congress
House Senate
Allowance Allowance
Appropriation
19B7
Indefinite
1986
Indefinite
1990
Indefinite
$10,569,
S227,
$12,302,
$262,
318,000
954,000
933,000
188,000
$10,569,318,000 $10,569,318,000
$12,300,384,000 $12,300,384,000
$10,569,318,000
$12,300,384,000
$12,473,953,000 $12,473,953,000 $12,473,953,000 $12,473,953,000
$12,034,758,000 $12,031,758,000
$12,052
$541
1991
Supplemental
Sequester Order
Indefinite
1992
Indefinite
1993
Supplemental
Indefinite
1994
Rescissionl'
1995
1996
1997 i'
$17,182,
$232,
442,000
533,000
394,000
000,000
$249,751,000
$17,476,
$1,008,
$21,243,
$150,
$1,330,
491,000
047,000
657,000
000,000
098,000
$15,158,594,000 $17,111,618,000
$232,000,000 $232,000,000
$17,476,491,000 $17,479,491,000
$21,234,773,000 $21,223,164,000
$150,000,000
$12,034,758,000
$S41,533,000
$17,159,170,000 1'
$232,000,000
-$14,000
$17,479,491,000
$21,237,675,000 i'
$27,331,775,000 $27,331,775,000 $27,322,775,000
$28,007,101,000 $27,962,101,000 $27,995,101,000
$27,333,775,000
-$10,909,000
$27,858,
$25,862,
$9,260,
601,000
555,000
000,000
-' The $14,031,394,000 included in the appropriation language for the SSI account
(which was in addition to the $3,157,000,000 previously appropriated for the first
quarter of 1991) was reduced by $29,224,000 in accordance with section 514 of the
Departments of Labor, Health and Hum«ui Services, Education and Related Agencies
Appropriations Act, 1991 (Public Law 101-517) .
^' The $16,009,657,000 included in the appropriation language for the SSI account
(which was in addition to the $5,240,000,000 previously appropriated for the first
quarter of 1993) was reduced by $11,982,000 in accordance with sections 511 and 513
of the Departments of LeUsor, Health and Human Services, Education and Related
Agencies Appropriations Act, 1993 (Public Law 102-934) .
i' The Congress rescinded, as part of Public Law 103-211, $80,000,000 for automation
investment funding. The SSI program's share of the reduction was $10,909,000.
*' Advance appropriation for the first quarter of FY 1997.
720
Supplemental Security Income Program
Justification
1995
Increase
1995
Current
or
ADDrooriation
Estimate
Decrease
Budget authority . .
(Obligations) . . .
First quarter advance
appropriation for
subsequent year . .
$27,995,101,000 $27,995,101,000
($28,653,362,000) ($27,574,116,000) (-$1,079,246,000)
($7,060,000,000)
($7,060,000,000)
1995
Increase
Current
1996
or
Estimate
Estimate
Decrease
Budget authority . .
(Obligations) . . .
First quarter advance
appropriation for
subsequent year . .
$27,995,101,000 $25,662,555,000 -$2,132,546,000
($27,574,116,000) ($27,560,919,000) (-$13,197,000)
($7,060,000,000) ($9,260,000,000) (+$2,200,000,000)
General Statement
Title XVI of the Social Security Act mandates a supplemental security income
(SSI) program of monthly cash benefits paycOsle to the needy aged, blind and
disabled, as a federally-guaranteed minimum income. The program is federally-
administered and financed from general funds. States are encouraged to
supplement the Federal benefit and may elect to have their supplementation
payments administered by the Federal Government. Supplementation is mandatory
for certain recipients who were on State rolls just prior to the creation of the
Federal program on January 1, 1974. Otherwise, State supplementation is
optional .
The President's appropriation request for FY 1996 is $25,862,555,000 which
includes $7,060,000,000 appropriated in advance for the first quarter. No
proposed law amounts are included in the request.
Highlights of the FY 1995-FY 1996 Budget Request
• The SSI program has experienced an overall growth of 28% from FY 1991 to
FY 1994 in the average number of recipients of federal SSI payments. Some
of the factors driving the increase include outreach efforts and changes in
the mental impairment eligibility criteria. There has been a significant
Increase in children's applications. This growth can be attributed to the
revision of medical standards for assessing mental impairments and the
(1990) ZebJey Supreme Court ruling that required SSA to liberalize its
rules for awarding benefits to children. The ruling required SSA to
consider whether the child can engage in age-appropriate behavior. While
recipients are still Increasing, SSA has reestimated the numlser of
recipients based on slower growth which occurred in FY 1994. The benefit
estimates in this request assume that the average number of Federal SSI
recipients will increase about S.3 percent in FY 1996 to 6,457,000 from
6,133,000 in FY 1995.
721
49
The meucimum Federal monthly benefit amount also is expected to increase in
FY 1996 to $472 for an individual and $709 for a couple, compared to the
FY 1995 standard of $458 for an individual and $687 for a couple.
Supplemental Security Income benefits are adjusted for changes in the cost
of living in the same manner as Social Security benefits. A cost-of-living
adjustment (COLA) of 2.8 percent was reflected in payments beginning in
January 1995, and the appropriation request reflects an estimated COLA of
3.1 percent payable in Jamuary 1996.
The amount actually paid to a recipient can vary from the benefit standard
based on other income received (e.g., earnings and Social Security
benefits) and the living arrangements of the recipient (e.g., residence in
one's own home, the household of another person, or in a nursing home which
meets Medicaid standards) . Net average monthly payments per recipient are
estimated as follows:-^
1995 1996
Aged $217.00 $226.00
Blind and Disabled . . . '. . $372.00 $386.00
All SSI Recipients $338.00 $353.00
i' These average monthly payments do not include the effect of retroactive
Zebley payments.
The FY 1996 President's budget also requests an advance appropriation of
$9,260,000,000 for the first quarter of FY 1997 to ensure that SSI
recipients will continue to receive timely payments at the start of FY 1997
in the event of a temporary funding hiatus. The request includes funds to
cover 4 months of benefit payments because the payment for January 1, a
holiday, will be made in December. The amount requested is approximately
31 percent of benefit payments estimated for FY 1997.
722
Supplemental Security Income Program
Federal Benefit Payments
Authorizing Legislation: Sections 1602, 1611, and 1617 of the Social Security Act.
1995
Increase
1994
1995
Current
or
Actual
ADDrooriation
Estimate
Decrease
Budget authority $25,478,000,000 $25,435,739,000 $25,435,739,000 ( )
(Obligations) . . ($24,232,721,000) ($26,094,000,000) ($24,990,000,000) (-$1,104,000,000)
First quarter advance
appropriation for
subsequent year ($6,770,000,000) ($7,060,000,000) ($7,060,000,000) ( )
1995
Increase
Current
1996
or
Estimate
Estimable
Decrease
Budget authority
(Obligations)
First quarter advance
appropriation for
subsequent year
$25,435,739,000 $23,548,636,000
($24, 990, 000, 000) ($25, 244 , 000, 000)
-$1,887,103,000
(4$254,000,000)
($7,060,000,000) ($9,260,000,000) (•>$2, 200, 000, 000)
Purpose and Method of Operation
The SSI program was established to pay needy aged, blind and disabled
individuals a minimum level of income through federally-administered monthly
cash payments. In many cases, these payments supplement income from other
sources, including Social Security benefits. The budget request for FY 1996
includes $25,244,000,000 for payments to 6,457,000 recipients of monthly
Federal payments.) The average number of recipients on the rolls during each
of the past 4 fiscal years (FY 1991-FY 1994) and the projections for FY 1995
are shown in the table below. This table includes recipients of both Federal
SSI payments and federally- administered State supplementation payments.
Average Number of SSI Recipients
(In Thousands)
Fiscal Year
Aged
Blind and disabled . .
Total , Federal . . .
State supplementation .
Total, average number of
SSI recipients . . ■
1991
1,263
3.234
4,497
4.864
1992
1,288
3.587
4.875
3B4
5.259
1993
1994
1995
Estimate
1,325
4.808
6,133
335
6.107 6.468
723
Funding levels (obligations) for Federal Isenefit payments the last 5 years
have been as follows:
Fiscal Year Obligations
1991 $15,277,188,000
1992 $17,847,022,000
1993 $21,033,050,000
1994 i-' .... $24,460,941,000
1995 (estimate) $24,990,000,000
i' FY 1994 obligations reflect 13 months of benefits as a result of the
accelerated chec)c provision of P.L. 95-216. In FY 1996 there will be 11 months
of benefits.
Rationale for the Budget Reguest
SSA's FY 1996 budget request for SSI Federal benefit payments is
$25,435,739,000, including $1,695,364,000 funded from prior year unobligated
balances. Realization of this estimate depends in part on how many SSI claims
SSA actually receives and processes. Estimates of current benefits are driven
by two factors which are largely not under SSA's direct control:
• the number of recipients eligible for monthly payments; and
• the amount of the monthly payments .
A discussion of these factors and several elements which affect them follows:
A. Number of Recipients
The table below reflects the estimated average monthly number of
recipients of Federal SSI payments (excluding recipients of federally-
administered State supplementation only payments) under current law:
(In Thousands)
1995
Current 1996 Change
Estimate
Estimate
Number
Percent
1,325
1,310
5,147
6,457
-15
+ 3?9
+324
-1%
Blind and disabled
Total
4.808
6,133
+ 7.1%
+ 5.3%
Maximum Monthly Federal
Payments
Under the automatic cost-of-living adjustment (COLA) provision, a
2.8 percent increase was paid effective for January 1995 and a 3.1 percent
increase is projected for January 1996. The mcutimum monthly Federal
payments estimated for FY 1995 and FY 1996 under present law are:
FY 1995 FY 1996
Last 9 Months Last 9 Months
First (2.8% First (3.1%
3 Months Increase) 3 Months Increase)
Single
individual . . $446.00 $458.00 $458.00 $472.00
Couple .... $669.00 $687.00 $687.00 $709.00
724
Estimated Average Monthly Payments ^'
Because SSI recipients generally have some other monthly income such as
Social Security benefits or private pensions, most have their Federal SSI
payment reduced. The table below shows the estimated net average monthly
Federal payments to SSI recipients for FY 1995 and FY 1996 under current
law:
1995 1996
Aged $217.00 $226.00
Blind and disabled $372.00 $386.00
All SSI recipients $336.00 $353.00
-' These average monthly payments do not include the effect of
retroactive Zebley payments.
The Major Factors Which Affect Average Monthly Payment Amounts
1 . Automatic Benefit Increases
The SSI automatic cost-of-living increases granted on January 1 of
each year raise average SSI payments. The effect of COLAs on the
maximum monthly payment is shown in paragraph B above. Those SSI
recipients who also receive Social Security benefits also receive a
Social Security COLA, which increases their other monthly income, thus
reducing their SSI payments. This factor partially offsets the
increase in average SSI payments.
2 . Mix of SSI Recipients Who Concurrently Receive Social Security
Benefits
Average monthly payments are significantly lower than the maximum
amount payable irnder the law primarily because about 41 percent of the
SSI recipients also receive Social Security benefits. Approximately
71 percent of the SSI aged group euid 33 percent of the SSI blind and
disabled population receive concurrent payments.
3. Mix of Aged and of Blind and Disabled Recipients
Current estimates indicate that the proportion of blind and disabled
recipients in the total recipient population will continue to increase
in FY 1995. This change in the population mix is illustrated in the
following table (excludes recipients of federally-administered State
supplementation only payments) :
Average Number of Recipients in Current Pay
(In Thousands)
Total
FY 1991 Actual
FY 1992 Actual
FY 1993 Actual
FY 1994 Actual
FY 1995 Estimate
FY 1996 Estimate
Blind
B&D
and
As % of
Aqed
Disabled
Total
1,263
3,234
72%
1,286
3,567
74%
1,311
4,037
76%
1,330
4,442
77%
1,325
4,808
78%
4,497
4,875
5,348
5,772
6,133
6,457 1,310 5,147 60%
The blind and disabled population receives a larger average monthly
benefit than the aged population, because blind and disabled
recipients generally have less income from other sources to offset SSI
benefits. As the proportion of blind and disabled recipients to the
total recipient population increases, the overall average monthly
benefit increases.
725
4 . Efforts to Improve Payment Accuracy
SSA is continuing its efforts to improve payment accuracy by locating
and removing from the rolls ineligible recipients and correcting
benefits to eligible recipients. A major meems of improving payment
accuracy is through the redetermination process . A redetermination is
a review of conditions for SSI eligibility to ensure that the
recipient is still entitled to benefits auid is receiving the correct
amount .
In addition, SSA conducts several types of computer matches including
one of Internal Revenue Service records of nonwage income against the
SSI rolls (under authority granted by the Deficit Reduction Act of
1984) to detect unreported assets (primarily bank accounts) . Actions
taken as a result of such matches include independent verification of
the assets or income, and notification to the recipient of the
findings and appeal and waiver rights involved.
Based on recommendations from the National Performance Review, "The
Social Security Domestic Employment Reform Act of 1994",
P. L. 103-387, gives SSA, for the first time, the authority to use
collection agencies and report- delinquent debt to credit bureaus.
FY 1995 Current Estimate
The current FY 1995 estimated average number of recipients is 6,133,000,
or 125,000 fewer than was projected for the appropriation. The FY 1995
appropriation assumed the average number of SSI recipients to be
6,258,000.
726
Supplemental Security Income Program
Beneficiary Services
Authorizing Legislation: Sections 1611(e)(3) and 1615(d) of the Social
Security Act .
1995
Increase
1994
1995
Current
or
Actual
ADDroDriation
Estimate
Decrease
Budget authority
(Obligations) . .
.$51,600,000 $143,400,000 $143,400,000
($49,674,000) ($143,400,000)($157,478,000) -f ($14 , 078 , 000)
1995
Current
Estimate
1996
Estimate
Increase
or -
Decrease
Budget authority
(Obligations) . .
. $143,400,000
.($157,478,000)
$176,400,000
($176,400,000
+$33,000,000
(+$18,922,000)
Purpose and Method of Operation
Funds requested for this activity are for two purposes:
1. Vocational Rehabilitation- -to reimburse Vocational Rehabilitation (VR)
agencies for reasonable and necessary costs of services which resulted in
disabled SSI recipients being successfully rehabilitated (section 1615(d)
of the Social Security Act) . The objective of vocational rehabilitation
for SSI recipients is to help discibled individuals achieve and sustain
productive, self-supporting wor)c activity. SSA provides funds to
reimburse VR agencies for costs incurred in successfully rehabilitating
SSI recipients. A successful reheUsilitation is defined by law as one in
which VR services result in performance of substantial gainful activity
(SGA) for a continuous period of 9 months.
2. Drug Addict and Alcoholic Monitoring- -to monitor the treatment of certain
disabled SSI recipients who abuse drugs or alcohol (section 1611(e) (3) of
the Social Security Act) . The law requires that when appropriate
treatment is available disabled SSI recipients who are medically
determined to be addicts or alcoholics and whose addiction contributes to
their disability must undergo such treatment for their conditions at an
approved facility. Under contracts with the Secretary, governmental and
private agencies refer these individuals to approved treatment facilities,
monitor their treatment, and report noncompliance and successful treatment
to the Social Security Administration. If the required treatment is
neither available nor appropriate, SSA will inform the DA&A recipient.
727
Rationale for the Budget Request
The following table shows budget authority and obligations for the beneficiary
services activity by purpose:
FY 1995
Increase
Current
or
FY 1994
Estimate
FY 1996
Decrease
Vocational
Rehabilitation:
Budget Authority.
. $32,
,800,000
$34,400,000
$34,400,000
(---)
(Obligations) . .
.($32,
,600,000)
($34,400,000)
($34,400,000)
(...)
Drug Addicts
and Alcoholics
Monitoring:
Budget Authority.
(Obligations) . .
Funds carried over
from prior years :
(Obligations) . .
. $18,800,000 $109,000,000
.($16,874,000)($109,000,000)
($0) ($14,078,000)
$142,000,000 +$33,000,000
($142,000,000) (+$18,922,000)
($0) (-$14,078,000)
Total, Beneficiary
Services :
Budget Authority. .$51,600,000 $143,400,000 $176,400,000 +$33,000,000
(Obligations) . . .($49, 674, 000)($157, 478, 000) ($176,400,000) (+$18,922,000)
1 . Vocational Rehabilitation (VR) Services to Disabled SSI Recipients
($34.400,000)
The estimate for FY 1996 assumes approximately 4,200 payment awards for
successful rehabilitation, the same as was estimated in FY 1995. The
average cost per award is estimated to rise from $8,200 per case in
FY 1995 to $8,600 in FY 1996. SSA continues to wor)c to improve the
management and oversight of the current VR program, to ensure the
effectiveness of the program and that the money spent is a good
investment. Specific efforts include an ongoing quality review of
State claims for reimbursement cmd continuing internal audits of the
Agency's payment process. These savings are partially offset by
general increases in rehabilitation costs and advances in expensive
medical technology which also affect average cost per case. In
addition, SSA is formulating a comprehensive employment strategy to
help achieve President Clinton's goal of economic independence for
people with disabilities.
728
Monitoring the Treatment of Drug Addicts and Alcoholics (S142 . OOP. OOP)
These funds are used for the referral and monitoring of drug addicts
and alcoholics in conjunction with the SSI program.
In FY 1995, SSA expanded the SSI DAJA referral and monitoring program
so that referral and monitoring agencies (RMAs) are now in 4 9 States
and the District of Columbia. On August 15, 1994, the President signed
into law P.L. 1P3-296, the Social Security Independence and Program
Improvements Act of 1994. Effective February 11, 1995, the law places
a 36 -month limitation on SSI benefit payments to disabled individuals
for whom drug addiction or alcoholism (DAtA) is a contributing factor
material to the determination of disability and strengthens complismce
with treatment by suspending benefits for noncompliance with treatment.
It also extends the referral and monitoring program to title II DAiAs.
Because the referral and monitoring contracts currently in place do
not provide for the significantly larger numbers of DASA recipients
that this will involve. Federal procurement rules require SSA to
recompete ctnd award new contracts. SSA has published its request for
proposals and expects to award these contracts in this fiscal year.
SSA will continue to work closely with the Substance Abuse and Mental
Health Services Administration and the Health Care Financing
Administration to ensure that addicted and alcoholic SSA recipients are
referred to the best available treatment sources.
729
Supplemental Security Income Program
Payment to the Trust Funds cind Research and Demonstration Projects
Authorizing Legislation: Sections 201(g)(1), llio and 1115, and 1633 of the Social
Security Act and section 505 (b) of the Social Security
Disability Amendments of 1980, as amended (P.L. 96-265) .
1995
Increase
1994
1995
Current
or
Actual
ADoroDriation
Estimate
Decrease
Payment to the
Trust Funds :
Budget authority . $1,780,566,000
(Obligations)
Research and
Demonstration
Projects :
Budget authority
(Obligations) . .
Total , Budget
authority . . .
(Total,
Obligations) . .
$2,388,262,000 $2,388,262,000
.($1,780,566,000) ($2,388,262,000) ($2,388,262,000)
$12,700,000
($13,174,000)
$27,700,000
■ ($38,376,000)
$27,700,000
($38,376,000)
.$1,793,266,000 $2,415,962,000 $2,415,962,000
.($1,793,740,000) ($2,426,638,000) ($2,426,638,000)
(...)
1995
Increase
Current
1996
or
.... Estimate
Estimate
Decrease
Payment to the
Trust Funds :
Budget authority
(Obligations)
Research and
Demonstration
Projects :
Budget authority
(Obligations) . .
Total , Budget
authority . . .
(Total,
Obligations)
$2,388,262,000
($2,388,262,000)
$27,700,000
($38,376,000)
$2,415,962,000
($2,426,638,000)
$2,130,819,000
($2,130,819,000)
$ 6,700,000
($9,700,000)
$2,137,519,000
($2,140,519,000)
-$257,443,000
(-$257,443,000)
-$21,000,000
(-$28,676,000)
-$278,443,000
(-$286,119,00J)
730
Purpose and Method of Operation
Payment to the Trust Funds
Section 201(g) (1) of the Social Security Act provides that administrative
expenses for the SSI program, including Federal administration of State
supplementation payments, may be financed from the Social Security trust funds
with reimbursement, including any interest lost, to the trust funds from
general revenues. The legislative history of the 1972 amendments (which
established this funding mechanism) indicates a desire to obtain economy of
administration by giving the Social Security Administration the responsibility
for the SSI program because of its existing district office network euid its
administrative and automated data processing facilities. Because of the
integration of the administration of the SSI and Social Security programs, it
was desirable to fund them from a single source, with reimbursement to the
trust funds based on a GAO-approved method of cost emalysis of the respective
expenses of the SSI and Social Security insurance programs, and a final
settlement by the end of the subsequent fiscal year required by law..
This activity funds the reimbursement to the trust funds from the general
fund.
Research and Demonstration Projects (Section 1110/1115 Research)
Section 1110 and 1115 of the Social Security Act provide funding authority,
including waiver authority where appropriate, for research and demonstration
projects. Authority is provided for conducting both broad-based projects and
projects dealing with specific SSI program issues. Under authority of section
1110 and 1115, the Social Security Administration funds a range of projects:
research efforts to obtain important longitudinal data about the demographics
and economic status of SSA beneficiaries; projects which pursue improvements
in the administration of the SSI program; projects which test alternative
methods of retum-to-work strategies; and projects which test various methods
of SSI outreach, targeting both aged and diseUsled individuals.
Rationale for the Budget Request
Payment to the Trust F\inds
The FY 1996 request includes $2,130,619,000 for payment to the Social Security
trust funds as reimbursement for the SSI program's share of SSA's
administrative costs, including the SSI program's share of Disability
Investment Funding and the Automation Investment Funding requested in SSA's
Limitation on Administrative Expenses appropriation.
Current law authorizes payment for SSI administrative expenses from the Social
Security trust fxinds, with reimbursement from general funds through this
appropriation .
731
Making the Trust Funds Whole for Prior Year Expenses
In FY 1994, the SSI program's share of SSA's administrative expenses exceeded
the amount available in the SSI appropriation for reimbursement to the trust
funds. Therefore, SSA requested, and the Congress approved, additional funds
for FY 1995 to make the trust funds whole, with interest, for prior year
costs. The following table shows how the funds appropriated for FY 1995 will
be used:
Amount appropriated for FY 1995 $2,388,262,000
Amount needed to reimburse the
trust funds, with interest, for
prior year costs -333 . 796 . 000
Estimate of the SSI program's share of
SSA's administrative expenses in
FY 1995 $2,054,466,000
Research and Demonstration Projects
The FY 1996 request for research and demonstrations is $6,700,000.
Additionally $3,000,000 in unobligated funds will be carried over from FY 1995
to FY 1996, for a total of $9,700,000. The funds will be used for the
continuation of existing projects euid the initiation of new projects.
Continuation of research into the underlying causes of the recent growth in
the SSI and OASDI disability programs is a priority for SSA. SSA is
implementing a research plan which will cover the following broad areas:
o Disability incidence in the general population,
o Trends in applications for disability benefits,
o Trends in allowance rates, and
o Duration of disability.
In addition SSA is requesting funding authority to cover projects designed to
address current issues in the general area of income security.
The SSA request does not include additional funds for outreach demonstration
projects in FY 1996. SSA plans to award a series of grants in FY 1995, using
$6,000,000 that Congress included in the FY 1995 appropriation, plus about
$3,300,000 in unobligated prior year funds for outreach demonstrations,
including, based on guidance from the Office of General Counsel, certain
Federal administrative costs. Our current plans assume these funds will be
obligated late in FY 1995.
For FY 1996 and beyond SSA plans to use unobligated carryover funding
authority for Project NetWork, SSA's first major retum-to-work demonstration.
The project has been underway since FY 1992. The first model -- the case
manager project -- was completed in FY 1994. The remaining three models will
be completed in FY 1995, «md the project evaluation will be completed in
FY 1997.
732
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
Limitation on Administrative Expenses
FY 1996 Budget Page No.
Appropriation language and explanation of language changes .... 63
Language analysis 65
Amounts available for obligation 67
Budgetary resources 68
Distribution of outlays by source of funding 69
Stimmary of changes 70
Budgetary resources by activity 75
Budgetary resources by object 76
Average grade and salary 60
Administrative costs 81
Significant items in House and Senate Appropriations
Committee reports 82
Authorizing legislation 86
Appropriation history table 87
Justification :
A. General statement 89
B. Detail of permanent positions
(Consolidated for SSA in Total) 119
733
63
Limitation on Administrative Expenses
For necessary expenses, including Ciie hire of two medium size passenger
motor vehicles^^ and not to exceed $10,000 for official reception and
repreaeatation expenses^^, not more than [$5,159,785,000] $5,297 ,200,000 may
be expended, as authorized by section 201(g) (1) of the Social Security Act or
as necessary to carry out sections 9704 and 9706 of the Internal Revenue Code
of 1986 [as such sections were in effect on January 1, 1993]^^, from any one
or all of the trust fimds referred to therein: Provided, That reimbursement to
the [Trust Funds] trust funds under this heading for administrative expenses
to carry out sections 9704 and 9706 of the Internal Revenue Code of 1986 shall
be made, with interest, not later than September 30, [1996] 1997.
In addition to funding already available under this heading, and subject
to the same terms and conditions, ($320,000,000] $534,000,000, for disability
caseload processing.
From funds provided under the previous two paragraphs, not less than
$215, 000, 000 shall be available for conducting continuing disability
reviews.-'
In addition to funding already available under this heading, and subject
to the same terms and conditions, [$97,000,000] $357,000,000, which shall
remain availeUDle until expended, to invest in a state-of-the-art computing
network, including related equipment and administrative expenses associated
solely with this network, for the Social Security Administration and the State
Disaibility Determination Services, may be expended from any or all of the
trust funds as authorized by section 201(g) (1) of the Social Security Act.
(Department of Health and Human Services impropriations Act, 1995.)
734
Explanation of Language Changes
This authority was previously included in the General Departmental
Management Account of the Office of the Secretary, HHS; as an
independent agency, SSA recpjires separate statutory authority for this
activity.
This authority was previously included in the General Provisions section
of the HHS appropriation; as an independent agency, SSA requires
separate statutory authority for this activity. The amount of funding
requested is consistent with the amount authorized in FY 1989, the last
time SSA received a separate line item for this activity.
Sections 9704 and 9706 of the Internal Revenue Code of 1986 have not
changed since enactment. Therefore, this language is unnecessary.
This provision sets a minimum funding level that will be directed to
conducting continuing disability reviews.
735
Limitation on Administrative Expenses
Lcmcruaqe Analysis
Language Provision
Explanation
. . . including the hire of two medium
size passenger motor vehicles...
...and not to exceed $10,000
official reception cmd
representation expenses . .
This authority was previously
included in the General Departmental
Management Account of the Office of
the Secretary of HHS; as an
independent agency, SSA requires
separate statutory authority to
lease two medium size sedans with
enhanced security features for the
Commissioner's use after SSA becomes
an independent agency.
This authority was previously
included in the General Provisions
section of the HHS appropriation; as
an independent agency, SSA requires
separate statutory authority to
expend resources for official
reception' and representation
activity. These activities include
meetings with foreign dignitaries in
the U.S. emd abroad, euid
negotiations on totalization
agreements with foreign countries.
The amount of funding requested is
consistent with the amount
authorized in FY 1989, the last time
SSA received a separate line item
for this purpose .
...to carry out Sections 9704 and
9706 of the Internal Revenue Code of
1966 [as such sections were in
effect on January 1, 1993] , from any
one or all of the trust funds
referred to therein:
Provided, That reimbursement to the
trust funds under this heading for
administrative expenses to carry out
sections 9704 and 9706 of the
Internal Revenue Code of 1986 shall
be made with interest, not later
than September 30, 1997.
This provision continues the
specific legal authority for SSA to
perform the Secretary's
responsibilities required by the
Coal Industry Retiree Health
Benefits Act of 1992. Since this is
not trust fund work, it also
provides for reimbursement to the
trust funds for funds used to carry
out two sections, as amended by
section 19141 of the Energy Policy
Act of 1992, and is intended to
prevent disruption of required work.
The section established the "Coal
Industry Retiree Health Benefits Act
of 1992." The Act requires a search
of the earnings records of a
specific group of coal miners and,
using rules provided in the Act, a
determination of which coal mine
operator is responsible for paying
the health premiums of each miner.
736
The Act also provides for appeal of
the initial assignment of premium
responsibility, and calculation of
annual premium amounts. Since no
additional funds were provided for
this work SSA is required to absorb
these additional costs.
From funds provided under the
previous two paragraphs, not less
than $215,000,000 shall be available
for conducting continuing disability
reviews .
This provision sets a floor for a
minimum funding level that will be
directed to conducting continuing
disability reviews.
737
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752
Limitation on Administrative Expenses
Significant Items in House. Senate, and Conference
Appropriations Committee Reports
1995 House Report
Workloads
The Committee remains very concerned
about the growing workload problems
and urges SSA to move rapidly to
implement the disability
reengineering reforms currently
being developed.
Action Taken or to Be Taken
SSA has established a Disability
Redesign Implementation Team which
is implementing the disability
reengineering recommendations as
well as a short-term disability
initiative focused on reducing the
current backlogs .
Bonuses /Awards
In view of current funding
constraints, the Committee is
concerned about recent reports
relating to the SSA employee bonus
program, and requests the Secretary
to review agency policies related to
bonuses, and report to the Committee
by September 15, 1994 on the
appropriateness of the current
policies, the distribution of
bonuses, and funding allocated to
the bonus program.
This report was overtaken by
Committee review of the award
program and enactment of a 1 percent
limitation on cash performance
awards for FY 1995. For FY 1996,
cash performance awards will be
funded at 1 percent of total salary
dollars as well.
Automation Initiative
The Committee believes SSA should
develop a general business plan that
projects future workloads,
establishes specific service
delivery levels, and defines the
combination of technology
improvements, staffing levels and
other resources that will allow SSA
to achieve those service delivery
goals ....
. . .The Committee requests that SSA
report to the Committee by
February 1, 1995 on progress towards
addressing these concerns. The
report should also include
information on short and long term
costs and performance goals of all
planned automation initiatives.
The report has been completed and is
being forwarded to the Committees .
753
Employee Training
The Committee is concerned that
sufficient funding be allocated for
training employees in the use of new
computer technology to maximize the
return on this investment . The
Committee urges SSA to consider
establishing an additional training
center for this purpose as a
possible option toward addressing
this concern.
SSA has ouialyzed employee training
needs and determined that current
onsite computer training facilities
and available courses are sufficient
for training employees in the use of
new computer technology.
Electronic Benefits Transfer
The bill includes $2,000,000 for the
electronic benefits transfer (EBT)
initiative. EBT will provide
improved benefits access through
automated teller machines (ATMs) and
retail point-of-sale (POS) terminals
for a full range of federal and
State government programs which
include the social security and SSI
programs .
$2,000,000 for the EBT initiative is
available in FY 1995.
Chronic Fatigue Syndrome
The Committee urges SSA to consider
establishing a Chronic Fatigue
Syndrome Surveillance advisory
committee to review current medical
standards and investigate the needs
of regional SSA offices with regard
to CFS training and information
resource needs. The Committee
requests that SSA provide a report
to the Committee on its current CFS
surveillance project including
efforts to investigate through this
project the obstacles to disability
benefits for persons with CFS.
The report is being forwarded to the
Committees .
1995 Senate Report
Computer Training
The Committee recommends up to
$10,000,000 to enhance SSA's
computer training programs for
employees of SSA who will then go on
to train other SSA employees through
the construction of an offsite
computer laboratory/classroom
facility in a campus-type
environment .
SSA has analyzed employee training
needs and determined that current
onsite computer training facilities
and available courses are sufficient
for training employees in the use of
new computer technology.
754
Chronic Fatigue Syndrome
The Committee requests that SSA
provide a report on its current
surveillance project with respect to
chronic fatigue and immune
dysfunction syndrome (CFIDS) . The
SSA is expected to use this recently
established surveillsuice to
investigate obstacles to benefits
for people with CFIDS and keep
medical information for CFIDS
claimants updated. The Committee
recommends that SSA establish a
CFIDS advisory committee to review
current medical standards and
investigate the needs of regional
SSA offices with regard to training
and information resource needs .
The report is being forwarded to the
Committees .
Business Process Reengineerinq
The Committee recommends that SSA
restructure its business process
reengineering to ensure that user-
centric approaches become a standard
way of doing business at the agency.
To that end, the Committee
encourages SSA to work with em
industry-based consortium dedicated
to software productivity, and with
experience institutionalizing
software processes and methods .
1995 Conference Report
Independent Agency
The conferees are aware that the
Social Security Administration
Reform Act of 1994, P.L. 103-296,
provides for the tremsfer of
budgetary resources within the
Department of Health and Human
services necessary to implement the
Act. Therefore, no specific
provisions are contained in this
appropriations bill to establish the
SSA as an independent Federal
agency. The conferees request the
Secretary emd the Commissioner to
submit to the Appropriations
Committees by Jemuary 1, 1995, a
status report on the establishment
of the independent agency, including
a comprehensive budget crosswalk
reflecting the proposed transfer of
staffing and funding by office
within the Office of the Secretary
to the SSA.
The report has been completed and is
being forwarded to the Committees .
The plan to establish SSA as an
independent agency was submitted to
the Committee on January 18, 1995.
The requested crosswalk will be
provided as soon as possible after
March 31, 1995.
755
Employee Training
The managers remain concerned that
adequate employee training accompemy
investments in computer hardware and
software, and expect SSA to expand
opportunities for computer training
in the most cost-effective manner
available.
SSA has analyzed employee training
needs and determined that current
onsite computer training facilities
emd available courses are sufficient
for training en^loyees in the use of
new con5)uter technology.
756
86
Limitation on Administrative Expenses
Authorizing Legislation
1995 1995 1996 1996
Amoimt Current Amount Budget
Authorized Estimate Authorized Request
Title II,
Section 201(g) (1)
of the Social
Security Act . Indefinite $5,540, 071, 000^' Indefinite $6,188,200,000 2''
The $5,576,785,000 included in the language for the limitation account for
FY 1995 was reduced by $36,714,000 pursusmt to sections 205, 207, and 513 of
the Departments of Labor, Health and Humcm Services, Education and Related
Agencies Appropriation Act, 1995 (Public Law 103-333) . This includes
$320,000,000 Disability Investment funding and $88,283,000 Automation
Investment .
Includes $534,000,000 Disability Investment funding and $357,000,000
Automation Investment funding contained in the FY 1996 President's budget.
757
Limitation on Administrative Expenses
Appropriation History Table
Appropriation
$3,840,000,000
$3,524,114,000i'
$3,750,113,000
$3,837,389,000^'
1991 $4,166,974,000 $4,166,974,000 $4,316,974,000 $4,157,309,000^'
Supplemental $232,000,000 $232,000,000
Sequester Order -$47,000
1992 $4,532,000,000 $4,582,000,000 $4,442,000,000 $4,550,456,0001'
1993 $4,749,142,000 i' $4,652,150,000 $4,579,839,000 $4 , 813 , 101 , 000^'
Supplemental^' $302,000,000 $10,000,000 $10,000,000 $10,000,000
1994!' $6,119,285,000 $5,524,285,000 $5,416,085,000 $5,496,085,000
Rescission!' -$80,000,000
1995>°/ $5,824,785,000 $5,609,785,000 $5,541,011,000 $5,540,071,000
1996 $6,188,200,000^'
Fiscal
Year
Budget
Estimate
To Conqress
$4,011,373,000
House
Allowance
$4,
Senate
Allowance
1987
.«4'
,000,373,000
,011,373,000
1988
$3,805,121,000
$3,
,680,921,000
$3,
,680,921,000
1989
$3,775,661,000
S3,
,705,000,000
$3,
,820,000,000
1990
$3,833,389,000
$3,
,833,389,000
$3,
,847,389,000
-' The FY 1988 appropriation included $6,682,000 for travel and transportation
which was unavailable for obligation under section 512 of the Departments of
Labor, Health and Human Services, Education amd Related Agencies
Appropriations Act, 1988 (Public Law 100-202) .
^' The $3,795,661,000 included in the language for the limitation account for
FY 1989 was reduced by 1.2 percent in accordance with section 517 of the
Departments of Labor, Health cmd Human Services, Educ ttion and Related
Agencies Appropriations Act, 1989 (Public Law 100-436, .
1' The $4,316,974,000 included in the language for the limitation account for
FY 1991 was reduced by $57,000,000 and 2.41 percent in accordance with
sections 514(a) and (b) respectively, of the Departments of Labor, Health aind
Human Services, Education and Related Agencies Appropriations Act, 1991
(Public Law 101-517).
1' The $4,582,000,000 included in the language for the limitation account for
FY 1992 was reduced by $31,544,000 in accordance with sections 214 and 513(a)
of the Departments of Labor, Health and Human Services, Education and Related
Agencies Appropriations Act, 1992 (Public Law 102-170) .
2' The program level funding requested for LAE for FY 1993, $4,809,142,000,
included $60,000,000 in user fees. A change in the appropriation language for
this account would have given the Secretary the authority to charge States for
SSA's work in administering SSI State supplemental payments.
758
i' The $4,699,142,000 included in the language for the limitation account for
FY 1993 was reduced by $66,041,000 in accordemce with sections 216, 511 and
513 of the Departments of Labor, Health and Human Services, Education and
Related Agencies impropriations Act, 1993 (Public Law 102-394) .
-' A FY 1993 Supplemental Appropriation for $302,000,000 for the processing of
disability work, investments in automation, infrastructure improvements and to
carry out new activity related to the Coal Industry Retire Health Benefit Act
(CIRHBA) of 1992 was submitted to the Congress. The Congress approved in
Public Law 102-466 $10,000,000 of the FY 1993 supplemental request for CIRHBA.
1' The $6,119,285,000 requested for FY 1994 included $120,000,000 in Discibility
Investment Funding and $1,125,000,000 for SSA's planned 5 year Automation
Investment Fund. The Congress approved $320,000,000 for Disability Investment
Funding and $300,000,000 for the Automation Investment Fund.
*' The Congress rescinded, as part of Public Law 103-211, $80,000,000 from
Automation Investment Funding. This resulted in an Automation Investment Fund
of $220,000,000.
i2' The FY 1995 President's Budget included $280,000,000 in Disability Investment
Funding euid $385,000,000 in Automation Investment Funding. The Congress
approved $320,000,000 in Disability Investment Funding and $68,263,000 in
Automation Investment Funding.
ii' The FY 1996 President's Budget includes $534,000,000 in Disability Investment
Funding and $357,000,000 in Automation Investment Funding.
759
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760
OKWBRAL STATmmiT
The Social Security Administration (SSA) has a direct effect on the well-being
of millions of Americans. The Public relies on SSA providing financial
support in their retirement years and protection against the financial
hardship that can accompany disability or the death of a household
breadwinner. We must ensure that all Americans receive the service from SSA
that they deserve .
On August 15, 1994, President Clinton signed P.L. 103-296, the "Social
Security Independence and Program Improvements Act of 1994," establishing SSA
as an independent agency, responsible for administration of the Old-Age,
Survivors, and Disability Insurance (OASDI) and Supplemental Security Income
(SSI) programs. Under the law SSA also will continue to provide support for
administration of the Medicare, Black Lung and Coal Industry Retirees Health
Benefits programs. SSA will separate from the Department of Health and Human
Services (HHS) on March 31, 1995.
The Limitation on Administrative Expenses (LAE) budget request for fiscal year
(FY) 1996 is $6,188,200,000. Resources to be transferred from HHS will be
addressed by the Administration in an amendment to the President's budget
request. SSA's LAE budget request is driven largely by growing workloads and
SSA's desire to meet customer service demands.
The Social Security Administration appreciates the confidence displayed by the
Congress in the funding provided for meeting our mission, especially the
investments in automation and disability which we have targeted specifically
at priority areas. We used the Disability Investment Fund in FY 1994 to
process disability cases and hearings for an additional one-half million
people, and we are allocating the funds in FY 1995 to serve an additional
537,000 persons waiting for decisions on their claims or hearings. The
Automation Investment Funding is targeted to equip our offices with the
technology we need to serve future generations of customers .
Our efforts for the future are reflected in the Agency' s staffing and
streamlining plan, which contains the following objectives:
• Keep Op with Workload Growth
We expect continuing growth in claims and related workloads received from
the public. SSA's staffing amd overall administrative budget needs are
driven to a large extent by trends in these measurable workloads . SSA is
very proud of its history of productivity improvements which exceed the
rest of the Federal government and the overall private sector index by a
substantial margin. Nevertheless, in recent years SSA's pending workloads
have grown despite our productivity track record, as unprecedented growth
in disability and telephone workloads outpaced both our available
administrative resources and our drive for further efficiencies.
761
91
In FY 1995 we plsm to turn around the trend of growing disability pending
caseloads. We will accomplish this in large part through new short-term
initiatives designed to reduce pending work sooner while we proceed with
automation and longer-term reengineering solutions.
With the resources in this budget, including the Disability Investment
Funding, we plan to reduce initial diS2j3ility claims average processing
time from 97 days in FY 1994 to 62 days by the end of FY 1996. We also
expect to reduce hearings average processing time from 337 days in FY 1994
to 262 days by the end of FY 1996.
Target Service la^rovamanta at Key Areas
Consistent with our goals of rebuilding confidence in the program and
providing world class service, this request supports:
o pursuing SSA' s Customer Service Plan commitment to improve telephone
service;
o accelerating issuance of Personal 'Earnings and Benefit Estimate
Statements (PEBES) ;
o processing an increased number of continuing disability reviews
(CDRs) ; and
o carrying out mandated changes in claims processing and maintaining
the rolls for persons entitled to disability benefits on the basis of
drug addiction or alcoholism (DA&A) .
Telephone Service- -Our budget redirects resources to telephone service by
converting Data Operations Centers in New Mexico and California from
facilities that process annual wage reports (AWR) to teleservice centers- -
a redirection made possible by automation of the AWR process. We are also
introducing new telephone service technologies, such as automated self-
service options and expert systems, and benchmarking how ethers provide
phone service to learn from their successes.
Personal Earnings and Benefit Estimate Statements (PEBES) --Our budget will
fulfill the legal requirement to distribute PEBES beginning in FY 1995 to
all individuals attaining age 60. In addition, it will permit us to begin
accelerating mailings to younger workers prior to the mandated FY 2000
requirement- -a step we believe will help us rebuild public confidence in
Social Security while getting a head start on the massive FY 2000
workload.
Continuing Disability Reviews (CDRs)--SSA will make available not less
than $215 million of this budget request to process CDRs during FY 1996.
Our budget objective is to dramatically increase CDRs processed, from
152,000 in FY 1994 to 431,000 in FY 1996, including both periodic medical
reviews and reviews initiated as a result of work activity by the
beneficiary. Of the total commitment, 116,000 are reviews of SSI program
762
recipients, including one-third of the estimated 48,000 disabled children
who will attain age 18 in FY 1996.
Drug Addict and Alcoholic (DAtA) Monitoring Requirements- -SSA is
implementing new, more stringent requirements related to disaibility
payments to the DA&A population. These include a 36-month limitation on
benefits, mandatory assignment of representative payees, penalties for
non-compliance with treatment plans, and a limitation on the size of
retroactive benefit amounts which may be paid at one time.
Streamlln* and Restructure the Workforce to Bnhance Productivity
We will enhance SSA workforce productivity through streamlining itnd
restructuring initiatives that decrease supervisory ratios by 50 percent,
and reduce "headquarters" staff functions and other target control
positions as part of achieving SSA.' s share of the government-wide
workforce reductions mandated by P.L. 103-226.
SSA will use incentives- -in particular, early retirement- -to encourage
certain employees to retire. We have already "bought out" approximately
1,200 staff -support headquarters -type employees and supervisors, to help
SSA meet its streamlining goals without affecting direct service. Our
FY 1995 and FY 1996 FTE estimates reflect these buyouts.
Automate to Increase Bffideney
SSA's budget request includes $357 million in new budgetary resources for
the Automation Investment Fund (AIF) , to provide employees the automated
tools and related equipment and training needed to carry out planned
automation and process improvements essential to mission accomplishment.
Ongoing Agency initiatives to increase efficiency will reduce costs and
improve service. The most significant long-range changes are those which
provide more advanced technology for processing growing workloads and/or
increase or improve automation of SSA's claims and postentitlement
operations. We will also continue to improve processes incrementally.
SSA's automation investments play an essential part in the Agency's
overall service delivery/streamlining efforts by contributing to the
workyear savings built into the budget request and the long-range
streamlining plan. In recognition of their essential relationship to
service delivery, these automation investments have been part of the
President's priority investments since FY 1994.
Reenginaer to Dramatically Improve Service and Efficiency
We endorse the National Performance Review (NPR) premise that to make
government work better and cost less, we must redesign antiquated
processes and structures that are no longer working well and take full
advantage of new technologies. SSA's Plan for a New Disability Process
does this. As we move forward to implement it, we will simultaneously
763
review our other business processes and initiate the next appropriate
reengineering effort.
Additional information on these objectives is provided later in this document.
Historically, SSA' s budget and outyear plans have always reflected elements of
automation and procedural change to increase efficiency. Although initiatives
for Agencywide restructuring euid process reengineering are relatively new and
will require time for implementation plans auid activities to be fully
developed, SSA has made significant progress and is moving aggressively in
these areas. This budget justification provides current information about
accomplishments to date and next steps.
THB MISSION AND GOALS OP THE SOCIAL SBCDRITY ADMINISTRATIOW
Throughout its nearly sixty-year history, SSA has held fast to a basic
mission: To administer national Social Security programs as prescribed by
legislation, in an equitable, effective, efficient and caring manner.
As in prior years this budget reflects the Agency Strategic Plan (ASP) , which
serves as the framework to guide our major long-range planning activities.
The ASP outlines SSA's vision of the future, defines its service goals and
commits SSA to a course of chamge in its service delivery system.
The ASP is a "living" document which supports SSA's pursuit of each of our
three major goals- -
• Rebuilding public confidence in Social Security,
• Providing world-class public service and
• Creating a nurturing environment for SSA employees.
This budget request moves us closer to attainment of these goals.
Providing customers service equal to the best in business is also a goal of
the NPR. SSA is committed to providing world-class service and is using
"benchmarking" to identify best practices and proven process innovations from
other orgsmizations. For the past year SSA has been soliciting feedback from
our customers and stakeholders regarding service delivery needs, expectations
and Agency performance .
As a result of our focus groups amd customer surveys we have developed a set
of eight customer service stemdards that capture the key elements of world-
class service as identified by our customers. These standards were published
in September 1994 euid have been posted in all SSA offices throughout the
nation. The standards are stated in the form of a service pledge to our
customers :
We will administer our programs effectively and efficiently to protect and
maintain the Social Security trust funds and to ensure public confidence
in the value of Social Security. We are committed to fair and equitable
764
service to our customers. We promise to respect your privacy and
safeguard the informatioa in your Social Security record.
We are equally committed to providing you with world-class public service.
When you conduct business with us, you can expect:
• We will provide service through knowledgeable employees who will
treat you with courtesy, dignity and respect every time you do
business with us.
• We will provide you with our best estimate of the time needed to
complete your request and fully explain any delays.
• We will clearly explain our decisions so you can understand why and
how we made them and what to do if you disagree.
• We will make sure our offices are safe, pleasant and our services are
accessible.
• Mien you make an appointment, we will serve you within 10 minutes of
the scheduled time.
• If you request a new or replacement Social Security card from one of
our offices, we will mail it to you within five working days of
receiving all the information we need. If you have an urgent need
for the Social Security number, we will tell you the number within
one working day.
• When you call our 800 number, you will get through to it within five
minutes of your first try. (Today we often are not able to meet this
pledge. During our busiest days you will get a busy signal much of
the time.)
• When you first apply for disability benefits, you will get a decision
within 60 days. (Today we often are not able to meet this pledge,
but we are getting better. In 1994, we made disability decisions two
weeks faster than we did in 1992. We do pledge to give you our best
estimate of how long it will take to get your disability decision at
the time you apply. )
SSA is in the process of determining the actions needed to enable it to meet
each standard and how to measure Agency performance against each standard.
I
765
PKRFORMAMCB KgXSnRKS
Our FY 1996 budget commits SSA to in5)rove performance significamtly in the key
areas of disability and hearings cases processed and efforts to rebuild public
confidence through PEBES and Continuing Disability Reviews (CDRs) , while also
maintaining high levels of payment accuracy in our non-disability programs.
It also assumes significant improvements in disability and hearings case-
processing efficiency as DDEs and hearings offices are projected to increase
productivity (cases processed per workyear) by 8 percent and 36 percent,
respectively, over FY 1994 levels.
Quantitative measures of increased performance in several areas reflected in
this budget request follow:
1 Parformance Maasura
1994 Actual
Parformanca
BXDactad Rasulta 1
1995 1996 1
Number of PEBES issued upon request juid,
beginning FY 1995, automatically to all workers
age 60 and over.
3,408,996
12,700,000
8,800,000
Percentage of individuals issued PEBES as
required by law.
100%
100%
100%
Number of cases received by Disability
Determination Services (DDSs) :
•initial disability cases
•total cases (includes reconsiderations and CDRs)
2,652,599
3,684,789
2,665,900
3,786,900
2,716,900
4,036,400
Number of cases processed by DDSs:
•initial disability cases
•total cases (includes reconsiderations and CDRs)
2,651,706
3,672,967
2,819,400
3,940,400
2,811,700
4,131,200
Number of cases pending in DDSs as of 09/30:
• initial diseU^ility cases
•total cases (includes reconsiderations and CDRs)
552,404
729,220
398,900
575,700
304,100
480,900
Number of periodic CDRs (medical reviews,
including mailers) processed by SSA
86,054
194,000
350,000
Number of hearings requests received by Office of
Hearings and Appeals (OHA)
549,402
596,523
609,335
Number of hearings processed by OHA
421,129
608,200
669,600
Number of hearings recpjests pending in OHA as of
1 09/30
485,837
474,100
413,800
766
8IZ« AMD SCOPl OP PK00RM18 APMIMISTKItKP
The following tables show estimated benefit outlays for FY 1996 and beneficiary estimates
for FY 1994 through FY 1996, under current law, for the major programs administered
through this account :
Federal Benefit Outlays
(Dollars in Billions)
Programs
FY 1996 Present Law
Estimate
Old-Age and Survivors Insurance
$303.0
Disability Insurance
$44.2
Supplemental Security Income
$25.2
Beneficiaries
(Millions of Beneficiaries in Payment Status)
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
Old-Age and Survivors Insurance
37.0
37.4
37.8
Disability Insurance
5.3
5.7
6.1
Supplemental Security Income
(including beneficiaries of
federally-administered State
supplementation only)
6.1
6.5
6.8
The following table displays examples of additional processed wor)cloads not
included in the "Performance Measures" table on page 95.
Wor)cload
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
f»on-Disabili1;Y Claims
► Old-Age cmd Survivors Insurance (OASI)
► Supplemental Security Income (SSI) Aged
3,185,068
204,402
3,156,600
228,800
3,154,300
233,800
Other JCey Wor)cloads
► SSI Redeterminations
► Social Security Number Requests
(Original and Duplicate)
► Annual Earnings Items
1,823,468
16,142,409
221,949,522
1,889,000
15,957,000
229,600,000
1,977,700
15,914,000
235,000,000 1
767
SSA'S STATPmO MTO 8TRKAMLIWIHO PLAM
To keep up with projected workload receipts, based on maintaining our "status
quo" workload processing methods, would drive up our FY 1996 staffing needs by
over 4,000 FTEs. However, we are not planning to maintain our current
processes; we are pursuing productivity and efficiency gains to achieve
FY 1996 savings well in excess of 4,000 FTEs.
Our first priority is to apply these savings to keep up with disability work,
an area in which we have experienced a recent deterioration in public service.
The remaining savings will be applied to improve performance in other areas
also essential to rebuilding public confidence and providing world-class
service, and to achieve our share of Government-wide employment reductions
required by P.L. 103-226, the Federal Workforce Restructuring Act of 1994.
We will obtain the FTE savings through:
• automation and other initiatives,
• streamlining and delayering the workforce,
• short-term diseUsility initiatives and
• reengineering for longer-term efficiencies.
The FTE savings will be invested in our plans to:
• keep up with workloads,
• improve telephone service,
• issue and accelerate PEBES and
• increase program integrity efforts (processing more CDRs and
implementing DA&A provisions of P.L. 103-296) .
Additional information on these savings /investment elements follows.
Automation and Other Initiatives
SSA historically and continuously streamlines and restructures work
processes to maximize efficiency and improve service. SSA has proven
success in achieving FTE savings from automation and other process
improvements. In the past, these initiatives have enabled SSA to
downsize to a significant degree atnd have freed up resources to invest
in workload growth and service improvements.
Our budget plan projects significant savings from automation and other
initiatives to increase efficiency- -more them 2,600 FTEs in FY 1996 when
compared with the FY 1993 base. However, in order for SSA to accomplish
the FTE savings, it is essential that current and future requests for
automation resources be fully funded.
Recent automation and related accomplishments include:
• Simplifying and automating procedures for employers to report
earnings ;
768
• Automating benefit applications to eliminate duplicate data coding
and input functions;
• Obtaining birth registration information to issue social security
numbers to newborns ; and
• Targeting eligibility reviews more effectively.
Key projects in SSA's budget plan with significant FTE savings include:
• IWS/LAW--This is the key strategic investment which will allow SSA
to deal with workload increases projected for the late 1.990s and
beyond by providing the automation and communications platform
essential to the service and efficiency improvements envisioned in
the Agency Strategic Plan smd the Customer Service Plan. It is
vital that SSA replace its aging national terminal network and
replace it with technology which will support reengineered
business processes, continued automation to streamline
administrative amd programmatic operations and a consistent high
level of customer service. Of our 1,300 field offices, fewer than
200 have this new technology. We're moving ahead aggressively
with the funds appropriated by Congress to get the others on
board. Timely funding of the IWS/LAN initiative through SSA's
Automation Investment Fund is essential to achieving our goals.
• Automation of Social Security Benefit Program Processes- -This
initiative continues automation of the title II claims application
and postentitlement processes, providing additional capability for
automated processing. The project also continues to improve the
"back-end" software that processes claims and postentitlement
actions to completion. These changes will reduce manual actions
currently required as a result of exceptions etnd/or exclusions
from the processing software.
• Automation of SSI Program Processes- -Automation of the SSI initial
claims application process has enabled direct keying of data into
the system, automatically generating a paper application form and
the system transaction. This budget supports further automation
of the SSI program by providing an on-line system for most
postentitlement events .
• Earnings Modernization- -This is a long-term project to build a
modernized earnings system to provide accurate earnings data for
use in benefit computations. It will contain automated facilities
for processing corrections to earnings records and online access
to earnings data for claims -related applications. He pltm to take
advamtage of the latest technology with the procurement of an
electronic image data capture system, and are exploring use of
optical disk for automated storage and retrieval .
Streamlining and Delavering the Workforce
SSA is achieving FTE savings by restructuring the workforce and is
relying on a number of special initiatives to encourage greater
769
99
employment losses in targeted areas (managerial, supervisory and staff
positions) and to redeploy staff enployees to direct workload
operations .
• Buyout authority in FY 1995 will ensUsle SSA to achieve significsmt
staff reductions. SSA has "bought out" approximately 1,200
employees, primarily GS-12 and above managers and supervisors as
well as non- supervisory en5>loyees in staff positions nationwide.
• At the same time, SSA is streamlining and delayering the agency by
consolidating organizational components and reducing managerial
layers .
• SSA is developing plans to establish a special central workload
processing unit in headquarters to which excess staff component
employees will be reassigned for direct workload processing. We
intend to train and move staff resources to workload activities in
order to improve service delivery.
Short-Term Disability Initiatives and Reengineering
SSA has put in place a Short-Term DisoJsility Project Plan, designed to
expedite processing of disability claims and hearings. The plan is an
immediate initiative, being carefully coordinated with our reengineered
disability process implementation team to insure consistency with the
longer-term process redesign. As addressed later in this justification,
this series of management actions is projected to result in the
clearance of significant amounts of disability work by December 1996,
after which the impact of our redesigned disability process should begin
to be felt. The disability redesign represents only SSA's first
reengineering project. We are committed to undertaking additional
reengineering projects to improve service and increase efficiency.
Investing FTE Savings in Improving Service Delivery in Critical Areas
SSA's staffing and streamlining plan reinvests FTE savings in four key
service delivery areas to support SSA's goals of providing world-class
service and rebuilding public confidence in Social Security.
Improving Telephone Service
The demand on SSA's telephone service continues to grow, as our
customers increasingly prefer to use our 800 number for more and more of
their business, including more complex transactions.
Based on surveys of what our customers want, the Agency has set a goal
of making sure that our customers can get through to us within 5 minutes
of their first attempt. At present we have not reached that goal. The
budget reflects SSA' s efforts to keep up with growing workloads so that
we can maintain and try to improve our service levels.
770
The approach we are talcing combines increased call-answering capacity by
SSA employees and automation techniques. He will increase the use of
employees who serve in spike units- -groups of employees who can be
shifted from other work to telephone service on days of high demand. We
are also re-missioning two of our Data Operations Centers to serve as
teleservice centers, as the earnings reporting work they have been
processing becomes increasingly automated. The following table shows
the workyear resources we expect to devote to 800 number service.
- - -- --
Fiscal Year
1995
1996 II
Total Workyears
5,111
5,287 1
SSA is moving ahead to optimize the use of automation in providing
service to our 800 number customers. Automated self-service options are
available in some locations for certain kinds of business (such as
requesting a form for a new or duplicate social security number) which
do not require assistemce from a teleservice representative. We are
working to improve and enhance this automated service in a cost-
effective manner. Another automation feature advises a customer put in
queue to wait for a teleservice representative, how long the wait will
be. SSA also has developed an 800 number expert system to guide
employees through responses to frequently asked questions. This will be
especially valuable to employees who serve in spike units, moving in cuid
out of telephone work as demand changes. The IWS/LAN platform is
critical to support this automation effort.
In striving to keep up with our 800 number work, the challenge facing
SSA is to deploy the right number and combination of automation and
human resources to meet our access goal and maximize the number of
satisfied customers. To aid us in reaching that point, SSA recently
visited eight well-known companies to benchmark their telephone service.
Our intent is to change our processes and culture to allow us to move
toward our service goal .
Issuing and Accelerating Personal Earnings and Benefit Estimate
Statement (PEBES)
Section 1143 of the Social Security Act requires that SSA issue a PEBES
annually to individuals not entitled to SSA benefits and for whom a
current mailing address can be determined. SSA's implementation plan
for meeting this requirement follows.
Beginning in February 1995, SSA will mail a statement to an estimated
8.9 million eligible individuals age 60 and over. In addition, SSA
expects to mail approximately 500,000 statements in FY 1995 to the
participants in the FY 1994 pilot to help us determine the amount of
"fallout" work that we can expect to receive from second-time mailings.
In FYs 1996 through 1999, SSA will mail statements to persons who attain
age 60 each year. Beginning in FY 2000, SSA must mail statements
annually to all eligible individuals age 25 and over.
771
101
Also in FY 1996, we will accelerate PEBES issuance to younger workers to
even out the workload and get a head start on meeting the FY 2000
requirement. Acceleration will spread the workload for processing
related inquiries and earnings corrections over several years, and help
rebuild public confidence by advancing one-time mailings to the age-25-
and-older group during FY 1996--FTf 1999.
SSA's plan, including estimated workyear requirements based on a FY 1994
pilot study, is summarized in the table below. The table includes only
SSA- initiated PEBES; it does not reflect the 3-to-4 million PEBES issued
by SSA upon request each year.
SSA- Initiated PEBES Mailings by Fiscal Year
(Estimated Mailings in Millions)
Mailings
1995
1996
1997
1998
1999
2000
Mandated
Accelerated
8.9
0.5
1.6
3.4
1.7
8.3
1.8
18.2
1.8
28.2
123.0
Total
9.4
5.0
10.0
20.0
30.0
123.0
Workyears
343
114
187
292
412
778
Continuing Disability Reviews (CDRs)
The following table displays the total number of CDRs, by category, for
FY 1994 through FY 1996.
Category
FY 1994
FY 1995
FY 1996
Periodic Review CDRs
• Title II CDRs
• Title XVI CDRs
81,691
4,363
184,000
10,000
234,000
116,000
Work CDRs
66,395
76,800
81,100
Total CDRs
152,449
270,800
431,100
Processing additional periodic review CDRs responds to NPR
recommendations and is essential for enhancing program integrity and
rebuilding public confidence in Social Security. This budget request
reflects processing 184,000 title II CDR mailers in FY 1995, doubling
our FY 1994 level of effort, and increasing that number to 234,000 in FY
1996 and eventually to 384,000 by FY 1999.
Consistent with recent independent agency legislation, we also will
complete 116,000 CDRs on the Supplemental Security Income (SSI)
caseload.
772
SSA also initiates thousands of CDRs each year triggered by
beneficiaries' work activity.
disabled
SSA is connnitted to investing not less than $215 million on activities
related to CDR processing in FY 1996 .
Drug Addiction and Alcoholism (DA&A) Provisions
P.L. 103-296 included a number of changes related to administration of
the disability programs for persons entitled to benefits on the basis of
drug addiction or alcoholism. These include:
• Extending to title II beneficiaries provisions which previously
applied only to title XVI beneficiaries (treatment participation
and need for representative payment) .
• Limiting benefit payments to 36 months.
• Requiring gradual payment of retroactive benefits.
SSA's FTE plan reflects resources needed to establish and change
representative payees, suspend/reinstate benefits in cases of treatment
noncompliance, prorate retroactive benefits, and process reconsideration
and hearing recfuests for DA&A disaibility determinations, consistent with
the provisions of this legislation. The aibove DAtA provisions carry an
estimated workload impact of 490 workyears in FY 1996.
STRDCTDRB OF LAB BDDGBT RBQDBST FOR FY 1996
The FY 1996 President's budget request for SSA's LAE account totals
$6,188,2 00,0000, made up of funding for continued investments in automation
and disability workload processing, and for the current operations base, as
summarized below.
Limitation on Administrative Expenses
FY 1996 Budgetary Resources
Requested
Automation Investment Funding
Disability Investment Funding
Current Operations (Base)
$357,000,000
$534,000,000
$5,297,200,000
Total
$6,188,200,000
773
APTOMATIOM INVESTMENT FUMDIMG (AIF)
The Automation Investment Fund (AIF) provides funding for a state-of-the-art
computing network for all of SSA and the State Disability Determination
Services (DDS) , atnd for new technological enhemcements needed to implement
SSA'B Strategic Plan. The five year (FY 1994 through FY 199B) requirement for
this investment is $1.1 billion.
SSA is establishing a cooperative processing architecture which continues the
large centralized mainframe computing system now in operation along with
distributed processing capabilities that move the power of technology closer
to employees. The AIF centers on the distributed processing capeOsility of the
cooperative processing architecture, by providing intelligent workstations and
local and wide area networks (IWS /LANs) --including related equipment, the
necessary workstations, software emd training and related costs- -to improve
the effectiveness, efficiency and economy of SSA's operations.
IWS/LAN is the foundation for SSA's strategy to improve the quality of service
to the American people without substantial increases in workyears. Without
this initiative, SSA:
• would see an adverse impact in the delivery of basic services, such as
taking and processing claims, since the Agency would be unable to
replace aging equipment;
• would not be able to implement the reengineered disability process;
• would not realize the planned workyear savings resulting from IWS/LAN
which are critical to our ability to process our future workloads.
The IWS/LAN is both an operational and strategic investment that is essential
for service delivery. For example:
• IWS/LAN provides the platform for the reengineered disability process.
The networking it provides will enable SSA to give high-quality service
to applicants for disability benefits, significantly reducing claims
processing time and greatly improving productivity across disability
claims and appeals workloads .
• IWS/LAN will allow SSA to transition to paperless processes by
permitting the development of an electronic claims folder. Eliminating
dependence on a paper folder ultimately will enable SSA to process work
without regard to the location of the folder, thus reducing processing
time and folder storage costs, and permitting optimum deployment of our
human resources .
• IWS/LAN computers will be the hosts for expert systems. For example, the
Agency has already developed expert systems to help emswer the 800 number,
but needs the IWS/LAN infrastructure to make them available to all
employees who need them- -especially those who answer the telephones only on
peak days, to give accurate information and high-quality service.
774
• The IWS/LAN initiative will provide the equipment to replace the Agency's
aging network of computer terminals, as they reach the end of their useful
lives. As we replace terminals in order to continue processing claims,
IWS/LAN will also allow automation of many administrative tasks now
performed manually.
The following table shows AIF budgetary resources and obligations by fiscal
year.
AIF Budgetary Resources and Obligations
by Fiscal Year (S in millions)
1994
1995
1996
1997
1998
Total
Budgetary Resources
$220
$86
$357
$300
$140
$1,105
Obligations
$22
$286
$357
$300
$140
$1,105
The FY 1996 request of $357 million would essentially restore the level of
funding requested by the President for the first three years of the
investment, in order to continue progress on the Agency-wide distributed
computing network. The funding is being requested to remain available until
expended in order to protect against the unpredictability of timing in major
systems procurements, which are particularly prone to procurement challenges
and delays that can shift final award and obligation of funds into a
subsequent fiscal year.
Acquisition and installation of the IWS/LAN platform is taking place over
several years. All funds currently appropriated are already obligated or are
planned to be obligated/committed in FY 1995. Availability of the funds
requested for FY 1996 is vital since any break in the planned funding would
cause delays in IWS/LAN implementation, risk higher costs and defer the
attainment of benefits resulting from and dependent on the IWS/LAN
infrastructure .
All reviews agree that SSA's IWS/LAN architecture is technically sound. SSA's
technical strategy for its planned evolution from "dumb" terminals to
networked microcomputers is well within widely accepted government and private
sector practice and will provide a flexible platform that has the potential to
improve service delivery. It is crucial that SSA acquire and exploit that
potential if it is to be able to process expected workloads within reasonable
resource levels and, in addition, meet our goal of providing world class
service .
Displayed below is a breakout of the AIF showing plsmned obligations by
investment category and equipment installations.
775
Projected Automation Investment Fund Obligations and Installations
(Dollars in Millions)
Obligations by Investment
Category
1994
1995
1996
1997
1998
Total
Workstations
►Computers
►Ergonomic Furniture
Subtotal - -Workstations
$0
19
$19
$58
54
$112
$49
98
$147
$8
80
$88
$3
43
$46
$118
294
$412
Local Area Networks
0
114
106
39
20
279
Site Preparation
2
47
69
52
10
180 1
Support Services &
1 Training
0
4
18
11
8
41
1 Telecommunications &
1 Maintenance
1
9
17
33
39
99
1 Subtotal
$22
$286
$357
$223
$123
$1,011 j
1 Reengineering/ASP
Initiatives
0
0
0
77
17
94
Grand Total
$22
$286
$357
$300
$140
$1,105
Installation Schedule
►IWS Installations
>LAN Installations
►Furniture Installations
102
4
9,044
23,288
799
20,309
30,405
1,009
20,711
8,800
402
5,400
62,595
2,214
55,464
776
DISABILITY INVBSTMBNT FUNDING
SSA continues to face increasing disability applications. In FY 1996 an
estimated 2.7 million claims will be forwarded to the State Disability
Determination Services (DDSs) for processing. While this represents a
56 percent increase over the number of claims received as recently as FY 1990,
based on recent trends the estimated increase over FY 1994 is a more modest
2 percent.
The growth in appellate cases continues largely unabated. As applications
move through the initial decision phase and into the appeals process, the
Office of Hearings and Appeals (OHA) continues to experience a phenomenal
growth in hearings workloads. In FY 1996 we project that more than 609,000
requests for hearings will be received. This is virtually double the FY 1990
level, and an 11 percent increase over. FY 1994.
SSA'B Response to Growing Disability Workloads
The Disability Investment Fund (DIF) has provided resources since FY 1994 to
enable SSA to process significant amounts of disetbility work. In FYs 1994 emd
1995, Congress appropriated $320 million each year to permit SSA to avert
even-greater workloads pending throughout the diseibility process.
The President's budget request for FY 1996 for SSA includes $534 million in
diseUsility investment funding. While the majority (roughly $446 million) of
these funds will be used to process additional diseUsility claims and appellate
work, SSA also plans an expanded role for the DIF in FY 1996. We propose to
use a portion of the resources to process more continuing disability reviews
(CDRs) and to begin implementing our long-term solution- -the reengineered
disability process.
The impact of Disability Investment Fund is illustrated in the charts and
graphs that follow.
Disability Investment Fund
(Dollars in Millions)
1
FY 1994
FY 1995
FY 1996
1 Disability Investment Fund
$320
$320
$534
Aj;(?<?at;ion pf DIF by PvrP99e
► Additional claims and appellate work
processed
► Additional CDRs
► Reengineering implementation
$320
N/A
N/A
$320
N/A
N/A
$446
68
20
777
Payoff from the Disability Investment Fund
(Cases in Thousands)
1
FY 1994
FY 1995
FY 1996
Base Work Processed without DIP
► Disability claims
1 ► Hearings
1 ► C33RS (including work CDRs)
2,213
365
152
2,371
519
271
2,371
519
275
Additional Production from DIP
► Disability claims
► Hearings
► CDRs (including work CDRs)
439
56
0
448
89
0
441
151
156
Total Cases Processed
» Disability claims
» Hearings
► CDRs (including work CDRs)
2,652
421
152
2,819
608
271
2,812
670
431
In FY 1996 to help SSA ensure the integrity of the disability program we will
apply $68 million of the DIP to processing 156,000 more CDRs than the FY 1995
base level , as shown in figure 1 .
431
CDRs
PROCESSED
(in thousands)
1990 1991
1992 1993 1994
Fiscal Ymt
1995 1996
I
778
The FY 1996 DIF also will provide $20 million to begin implementing SSA's
long-term plam to dramatically improve quality of service by reengineering the
disability process. When the new process is fully implemented, we expect
average processing time to pay an initial disability claim to improve to
60 days, «md average processing time through the hearing stage to improve to
225 days. Because of the complexities smd investments involved in making all
of the changes needed to attain these levels, it will require approximately
five years to achieve these goals.
SSA has therefore put in place a Short-Term Disability Project Plan, designed
to expedite processing of claims in a manner compatible with the longer-term
redesign and achieve some near-term reductions in pending workloads. The Plan
has established targets for signif icamtly reducing pending workloads (from the
level that existed at the beginning of FY 1995) by roughly 100,000 in the DDSs
and 111,000 in OHA. These reductions will be achieved by December 31, 1996
through a series of management actions, which are being implemented within
existing budgetary resources.
With the help of these actions we expect continuation of productivity
improvements in the State DDSs .
DDS Production per Workyear by Fiscal Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
210
215
220
218
236
261
272
288
294
Figure 2 illustrates the end result of these productivity improvements which,
coupled with the application of additional resources from the Disability
Investment Fund, have produced significant increases in the amount of work
processed, as well as a reduction in average processing time.
DISABILITY
CLAIMS
PROCESSED
(In thousands)
1,659
2,652
2,818 2,812
Proe«Mi»9
TftiM (Daft) 97
779
Disability Claims Processed
FY 1992 and FY 1993 showed substantial increases over the previous year's
output, due in large part to the release of SSA's contingency reserves in
those years ($100 million in FY 1992 and $19B million in FY 1993) , most of
which was targeted to growing disability caseloads. Figure 2 illustrates how
the FY 1994--FY 1996 DIF will permit SSA to continue to surpass the number of
initial claims cleared during the contingency reserve -fueled years of 1992 and
1993.
The Short-Term Disability Project Plan implements management actions projected
to result in a reduction in pending claims workload, including encouraging
applicants to assist in obtaining medical evidence and increasing DDS
flexibility in using funds for systems purchases.
Appeals Processed
HEARINGS
PROCESSED
(in thousands)
870
ProcTlitM
(Dmyn)
1991
214 228
A major part of the overall disability process involves the processing of
appeals. Applicants whose claims for disability are initially denied may file
for a reconsideration (processed by the DDS) of the initial determination.
;4>plicants receiving an unfavorable decision on a reconsideration request may
request a hearing before an Administrative Law Judge (ALJ) in SSA's Office of
Hearings and Appeals (OHA) . Thus our success in processing initial decisions
proves to be a "double -edged sword" as the increased output inevitably leads
to an increase in the number of reqpiests for hearing.
780
Figure 3 above Illustrates the number of hearings processed in recent years
(as well as the average processing time), and reflects the FY 1995--1996
impact of the Short-Term Disability Project Plan.
DISABILITY
CLAIMS
PENDING
The Plan introduces a number
of mamagement actions which
will have a significant
impact on SSA's hearings
workload, including:
• Encourage applicemts
who file hearing
requests to assist in
obtaining medical
evidence of record.
• Enhance the -work of
special screening
units, which use
profiles developed from
SSA's quality assurance
system to identify
Figure 4 hearing requests in
which we may be able to
reverse the
reconsideration decisions, rather than send the cases to a hearing
office.
• Expand the prehearing conference program, under which senior staff
attorneys screen cases and confer with claimants and their attorneys to
make sure all evidence has been gathered and the file is con^lete before
the hearing.
• Seek temporary FI«o«l¥Mr
authorization for
senior staff attorneys
to issue fully
favorable revised
reconsideration
determinations , where
appropriate, rather
than have the case go
to an ALJ for a full
hearing when new
evidence suggests it
should be allowed.
• Provide additional
support for OHA from
within the Agency
(e.g., organizing the
material in the Figure s
hearing folders so
that it is easily
accessible) .
• Provide hearing offices with additional personal con^uters, hardware and
software to facilitate preparation of decisions.
Figures 4 and 5 illustrate our objective to reduce initial claims and hearings
pending workloads through use of the Disability Investment funding and full
implementation of SSA's Short-Term Disability Project Plan.
HEARINGS
PENDING
781
Lonq-Temi Approach to Improvino Disability Program: Reenoineering
SSA's plan to reengineer its disability claim process has been well
publicized. SSA realized that despite workload, demographic and program
changes since the beginning of the Disability Insurance program in the 19508,
our method for processing disability claims changed relatively little.
Uhprecedented workload increases in recent years have contributed to
difficulties in providing satisfactory service to claimants for disability
benefits, in spite of automation and other productivity improvements.
It is clear that incremental improvements are no longer sufficient to achieve
the world-class service SSA is pledged to provide to its disability customers.
As a result, SSA has embarked on a course of action to completely reengineer
the way it delivers service in the disability claims process. We do not
expect the new process to be fully in place until FY 2001, including
implementation of a simplified disaibility determination methodology which will
require extensive research, consultation and testing before it Cem be adopted.
However, we are beginning right away to initiate activities related to
implementation of immediate and midterm aspects of the plan. We expect
savings from these changes to be fully realized by FY 1999 and they are
included in SSA's FTE and streamlining plan. These savings assume
implementation of the Modernized Discibility System, which is dependent upon
timely implementation of the IWS/LAN initiative, and use of additional
personal computers (PC) and LANs to complete modernization of OHA's case
processing and administrative functions, including PCs for OHA decision
writers to increase efficiency and save time in processing hearing decisions.
The five primary objectives for the redesigned disability process are to make:
• The process "user friendly" for claimants and those who assist them;
• The right decision the first time;
• The decision as quickly as possible;
• The process efficient; and
• The work satisfying for employees.
Immediate or near-term implementation activities which will begin in FY 1995
and be fully implemented nationwide by the end of FY 1996, or for which
research and development or site testing can be initiated within the next two
fiscal years include:
• Streamlining and simplification initiatives or other procedural elements
of the new process that can be implemented using existing administrative
or regulatory discretion;
• Client-service activities associated with improving the claimsmt's
access and entry into the disability claim process;
• Development cuid site testing of options for streamlining parts of the
administrative appeals process;
• The provision of unified training and direction to disetbility
decisionmakers; and
• The establishment of new measures and the testing of improved
quality assurance mechanisms.
782
The recently- appointed implementation manager for the new disability process
has put together an implementation planning team. Current Federal FTE savings
estimates associated with disability reengineering as shown in SSA' s staffing
and streamlining plan exceed 2,900 by FY 1999. As implementation planning
proceeds and more detailed, component-level plans are developed, savings
estimates will need to be updated smd revised.
Disability Research Agenda
Given the growth in the disability beneficiary population and its relationship
to overall trust fxmd solvency, the Agency has undertaken a research agenda to
assess causes and factors contributing to the growth. SSA's short-term
disability research agenda represents an effort to develop a new deitabase and
other analytical tools to help SSA:
• determine whether the program growth SSA has been experiencing is
a short-run phenomenon or a longer-term trend, and
• improve future estimates of benefit and administrative costs.
SSA's long-term disability research agenda focuses on a more sophisticated
survey research program that will help SSA:
• predict change in program size in the future,
• estimate cost/effects of proposals to change the disability
program, and
• evaluate options for program change.
BASH BODGKT
The FY 1996 request for SSA's LAE account includes $5,297,200,000 for current
operations, which SSA will use in carrying out its primary responsibility of
administering the nation's major income security programs.
The LAE account finances from the Social Security trust funds most of SSA' s
administrative costs. It provides resources for SSA to administer the Social
Security programs of old-age, survivors and disability insuremce, certain
health insurance functions and the supplemental security income (SSI) program
for the aged, blind and disabled. Funds for annual reporting of earnings and
certain activities related to pension reform also are included, as well as
automated data processing (ADP) and telecommunications expenses.
Administrative expenses of the SSI program ouid of those pension reform
activities that are appropriately charged to Federal funds are reimbursed to
the trust funds from the Supplemental Security Income account and the Payments
to Social Security Trust Funds account, respec'.ively.
Included in the FY 1996 request is $2,000,000 for an intergovernmental effort
on electronic benefits transfer.
783
Tachnlcal Componanta of Baae lAB Budqat
Employment
FTEs and Workvears
A summary of SSA's full-time equivalent (FTE) and workyear estimates and
associated employment needs is shown in the following table. FTEs
measure the cumulative workyears of effort during the fiscal year by all
full-time, part-time emd temporary employees working on regular time.
Total workyears include FTEs and overtime workyears. The FY 1994 actual
tAE FTE number has been adjusted for comparability to FY 1995 and
FY 1996 to reflect direct Agency spending of funds for operation of
General Service Administration (GSA) delegated buildings instead of
budgeting for these requirements in the GSA Federal Buildings Fund.
FTE Emplovment
LAE only
All programs
FY 1994 Actual
FY 1995 Estimate
FY 1996 Estimate
64,017
64,484
64,548
64,930
63,652
64,032 1
Total Workvears
LAE only
All programs
66,259
66,741
66,445
66,851
66,372
66,776
The Limitation on Administrative Expenses (LAE) covers trust fund and
SSI program needs, as well as work related to implementation of the Coal
Industry Retiree Health Benefit Act. "All programs" includes LAE plus
Black Lung and reimbursable work.
Mix of Overtime and FTEs
SSA relies on a mix of FTEs and overtime to achieve its overall
workyears. The following table shows how SSA plans to achieve its
workyears for all programs in FY 1995 and FY 1996. These plans are
compared to FY 1994 actual experience.
Workvears (All Programs)
Type
FTE employment
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
64,484
64,930
64,032
Non-ceiling workyears
(e.g. , overtime)
2,257
1,921
2,744
Total Workyears
66,741
66,851
66,776
784
Budget for State Disability Determination Services
State Disability Determination Services (DDSs) make disability determinations
on claims, appeals and continuing disability reviews (CDRs) . The budget for
the State DDSs is summarized in the following table.
FY 1994 Actual
FY 1995 Estimate
1 1
FY 1996 Estimate
Dollars
$1,135,697,095
$1,199,667,000
$1,297,042,000
1 Workyears
13,267
13,680
14,061
1 Total Workload
3,672,967
3,940,409
■4,131,219
The DDS budget reflects the following key assumptions:
• Includes the following amounts from the Disability Investment Fund:
$195 million for FY 1994, $180 million for FY 1995 and $246.5 million for
FY 1996.
• Includes the following amounts for DDS automation improvements:
$22.0 million in FY 1994 and $4.0 million in FY 1995.
• Production rates will continue to increase, from an average of 272 cases
per workyear in FY 1994, to an estimated average of 288 cases per workyear
in FY 1995 and 294 cases per workyear in FY 1996.
• Estimated State cost-of-living raises and other average salary changes
result in assumed DDS average salary costs increasing to $49,000 in
FY 1996 from the FY 1995 level of $47,000.
• By the end of FY 1996 the DDS initial claims pending workload will be down
to roughly 304,000 cases, a decrease of 45 percent from the FY 1994
pending level of 552,404 cases.
• The DDSs will also process a substantial court case workload in FY 1995
and FY 1996.
o The DDSs will process an estimated 12,000 cases resulting from the
State of New York court case in FY 1995--FY 1996.
o Approximately 50,000 cases related to the SCieberger court case will be
processed in FY 1995- -FY 1996.
This budget request does not contain resources for processing the
potentially large workloads which could result from other court decisions
still under litigation.
785
Information Technolocrv Systems
The budget request for the LAE account includes amounts shovm in the following
table for lease, purchase and maintenamce of automated data processing (ADP)
and telecommunications hardware and software, and for contractual services
(excluding SSA personnel costs) . This is referred to as the Information
Technology Systems, or ITS, budget. The amoxmts shown below for FY 1996
include the costs for telephone and data communications services (roughly
48 percent of total) ; hardware and software, including lease and maintenance
(about 17 percent) ; contractor support/time sharing services (about
11 percent) and strategic initiatives and other minor enhancements (about
24 percent) .
The table below displays new budgetary resources requested and estimated
obligations for ITS activities for FY 1994 through FY 1996 for the LAE
account .
ITS Budget (Dollars in Thousands)
FY 1994 Actual
FY 1995
FY 1996
New Budgetary Resources
Estimate
Estimate
$231,000
$211,283
$222,200
Unobligated balances
carried forward:
- from FY 1993 to
FY 1994
+2,257
- from FY 1994 to
FY 1995
-4,907
+4,907
Recoveries of prior
years' obligations
+2,724
Total Obligations
$231,074
$216,190
$222,200
Relationship of ITS Base Budget to Automation Investment Fund (AIF)
Both the AIF cu:id the ITS base budget address automation investments cmd,
after the AIF expires, ongoing costs for hardware and software acquired
as AIF automation investments will be met from the ITS base budget.
Some basic differences between the two accounts include the following.
• The AIF primarily addresses one major infrastructure investment- -
the creation of a state-of-the-art computing network- -while the
ITS base budget addresses the balance of the Agency' s ITS
investments and ongoing information system expenses.
The AIF takes a holistic approach including requirements (such as
ergonomic furniture, site preparation and training) that would not
be included in the base ITS budget.
786
While the ITS base budget is funded with one-year budgetary
resources, the AIF employs no-year fxmds to avoid the delays,
planning complications and higher acquisition costs associated
with annual funds.
ADDITIOWAL BDDGET P8TAIL
Comparison of Administrative Costs with Present Law Income and Benefits
The principal source of income to the trust funds for the Social Security old-
age, survivors, and disability insurance (OASDI) and health insurance programs
is the Social Security tooc on employees, employers and self-employed persons.
The total administrative costs of the Social Security trust fund programs
include :
• The following activities funded through the lAE account:
o Administrative expenses for Social Security Administration components
and costs for the State Disability Determination Services.
o Facilities maintenance and construction costs.
o ADP, telecommunications and telephone systems costs.
• Social Security- related work performed by other Federal agencies such as
the Treasury Department, which issues Social Security checks.
As displayed in the table below, the total FY 1996 administrative cost for the
OASDI programs (including obligations from the investment proposals discussed
earlier) is estimated to be 0.6 percent of anticipated contribution income to
the OASI and DI Trust Funds emd 1.0 percent of estimated benefit payments.
Administrative Expenses as a Percentage of Trust Fund
Contribution Income amd Benefit Payments - Fiscal Year 1996
Trust Funds
Old -Age and Survivors Insurance
Disability Insurance
Percent of Income
Percent of
Benefit Payments B
0.6
2.0
0.7 1
2.7 1
Total, Social Security
Trust Fund Programs
O.S
1.0 I
787
Supplemental Security Income Program
The FY 1996 administrative costs of this program (including obligations
from the investment proposals discussed earlier) are forecast at
7.0 percent of benefit payments. In many cases, SSI benefits supplement
other income. Since monthly SSI payments are both "means-tested" cmd on
average much lower than OASI and DI payments, the administrative cost-
to-program payments ratio is higher than that for Social Security
programs .
The cost of administering the supplemental security income program is
initially paid from the Limitation on Administrative Expenses accoxmt,
because administration of the SSI and trust fund programs is so heavily
integrated. For example, an applicant filing concurrently for SSI and
Social Security Disability Insurance benefits would file both claims
with the same Claims Representative in the same field office. Medical
decisions on both claims would be rendered by the same staff in the
State Disability Determination Service office. Administrative costs of
the SSI program represent approximately one-third of SSA's
administrative expenses . The trust funds subsequently are reimbursed
from the Supplemental Security Income appropriation, because this
program ultimately is financed entirely from the general funds of the
Treasury.
Notch Commission
The Notch Commission was established by P.L. 102-393, as amended, to study the
"notch" issue, and report its findings and conclusions to the Congress by
December 31, 1994.
The "notch" refers to the effect of a reduction in initial benefit levels for
new retirees who reached age 62 in 1979 or later. This reduction was enacted
into law by the Social Security Amendments of 1977 because of a serious flaw
in the benefit computation method put into place by the 1972 Social Security
Amendments- -a flaw which was causing initial benefit levels to rise very
rapidly. Many of those who had their initial benefits computed under the new
method believed they had been treated unfairly.
On December 31, 1994 the Notch Commission released its report, which concluded
that the "notch" is a "necessary and appropriate result of the 1977
legislation. . .and that no remedial legislation is in order."
SSA's FY 1994 LAE appropriation included up to $1.8 million, available until
the end of FY 1995, for expenses necessary for the Notch Commission.
From April through November 1994, the Notch Commission spent roughly $500,000,
with a final accounting still pending.
788
union Activities
The Senate Appropriations Committee Report on action on SSA's FY 19B8
appropriations requests (Senate Report 100-189) addressed the subject of
Social Security trust fund support of union activities. The Committee
requested that SSA's FY 1989 and future budget justifications include
information on SSA's expenditures for union activities.
The following table shows estimated expenditures from the Limitation on
Administrative Expenses account to subsidize the unions in 1994:
:_^ ■■ "■■■
LAE Union Expenses (Dollars in Millions)
FY 1994
Salary
Travel and Per Diem
Office Space and Telephones
Arbitration Expenses
$8.1
.4
.5
.1 1
Total Expenses
$9.1
SSA' s labor contracts with the Americem Federation of Government Employees
(AFGE) , the National Federation of Federal Employees (NFFE) and the National
Treasury Employees Union (NTEU) obligate the Agency to pay the cost of certain
union expenses, such as salaries for official time to conduct union business,
travel and per diem expenses, office space, telephones, and arbitration costs.
There are currently about 145 SSA employees nationwide who spend all or
virtually all of their workday on union activities, in addition to those
employees who spend part of their wor]cday on union business. We expect that
costs related to union activities will continue to rise due to the January
1995 general schedule amd locality pay increases, cooperative bargaining
activities which focus on problem solving (interest-based bargaining) , joint
union-management committees resulting from the 1993 National Agreement with
AFGE, and partnership activities resulting from Executive Order 12871.
789
Social Security Administration
Detail of Full-Time Equivalent Employment (FTB)
FY 1995
FY 1994 Current FY 1996
Actual Estimate Estimate
Account
Limitation on Administrative
Expenses (lAE) 64,017 64,548 63,652
Special Benefits for Disabled
Coal Miners 59 85 85
Reimbursable Work 382 295 295
Project NetWork ' 2i 1 0
All Programs 64,484 64,930 64,032
NOTE: FY 1994 actual for LAE and reimbursables are adjusted for
compar£ibility to FY 1995 and FY 1996 to reflect direct agency
spending of funds for operation of General Service
Administration (GSA) delegated buildings instead of budgeting for
these requirements in the GSA Federal Buildings Fund.
Average GS/GM Grade
1991 8
1992 9
1993 9
1994 9
1995 9
1996 9
Tuesday, March 28, 1995.
ADMINISTRATION FOR CHILDREN AND FAMILIES
WITNESSES
MARY JO BANE, ASSISTANT SECRETARY, ADMINISTRATION FOR CHIL-
DREN AND FAMILIES
ANN ROSEWATER, DEPUTY ASSISTANT SECRETARY FOR POLICY AND
EXTERNAL AFFAIRS, ADMINISTRATION FOR CfflLDREN AND FAMI-
LIES
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
DHHS
Mr. Porter. The subcommittee will come to order.
Let me apologize to both the Members of the subcommittee and
to all of you for being late. It is springtime now and there are lots
of groups of students out there. I had 70 students from three
schools in my district. And the difficulty is we used to meet on the
House steps for the pictures. There are no House steps at the mo-
ment. So we had to meet clear over on the national steps, and I
was delayed, and I do apologize.
We continue our hearings on the Department of Health and
Human Services fiscal year 1996 budget with the Administration
for Children and Families. We are pleased to have with us the As-
sistant Secretary, Mary Jo Bane.
Ms. Bane, why don't you introduce the people with you.
Mr. Hover. Mr. Chairman, she is going to introduce people, but
before she does, I have already told Secretary Bane that I am going
to have to leave at 2:30 because we have another hearing at Treas-
ury, Postal. Lee Brown, the drug coordinator, is going to be testify-
ing. I just w£mt to let you know and Ms. Bane know why I am leav-
ing at 2:30.
Mr. Porter. I would be happy to call on you first, if you would
like.
Mr. HOYER. That is not necessary. I will try to get back. I just
wanted you to know.
Ms. Pelosi. Mr. Chairman, I already told the Secretary, ex-
tended my apology to her, because we have an Ethics Committee
meeting at 2:30.
Mr. Porter. Now I really apologize to everyone.
Mr. Miller. Mr. Chairman, I plan to stay.
Mr. Porter. It is you and me, Dan.
Ms. Bane. Mr. Chairman, I wondered if I might introduce a cou-
ple of visiting students. My brother and his family are here kind
of hiding in the back row, Jim Bsme and Emily, Fred and Clare,
and my mother visiting from Florida, Helen Bane.
Mr. Porter. Nice to see all of you.
(791)
792
Ms. Bane. With me at the table are Dennis WiUiams, Deputy As-
sistant Secretary for Budget in the Department, and Ann
Rosewater, Deputy Assistant Secretary for PoUcy at the ACF.
Testimony Summary
I would like to summarize the testimony I submitted for the
record.
President Clinton has submitted to Congress a budget which ad-
dresses the concerns of Americans, serves their interests and cre-
ates opportunity, a budget that keeps faith with the long-standing
commitments of this Department.
In keeping with Administration policy to increase support for
programs that promote economic security and independence, the
budget that the Administration for Children and Families is re-
questing reflects programs that show pay-offs.
The fiscal year 1996 budget of $34.5 billion for the Administra-
tion for Children and Families meets the challenge of previous
years, which will lead to future service improvements, cost savings,
and ultimately citizens who are more independent.
Substantial increases are requested for Head Start and for the
Child Care and Development Block Grant. Approximately 60 per-
cent of ACF's discretionary spending supports programs that serve
young children in the Head Start and the Child Care and Develop-
ment Block Grant Program.
Additional increases have been requested for Family Preserva-
tion and Family Support programs, and in programs addressing
the reduction of violence and crime. These increases have been par-
tially offset through a comprehensive budget strategy which in-
cludes combining programs to improve efficiency at all levels and
reducing the number of small categorical grant programs.
HEAD START
Let me mention some of the programs in our budget that are of
utmost interest. First, Head Start. For 1996 we are requesting $3.9
billion for Head Start, an increase of $400 million over the fiscal
year 1995 level. This increase will be used to ensure quality in
Head Start centers nationwide, to serve more children and families,
and to respond to the needs of working families by providing full-
day, full-year care to more children, as was recommended by the
bipartisan Head Start advisory committee and envisioned in the
Head Start Reauthorization Act of 1994.
We have learned an important lesson in the last 30 years. The
sooner we help children with Head Start and the earlier we help
parents in their role as primary educators of their children, the
stronger our families and country will be.
CHILD CARE AND DEVELOPMENT BLOCK GRANT
Our funding request for the Child Care and Development Block
Grant is $1.05 billion, which is an increase of $100 million over fis-
cal year 1995. Over 750,000 children were served in fiscal year
1993 with the Child Care and Development Block Grant. However,
we know that current resources are not meeting even the current
need for child care assistance.
793
The administration's 1996 request will allow States to serve
more families, keep families off welfare, and give parents peace of
mind, knowing that their children are safe and healthy in child
care.
This increase is critically important if we are to enable low-in-
come working families to maintain their independence at the same
time that we move more and more families from welfare into the
labor force.
Current welfare reform efforts will put new demands on the child
care system for working families. With work requirements placed
on parents with young children comes the need for child care as-
sistance.
CHILD WELFARE AND CHILD PROTECTION
Child welfare and child protection: This budget also requests a
clear administration commitment to the safety, permanence, and
well-being of children who have been abused or neglected or are in
danger of abuse and neglect. In 1993, three million children were
the subject of a report of abuse or neglect, an increase of almost
25 percent since 1988.
About 40 percent of these reports were substantiated, affecting
over one million children. At the end of 1993, 440,000 children
were in foster care, an increase of almost 42 percent since 1988.
To strengthen and reform child protection and child welfare serv-
ices, the fiscal year 1996 budget request contains a number of key
items, including an increase of $75 million for family preservation
and family support, investments in the development and reform of
State service systems through funding of child placement, training,
and the administrative costs associated with foster care and adop-
tion, and full funding of the Federal guarantee of support to States
for low-income children who are in foster care and special needs
children placed in adoption.
VIOLENT CRIME REDUCTION
Programs to reduce violent crime: In an effort to reduce the un-
acceptable violence that threatens all of us and cuts short too many
young lives, our 1996 request includes $105 million to support a
variety of programs designed to address crime prevention and law
enforcement efforts in the community.
COMMUNITY SERVICES PROGRAMS
For community services programs, the 1996 request of $417 mil-
lion is $56 million less than was available for community services
programs in 1995. We are requesting no funds for discretionary
programs where similar activities can be performed under the
Community Services Block Grant. These changes, consistent with
policy to reduce the number of categorical programs, will allow bet-
ter focusing of resources and enhance the effectiveness and capac-
ity of agencies to respond to low-income community needs.
LIHEAP
For the Low-Income Home Energy Assistance program, our re-
quest includes $1.3 billion for 1996, the amount provided in ad-
794
vance funding in the fiscal year 1995 appropriations act. In addi-
tion, $1.3 billion, again, level funding, is requested as an advance
appropriation in fiscal year 1996 for obligation in fiscal year 1997.
ORR
For the Office of Refugee Resettlement programs for 1996, $414
million is requested, an increase of $14 million over the 1995 level,
an increase which represents the cost of maintaining 8 months of
cash and medical assistance to refugees.
ENTITLEMENTS
Our request for entitlement programs is $26.3 billion. Spending
will increase by $1.1 billion for programs including AFDC, Emer-
gency Assistance, Child Support Enforcement, Foster Care and
Adoption Assistance, the Job Opportunities and Basic Skills Train-
ing Program, and Family Preservation and Family Support. In ad-
dition, we are requesting a $26.3 million supplemental for the
adoption assistance program.
CONCLUSION
The Administration for Children and Families is working hard to
transform itself into a high-performance, customer-driven organiza-
tion that empowers its partners and employees to achieve results.
We plan to continue our efforts in 1996 to make ACF a results-ori-
ented organization, spending more resources on high-leverage help-
ing activities and fewer resources on checking and watching activi-
ties.
Mr. Chairman, I thank you for the opportunity to be here and
I am happy to answer any questions at this point.
[The prepared statement and biography of Mary Jo Bane follow:]
795
Mr. Chairman and members of the subcommittee, I am pleased to present the
President's budget request for the Administration for Children and Families
(ACF) for FY 1996. I am accompanied by Ann Rosewater, Deputy Assistant
Secretary for Policy and External Affairs, and Dennis Williams, Deputy
Assistant Secretary for Budget for the Department.
President Clinton has presented to Congress a budget which addresses the
concerns of Americans, serves their interests, and creates opportunity; a
budget that keeps faith with the long-standing commitments of this Department.
In keeping with Administration policy to increase support for programs
that promote economic security and independence, while working toward more
efficient government, our increases are targeted in areas that have shown
significant payoffs. The development of the FY 1996 request for the
Administration for Children and Families incorporated many of the
Administration's priorities:
o Investing in Children and Working Families;
o Reducing Violence and Crime; and
o Streamlining Government, including program
consolidations and program reductions.
The FY 1996 budget of $34.5 billion for the Administration for Children
and Families, which is an increase of $1.65 billion over the FY 1995 level,
meets the challenge of continuing investments of previous years which will
lead to future service improvements, costs savings, euid ultimately citizens
who are more independent .
Substantial increases are requested for Head Start, the Child Care and
Development Block Grant, Family Preservation and Family Support programs, and
programs addressing the reduction of violence and crime. These increases have
been partially offset through a comprehensive budget strategy which includes
combining programs to improve efficiency at all levels, and reducing the
number of small categorical grant programs.
The FY 1996 budget request includes $8.1 billion for ACF discretionary
programs - an increase of $545 million over the FY 1995 appropriation.
Approximately 60 percent of ACF's discretionary spending supports programs
serving young children through the Head Start and the Child Care and
Development Block Grant programs .
Head Start - In 1996, we are requesting $3.9 billion, an increase of
$400 million dollars over the FY 1995 level. This increase will be used to
ensure the quality of Head Start centers nationwide, serve more children and
families, and respond to the needs of working families by providing full-
day/ full-year care to more children --as recommended by the bipartisan Head
Start Advisory Committee and envisioned in the Head Start Reauthorization Act
of 1994. We are proud of the bipartisan leadership and commitment that led
last year to the most thorough review of the Head Start program in its 30-year
history and resulted in the Head Start Reauthorization Act. We've learned a
very important lesson in the last 30 years: the sooner we help children with
Head Start and the earlier we help parents in their role as the primary
educators of their children, the stronger our families and our country will be
The $400 million increase requested carries out key directions of the
Advisory Committee and the bipartisan reauthorization and it builds on the
Administration's commitment to quality, responsiveness to families, and
partnerships .
o At least $176 million will be spent to maintain and improve the
quality of local programs by providing sufficient staffing, staff
796
training and education, salaries adequate to attract and retain
qualified staff, and better facilities. This investment builds on
our efforts in FY 1994 and FY 1995 to ensure quality throughout
Head Start programs .
In FY 1994 and FY 1995, local grantees made major quality
investments to address critical problems identified by the
Inspector General and the Advisory Committee, such as inadequate
staffing to meet the social service needs of families with
multiple problems. At the same time, the Administration
implemented tough new procedures to identify poorly performing
grantees, provide concentrated technical assistance for a limited
period of time, cind terminate fxanding if the problems could not be
resolved.
o A portion of the increase will support expansion of Head Start
services to families not now served by the program. We will
create an additional 7,000 slots for children under the age of
three, and an additional 25,000 slots for current part-day
programs. These increases will expand services to approximately
784,000 children in 1996.
o A portion of the increase will provide grantees increased
flexibility in meeting the needs of working parents and their
families by expanding 22,000 current part-day slots to provide
full-day, full-year services. It is estimated that approximately
49,000 will receive full-day/full-year services in FY 1996.
The Administration's FY 1996 request also will be used to continue
funding collaboration grants in all 50 States and to build and strengthen
partnerships with State child care, child health, and family support systems.
Child Care and Development Block Grant - The funding request for the
block grant is $1.05 billion, an increase of $100 million, or 10.5 percent
over FY 1995. Over 750,000 children were served in FY 1993 with the Child
Care and Development Block Grant. However, we know that current resources are
not meeting even the current need for child care assistauice. As indicated in
a May 1994 General Accounting Office study, states are experiencing waiting
lists for child care subsides for the working poor - 225,000 on the list in
California, and 40,000 on the list in Texas. The Child Care and Development
Block Grant serves families who are working, or in training or education.
The Administration's FY 1996 request will allow states to serve more
families - keeping families off of welfare and giving parents the peace of
mind, knowing their children are safe and healthy in child care. Currently,
working poor child care funds only reach a fraction of the number of families
needing child care support. There are an estimated 8 million children in
families with a single working parent or dual working parents that are
eligible for Child Care and Development Block Grant funds. The General
Accounting Office (December, 1994) reported that the availability of
affordable child care is a decisive factor allowing low- income mothers to
work. They predict that providing full subsidy to mothers who pay for child
care could increase the proportion who work substantially. We hear countless
stories from parents on waiting lists who will soon be turning to welfare
unless child care assistance becomes available.
This increase is critically important if we are to enable low- income
working families to maintain their independence at the same time that we move
more and more families from welfare into the labor force. Current welfare
reform efforts will put new demands on child care supports for working
families. With work requirements placed on parents with young children comes
the need for child care assistance.
797
The Child Care and Development Block Grant was signed into law in 1990
with bipartisan support from Congress. This landmark legislation has made a
significant contribution to low-income working families across America. Over
the pa:: two years, we have actively solicited views on how the program is
working, and we have repeatedly heard that this program is one federal
initiative that really works by supporting those who are trying to support
themselves. We must continue to expcind child care opportunities to those
working parents who are struggling to remain out of the welfare system. At
the same time, we strongly believe that parents moving towards self-
sufficiency must be confident that quality ch-^ ■■ d care is available for their
children. If we require all parents to becom" active cind productive workers,
we must not oibandon them in their efforts to care for their children.
Consistent with the policy to reduce the number of small categorical
programs, this request also consolidates the Child Development Associate
Scholarships program and the Dependent Care Planning euid Development Grant
program under the Child Care and Development Block Grant.
Child Welfare and Child Protection. This budget also reflects a clear
Administration commitment to the safety, permanence, and well-being of
children who have been abused or neglected or are in danger of abuse or
neglect. In 1993, three million children were the subject of a report of
abuse or neglect, an increase of almost 25% since 1988. About 40% of these
reports were substamtiated, affecting nearly 1 million children. At the end
of 1993, 440,000 children were in foster care, eui increase of almost 42% since
1988. These are large numbers, and the children behind these numbers are the
most vulnerable children, whose safety, well-being, cuid healthy development
depend on how well our services respond to them and their families. To
strengthen and reform child protection and child welfare services, the FY 1996
budget includes a number of key requests :
o An increase of $75 million in Family Preservation and Family
Support, enacted by the Congress in 1993 as the first major
Federal investment in prevention in child welfare in more than a
decade. This investment funds prevention and early intervention
services in every state, based on individualized state strategies
which have been developed by a wide range of citizens,
commiinities, and state officials in each of the 50 states over the
past year.
o Investments in the development and reform of state service
systems, through funding of child placement, training, and
administrative costs associated with foster care and adoption. In
FY 1996, these resources fund the third year of a critical
investment in state automated systems made possible by Congress in
FY 1994. Automated child welfare systems are a key part of system
reform because they enable states to better track the placement of
children, the services they receive, and the costs and results of
those services; and they help free workers from processing paper
GT they have more time to work with families.
o Consolidation of Family Support Centers into the Community- Based
Family Resource program, in keeping with the aim of bringing
together small categorical programs to provide more flexibility
and responsiveness in services.
o Full funding of the Federal guarsuitee of support to states for
low-income children in foster care and special needs children
placed in adoption. These guareuitees assure that states will be
able to keep children safe even if they experience unpredictable
increases in family crisis; and that children who cannot return
safely to their biological parents have a cheuice at a loving
adoptive home .
798
Programs to Reduce Violent Crime - In an effort to reduce the
unacceptable violence that threatens all of us and cuts short too many young
lives, our FY 1996 request includes $105,300,000 to support a variety of
programs designed to address crime prevention and law enforcement efforts in
communities. This is an increase of $78,400,000 over the support provided in
FY 1995. Of the funds requested:
o $72.5 million will continue and increase fvinding for grants for
the Community Schools Youth Services and Supervision Grant
Program. This program provides commxinities with resources to
develop, coordinate, and deliver academic and social services that
promote the positive and healthy development of youth and to
develop family and community support in communities beset by crime
and violence . The parameters for this program were developed
based on extensive consultation with youth, parents, service
providers and academicians, all of whom emphasized the need to
provide youth with positive alternatives to crime eind violent
activities.
o $15 million will support grants for Battered Women's
Shelters which will provide immediate assistance to victims of
violence and their dependents .
o $10 million will support projects designed to provide business and
employment opportunities for low- income, unemployed or under-
employed individuals, and to improve the quality of life in urban
and rural areas . Some of these funds may be used to help the
Commxinity Development Corporations set up revolving loan funds .
o $7 million will support discretionary grants to provide outreach,
education, and referral services to runaways aind street youth who
have been, or are at risk of being, sexually abused.
o $400,000 will continue the activities of the National Domestic
Hotline implemented in FY 1995.
Community Services Programs - The FY 1996 request of $417 million is $56
million less thcin was availadDle for Community Services programs in FY 1995.
The decrease results from requesting no funds for several discretionary
programs where similar activities can be funded vmder the Community Services
Block Grauit. These changes, consistent with policy to reduce the number of
categorical programs, will allow better focussing of resources and enhance the
effectiveness and capacity of community action agencies to respond to low-
income community needs .
Low Income Home Energy Assistance Program - This request includes $1.3
billion for FY 1996, the amount provided in advance funding in the FY 1995
Appropriations Act. In addition, $1.3 billion is requested as an advance in
FY 1996 for obligation in FY 1997. These funds support gremts to States to
assist low- income households in meeting the costs of heating and cooling their
homes. Congress provided $600 million in emergency contingency funds in FY
1995. These funds will be made availeible only if requested by the President
cind designated as ein emergency under the Budget Enforcement Act. No funds
have been released in FY 1995. Appropriation language has been added in FY
1996 to make funds appropriated, but not obligated, in FY 1995 availeible until
expended .
Office of Refugee Resettlement Programs - For FY 1996, $414 million is
requested. This is an increase of $14 million over the FY 1995 level, am
increase which represents inflation costs
to maintain 8 months of cash smd medical assistance to refugees.
Entitlement Programs - The request for entitlement programs is $26.3
billion. Spending will increase by $1.1 billion for programs including Aid to
I
799
Families with Dependent Children (AFDC) , Emergency Assistance, Child Support
Enforcement, Foster Care and Adoption Assistance, Job Opportunities and Basic
Skills Training (JOBS) Program, and Family Preservation and Family Support.
In addition, we are requesting $26.3 million in FY 1995 supplemental
fiinding for the Adoption Assistance program to meet the revised estimate of
eligible claims.
Re- invention Accomplishments
The Administration for Children and Families is transforming itself into a
high performance, customer -driven organization that empowers its partners and
employees to achieve results. In our efforts to become an organization that
works better and costs less, ACF:
o Worked with our partners to achieve performance-based, results-
oriented administration of the child support program through
implementation of the child support pilot of the Government
Performance and Results Act (GPRA) . Twenty-eight State and local
jurisdictions applied and are participating in this national
effort to discover and apply more effective enforcement methods
and measure performance results ;
o Began reengineering ACF's grants business process to create a new
system of supporting grant programs through a more streamlined,
decentralized, customer-focused, automated approach to awarding
and managing grant funds. This will result in more efficient and
timely processing of grants and is projected to save ACF and its
grantees up to $44 million annually; and
o Promoted continuous improvements in the way ACF does business and
began the reinvention of key operational areas, such as
monitoring, performance measurement, training and staff
development, delegations of authority, and communications.
Project Teams of regional and central office managers and staff
developed recommendations in these areas after being trained in
quality management and team skills. Implementation has begun in
each component .
In FY 1996, we will continue our efforts to make ACF a results-oriented
organization, spending more resources on high leverage/helping activities and
less resources on checking/watching activities.
Conclusion
Thank you, Mr. Chairman. I will be happy to answer any questions you and
the committee may have at this time.
800
MARY JO BANE
Assiitant Sacfstaiy tar ChUran and FaniBM
Dtpartmant Of HmMi And Human Saivleas
Maiy Jo Bane was sworn in a* nsiatant sacrataiy for chiUrsn and famlEes, Dapaitment of Hoalh and
Human Services, on Oct 8, 1993.
As assistant sacrataiy. Bane overeees ttie Administration for CMIdran and Famiies, the agency that
tMings together the liroad range of over 60 federal programs that address the needs of children and fnniies.
These programs include Head Start Aid to Fainiies with Dependent CMIdran, Child Support Enforcamant.
reftjgee. Native American, and developmental (fisabOty programs, the Community Services. Sodal Seivioas,
and Low Income Home Energy Assistance block grants, and the Family Preservation/Famiiy Support
Services program. ACF% budget exceeds $30 bWon. Bane is also a co^hair of President Clnton^
Wortdng Group on Welfara Reform. Family Support and Independence.
Before coming to the Department of HeaKh and Human Services, Bane was the commissioner of ttie
New York State Department of Social Services, whera she had also served as executive deputy
commissioner from 1984-66. For 11 years prior to that stie was a Malcolm Wiener Professor of Social
Pobcy and director of the Malcolm Wiener Center for Sodal PoEcy at the John F. Kennedy School of
Government at Harvard University. In 1980-81 . she served as deputy assistant secretary for planning and
budget at the U.S. Department of Education. From 1977-60. she was associate professor at the Hanrard
University Graduate School of Education, and an associate director of the Massachusetts Institute of
Technology-Harvard Joint Center for Urttan Studies. She was associate (firector of the Center for Research
on Women at Wellesley College from 197S-77. She served as a Peace Corps volunteer in Liberia from
1963-6S, and as a junior high school teacher from 1967-1971.
Bane is the author of numerous tx>olcs and articles in the area of human services and putdc pofcy.
including Gtnder and PuMc Pofcy: Cas9 and Comments (1993), The Staie and the Poor in ttie 1980t
(1984), and Hen to Stay: American FamMes in ttte Twenttettt Century (1976). She is the author. wHh
David EMwood. of a number of articles on poverty and welfare, and a forthcoming book on welfare research
and poicy.
Bane was bom Feb. 24. 1942. in PrinceviUe, Id. She earned her doctorate in education and a master
of arts in teaching from Harvard University. She received a bachetor of sdenoe degree in foreign service
from Georgetown Univeisity.
October 1993
801
ANN ROSEWATER
Deputy Assistant Secretaiy for Policy and External AfEairs
Administration for Children and Families
Department of Health and Hnman Services
Ann Rosewater is the deputy assistant secretary for policy and external aflairs in the
Administration for Children and Families, Department of Health and Hnman Services.
As deputy assistant secretary, she has major management and policy-making responsibilities in
ACF, the agency that brings together the broad range of over 60 federal programs addressing the
needs of chUdren and families. These programs include Head Start, Aid to Families with
Dependent Children, Child Support Enforcement, refugee. Native American, and developmental
disability programs, the Community Services, Social Services, and Low Income Home Energy
Assistance block grants, and the Family Pi^eservation/Family Support Services program. ACFs
budget exceeds $30 billion.
Rosewater assisted in the creation of the U.S. House of Representatives Select Conunittee on
Children, Youth, and Families, and served as its staff director and deputy staff director for seven
years. From 1979-1983, she served as senior legislative assistant to Congressman George Miller
(D-CA). During the 1970s, she was national education staff for the Children's Defense Fund and
assistant to the vice president of the National Urban Coalition. Immediately before coming to
ACF, Rosewater was a senior associate at tlie Chapin Hall Center for Children at the University
of Chicago. She also served as a senior consultant to the Pew Charitable Trusts' Children's
Initiative, as well as the Casey, Ford, and Rockefeller Foundations' urban change initiative, and
former president Jimmy Carter's Atlanta Project
Rosewater was the first non-elected oflicial to receive the Leadership in Human Services Award
of the American Public Welfare Association, and received the President's Certificate for
Outstanding Service from the American Academy of Pediatrics. She has served as a national
board member of the Jewish Fund for Justice, the Family Resource Coalition, and the Youth Law
Center. She was a member of the Georgians for Children board of directors, and a number of
other national and local advisory boards. She has written extensively on child health and
education, disabled children, child and family policy, and comprehensive strategies to reduce
urban pover^.
Rosewater was bom in Philadelphia, PA. She earned her masters degree in the history of art at
Columbia University and her bachelor of arts degree "with distinction'' at Wellesley College.
802
Mr. Porter. Thank you.
I am going to call on Mr. Hoyer first, if he wishes. Or Ms. Pelosi,
then.
Mr. Hoyer. We have both got to run. Thank you.
Ms. Pelosi. I appreciate that, Mr. Chairman. I don't have the
same flexibility Mr. Hoyer has because I never know what time our
meeting will be over. But I want to join you in welcoming Secretary
Bane here and her entire family, official and personal, and I will
be brief.
I have a couple of questions. First, I want to say that I was
pleased with your emphasis on reducing the number of categorical
programs to allow better focus to meet community needs. I think
that is exactly the direction we should be going, and I commend
you and the Clinton Administration for that.
CHILD CARE
On child care, what are the consequences of successful welfare
reform if we don't appropriate the full amount for child care in-
cluded in H.R. 4, $2.03 billion for fiscal year 1996?
Ms. Bane. One of the things we are all worried about in the wel-
fare reform bill passed by the House last week is that it doesn't ap-
pear to provide enough funds for child care to ensure that people
who are moving from welfare to work or who are in low-income
working families have the subsidies that they need for child care.
I think a cutting back of the child care funds or a slowing of the
rate of growth there will make it much harder for the States to
carry out real welfare reform, which of course involves helping peo-
ple to move from welfare into work.
And I think the fact that all of the child care funding has been
placed on the discretionary side and subject to appropriations is a
matter of special concern given how tight the discretionary budgets
are this year, and how tight we anticipate they will be in the fu-
ture.
Ms. Pelosi. I appreciate your answer. I think it is so key to hav-
ing mothers be able to work. That concerns me a great deal, the
change that is being proposed.
COMMUNITY schools PROGRAMS
As far as community schools are concerned, your budget request
is for an increase from $26 million to $73 million for the commu-
nity schools program. I am concerned that the House rescissions
bill cut all of the money for community schools and the FACES pro-
grams. These are important after-school and summer activities for
children in high-crime neighborhoods.
I understand the Senate Appropriations Committee restored the
fiscal year 1995 funding for these programs and the House elimi-
nated it in its rescission package.
In addition to this problem, we have the problem of the crime bill
passed by the House which repeals all future funding for these pro-
grams.
What can you tell us about the effectiveness of these programs
and what are you doing to implement them?
Ms. Bane. We think it would be a real shame if we lost the op-
portunity to extend these programs nationwide. There have been a
803
number of community schools programs operating in a variety of
different places, in New York, in California, in Florida. They seem
to be quite successful in providing a safe place for kids in the com-
munity, a focus for community activity, recreation for kids, useful
things to do. They generally play a role in preventing crime.
In terms of implementation, we are proceeding on the schedule
that we laid out after the bill was passed.
We have received 5,000 letters of intent to apply for this commu-
nity school money. I think that suggests that there are a lot of com-
munity organizations and schools who very much want the oppor-
tunity to start these programs and who see the opportunity offered
by some seed money as something that is very important for their
communities.
Ms. Pelosi. Thank you.
DOMESTIC VIOLENCE
I want to commend you for how much ACF has been able to ac-
complish with so few resources with regard to domestic violence. I
commend you in general for the effort of the Administration.
I have been particularly impressed by the information and tech-
nical assistance centers. The State violence coalition grants is an-
other good program. These programs are committed to ending do-
mestic violence. I know you are well aware of that, but I want to
say why I think they are important.
Would you tell us what you have been able to do about domestic
violence and speak to the importance of fully funding this particu-
lar Federal program?
Ms. Bane. I think you have said it all, Ms. Pelosi. This is a very
important program that funds services for victims of domestic vio-
lence and also funds programs that help in prevention of domestic
violence. It is a small program but it does seem to be very effective,
and we think it is important to continue to fund it.
Ms. Rosewater. We are also pleased that we have the oppor-
tunity now to have four national resource centers, one of which is
in San Francisco, run by the Family Violence Prevention Fund and
the Trauma Foundation, that focuses particularly on health and do-
mestic violence.
In addition I think it is important to mention that the Violence
Against Women Act reinforced the importance of the Family Vio-
lence Prevention Services Act. It supported additional resources be-
cause the current resources support State coalitions as well as shel-
ters for battered women and their children.
And of course there are many, many communities that still do
not have safe havens, nor do they have adequate support systems
either in trained professionals who can recognize domestic violence
and know how to support women and their children in crisis or pre-
vent it from happening in the first place.
We are looking forward to the additional support that our 1996
request reflects.
Ms. Pelosi. I appreciate that. When we were having our mark-
up, we had some back and forth on the domestic violence crisis hot
line. I wondered when you would be expected to issue regulations
for releasing $1 million fiscal year 1995 funds to create and admin-
ister the national domestic crisis hot-line.
804
Ms. ROSEWATER. Actually the program announcement for the do-
mestic violence hot line was issued at the end of February, and we
expect applications by early June. We will fund a hot line in the
summer.
Ms. Pelosi. Thank you very much for your testimony.
Mr. Chairman, I spent some time on the violence issue. I was
so — I don't know if "pleased" is exactly the word because it is a big
problem, but I was glad to hear the President when he made his
State of the Union speech talking about health, talk about violence
in that context. I think that is very important. And what you are
doing is very important as well.
I thank you for your testimony and for your answers.
Thank you, Mr. Chairman. I owe you, now. I will go last next
time. Thank you.
Mr. Porter. Thank you, Ms. Pelosi.
Dr. Bane, you have some of the most important programs that
we consider under our jurisdiction and one of the largest budgets
as well. You will be happy to know I only have 25 questions for
you. I had 42 this morning for Social Security, even though your
budget is large than theirs.
LIHEAP
I want to start with LIHEAP. Last year the Administration took
the courageous step of recommending a large reduction in LIHEAP,
coupled with a reform of the program to better target funds. I
thought the proposal was a good one and that it would move the
program in the right direction. This year the Administration rec-
ommends full funding of the old LIHEAP program and recommends
no legislative reforms.
In the budget justification last year, the Administration provided
an analysis of the program and the need for its continued exist-
ence. On page H-18, the justification noted that the program "is
not intended to meet the entire energy costs of low-income house-
holds." Rather, it is a supplement to other welfare programs includ-
ing SSI and AFDC.
The justification noted that Congress made major improvements
in some of these support programs, including a major increase in
the earned income tax credit for the working poor and a large ex-
pansion of the food stamps program.
The justification also noted that the cost of energy in real terms
has declined dramatically. Electricity is at pre- 1994 levels and oil
is as pre- 1975 levels. The result has been that the percentage of
income spent on energy for low-income households has declined by
a third. Little has been done to help the low-income find ways to
pay their own energy costs or find other sources of assistance.
Page H-22 states, "What began as a program focused on easing
the energy crisis has evolved into a very narrowly focused income
supplement program which provides average benefits of less than
$200, does not target well those low-income families with excep-
tionally high energy costs in relation to income, and which does lit-
tle to help assisted households achieve independence from the pro-
gram."
Dr. Bane, last year's budget justification, which you wrote, sums
up its recommendation by saying, "We concluded that the time had
I
805
come to refocus LIHEAP on the energy needs of low-income fami-
lies and to shift away from income supplementation and depend-
ency."
What part of the analysis I just read do you now believe was in-
correct or has changed since our hearing of May 3rd last year?
RATIONALE FOR LIHEAP REQUEST
Ms. Bane. The main thing that changed since then was that our
last year budget request and our reauthorization requests were
pretty soundly and dramatically rejected by this committee and by
the Congress. I
Mr. Porter. But now you have a much better chance.
Ms. Bane. I attended quite a number of unpleasant hearings,
and I think the Administration was convinced that the action of
Congress last year was correct. As you know, we are indeed re-
questing level funding for the program this year.
I would note in terms of the analysis that it is still the case that
the energy burdens of low-income households are very high, that
they are much higher than for most people in the population. I
would note that 44 percent of those eligible for LIHEAP benefits
are elderly and depend in many ways on the LIHEAP program to
supplement their energy needs.
Mr. Porter. Well, then, why shouldn't we construct a program
that is targeted at the people most in need?
It seems to me we have here yet another prime example of a
Federal Government that passes a program in response to a real
need. There was a real need in the 1970's. And when the need —
when the justification for the program has changed, although the
need is still great in certain respects, we can't either redesign the
program or eliminate it. We continue on and on, and it is a very
large expenditure.
What other circumstances have changed to cause you to believe
the program should now be funded at $1.3 billion with no accom-
panying reform legislation?
Ms. Bane. We are requesting for this year the same amount that
was appropriated by the Congress last year. Congress reauthorized
the LIHEAP program just last year and reauthorized it for three
years. The LIHEAP program, as you know, is a block grant to the
States, and gives the States considerable flexibility in targeting
LIHEAP money on those families who do need it the most. There
were in fact some changes made in the reauthorization last year
which would allow the States to do greater targeting.
I think this is an example of a program where the States have
a good deal of latitude to use the money as they see fit. The basic
point is that Congress just reauthorized the program, and we
thought we ought to respect that reauthorization since it was
passed last year.
Mr. Porter. It is my understanding that roughly 25 percent of
LIHEAP recipients live in public or assisted housing. Many of
these individuals either pay no energy bills or receive other Fed-
eral, State or local assistance to pay their energy bills. Some make
fixed payments for energy which do not fluctuate during extremely
cold or hot periods.
806
How many individuals in these circumstances are receiving
LIHEAP funding, if you can tell us?
Ms. Bane. I am not sure I have the exact data for you. My infor-
mation is that 27 percent of LIHEAP recipients do live in rent sub-
sidized or public housing and that 32 percent receive AFDC bene-
fits.
People who receive LIHEAP benefits are poor. Benefits are tar-
geted at very poor families. So it is not surprising that they receive
other kinds of cash assistance. Again, the States have a good deal
of flexibility in tailoring their program to meet the needs of fami-
lies, and our evidence is that they do that.
ADMINISTRATIVE COSTS
Mr. Porter. Under the current authorization, States are allowed
to retain up to 10 percent of their allocations for planning and ad-
ministrative costs.
Can you provide a table for the record indicating for the two
most recent years for which data are available, the allocation for
each State, the amount the State reserved for planning and admin-
istrative expense, and the percentage of the allocation reserved for
such purposes?
Ms. Bane. Yes, we can submit that for the record.
[The information follows:]
LIHEAP Administrative Costs
Tables for FY 1993 and FY 1994 are attached. The LIHEAP statute allows States
to spend up to 10% of funds payable, which may include leveraging incentive
awards, or oil overcharge or State or other funds added to thier block grant alloca-
tion. State ftinds added to the program may all be spent on administrative and plan-
ning costs, without regard to the 10% limit. Accordingly, some States may appear
to have exceeded the 10% limit. However, we have verified in each case that the
States' administrative and planning costs did not exceed 10% of their funds payable.
Note: In FY 1993, the 10% limit was calculated after deducting any LIHEAP
funds transferred to another HHS block grant program. Beginning in FY 1994,
States can no longer transfer LIHEAP funds to another block grant.
807
FY 1 993 LIHEAP administrative costs as a percentage of net allotments minus block grant transfers,
by state
Net
Transfers
Administrative
Admin. Costs
State
allotment
costs
/Allot-Transfers
Total
$1,307,182,655
$41,181,973
0
500,000
$125,341,683
10%
Alabama
11,280,337
764,656
7%
Alaska
4,717,311
0
622,312
13%
Arizona
4,834,769
0
559,613
12%
Arkansas
8,655,748
865,575
830,352
11%
California
60,489,538
6,048,954
5,743.219
11%
Colorado
21,218,391
1,060,920
2,082,050
10%
Connecticut
27,680,140
0
2,765,174 ,
10%
Delaware
3,674,006
0
342,938
9%
Dist. of Col.
4,298,771
0
472,736
11%
Florida
17,935,527
1,793,552
1,588,364
10%
Georgia
14,191,481
1,419,148
1,142,403
9%
Hawaii
1,429,160
0
142,916
10%
Idaho
8,154,122
815,412
763,467
10%
Illinois
76,613.847
0
7,113,643
9%
Indiana
34,688,598
0
3,381,195
10%
Iowa
24,584,274
0
2,081,978
8%
Kansas
11,275,405
1,127,540
1,163,502
11%
Kentucky
18,051,829
0
2,448,448
14%
Louisiana
11,589,893
1,158,989
1 ,043,090
10%
Maine
17,332,318
0
1,932,717
11%
Maryland
21,194,333
300,000
2,774,442
13%
Massachusetts
55,359,810
0
5,719,560
10%
Michigan
72,601,649
1 ,900,000
5,300,000
7%
Minnesota
52,403,709
5,240,371
5,261,460
11%
Mississippi
9,714,872
0
971,487
10%
Missouri
30,602,562
0
3,179,726
10%
Montana
8,238,065
823,814
823,240
11%
Nebraska
12,157,867
1,215,786
1,215,786
11%
Nevada
2,576,577
208,079
314,599
13%
New Hampshire
10,480,307
0
970,333
9%
New Jersey
51,321,226
5,100,000
6,400,000
14%
New Mexico
6,369,423
0
625,022
10%
New York
167,660,542
0
17,847,384
11%
North Carolina
24,477,911
766,871
2,715,971
11%
North Dakota
9,365,661
936,566
1,025,941
12%
Ohio
67,776,399
0
4,473,578
7%
Oklahoma
9,678,967
0
750,042
8%
Oregon
16,445,150
1,644,515
1,142,550
8%
Pennsylvania
90,152,177
0
8,231,761
9%
Rhode Island
9,076,024
0
1,178,946
13%
South Carolina
9,009,177
0
983,870
11%
South Dakota
7,292,137
729,213
589,642
9%
Tennessee
18,286,116
1,445,400
347,168
2%
Texas
29,861,240
0
2,985,983
10%
Utah
9,693,988
969,399
695,844
8%
Vermont
7,855,363
0
785,536
10%
Virginia
25,817,067
0
2,785,398
11%
Washington
25,953,920
2,594,388
2,494,991
11%
West Virginia
11,946,266
897,165
1,104,910
10%
Wisconsin
47,170,863
1,600,000
4,264,472
9%
Wyoming
3,947,822
20,316
397,268
10%
808
FY 1 994 LIHEAP administrative costs as a percentage of net allotments, by state
States
Total
net
Administrative
Administrative
allotments
costs
costs/ not
allotments
$1,695,118,203
$151,166,664
9%
12,054,122
51,160,000
10%
5,178,324
$650,974
13%
5,168,464
$585,069
11%
9,253,168
$909,609
10%
64,620,824
$6,697,794
10%
22,682,886
$2,280,593
10%
34,985,844
$2,933,647
8%
4,214,066
$421,234
10%
4,595,473
$447,298
10%
19,173,438
$1,917,343
10%
15,170,978
$1,289,533
8%.
1,527,801
$152,780
10%
8,716,921
$878,488
10%
93,921,206
$8,191,488
9%
39,407,935
$4,197,453
11%
34,335,165
$2,918,489
8%
12,058,203
$1,205,343
10%
24,638,883
$2,491,105
10%
12,390,034
$1,228,622
10%
26,365,346
$2,217,231
8%
29,288,356
$2,773,217
9%
73,053,759
$6,767,597
9%
126,360,604
$7,692,723
6%
93,420,464
$8,114,284
9%
10,379,303
$1,879,756
18%
32,714,753
$3,264,875
10%
8,806,656
$814,616
9%
12,997,004
$1,299,700
10%
2,754,413
$297,095
11%
14,351,322
$1,590,464
11%
61,739,044
$6,500,000
11%
6,786,674
$680,904
10%
240,645,272
$24,444,369
10%
26,242,725
$3,074,630
12%
16,546,795
$1,664,255
10%
96,381,778
$5,169,927
5%
10,276,943
$818,533
8%
17,570,961
$1,863,419
11%
116,857,601
$8,467,367
7%
11,422,761
$1,130,000
10%
9,630,991
$1,025,447
11%
9,493,377
$736,244
8%
19,548,225
$301,596
2%
31,922,264
$3,192,226
10%
10,334,889
$785,094
8%
13,196,404
$1,319,640
10%
28,277,434
$2,833,184
10%
27,788,023
$2,527,071
9%
16,503,089
$1,650,308
10%
65,146,937
$5,287,000
8%
4,220,301
$422,030
10%
Total
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Oist. of Col.
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
809
CARRYOVER
Mr. Porter. Under the current law, a grantee may carry over up
to 10 percent of its allocation from one year to the next. For 1993
and 1994, what percentage of total LIHEAP funding was carried
over into the subsequent year by grantees?
Ms. Bane. Mr. Chairman, I will submit that for the record, too,
to get the percentages correct.
[The information follows:]
LIHEAP Carryover
In FY 1993, a total of 38 States carried over $37,791,351 to the following fiscal
year, which was 2. 1% of the total funds payable to the States (funds payable include
block grant allocations, leveraging incentive awards, oil overcharge funds, and State
and other funds added to the program). In FY 1994, a total of 37 States carried over
$61,098,141 to the following fiscal year, which was 3.4% of total funds payable.
Mr. Porter. Thank you very much.
Mr. Miller.
Mr. Miller. How many reauthorizations-
Mr. Porter. I apologize, Mr. Miller. I didn't see that Mrs. Lowey
had come in.
Mrs. LowEY. Why don't — that is quite all right, since I just got
here. Go right ahead.
PROGRAMS REQUIRING REAUTHORIZATION
Mr. Miller. How many reauthorizations are you involved in this
year, programs? Head Start, for example, was reauthorized last
year.
Ms. Bane. Not as many as last year, I think is the answer. The
Child Care and Development Block Grant is up for reauthorization
as well as the Native American Act, Adoption Opportunities, Aban-
doned Infants Assistance, the Child Abuse Prevention and Treat-
ment Act, and Drug Prevention programs for runaway youth and
youth gangs. Those are the major programs that require reauthor-
ization.
Mr. Miller. Those new programs, they aren't authorized so far,
right?
Ms. Bane. I believe everything for which we are requesting fund-
ing is currently authorized.
Mr. Miller. I thought I saw something that showed it was not
authorized yet. What about the community economic partnership
investment improvement grants?
Ms. Bane. I am sorry.
Mr. Miller. Community economic partnership investment and
improvement grants.
Ms. Bane. I believe
Mr. Miller. Has that been authorized already? It was not au-
thorized last year.
Ms. Bane. That was authorized under the crime bill that was
passed last summer.
PROGRAM CONSOLIDATIONS
Mr. Miller. So how many different programs do you have or did
you have before consolidations? How many are you going to end up
with?
810
Ms. Bane. The Administration for Children and Families admin-
isters about 60 programs. We are proposing some consolidations
this year. We are proposing to consolidate two programs into the
Child Care and Development Block Grant. We are proposing to con-
solidate three programs for runaway and homeless youth into one
program. And we are proposing to move the family support center
program for the homeless into the broader family support consoli-
dation.
Those are the major consolidations that we are proposing at this
point.
FEDERAL ADMINISTRATION
Mr. Miller. In your summary where you discuss your programs,
"Federal administration," what is that? Is that the overhead?
Ms. Bane. Most of the Federal administrative cost supports staff
who administer the programs, a large proportion of whom are re-
sponsible for fiscal monitoring and making sure that Federal
money is being spent effectively. It is basically support for staff and
related expenses including rent, communication contracts, travel,
and computers.
Mr. Miller. I notice that area going up when everything else is
experiencing a downward trend. Is there any particular reason that
the Federal administration is increasing by 7 or 8 percent?
Ms. Bane. The increase represents a cost-of-living increase for
salaries, and reflects a request to bring ourselves into the 20th
Century in terms of computers for our staff.
We are requesting some increases to accomplish that.
reinventing government
Mr. Miller. Where do you fit in on Vice President Gore's
reinventing government? What are you doing along those lines?
Ms. Bane. We are a pretty small agency in the internal scheme
of things, so we are a relatively small part of it. I think we are
doing a lot of exciting things, though.
The major thing I have been trying to do with the agency is to
get us out of the business of getting in the way of States and con-
tractors who want to do things. Working with our partners, the
States, the Head Start grantees, other grantees, we want to im-
prove the way they do business and to make sure that we are all
using our resources as effectively and as efficiently as possible.
We have been working with the States and grantees, for exam-
ple, on performance measures so that we can do more of our mon-
itoring effectively and efficiently. We have been working on ways
to streamline our grants process. We have been doing a lot of work
with our partners on automation in order to improve the way our
services are being provided.
We have a lot of things going on that address the reinvention of
government.
HEAD START QUALITY CONTROL
Mr. Miller. There was a report a couple of years ago that Head
Start had some quality problems. I have a fine Head Start program
in my hometown in particular, so I am glad to see you are address-
811
ing quality. Somebody from my Head Start is up in Washington
working on that, I don't see her here, but she started a good pro-
gram in Manatee County, and it continues.
However, a $400 million increase is a lot of money. You have to
have a lot of confidence that the quality problems are under con-
trol.
Ms. Bane. I do have a lot of confidence that the quality problems
are under control. Over the last year and a half we have focused
on identifying those programs which were not up to standard. We
identified 125 grantees which were poor performers. We worked
with 68 of them so that they were able to achieve a satisfactory
level of performance. We terminated seven. And we are continuing
to work with the remaining 50 grantees to improve quality.
We can't have poorly performing grantees in the Head Start pro-
gram.
Mr. Miller. How many grantees have been terminated in the
history of Head Start?
Ms. Bane. Can we get that for you for the record?
Mr. Miller. I am sure there have not been very many. Termi-
nations did not occur very much in the past.
Ms. Bane. We see terminations as a last resort. We have in fact
terminated grantees. But I think we are increasing our effort to
identify poor performers and ensure we either get them up to a sat-
isfactory level of performance or terminate them.
[The information follows:]
We do not have exact data on the number of Head Start programs defunded in
the last 30 years. However, we do know that since the beginning of FY 1994, action
has been taken to replace 20 of Head Start's approximately 1400 grantees. Seven
of these 20 grants have been defunded and another 13 have voluntarily relinquished
their grant, in most cases because of pending adverse actions HHS was taking
against them.
Although we do not have data on the exact number of grants that changed spon-
sorship in the years between 1965 to 1993, we estimate that, on average, the num-
ber was in the range of five to ten programs a year.
Mr. Miller. Thank you, Mr. Chairman.
Mr. Porter. Ms. Lowey.
Mrs. Lowey. Thank you, Mr. Chairman, and welcome. Nice to
have you with us today.
ELDERLY LIHEAP RECIPIENTS
As a New Yorker, you know that thousands of New Yorkers re-
ceive vital support from LIHEAP. And I know there has been some
discussion before I arrived, but perhaps you could just provide for
the record a breakdown of the number of LIHEAP recipients by
State and a breakdown of the number of elderly people in each
State receiving assistance.
Ms. Bane. We will do that.
[The information follows:]
Number of Households Served
Tables are attached showing the nvunber of households served under the heating,
cooling, winter crisis, summer crisis, and weatherization components of the LIHEAP
program for FY 1994, as well as how many of those households contained at least
one person 60 years of age or older.
812
Number of total and elderly households receiving
LIHEAP heating assistance by state, FY 1994
All
households
State
assisted
Elde
rly
Total
5,663,040
1, 685
, 177
Alabama
59, 901
18
897
Alaska
13
489
2
135
Arizona
32
916
4
202
Arkansas
54
057
22
188
California
418
020
131
347
Colorado
71
139
14
835
Connecticut
78
982
23
823
Delaware
15
090
4
376
Dist. of Col.
14
139
5
620
Florida
79
996
17
102
Georgia
71
748
39
350
Hawaii
7
045
2
269
Idaho
28
225
8
323
Illinois
246
556
67
298
Indiana
116
136
41
594
Iowa
76
133
26
592
Kansas
29
527
10
245
Kentucky
129
108
31
152
Louisiana
46
108
17
327
Maine
54
464
26
500
Maryland
92
240
26
682
Massachusetts
150
797
42
981
Michigan
385
139
151
542
Minnesota
111
526
28
731
Mississippi
31
745
18
676
Missouri
129
574
34
339
Montana
21
628
5
201
Nebraska
34
277
6
002
Nevada
9
534
4
688
New Hampshire
25
793
7
409
New Jersey
167
856
30
773
New Mexico
68
365
14
472
New York
1, 121
635
242
343
North Carolina
188
568
63
495
North Dakota
16
270
3
912
Ohio
313
127
101
462
Oklahoma
68
572
22
337
Oregon
51
802
17
219
Pennsylvania
313
830
108
435
Rhode Island
26
263
9
512
South Carolina
82
034
43
905
South Dakota
17
888
6
148
Tennessee
106
752
54
896
Texas
26
883
7
030
Utah
34
894
7
806
Vermont
25
433
4
861
Virginia
124
568
38
488
Washington
72
227
13
387
West Virginia
63
836
12
707
Wisconsin
126
448
39
095
Wyoming
10
757
1
468
813
Number of total and elderly households receiving
LIHEAP cooling assistance by state, FY 1994
Elderly
56,807
508
10,733
12,054
4,751
2,677
13,638
11,492
954
All
households
State
assisted
Total
145,684
Indiana
2,287
Kansas
18,689
Louisiana
31, 728
Mississippi
13,367
Nebraska
6,602
Nevada
5,010
New Jersey
21, 567.
Texas
43,947
Virginia
2,487
814
Number of total and elderly households receiving
LIHEAP winter crisis assistance by state, FY 1994
All
households
State
assisted
Elderly
Total
1,127,832
143,462
Alabama
7,608
1,926
Alaska
998
146
Arizona
1,674
274
Arkansas
15,833
1,128
California
88,837
9,205
Colorado
808
155
Connecticut
14,314
7,203
Delaware
1,102
99
Dist. of Col.
5,186
774
Florida
25, 044
10,743
Georgia
12,868
1,853
Hawaii
1,846
994
Idaho
2,178
286
Illinois
13,840
4,415
Indiana
8,679
1,460
Iowa
6,613
2,314
Kansas
7,614
703
Kentucky
77,013
8,776
Louisiana
124
17
Maine
4,327
706
Maryland
6, 846
562
Massachusetts
16,663
2,827
Michigan
110,557
3,352
Minnesota
26,511
6,830
Mississippi
1, 883
237
Missouri
22,208
2,468
Montana
4,549
894
Nebraska
11,729
846
New Hampshire
8,677
--
New Jersey
12,154
1,573
New Mexico
7, 859
711
New York
118,661
10,368
North Carolina
36,466
5,226
North Dakota
1, 031
121
Ohio
139,711
11,503
Oklahoma
10,634
366
Oregon
182
40
Pennsylvania
132,579
22,556
Rhode Island
4,636
1,565
South Carolina
5,610
752
South Dakota
1,012
51
Tennessee
21,802
3,175
Texas
43,415
4,260
Utah
1, 197
128
Vermont
3,662
218
Virginia
17,881
1, 958
Washington
12,289
642
West Virginia
25,003
1,487
Wisconsin
25,023
5,444
Wyoming
896
125
815
Number of total and elderly households receiving
LIHEAP summer crisis assistance by state, FY 1994
All
households
State assisted Elderly
Total 24,532 10,179
5,692
22
18
1,259
3, 188
Alabama
14,
,291
Mississippi
344
Nevada
319
South Carolina
2,
,557
Tennessee
7,
,021
816
Number of total and elderly households receiving
LIHEAP weatherization assistance by state, FY 1994
All
households
State
assisted
Total
126,086
Alabama
524
Alaska
1,166
Arizona
899
Arkansas
1,368
California
22,795
Colorado
3,292
Dist . of Col.
253
Florida
496
Georgia
924
Idaho
1,672
Illinois
7,808
Indiana
2,264
Iowa
1,290
Kansas
943
Kentucky
2,078
Louisiana
1,245
Maine
2,243
Massachusetts
7,734
Michigan
5,179
Minnesota
2,570
Mississippi
750
Montana
502
Nebraska
609
Nevada
84
New Hampshire
312
New Jersey
1,618
New York
14,406
North Carolina
1,038
North Dakota
990
Ohio
17,295
Oklahoma
422
Oregon
2,350
Pennsylvania
3,590
Rhode Island
241
South Carolina
814
South Dakota
342
Tennessee
970
Texas
2,922
Utah
492
Vermont
306
Washington
5,566
West Virginia
536
Wisconsin
2,831
Wyoming
357
Elderly
37,251
220
140
553
314
497
681
92
148
364
331
284
668
451
275
632
654
500
,107
,068
662
558
121
176
14
102
652
,584
350
172
,006
151
527
998
43
488
240
439
788
94
93
976
193
765
80
817
TEENAGE PREGNANCY POLICY
Mrs. LOWEY. I want to go back to welfare reform. Last year you
and I and many of the Members worked so very hard on welfare
reform. And it seems to me in all of our discussions, our focus was
on work: How do you make people self-reliant? How do you get
them trained? How do you get them into a job so you can give them
a lift up, not a handout?
We also discussed in great detail what we are going to do about
teenage pregnancy. How are we going to encourage these young-
sters not to have children, and then what should they do if they
do have children? As you well know, there have been differences
of opinion between the various parties on that issue and various
bills that were presented before the Congress.
I happen to believe you have to do everything you can to prevent
the teenager from getting pregnant, but then when she does I
think it is appropriate to demand that the teenager either live at
home, with a responsible adult, or in an institutional setting.
Could you discuss the Administration's position on the issue of
teenage pregnancy, particularly in comparison with the Personal
Responsibility Act? What strategies will the Administration pro-
mote to prevent teenage pregnancy and to help teenage children
learn how to care for themselves and their children if unfortunately
children arrive before they really can handle them?
Ms. Bane. In the welfare reform bill that the administration sub-
mitted last year, Mrs. Lowey, there were several provisions related
to teen pregnancy. One was a request for a teen pregnancy preven-
tion program which would have given grants to communities and
to schools to try at the community level a number of approaches
to preventing teen pregnancy. We believe, like you, and I suspect
most people, that prevention is by far the best way to go, and that
we need to work at the community level in order to prevent teen
pregnancy.
The Administration's welfare reform bill also included a require-
ment that minor mothers who were receiving AFDC live at home
or in a supervised setting, that they stay in school, that they iden-
tify the father of their child so we can begin to collect child support,
and that they make progress towards working, as a condition of re-
ceiving AFDC benefits. We believe, like you, that it is quite reason-
able to expect that minor mothers who are receiving AFDC would
be doing those things.
We do think, though, that the approach which was taken in the
Personal Responsibility Act that the House passed last Friday,
which would simply cut off cash benefits for minor mothers and
their children, is not the right approach. It is not the right ap-
proach, in part, because if those minor mothers are not receiving
cash benefits, we don't have the tools to require them to stay in
school and identify the father and make progress towards work.
And secondly, we think that simply cutting off cash benefits for
those moms and their children really does punish the children in
important ways for something that is not their fault.
So our approach to teen pregnancy would be a combination of in-
vesting in prevention, and also trying to send very strong messages
to both the young mother and the young father that being a parent
818
is a very serious responsibility, and that both parents must pick up
those responsibilities.
WELFARE REFORM AND HEALTH CARE
Mrs. LowEY. Another area that we focused on last year, and I
think there is general agreement, that without reform of the health
care system we couldn't be too successful in reforming the welfare
system, because in fact in my district, in talking to many groups,
governmental groups, not-for-profit groups, who work with welfare
reform and try to assist those mothers to get off welfare, one of the
reasons they go on and off is for health care. This is really a conun-
drum. If you go off welfare and then you have some kids who are
sick, how do you pay for it? It is really incredibly difficult.
So I wonder if you can assess the success or the viability of the
welfare reform bill that was passed, in light of the fact that we
don't have any health care reform.
Ms. Bane. I think it is going to make it more difficult for the
States to carry out welfare reform, since the problems of families
that you note — in terms of health coverage — do in fact remain, and
we continue to hope that some steps will be taken on the health
care side. Many States are trying to do that as well. But it is going
to be difficult.
Nonetheless, we believe that there are some things that do need
to be done in the welfare system and that we ought to proceed with
that as best we can.
Mrs. LowEY. It was interesting, I was talking to a young woman
just about a couple of weeks ago who was working three jobs, and
one of her youngsters got sick, and she went to the welfare office
to see if she could just get some help with health care, and they
outright told her, "You just have to go on welfare because it is the
only way you can get your health care."
So I do hope that both the States and the Federal Government
can move as efficiently as possible and as expeditiously as possible
to do something about health care.
I believe my time is up. Are we getting additional time today,
Mr. Chairman?
Mr. Porter. You have a few minutes left.
Mrs. LowEY. Oh, okay.
QUALITY OF CHILD CARE
I know that Mrs. Pelosi did focus on child care. I have some fol-
low-up questions, because I have been very concerned about the
progress that we have been making or haven't been making in
goals and standards for child care supported by this subcommittee.
In fact, there was a report released recently that discussed in de-
tail the current gaps in quality and how far we need to come in
improving the quality of child care.
Could you discuss for the committee, comment on the current
status of the quality of child care in this Nation, how the effect of
Federal standards and guidelines and quality is bringing us closer
to the goal of high-quality child care? And can you discuss the im-
pact of this budget on that goal?
Ms. Bane. As you note, there have been several reports recently
looking at the quality of child care, and identifying some areas
819
where, I think we would all agree, quality is not as high as we
would like.
I think one of the real accomplishments of the Child Care and
Development Block Grant since 1990 when it was passed, is what
it has meant for improving child care quality.
As you know, a part of the Child Care and Development Block
Grant is required to be set aside for quality improvements. And
what that has meant is that the States have been able to invest
in training for child care workers, to invest in some improvements
in child care programs and licensing, and to invest in consumer in-
formation, which, in some ways, I think is one of the most impor-
tant things that we can do. So that set-aside has been very impor-
tant, and we have lots of evidence from lots of States that it has
been very important.
I think it has also been very important that the Child Care and
Development Block Grant required the States to have in place
standards related to health, related to safety and related to train-
ing. Those were not Federal standards at all, but there is in the
Federal law a requirement that the States have standards in place,
and that child care programs which receive money under the block
grant meet those standards.
I was distressed to see that in the child care consolidation block
grant proposal that the House passed last week, that both those
things were removed, both the set-aside for investments in quality
on the child care side and also the requirement that States have
quality standards in place. I hope that we might continue to focus
on quality and quality standards as we move along, because I think
that those have been very important in helping increase the quality
of child care over the last few years.
Mrs. LOWEY. Thank you. I have been equally concerned, having
worked on the bill when I was on the other committee. We made
such progress towards that end, and just to see it go up in the air
without any standards, would be a shame. Some of us may have
great faith in the States following those standards, but just to send
the money without those standards in place should be a concern to
all of us.
Thank you.
Thank you, Mr. Chairman.
Mr. Porter. Ms. Lowey, I would note that although you called
Dr. Bane a New Yorker, her place of nativity is Princeton, Illinois.
Ms. Bane. Princeville.
Mrs. Lowey. A testament to all the good things she has done in
New York. We trained her for this important job she is doing.
Thank you.
Mr. Porter. Mr. Istook.
Mr. Istook. Thank you, Mr. Chairman.
I guess I ought to ask you. Dr. Bane, if you ever set foot in Okla-
homa.
Ms. Bane. I don't think so.
Mr. Istook. Oh, dear.
Ms. Bane. I will, though. I promise.
Mr. Istook. I appreciate that.
Mr. Miller. She is looking forward to it.
820
IMPACT OF PERSONAL RESPONSIBILITY ACT ON STATES
Mr. ISTOOK. I wanted to ask you if I might about some informa-
tion about a document from the Administration of Children and
Families. If the court reporter will hand this to Dr. Bane.
What the court reporter gave you is a copy of a document that
was given to me that, according to its face, is either, depending on
whether you count the cover sheet or not, 20 or 22 pages, that
shows it was faxed out last week on March 21 from HHS through
the HHS Banyan network. It is a document about the welfare re-
form bill that was under debate at that time, and ultimately passed
the House that week. It is called a State-by-State impact analysis
of H.R. 1214, the Personal Responsibility Act of 1995.
Are you familiar with this particular document?
Ms. Bane. Yes.
Mr. ISTOOK. Can you tell me, because the cover page indicates
evidently the faxing started maybe around a little after noon, and
the particular copy here was being faxed to someone after 6:00 p.m.
and it has a note on the cover page that says the document title,
"Impact of the House Republican Welfare Proposal on the 50
States," is available for pickup after 12:30 p.m. at the sixth floor
of the Aerospace Building, 901 D Street, Southwest. I am reading
that as it is written even though there are a couple of grammatical
problems in it.
Can you tell me, to whom was HHS involved in getting all this
information imparted while that bill was under debate?
Ms. Bane. HHS produced analyses of this bill and other bills as
we were going along. They were produced for internal use. They
were also provided to Members of Congress who requested them
and others who requested them.
One of the reasons that HHS does these analyses is that we have
data sources that enable us to do analyses of State-by-State im-
pacts that aren't available to many other people. So we did produce
these documents for internal and some general public use.
Mr. ISTOOK. Well, you mentioned, of course. Members of Con-
gress who requested things, and you said others who requested
them, and you also used the term general public use.
I need to ask you, was this being faxed to groups that HHS was
aware were involved in the debate and lobbying activities on that
particular piece of legislation?
Ms. Bane. I actually don't know exactly who the fax list was for
this document. We did provide this document to people who re-
quested it from us.
Mr. ISTOOK. Was it provided only to people who had made an ad-
vance request for this specific document?
Ms. Bane. There are organizations that request information from
us of this sort and we do try to provide it. We try to provide it in
a simple, informative and very straightforward way.
Mr. ISTOOK. But my question was, it was provided only to groups
who had specifically requested this document?
Ms. Bane. I am not sure I can answer that question. Let me get
back to you on that.
821
Is your question whether the specific requests were for this docu-
ment or whether it was a general request for information on the
welfare reform bill? Because we may have done the latter.
Mr. ISTOOK. Well, first, the question, the specific question was
about this specific document. Are you able to answer as to that?
Ms. Bane. I can't answer the specific question as to whether
every copy that we sent out had been requested as such. I can't an-
swer that at this point.
Mr. ISTOOK. Well, I presume that somebody was keeping a list
of groups that either, as you say, had been generally requesting in-
formation regarding the bill, or had specifically requested this par-
ticular document.
Ms. Bane. I assume so. I didn't personally keep such a list. But
I believe it was kept, yes.
Mr. ISTOOK. Sure. Obviously such a list exists. I would ask that
you supply me and the subcommittee with a copy of that list, as
well as with an indication as to whether those persons or groups
or entities had requested this specific document or made some
other request, or whatever was the reason that HHS was initiating
the sending out of this material.
Ms. Bane. I will provide you whatever information we can.
[The information follows:]
Analysis of H.R. 1214
In addition to sending the analysis to members of Congress, the Administration
for Children and Families sent it to all directors of State agencies responsible for
administering State AFDC and child welfare systems and to a number of organiza-
tions interested in the administration of state and local welfare and child welfare
systems. A mailing list, which includes 375 addresses, was supplied and has been
retained in committee files.
ANALYSES PREPARED BY HHS
Mr. ISTOOK. Can you tell me — this, of course, is one analysis re-
lating to the welfare reform plan — can you tell me generally what
analyses or how many analyses HHS prepared regarding this legis-
lation?
Ms. Bane. We prepared analyses as the debate was going along.
Most of what we prepared was a simple summary of what was in
the bill since that was important information for us and for others.
I believe this set of tables is the only set that we prepared that was
State by State.
Mr. ISTOOK. Well, you say it was important to us and to others.
I recognize, of course, HHS has, you know, the need to be inter-
nally tracking what may be going on, and I certainly understand
that Members of Congress may be requesting the information. But
who are the others of whom you speak for whom HHS would de-
vote the resources to prepare this and other smalyses?
Ms. Bane. Again, I will try to get you a list of who we sent this
to. I can't do it off the top of my head. There were some States,
of course, that requested information as well.
Mr. ISTOOK. But you indicate, because I was asking about other
documents in addition to this one, so you may have information re-
garding other documents that you initiated and to whom you made
an effort to disseminate those other documents?
822
Ms. Bane. Again, I will find out what information we have on
that.
Mr. ISTOOK. If you would provide that.
[The information follows:]
Documents Distributed
The following documents were distributed:
Analysis of H.R. 1214, The Personal Responsibility Act of 1995
State of State Impact Analysis of H.R. 1214, The Personal Responsibility Act
of 1995
Impact of the House Repubhcan Welfare Proposal on the 50 States
Effects of the Proposed Child Protections Block Grant
Statement of Administration Policy
Remarks by the President to the National Association of Counties
Paying Up
These documents were supplied and have been retained in committee files.
MEETINGS ON LEGISLATION
Mr. ISTOOK. According to reports I have received, officials from
your Administration, the Administration on Children and Families,
were participating in meetings of an informal coalition that was op-
posing the legislation on the Floor of the House last week. Is that
accurate?
Ms. Bane. I believe that members of the Administration did meet
for purposes of trying to provide some public information to groups
who were interested in this. We did not ask them particularly if
they were supporting or opposing the bill.
Mr. ISTOOK. Well, let me make sure that we don't get bogged
down in nomenclature. In this context when I say Administration
and you say Administration, I am not talking about the Clinton
Administration. I am talking about the Administration for Children
and Families. I want to make sure there is no misunderstanding
on that.
Would you elaborate, please, and describe for us, what are the
meetings of any type of formal or informal coalition in which mem-
bers of the Administration on Children and Families participated?
Ms. Bane. I wasn't present at any of them so I can't describe
them from a personal point of view.
Again, why don't I check and see what information we can get
you on this.
Mr. ISTOOK. Can you tell me who did attend such meetings?
Ms. Bane. Again, I can't off the top of my head.
Mr. ISTOOK. How is it you are aware that such attendance did
occur?
Ms. Bane. I suppose someone told me. I think that is correct.
And again, I will try to get you the information that we have on
this.
Mr. ISTOOK. But can you tell us who it was that told you
that
Ms. Bane. I actually don't remember, and I am sorry.
Mr. ISTOOK. I would appreciate receiving information on who at-
tended such meetings, when and where and who participated in
them. And if your people from your office took notes or minutes of
any such meetings, I would like to receive copies of those.
I assume the attendance at these meetings was as far as you
were concerned conducted as an official activity?
823
Ms. Bane. Yes. We consider it part of our job to provide informa-
tion to the public and others.
Mr. ISTOOK. I understand making information available, but as
I was careful to mention from the outset here, my understanding
is that these were not informational meetings, these were meetings
of a coalition opposing the legislation.
Ms. Bane. All participation by any member of the Administration
generally or the Administration for Children and Families would
have been only to provide information to the public. And we do that
without regard for the position of the people who are asking for it.
SHARING INFORMATION WITH OUTSIDE ORGANIZATIONS
Mr. ISTOOK. So if someone called, for example, your Administra-
tion and said, "There is a bill, we have concerns over it, we think
it is a bad bill, we don't like it, we would like someone from your
office to attend," if for no other purpose than to share information,
you are saying you would send someone to such a meeting?
Ms. Bane. It would depend on what the organization was. We
certainly don't put very much of our time or resources into that
kind of activity. But we would assess such a request, yes.
Mr. ISTOOK. Who would receive such a request in your office and
how would you assess whether this was the type of group or coali-
tion with whom you would want to cooperate?
Ms. Bane. Normally those requests would come to our Office of
Intergovernmental Affairs.
Mr. ISTOOK. And do you know if that was the case?
Ms. Bane. I do not know if that was the case. I assume so.
Mr. ISTOOK. And how would you assess, since you say you would
not necessarily send someone to any such meetings, how would you
assess whether this was an entity or coalition to which you would
want to send someone.
Ms. Bane. I think that we would spend our time providing infor-
mation to people who are major players or responsible actors in the
debate. We wouldn't want to participate in frivolous meetings or
meetings that would be a waste of time.
Mr. ISTOOK. Well, I presume then — I would like to ask if there
are any — whether it be memos or letters or notes, discussing, you
know, being an actual invitation to attend or discussing whether or
how or in what fashion to send someone and what they were or
were not to do. I would appreciate receiving copies of that informa-
tion.
Ms. Bane. I would be happy to provide that.
[The information follows:]
Meetings on H.R. 1214
Personnel of the Administration for Children and Families were not invited to and
did not participate in any meetings of formal or informal coalitions opposing the
welfare reform bill.
The meetings were organized by ACF personnel and held at the Department. Indi-
viduals from organizations interested in welfare and child welfare reform were in-
vited to the Department so that Department officials could share information about
the Administration's perspectives on various aspects of the welfare reform legisla-
tion and could hear in turn the different perspectives of the meeting participants.
824
ANTI-LOBBYING LAW
Mr. ISTOOK. How did you — ^because I am sure you are aware that
there is a law against direct or indirect use of your offices to lobby
Members of Congress on legislation. And since you were aware that
this legislation was under active consideration at the time of these
meetings and sending this report, can you tell me what was done,
if anything, to make sure that your activities would not fall afoul
of that law?
Ms. Bane. We do try to be very careful in all of our activities so
as not to violate that law. My understanding is that the law per-
mits us to provide information, which we do. The law also permits
the Administration to have positions on issues, which we have, and
which we communicate. And the Administration is permitted to
communicate those positions in appropriate times and places.
We do not lobby. We do not assist people in lobb3dng. But we do
both provide anal3^ic information and information on the Adminis-
tration's position.
Mr. ISTOOK. From what you say, I presume there was an affirma-
tive effort to be sure that you were in compliance with the law on
these particular meetings?
Ms. Bane. Very much so, sir.
Mr. ISTOOK. Can you describe who made those decisions?
Ms. Bane. Our General Counsel.
Mr. ISTOOK. And who — well, obviously he wouldn't do it by him-
self or she wouldn't do it by herself. That is in consultation with
who? With you, with someone else? With who?
Ms. Bane. We rely on our General Counsel to interpret the law
for us. And I basically do whatever they tell me.
Mr. ISTOOK. Somebody has to raise the issue. Somebody has to
go to the General Counsel and say, '*We have been invited to attend
some meetings opposing the legislation that is up, and we want to
know whether we can or cannot go or what we can or cannot do."
General Counsel, something initiates the process. I am saying,
since you are saying there was something affirmative here, I am
asking who initiated that process.
Ms. Bane. I instructed all my senior managers that under any
circumstance when they were sending out information or meeting
with outside groups on these issues, that they initiate a request for
a General Counsel opinion to make sure that they were within the
guidelines.
So I initiated a request, and I asked that requests be initiated
to assure we are within the law each time such an issue arises.
Mr. ISTOOK. I would ask, if there is any such advisory regarding
the specific meetings on this specific legislation from the General
Counsel, that we be provided copies of that.
[The information follows:]
General Counsel Advice
Prior to holding the meetings at the Department, Administration for Children and
Families personnel received from the HHS General Counsel's office oral advice on
the requirements of the anti-lobbying law and the obligations of agency personnel
at these, and all other, meetings which involve discussion of pending legislation.
There was no written advisory. Our General Counsel's office did review the written
materials prior to their being mailed out.
825
Mr. Porter. I would advise the gentleman he is five minutes
over his time.
Mr. ISTOOK. I will certainly suspend. I appreciate that, Mr.
Chairman.
Mr. Porter. We will have a second round.
Mr. ISTOOK. I was wrapping up an5rway. Thank you.
Mrs. LOWEY. Mr. Chairman, if I could just respond.
Mr. Porter. The gentleman would have to yield.
Mrs. LowEY. Will the gentleman yield?
Mr. ISTOOK. Certainly.
PROPER RESPONSES TO REQUESTS FOR INFORMATION
Mrs. LoWEY. It is very clear that the gentleman is referring to
section 504, no Federal funds for lobbying. That was put in place
I believe 20 years ago in response to the Nixon Administration ac-
tivities.
And it appears to me that the gentleman would have liked the
Contract to go through without any information and any statistics
as to the impact of this legislation on the individual States.
But it would seem to me, and I think it is only fair to have Mary
Jo Bane respond, that the agency has an absolute obligation to re-
spond to requests for information and to educate the States and the
communities as to the impact of this legislation.
And so to call it lobbying when the Administration responds with
specific data, whether it be on a LIHEAP program or whether it
would be on the impact of cutting off specific people, it would seem
that the agency has to respond to these requests, and to even imply
that this is lobbying I think is wrong.
Perhaps you would like to respond to that, if the gentleman
would allow you to respond to me, as to what are the responsibil-
ities of the agency regarding the impact of legislation on a particu-
lar State.
Certainly in terms of New York, it was very helpful to me to get
specific data as to the number of people who would be impacted by
this legislation, and to keep us in ignorance and saying that is lob-
bying I think is just wrong.
Mr. ISTOOK. Mr. Chairman, if I might, I believe Ms. Lowey's
questions were initially addressed to me. If I might respond briefly
to those and then let the witness say whatever she wishes to say
on it.
To paraphrase Shakespeare, "Me thinks the lady protests too
much." I was merely asking the witness for information on what
was done. Whether it does or does not constitute lobbying depends
on what was done. I am trying to find out enough information to
know that.
And I think it would be totally inappropriate for someone to say,
"Gee, we shouldn't even inquire into what an agency may be doing,
to make sure that it stays within those bounds, that we should
automatically make a presumption that everything is always done
properly."
^d I am sure that you, Ms. Lowey, nor I would feel that we
were performing our duties if we did not make inquiries when in-
formation has been brought to our attention in this area.
826
And if you were listening, I am sure you noted that I made no
type of accusation. Obviously I asked questions which I believe are
direct and are pertinent. But I am trying to find that out, because
I realize that there has been a lot of public discussion on several
pieces of legislation, not limited to HHS, about potential lobbying,
and I am not saying there was, I am not saying there wasn't. I am
saying there is some information that has come to my attention
that I thought needs to be followed up upon.
That is simply what I have sought to do.
Mrs. LOWEY. The gentleman was kind enough to yield. I would
just like to comment again, thank God this is the United States of
America, where information is circulated, and that when we vote
on a particular piece of legislation, we have the opportunity to get
as much information as we can. Perhaps Mary Jo Bane will supply
to all of us the charts and the information that she supplied to any
groups, because I think it would be very helpful in educating all
of us.
I would hope that the gentleman, even though you are not on
that subcommittee, I believe, would offer those questions to the De-
fense Department. And I would hope that as bases are being closed
and weapons systems are in the process of being eliminated, that
the gentleman would be equally concerned that the Defense De-
partment would not provide that information to the States and the
impact on those States.
But I would hope that you would share this information with us,
because that would be very helpful.
Ms. Bane. We surely will. Much of it was requested by Members
of Congress anyway. And we did indeed provide it.
Mr. Porter. I hardly know how to charge the time on this de-
bate. I charge it to myself.
Mrs. LowEY. Thank you, Mr. Chairman, for your indulgence.
Mr. ISTOOK. I don't have further questions. Thank you, Mr.
Chairman.
Mr. Porter. Thank you, Mr. Istook.
USE OF head start INCREASES
Dr. Bane, Head Start has grown enormously from $1.5 billion in
1990 to $3.5 billion in 1995. You are requesting another $400 mil-
lion in this budgetary environment. That is a very large request in-
deed.
I wonder if you could provide for us, for the record, a chart, but
perhaps comment on it now, on how this money, the growth in the
program, has been allocated. Have there been mainly greater popu-
lations of children to serve? Are we spending more money on teach-
ers salaries proportionately?
If you could provide a chart showing the number of children
served, the increase in teacher salaries, the increase in other ex-
penses, that might help us very greatly. If you want to comment
on that, I would appreciate it.
Ms. Bane. Yes, we certainly will provide a chart.
[The information follows:]
827
Head Start Increases
Since FY 1990, Head Start's appropriation has increased by a little less than $2
billion. Following is a chart showing the major categories for which these increased
funds were used:
Million
Expansion of 211,000 children $799
Quality Improvement 686
Cost-of-living 289
Infant and toddler initiative 68
Increased hours of service 57
Increased training and technical assistance 40
Head Start transition 35
While we do not have the exact amount that teacher salaries have increased in
total most of the increased funding not used to expand enrollment has been used
to award grantees annual cost-of-living increases and to enable grantees to improve
Head Start quality. Both of these amounts may be used to increase teacher salaries.
We estimate that the average salary of a Head Start teacher in FY 1995 is $16,700.
Ms. Bane. The answer is all of the above, that the increase is
being spent partly on cost-of-living increases for teachers' salaries,
partly for improvements for part-day programs, on the expansion
of part-day programs to full-day, full-year, and on the new program
for infants and toddlers which was authorized by the Head Start
reauthorization bill last year.
The reauthorization bill that was passed last year was actually
quite clear about what proportions of increases should be used for
particular aspects of the program. This was a reauthorization that
had very broad bipartisan support, which we of course were de-
lighted about, and I think represented the commitment of the au-
thorizing committee and others as well, to both improve quality
and expand services.
So the legislation told us to provide a cost-of-living increase first,
before we did anything else, and we do that. It then provided a 25
percent set-aside for quality improvement, then a set-aside for the
new infant toddler program, and finally a set-aside for expansion.
The way this plays itself out depends on the size of the increase,
and we can provide you both with information on how that was
done in 1995 and what our 1996 increase would be used for.
HEAD START SALARIES
Mr. Porter. So is it fair to say that the proportion of the money
used for teachers' salaries increased more rapidly than the popu-
lation served increased, but that was done because Congress made
that a higher priority?
Ms. Bane. I think that is probably true, and I have been sitting
here trying to do the arithmetic in my head and I am not sure I
am getting it right, but I think that is true.
One of the major concerns of the Head Start advisory committee
and of the bipartisan committees that worked on the reauthoriza-
tion was teacher salaries. I think there was a broad consensus that
one of the most important ways to improve the quality of the Head
Start program was to ensure that the staff who worked in Head
Start, would be getting salaries competitive with public schools,
they don't, but that they were getting salaries high enough to at-
tract people who would in fact be appropriate teachers in the Head
Start program.
828
That was a recommendation that was made by the Advisory
Committee and it was a concern of the congressional committees
that looked at the reauthorization. I think it was entirely appro-
priate.
HEAD START FACILITIES
Mr. Porter. In your opinion, how significant is the problem of
inadequate facilities in the Head Start program?
Along with that, how many grantees do you think will take ad-
vantage of the new provision allowing grantees to use funds to
build facilities where none are available, and can you estimate the
potential cost of building these facilities?
And thirdly, how much money are Head Start grantees currently
spending on facilities costs of various kinds?
Ms. Bane. I am not sure I can answer all those questions. Let
me take a stab at a few of them, and we can provide more informa-
tion for the record.
We certainly heard from both the authorizing committee and the
Head Start advisory committee about inadequate facilities. They
are of great concern. Safe and appropriate facilities are very impor-
tant.
In October of 1992, the law was amended to include a provision
that would allow Head Start grantees to purchase facilities. To
date I am told that authority has been given to approximately 100
Head Start agencies to purchase facilities and authority has been
given to three agencies to construct Head Start facilities.
We approve requests for purchase. When we approve a request
for construction of facilities we look at it carefully to ensure it is
the most cost-effective way of providing facilities to Head Start.
Approval for 100 requests to purchase facilities is relatively
small, but that authority is providing grantees with greater flexi-
bility in the way they deal with inadequate facilities.
Mr. Porter. It has been suggested to the subcommittee that it
would be a good idea to create a child care capital fund to pay for
the renovation and construction of child care facilities, including
Head Start facilities. The idea would be to use the money to lever-
age private sector funds and to repay debt service over a period of
15 years. Nonprofit financial and development intermediaries, child
care agencies, and Head Start agencies would be eligible to apply
for the funds.
Has the Department examined any proposals such as this to see
whether it would be feasible and desirable, and do you have an
opinion regarding it?
Ms. Bane. No. I am actually not aware that the Department has
done analyses of this proposal. It is obviously an idea that we, like
you, would like to explore, because it is an interesting one. It
sounds like something we should look at together.
Mr. Porter. All right. We will do that. We will just let you take
it from here.
Ms. Bane. Terrific. Thank you.
capta religious exemption regulations
Mr, Porter. As you are well aware, this subcommittee in last
year's appropriations bill included a provision that prohibits the
829
Department from withholding funds under the Child Abuse Pre-
vention and Treatment Act by reason of a State's failure to comply
with certain religious exemption regulations. This provision is
scheduled to expire upon the reauthorization of CAPTA or Septem-
ber 30, 1995, whichever first occurs.
What person in your Department is assigned to monitor the im-
pact of HHS policies to make sure that they conform to the require-
ments of the Religious Freedom Restoration Act?
Ms. Bane. Joe Mottola is the person who monitors that. As you
note, last year, the Appropriations Committee put a moratorium on
our dealing with States in terms of the religious exemption. We
have obviously respected that and have taken no action with re-
gard to the religious exemption as it regards States.
Also, as you know, the Child Abuse Prevention and Treatment
Act is up for reauthorization this coming year, and we expect that
debate over the religious exemption will be part of the dialogue
around the reauthorization of CAPTA.
Mr. Porter. Has a review been done of HHS policies to see if
they conform to the RFRA requirements?
Ms. Bane. That is the Religious Freedom Act?
Mr. Porter. Yes.
Ms. Bane. I am tr5dng to remember — this year, our activities
around the religious exemption have been governed by the instruc-
tions from Congress. Given those instructions from Congress, we
have followed them.
Mr. Porter. Can you provide us a list of the States that you con-
sider to be out of compliance because of spiritual treatment lan-
guage in their child abuse and neglect laws?
Ms. Bane. Yes.
[The information follows:]
Any list that we have would be inaccurate since we have discontinued enforce-
ment action consistent with the Congressional moratorium. We are no longer closely
reviewing those provisions of State laws and procedures as we await action by the
authorizing committee.
Mr. Porter. Have these States been notified about the morato-
rium?
Ms. Bane. Oh, yes.
Mr. Porter. How did you do that?
Ms. Bane. We sent out an information memorandum to the
States.
PROPOSED CONSOLIDATIONS
Mr. Porter. As you know, there are a significant number of rel-
atively small categorical grant programs in your agency. A number
of these appear to serve similar populations and have similar pur-
poses. The number of these programs has grown significantly over
the past 10 years or so.
To what extent does your budget request attempt to consolidate
and/or eliminate some of these programs?
Ms. Bane. The most significant area in which we are proposing
to eliminate programs is in the area of community services. We are
proposing to eliminate a number of small discretionary programs —
the community economic development program, the rural housing
program, the rural community facilities — mostly because we believe
830
that by and large these activities can be performed by the States
under the Community Services Block Grant. I feel like we are mak-
ing significant progress in eliminating duplicative programs and
that it is important to do that.
As I noted before, we are also proposing to consolidate two small
discretionary programs into the Child Care and Development Block
Grant and we are proposing to consolidate three programs for run-
away and homeless youth. I think we are making a good start in
proposing consolidations.
Mr. Porter. What about Title XX, the Social Services Block
Grant? Is that a place where some of these programs could be con-
solidated?
Ms. Bane, It is certainly something that we can look at. It is a
block grant. It is used for a wide range of services. We will con-
tinue to look at our discretionary programs to see if there are ways
that we can operate them more efftciently.
Mr. Porter. So we agree that it would be easier for people at
the local level to apply for funds if there weren't so many separate
categorical programs, each having a separate set of regulations and
grant applications?
Ms. Bane. Obviously if you have fewer, there are fewer applica-
tions to make. Each of these programs was designed for a specific
purpose, and most of them are discrete purposes. As we look at
these programs, the conversation that needs to go on is the con-
versation about the specific purposes and how they can best be
achieved.
The consolidations that I noted into the Community Services
Block Grant, runaway and homeless youth programs, and the child
care block grant, look to us like places where the purpose could be
very well served by folding smaller categorical programs into larger
programs, and we have proposed to do that.
Mr. Porter. I have a theory of government that if we consolidate
about every 20 years, all the programs will come back 20 years
later, they will all be back in place, then we consolidate them again
and go on from there, because it is human and political nature to
WEint to serve particular constituencies and to do things for people.
It is not a bad trait at all, but at some point we really do need to
look at things like this and say, perhaps we could do it better by
allowing it to be done by another level of government.
Mrs. Lowey.
CONGRESSIONAL CAUCUS ON WOMEN'S ISSUES
Mrs. LowEY. Thank you, Mr. Chairman.
Madam Secretary, with regard to that, I know my colleague, Ms.
Pelosi, talked about the battered women shelters, domestic violence
hot line, an important commitment on the part of the Administra-
tion to deal with violence that is impacting women and families. So
I just want to thank you for your efforts in that area. I look for-
ward to working with you. These are important priorities of the
Congressional Caucus on Women's Issues.
And with regard to the caucus, we were very pleased that both
in the Majority bill and in the Deal bill, we got the child support
provisions included. As you know, there was a good deal of discus-
sion and education that was necessary with regard to child sup-
831
port. But it was a good success, and in fact was one of the few
areas where we have seen some success, and we look forward to
working with you on that area.
IMPACT OF IMPROVED CHILD SUPPORT ENFORCEMENT
Do you have any information, or could you provide for the record,
the estimates of how many families would avoid welfare in the first
place if child support enforcement were stronger, and could you
also provide information on the savings to the Federal Government
of improved child support enforcement mechanisms?
Ms. Bane. Yes, we certainly can. We have done some preliminary
estimates. We think that as many as 800,000 persons might be
able to leave the welfare rolls if child support were being fully col-
lected, and that we might be able to save up to 25 percent. But let
me get you some more accurate estimates and we will provide
those for the record.
[The information follows:]
Impact of Improved Child Support Enforcement
Approximately six percent of the AFDC caseload would be able to move off welfare
if they received child support pa)Tiients. In addition, for a custodial parent in a low
wage job, child support could be the crucial factor preventing the parent from enter-
ing the welfare rolls.
AFDC costs could be reduced by over 25 percent if child support awards were in
place in all cases, and non-custodial parents paid appropriate support. This money
would come from the eight percent reduction in caseload and from the reimburse-
ment the government would get for AFDC benefits paid to custodial parents on wel-
fare.
Mrs. LOWEY. I think it is important that we continue to educate
people on both sides of the aisle about those numbers, because so
many people end up on welfare, when clearly if both parts — I don't
want to say the family — of those who conceived the child, both par-
ents, took responsibility. So I would appreciate that information.
Ms. Bane. We too were very pleased that the bill as it was
passed included a very strong set of child support enforcement pro-
visions. And we are delighted that that was in fact a bipartisan ef-
fort.
Mrs. LowEY. And it took a lot of work on the part of Nancy John-
son and Barbara Kennelly and Marge Roukema, who really worked
very hard and were pleased that the provisions could come as a re-
sult of the bipartisanship of the Caucus. So we thank you for your
efforts.
AUTOMATED CHILD WELFARE SYSTEMS
By the end of this year States have to be fully automated or they
lose child support funds. Both the Administration bill and the Cau-
cus bill envision centralized registers, but States are having trouble
automating and getting on-line. These improvements are essential
to improving the system.
How can we help States meet this deadline and improve services
for children and families?
Ms. Bane. As you note, the automation is really a key to improv-
ing child support collections. It is very important in making the
system simpler and more automatic. It will be especially important
832
as we move to improve our interstate efforts to have registries that
speak to each other.
We are confident and are working hard with the States to help
them meet the deadline that is in the legislation. We think it is
very, very important that they do so. As I say, we are working very
hard with them to have that be true.
So we continue to be confident this will happen, and we will keep
working with the States on it.
EFFICIENCIES IN COMMUNICATIONS
Mrs. LOWEY. Talking about being on-line and being more effi-
cient, it seems to me, I recall last year talking to you about the fact
that computers in different agencies really don't talk to each other.
Computers in different Federal agencies don't talk to each other,
and certainly computers in Federal agencies can't talk to State
agencies.
And when we talk about waste, firaud and abuse and cost effec-
tiveness, if we don't really have a good handle on a particular per-
son and what kind of benefits they are getting, how do we ever
straighten them out?
Could you address any kind of progress that has been made in
that regard? And if you would — as AJ Gore's reinventing govern-
ment program does — really focus on greater communication effi-
ciencies in those areas.
Ms. Bane. I think we are making quite a bit of progress. The
technology is really quite wonderful. We were all quite excited to
get on the Internet tnis year, so that we can in fact communicate
much more efficiently, not only within the Federal Government but
also with the States.
I think that as we work with the States on their child support
systems, on their child welfare systems, on welfare systems more
generally, we are working with them to make sure that we can in
fact communicate well. I think the technology is progressing, and
we are all progressing in our knowledge of how to use it, so that
we are making some real improvements.
IMPACT OF PROPOSED HOUSE FOSTER CARE RESCISSION
Mrs. LowEY. I also understand that the House bill rescinds $100
million for foster care and there is no Senate cut. How does this
affect the child support enforcement and frankly the States' auto-
mation efforts?
Ms. Bane. The rescission that you note, Mrs. Lowey, that was
proposed by the House is in the foster care preplacement training
and administrative account, which is currently an open-ended enti-
tlement and allows the States to claim the money they need to ad-
minister their child welfare programs and to do pre-placement
services and improve their computer services and so on.
The rescission that was proposed we have serious concerns
about. We have serious concerns that it would interfere with the
State's ability to run effective child welfare systems, and especially
that it would interfere with their ability to get their automated sys-
tems going.
One of the areas where we have seen reasonably large increases
in the State claims in the last year is for automated systems for
833
child welfare. It is going to be very important for the States to be
able to keep track of kids and make sure that they are in fact pro-
viding effective services and moving children out of foster care as
quickly as possible.
Mrs. LOWEY. I just want to say in closing — I guess we lost our
colleagues — that I hope will you continue to educate the Senate as
this welfare bill goes through that body so that they can act wisely
and responsibly, and that all the States, and I daresay all the citi-
zens, perhaps it is even more important, will be aware of the im-
pact of these changes on people's lives. And we can be very glib
down here, and some of my colleagues probably aren't aware of the
impact of some of these programs on people, as some of us are who
have communities that are very diverse.
So I would hope that you would continue your education and let
the Senate know the impacts of all these programs. And we thank
you very much for your efficiency and your commitment. And the
enormous strides you have made in this agency.
Thank you.
Ms. Bane. Thank you.
Mrs. LowEY. The Chairman will be right back. Let me see if
there is anything else we can deal with.
IMPACT OF HEAD START IN LATER YEARS
The Chairman was talking, while we are waiting for the Chair-
man to come back — I might as well finish the question, I thought
we were going to end the hearing. But while the Chairman is tak-
ing his seat, the Chairman was asking many good questions about
Head Start. And there have been many questions over the years as
to the impact of Head Start on later years.
We all recognize the success of the program, then we forget about
the children until they get into trouble. There is a whole block of
time.
Could you discuss any research that is available on the impact
of the Head Start program on the development of youngsters in
their later years? How far-reaching are the benefits?
Ms. Bane. The best information we have, Mrs. Lowey, as you
know, is from a study of an intensive preschool program that has.
now been studied for a very long time, 27 years, following children
who were in that program through elementary school into junior
high school and now into adulthood.
I think we have all been startled, or at least I have as I read
the reports of that evaluation as they come out over the years, of
the continuation of the difference between the children who were
in that program and the children in the control group.
It does seem that at least in that program, which is not identical
to Head Start programs but is similar to Head Start programs and
allows us to make some judgments, that those benefits have been
very wide-ranging and affect things that seem as far removed as
perhaps teen pregnancy, emplojrment in adulthood, and so on. So
I think that gives us some evidence of the impacts that good pre-
school programs can have on children's development over a very
long period.
Mrs. LowEY. Of course, wouldn't it be nice if we continued to in-
vest in our children with the concentration we do in Head Start,
834
rather than hoping that that investment will last until they become
an adult.
So I look forward to greater wisdom on the part of all of our col-
leagues to continue these investments, which clearly pay off later
on.
Thank you again.
Mr. Porter. Thank you, Ms. Lowey.
CHILD CARE BUREAU
In January 1995, you created a new child care bureau within the
Administration for Children and Families to oversee administration
of all child care programs conducted by the department. The Ad-
ministration also proposed regulations in May of 1994 to improve
coordination of child care programs.
Can you describe your recent reorganization and creation of the
child care bureau within the agency? How will this improve the ad-
ministration of child care services and what impact if any will it
have on Federal administrative costs?
Ms. Bane. Prior to the reorganization, we actually had two
places in the agency which had responsibility for child care. One
was within the Office of Family Assistance and had responsibility
for child care for welfare recipients and another in the Administra-
tion for Children, Youth and Families in the Children's Bureau
which had responsibility for child care for nonwelfare recipients.
Welfare recipients and nonwelfare recipients are often the same
people who move back and forth.
Obviously we want to do everything we can to make the child
care system available broadly to people who need it. So the reorga-
nization was basically to bring those two offices together. That was
also the purpose of the regulations that we proposed, to achieve
better coordination through administrative and regulatory mecha-
nisms on the child care system.
That was the thought behind bringing them together. I think it
has improved our ability to work with the States and to help them
bring about better child care settlements.
Mr. Porter. Do you intend to issue final regulations based on
your May 1994 proposal?
Ms. Bane. I hope so. We are watching what is happening.
DEPENDENT CARE PROGRAM CONSOLIDATION
Mr. Porter. Under your proposed consolidation of State depend-
ent care grants with the child care block grant, do you believe that
States would continue to fund before- and after-school child care
services or scholarships to help low-income child care workers ob-
tain their CDA credential?
Ms. Bane. We think the States would make good judgments
about that, and in those areas where it was important to provide
those services, that they would do so, yes.
comments on house welfare block grant proposals
Mr. Porter. The House has approved welfare reform legislation
that would eliminate child welfare foster care and adoption assist-
ance programs under the Social Security Act, as well as several dis-
835
cretionary programs targeted at child abuse prevention and treat-
ment and instead create a child protection block grant to the
States.
Can you comment on the proposal approved by the House to con-
solidate existing child welfare programs into a block grant to the
States? What are the proposal's strengths and weaknesses?
Ms. Bane. We have serious concerns about that proposal as it
was passed by the House. The children who are served by the child
welfare system are among the most vulnerable and troubled in this
society, children who are the subject of abuse and neglect, who may
need to be placed outside their home, who may need to be adopted.
We have basically two sets of concerns. The first is that the block
grant would change what is now an entitlement for foster care and
adoption assistance and instead put it under a funding cap, and
that would mean that money might not be available to the States
for children who needed foster care, who needed adoption assist-
ance. We think that could result in real dangers to the States and
also to the children.
That is one area of concern. The other major area of concern that
we have about the block grant as it was proposed in the bill that
was passed by the House last week is that it effectively removes
the Federal Government's ability to monitor the child welfare sys-
tem and to use Federal leadership and Federal energy to improve
what I think everyone agrees is a system which is not operating
very well. At the national level we need to do whatever we can to
ensure basic protections for children.
Mr. Porter. So you are also concerned that the funding levels
for the proposed child protection block grant may not be adequate?
Ms. Bane. That is correct,
FOSTER care
Mr. Porter. And given the past unanticipated growth in foster
care caseloads, is it reasonable to cap Federal expenditures for
these activities?
Ms. Bane. Well, that is one of the things we have great concern
about. As you say, the recent growth in foster care caseloads and
in foster care expenditures were indeed unexpected. No one pre-
dicted a crack epidemic, no one predicted AIDS, no one predicted
some of the things leading to the growth in the foster care case-
load. And because they are in fact unpredictable, that is the reason
that capping the funding could potentially be so dangerous.
GROWTH in foster CARE ADMINISTRATIVE COSTS
Mr. Porter. Why is there rapid growth in foster care adminis-
trative costs?
Ms. Bane. I think there are a number of things coming together,
all of them sad. I think a lot of the increase over the last couple
of years was driven by the crack epidemic and by AIDS. It was
driven by some of the circumstances that children and families
face.
We have seen a dramatic increase in the number of child abuse
and neglect reports, and as a direct result of that, an increase in
the number of children who, for their own safety and protection,
836
need to be placed outside their home, and I think we have seen
that.
I think the other thing we have seen is that the age of children
in foster care has gone down over the last couple of years, again,
primarily because of the events related to drugs and so on, and
those younger children are tending to stay in foster care a bit
longer, and that is increasing the caseload as well.
RELATIONSHIP OF ECONOMIC CIRCUMSTANCES TO CHILD ABUSE
LEVELS
Mr. Porter. Do child abuse levels often relate to economic cir-
cumstances, the greater number of people in poverty, let's say?
Ms. Bane. There is some relationship to economic circumstances.
There is some evidence that child abuse and neglect go up when
the economy is bad. But I think what is even more interesting is
that child abuse and neglect are by no means limited to low-income
families or to low-income neighborhoods. It is a phenomenon that
affects children across the income range.
Mr. Porter. What are we seeing right now? Do you have any re-
cent statistics on levels?
Ms. Bane. Unfortunately, we are continuing to see growth, both
in the number of abuse and neglect reports and in foster care case-
loads.
Mr. Porter. Well, we have a substantial number of other ques-
tions for the record. We very much appreciate your very good, can-
did and forthright testimony today. We also appreciate your good
service to the Department, to the children of this country, and to
the country. And we thank you for coming to testify and we will
take the budget under consideration.
Thank you very much.
The subcommittee will stand in recess until 10:00 a.m. tomorrow.
[The following questions were submitted to be answered for the
record:]
837
LIHEAP
Mr. Porter: How many LIHEAP recipients live in public or
federally-assisted housing?
Ms. Bane: Based on estimates from the March 1994 Current
Population Survey (CPS) conducted by the Census Bureau, indications
are that of the 6 . 1 million households receiving heating assistance
during the period of October 1993 - March 1994, 27 percent, or 1.6
million households, lived in rent subsidized or public housing.
Mr. Porter: Many individuals in public and assisted housing
either pay no energy bills or receive other federal, state, or local
assistance to pay their energy bills. Some make fixed payments for
energy which do not fluctuate during extremely cold or extremely hot
periods .
Please submit a table for the record indicating the number of
LIHEAP recipients that pay no energy bill, receive other energy
assistance and the amount of that assistance, and the number of
recipients who make fixed energy payments. In each case, indicate
the amovint of LIHEAP funding received by these individuals.
Ms. Bane: An estimated 1.6 million households that received
heating assistance in FY 1994 lived in rent subsidized or public
housing. We do not know how many of these made fixed energy payments
or paid no energy bills, nor do we know how many received
reimbursements in part or in whole from other agencies for their
energy bills.
Mr. Porter: If this information is not available, on what basis
did the Administration argue that the LIHEAP funding is adequately
targeted to those individuals most in need of energy assistance?
Ms. Bane: States report to us that 70% of their LIHEAP
beneficiaries have incomes of $8,000 or less. Under current LIHEAP
funding levels. States are only able to assist about 20% of those who
are eligible for LIHEAP assistance under the maximum Federal income
standards, and about 29% of those eligible under the stricter
standards imposed by most States. Because funds are so limited.
States have been diligent about targeting benefits to those most in
need, consistent with statutory requirements. Amendments to the
LIHEAP statute enacted in 1994 increased the ability of the States to
target their programs .
Mr. Porter: The 1995 budget justification stated that "little
has been done in a coordinated way to help the low income find ways
to pay their own energy costs or to find other sources of
assistance." It also stated that the program, "does not target well
those low- income households with exceptionally high energy costs in
relation to income" and "does little to help assisted households
achieve independence from the program. " Is the Administration still
of this view, eind if not, why not?
Ms. Bane: Amendments to the LIHEAP statute enacted in 1994
greatly increased the ability of the States to target benefits to
those households with the highest home energy needs or costs, thus
relieving our concerns in this area. States are taking advantage of
this increased authority to better target benefits. We have also
noted that States increasingly are helping make energy more
affordable to low income households by pursuing rate or price
reductions and improving coordination with other programs that help
low income families become self-sufficient.
838
Mr. Porter: Please submit a 22 year historical table 1973-1994
indicating average price by fuel type and by year in constant dollars
per million of British Thermal Units.
Ms. Bane: A table and chart are attached showing prices adjusted
for inflation (using FY 1994 dollars) for the three major heating
fuels - natural gas, electricity, and fuel oil - as well as for a
composite average.
839
Table 2. Average price by fuel type and by year, constant FY
1994 dollars per millions of British Then&al Units*
FiMlTyp*
Catendar Year
1873
1974
1975
1976
1977
1978
1979
1980
1961
1982
1963
ElMblciy
2429
27.13
28i>7
28.05
29.19
28.45
27 J4
2827
29.43
30.85
31.19
Natural Om
4^
427
4.68
5.12
5.71
5.78
6.04
637
6.95
7.89
8.96
RmIOI
5.45
6.51
7.44
737
8.06
7.96
1029
1235
13S4
12.76
11.49
CempoUa Avarag*
9.35
1026
10.91
11.17
11.87
11.71
12i>8
1321
14.34
14.80
15.16
*
Calandar Yaar
FiMtTyp«
1984
1985
1986
1987
1968
1989
1990
1991
1992
1993
FY94
Etectrtctty
31.14
3127
29.13
28.10
27.40
26.44
25.89
25.69
2523
24.80
24.62
Natural Gas
8.67
837
7.83
7.18
6.82
6.70
633
630
6.16
628
6.39
FualOl
11.14
1030
8.10
730
731
7.70
8.68
7.94
7.07
6.74
6.40
Compoala Avaraga
15.49
15.16
1424
13.77
1339
1326
1333
13.06
12.73
12.60
1236
Average Fuel Prices in Constant Dollars
DolarB per mmBTU
Calendar Year
-^Qectridty -^Natural Gas -«-FuetOI -*-Coinpostte
'coafxxit* (all fuela) awraga la nalghtad, basad on the aaomt of cadi fuat (i.e.,
alactricity, natural gaa, ard fual oil) purchased for realdential uaa. Fual pricea Mara taken froa
tables 9.8, 9.9, and 9.11 of the Mcothlv Energy Hevtau (Decaeber 199«, OOE/EIA-OOSS (94/12). Fuel
coats uara converted to dollars par aabtu using conversion factors shoMn in tablea A.2, A.S, and A.9
of the saas iasue of the Wcnthlv Energy Heview.
840
Mr. Porter: Please provide a tcQjle for the record similar to the
one provided last year indicating which states provide special need
assisteuice payments in conjunction with AFDC and what types of
assisteuice payments are provided.
Ms. Bane: Please refer to the accompanying table. It provides
the latest availeUole data on those states that have opted to provide
additional payments to AFDC recipients based on certain eligibility
conditions .
841
SPECIAL NEED ITEMS
No special need items specified in the State standard 23
States
Alabama Georgia Missouri South Dakota
Alaska Idaho Nevada Tennessee
Arizona Indiana New Hampshire Texas
Delaware Kentucky Oklahoma Virginia
D.C. Louisiana Puerto Rico Wyoming
Florida Mississippi South Carolina
Special need items included in the State standard 31
States
Arkansas Kansas New Jersey Rhode Island
California Maine New Mexico Utah
Colorado Maryland New York Vermont
Connecticut Massachusetts North Carolina Virgin Islands
Guam Michigan North Dakota Washington
Hawaii Minnesota Ohio West Virginia
Illinois Montana Oregon Wisconsin
Iowa Nebraska Pennsylvania
Additional/excess cost of shelter, fuel, or utilities 9
States
California Massachusetts Minnesota Pennsylvania
Connecticut Michigan New York Vermont
Maine
Pregnancy allowance 10
States
California Maryland New York Utah
Colorado Nebraska Ohio Wisconsin
Kansas New Mexico
Child care (not related to employment, education, or training
of the parent ) 9
States
Colorado Kansas New Jersey Utah
Hawaii Montana New York Vermont
Illinois
School and/or educational expenses 5
States
Connecticut Iowa Kansas North Carolina
Illinois
Special clothing or clothing replacement 10
States
Connecticut New Mexico Pennsylvania Vermont
Kansas New Jersey Rhode Island West Virginia
Massachusetts New York
Expenses caused by catastrophe or eviction 8
States
Connecticut Kansas North Dakota Virgin Islands
Illinois New York Rhode Island Washington
842
Repair of property, appliances, or furnishings 8
States
California Hawaii Minnesota Vermont
Connecticut Kansas New York Virgin Islands
Special transportation 4
States
Kansas New Jersey Pennsylvania Washington
Special diets 4
States
California Illinois Minnesota Oregon
Telephone or special telephone service 5
States
California Guam Oregon Washington
Connecticut
Guardian, conservator, or personal representative fees 4
States
Iowa Kansas Maine North Dakota
Household equipment or furnishings 6
States
California Minnesota New York Rhode Island
Hawaii New Jersey
Moving and/or storage expenses 5
States
Connecticut New Jersey New York Rhode Island
Kansas
Medical transportation 3
States
California Pennsylvania Utah
Fees and/or deposits 6
States
California Hawaii New York West Virginia
Connecticut New Jersey
Restaurant and/or home-delivered meals 4
States
Connecticut New Jersey New York Washington
Funeral and burial expenses 6
States
Massachusetts New Jersey Washington Wisconsin
Minnesota New York
Temporary shelter 6
States
843
California Illinois New York Rhode Island
Connecticut New Jersey-
Laundry 3
States
California Virgin Islands Washington
Chore services 3
States
California Michigan West Virginia
Nursing care and/or personal services 2
States
Arkansas Virgin Islands
Insurance premiums 2
States
New York North Dakota
Room and board 2
States
New Mexico New York
Personal care items 2
States
New York Pennsylvania
Other 7
States
Colorado Court -ordered services for abused, neglected,
or delinquent children
Guam Basic costs of power, water, LP gas, sewer
Massachusetts Infant benefits
New York Camp fees
Exterminat ion
Additional cost of meals
Shelters for pregnant women
North Dakota Child restraint seats
Essential services
Oregon Minimum wage equalization allowance
Guide dog costs
Washington Home winterization
844
Mr. Porter: For those states that provide payments for
additional/excess cost of shelter, fuel or utilities, please indicate
the average payment, the total amount of payments to LIHEAP
recipients and the corresponding adjustment made in the LIHEAP
payment for individuals receiving assistance under both programs.
Ms . Bane : Included in the accompanying table are those states
that provide an additional payment for shelter, fuel or utilities.
These special need assistance payments are made at state option. We
do not collect data on the average payment made to AFDC families who
are eligible for and receive these payments, or the number of these
families also in receipt of LIHEAP payments.
Based on estimates from the March 1994 Current Population Survey
(CPS) conducted by the Census Bureau, indications are that of the 6.1
million households receiving heating assistance during the period of
October 1993 - March 1994, 32 percent, or 1.95 million households,
also received AFDC payments. We do not know how much those
households received in LIHEAP assistance or whether their LIHEAP
benefits were reduced because they received AFDC payments.
SPECIAL NEED ITEMS
Additional/excess cost of shelter, fuel, or utilities 9
States
California Massachusetts Minnesota Pennsylvania
Connecticut Michigan New York Vermont
Maine
WINTER ENERGY ALLOWANCE
Mr. Porter: According to information provided to the Committee
by ACF last year, Illinois provides an additional AFDC winter energy
allowance. Please indicate the average payment, to total amount of
such payments to LIHEAP recipients and the corresponding adjustment
made in the LIHEAP payment for individuals receiving assistcuace under
both programs .
Ms. Bane: The State of Illinois no longer provides an additional
special need allowance to AFDC families solely for the purpose of
defraying the cost of excess utilities in the winter months.
Mr. Porter: Please provide the same information relative to AFDC
winterization payments in Washington state.
Ms. Bane: Washington State has an energy conservation program.
The State provides an additional payment for home repairs to minimize
heat loss, or increase the efficiency of the home heating system for
AFDC families. The payments can be used for insulation, furnace
repair, storm windows, etc. We have no data on the average payment
received under this provision, or the number of AFDC families who
receive winterization payments in addition to LIHEAP benefits.
LIHEAP - TYPE OF ASSISTANCE
Mr. Porter: Please provide a ten year table indicating the
number of households assisted under the LIHEAP program by type of
assistance. Please also provide a 10 year table indicating the
average household benefit by type.
Ms. Bane: The tables are attached, showing data for the fiscal
years 1984-1993.
845
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U O M
H Oi W
M p^ o:
s 3 u
•i -i
n in
o\
in
t^
in
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a\
VD
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f ■"t
in
(T\
(N
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in
vo
O
00
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m
f
CD
in
■"J"
[^
o>
fN
|2
846
MOM
H B! W
<-i <-* i-t ri
847
LIHEAP - AVERAGE RESOURCES
Mr. Porter: Please provide a table for the record which
indicates the average resources in constant dollars available to
LIHEAP recipients from all sources including income, and federal,
state and local assistance 1979-1994.
Ms. Bane: A table is attached showing constant dollar income
available for LIHEAP recipients for the years 1981-1992. LIHEAP and
its predecessor, the Low Income Energy Assistance Program, known as
LIEAP, did not exist in 1979 or 1980. This data is not yet available
for 1993 or 1994.
Income data that we use for our calculations comes from the March
Current Population Survey conducted by the Census Bureau. As defined
by the Census Bureau, income includes cash assistance received by a
household, such as AFDC and SSI. It does not include estimates of
the value of non-cash income, including non-cash assistance, such as
food stamps or subsidized housing. Accordingly, this table is valid
as it relates to cash income and cash assistance. We are not able to
provide calculations based on non-cash assistance.
848
Average LIHEAP recipient household cash income from March Current
Population Surveys in 1981 constant dollars, calendar years
1981 - 1992
1981 constant
Calendar year dollars
1981 $7,215
1982 $6,690
1983 $6,709
1984 $6,921
1985 $6,623
1986 $6,812
1987 $6,568
1988 $6,383
1989 $6,551
1990 $6,526
1991 $6,366
1992 $6,310
849
CONSTANT DOLLAR VALUE OF BENEFITS
Mr. Porter: Please provide three historical tables for the years
1979-1994 similar to those printed on pages 600-662 of the 1995
hearing volume indicating the constant dollar value of the average
benefit available under the Food Stamps, SSI and AFDC programs.
Please provide similar tables for Social Security benefits as well as
all other major income support programs in which LIHEAP recipients
participate.
Ms. Bane: The tables follow.
850
5 c 8a**s
in <• M
5 1
I ^= si ^ g;ss3S83^!^83Si:ii^§S^S;:i^sd::ss;:9i^^^zR^^|S^i^^E^^^^^ s
^ |: S iC g::J88:!!»S8SS3S!&S^!i;!QRef^RSSSt:D;S8SSSSS8K5!CSm2SS8::$S^::nS^^&&!C 1
I
.5 ■ 5 U « a 'C^o oo cuSoo. -S C— _ 9
aia -^S 4t*flS vvu i^M m-^^^Mp m one ^
• ■ l«CBoaus 'O— — gc ■ u— a o a* aac ■• ■ • « o »£>'<*- S_ E^^^^k^ *"
851
218
TABLE 6-3.— FEDERAL SSI BENEFIT LEVELS
Pn dollanl
Efigibility status
Dtte
aid in-
stitu-
tion
Own household
Household of anottier
Single Couple
^sential
poison
Single Couple
cnential
penon
initial 25.00 130.00 195.00 65.00 86.67 130.00 43J4
Jan. 1974 25.00 140.00 210.00 70.00 9334 140.00 46.67
July 1974 25.00 146.00 219.00 73.00 9734 146.00 48.67
July 1975 25.00 157.70 236.60 78.90 105.14 157.74 ..52.60
July 1976 25.00 167.80 251.80 84.00 111.87 167.87 56.00
July 1977 25.00 177.80 266.70 .89.00 .118.54 177.80 5934
July 1978 25.00 189.40 284.10 94.80 126.27 189.40 .63^0
July 1979 25.00 208.20 31230 104.20 138.80 208.20 ,69.47
July 1980 25.00 238.00 357.00 119.20 '158.67 238.00 79.47
July 1981 25.00 264.70 397.00 132.60 176.47 264.67 88.40
July 1982 25.00 28430 426.40 142.50 189.54 284.27 95.00
July 1983 25.00 30430 456.40 152.50 202.87 304.27 101.67
Jan. 1984 « . 25.00 314.00 472.00 157.00 20934 314.67 104.67
Jan. 1985 25.00 325.00 488.00 163.00 216.67 32534 108.67
Jan. 1986 25.00 336.00 504.00 168.00 224.00 336.00 112.00
Jan. 1987 25.00 340.00 510.00 170.00 226.67 340.00 11334
Jan. 1988 25.00 354.00 532.00 177.00 236.00 354.67 118.00
Jan. 1989 30.00 368.00 553.00 184.00 24534 368.67 122.67
Jan. 1990 30.00 386.00 579.00 193.00 257.34 386.00 128.67
Jan. 1991 30.00 407.00 610.00 204.00 27134 406.67 136.00
Jan. 1992 30.00 422.00 633.00 211.00 28134 422.00 140.67
Jan. 1993 30.00 434.00 652.00 217.00 28934 434.67 -144.67
Jan. 1994 30.00 446.00 669.00 223.00 29734 446.00 148.67
I Cost-of-living adjustments to Federal SS) benefit levels an rounded to the not lower whole dollar
beginning with the increase effective January 1984.
Source: Office of Researduand Statistics, Social Security Adoinistntion.
Regulations specify the criteiia for determining when this re-
duced benefit applies. It does not ^ply to an individual who owns
or rents; buys food separately; eats meals out rather than eating
with the household; or pays a pro rata share of the household's food
and shelter expenses.
In September 1993, 5.3 percent, or about 313,100 SSI recipients,
had their benefits determined on the basis of this "one-third reduc-
tion" benefit standard. Sixty-five percent of those recipients were
receiving benefits on the basis of disability (see table 6-4).
Of the 26 States and the District of Columbia that provide op-
tional supplements to the Federal SSI benefit, 9 States and tiie
District of Columbia provide the same amount of supplementation
for those whose Federal SSI benefit amoimt is determined^on the
basis of the "one-third reduction." Eight States provide a higher
State supplementation for such recipients; in six States the amount
of State supplementation is less; two States provide no supple-
mentation for those recipients; and one Stated supplementation
varies depending upon need.
852
Fiscal year
782
TABIi 18-11.— HISTORICAL FOOD STAMP STATISTICS
Total Federal sperxllng (in
millions) >
Current dol-
lars
Constant
(1993) dol-
lars 3
Average
monthhr
participa-
tion (in mil-
liofls of per-
sons)
Avenge monttihr benefits
(per person)
Current doi-
Uis
Constant
(1993) dd-
lars'
4-persoa
ounmum
nonthhfal-
lotment'
1972* .> $1,871 . $6,242 11.1 $13.50 $45.00 $108
1973 2^11 6,865 12.2 14.60 45.00 112
1974 2,843 7.370 12.9 17.60 45.20 116
19755 4,624 10.922 17.1 21.40 50.10 150
1976 5,692 12,718 18.5 23.90 52.80 162
Transition
quarter 6 U67 3.000 17.3 24.40 52.90 166
1977 5.469 .11.707 17.1 24.70 52.40 166
1978 5.573 10.947 16.0 26.80 52.00 - 170
1979 7 6.995 12.326 17.7 30.60 53.20 182
1980 9.188 14.883 21.1 34.40 55.40 204
1981 11.308 16.824 22.4 39i0 58.50 209
19828 11,117 15,947 22.0 39.20 56.10 233
1983 « 12.733 17.985 23.2 .43.00 60.60 253
1984 « 12.470 16.989 22.4 42.70 58.10 '253
19858 12.599 16,893 21.4 45.00 60.30 264
19868.. 12.528 16,412 20.9 45.50 59.60 268
19878 12.539 15.710 20.6 45.80 57.30 271
19888...„.„ 13.289 16,106 20.1 49.80 60J0 290
19898 13.815 15,664 20.2 51.90 58.60 300
19908 16,512 17,739 21.5 59.00 63.10 331
1991 8 ._ 19.765 20.589 24.1 63.90 65.80 352
19928 23.539 24.027 26.9 68.50 69.90 370
19938 24,806 24.806 28.4 68.00 68.00 375
■Spending fw benefits and administration, including Puerto Rica
'For the ii contiguous States and tht Oistrict of Columbia, as in effect at tilt beginntag of tb* fo-
Cii year in current dollars.
* Constant dollar adjustments were made using ttM overall Consumer f^ict Indei for AH Uitaa Con-
sumers (CPMJ) for administiative costs and the CPMJ 'lood at home" component for benefits.
'The first fiscal year in whidi benefit and eligibility rules ««re. by law, nationaUy uoiform and in-
dexed for inflation.
*The first fiscal year in which food stamps were available nationwide.
•July through September 1976.
'The fiscal year in which the food stamp purchase requirement was eliminated, oo a phased in basis.
■Includes funding for Puerto Rico's nutrition assistance grant; earlier yearr include funding for Puerto
Rico under the regular food stamp program. Participation figures include enroOment in Puerto Rico (aver-
aging 1.4 to li million persons a month under the nutrition assistance giant and higher figures in ear-
lier years). Average benefit figures do not reflect somewhat lower benefits in Puerto Rico under its nutri-
tion assistance grant
Note: Figures in this table have been revised fn» similar tables presented in eartier vanions ol tbis
print to reflect more recent spending information and more precise inflatioa adjustoeata-Xar constant
dollar amounts.
Source: Compiled by the Congressional Reseaich Service.
853
Mr . Porter :
1995 or 1996?
OIL OVERCHARGE FUNDS
Are any oil overcharge funds availeible for either
Ms . Bcuie : According to information provided to us by the
Department of Energy, $5.1 billion in oil overcharge funds have been
distributed to the States since 1981. Of this amount, all but $200
million has already been spent or designated for alloweible purposes .
Two cases remain in court, but eventual settlement amounts, if amy,
and timing are unknovm. No other distributions are planned for FY
1995 or FY 1996.
Mr. Porter: Provide a table for the years 1979-1994 indicating
the average percentage of income spent for home heating for all
households and for all households with incomes at or below 150% of
the poverty income guidelines.
Ms. Bane: The information follows for the fiscal years 1982-
1993. LIHEAP did not exist in 1979, 1980 or 1981. This data is not
yet available for FY 1994 .
Percent of household income spent on residential, space heating, eind
space cooling energy by all, low income, and LIHEAP recipient
households*
Fiscal
Total
Residential
Soace Heatincr
year
"All
Loin
LIHEAP
All
Loin
LIHEAP
1982
4.5
10.7
13.3
-
-
6.8
1983
4.3
14.1
16.1
1.6
5.8
7.0
1984
4.4
13.9
-
1.7
5.9
-
1985
4.1
13.4
15.6
1.6
5.4
6.6
1986
3.9
12.9
15.1
1.4
5.1
6.2
1987
3.4
11.4
13.2
1.2
4.2
5.2
1988
3.4
10.6
13.8
1.2
3.9
5.4
1989
3.3
10.8
13.7
1.1
3.9
5.4
1990
3.1
10.3
13.2
1.1
3.7
5.2
1991
3.2
10.1
12.4
1.0
3.3
4.7
1992
3.1
9.6
11.5
1.0
3.2
4.4
1993
3.3
9.7
12.1
1.1
3.3
4.7
Space Cooling
All Loin LIHEAP
0.4
0.4
1.1
1.0
1.2
1.1
1.1
1.1
0.9
1.0
- indicates that data are unavailable.
*As reported in HHS' annual LIHEAP reports to Congress
Mr. Porter: Provide a similar table indicating the same
information for households with incomes at or below 150% of the
poverty income guidelines, with the exception that the percentage
should be calculated as a percentage of income including all federal,
state and local assistance.
Ms. Bane: Income data that we use for our calculations comes
from the March Current Population Survey conducted by the Census
Bureau. As defined by the Census Bureau, income includes cash
assistance received by a household, such as AFDC and SSI. It does
not include estimates of the value of non-cash income, including non-
cash assistance, such as food stamps or subsidized housing. The
information follows :
854
Percent of household income spent on residential, space heating, and
space cooling energy by all, low income, and LIHEAP recipient
households*
Fiscal
Total
Residential
L Scace Heatina
SDaC(
e Coolina
vear
"All
Loin
LIHEAP
All
Loin
LIHEAP
All Loin LIHEAP
1982
4.5
10.7
13.3
-
_
6.8
_
_
_
1983
4.3
14.1
16.1
1.6
5.8
7.0
-
-
-
1984
4.4
13.9
-
1.7
5.9
-
-
-
-
1985
4.1
13.4
15.6
1.6
5.4
6.6
-
-
-
1986
3.9
12.9
15.1
1.4
5.1
6.2
0.4
1.1
1.0
1987
3.4
11.4
13.2
1.2
4.2
5.2
0.4
1.0
1.4
1988
3.4
10.6
13.8
1.2
3.9
5.4
0.4
1.2
1.3
1989
3.3
10.8
13.7
1.1
3.9
5.4
0.4
1.1
1.1
1990
3.1
10.3
13.2
1.1
3.7
5.2
0.4
1.1
1.1
1991
3.2
10.1
12.4
1.0
3.3
4.7
0.4
1.1
1.2
1992
3.1
9.6
11.5
1.0
3.2
4.4
0.4
0.9
0.9
1993
3.3
9.7
12.1
1.1
3.3
4.7
0.4
0.9
1.0
- indicates that data are unavailable .
*As reported in HHS' annual LIHEAP reports to Congress
FUEL CONSUMPTION/EXPENDITURES
Mr. Porter: Please provide a table showing fuel consumption,
fuel expenditures and energy burden by fuel type for all households,
low income households and LIHEAP recipient households 1980-1994. For
the purposes of this table, the income measurement used to calculate
energy burden should include the value of all federal, state and
local assistance. Please provide a graph showing the same data.
Ms . Bane : Attached are excerpts from Appendix E of our FY
1993 Annual Report to Congress, showing the data requested.
Income data that we use for our calculations comes from the
March Current Population Survey conducted by the Census Bureau. As
defined by the Census Bureau, income includes cash assistance
received by a household, such as AFDC and SSI. It does not include
estimates of the value of non-cash income, non-cash assistance, such
as food stamps or subsidized housing. Accordingly, the information
provided is valid as it relates to cash income, including cash
assistance. We are not able to provide calculations based on non-
cash assistance.
855
LIHEAP Report to Congnss .Appendix E- Fiscal Year 1993
Tabic E-2 presents information on the series of surveys that were used to prepare this
Appendix. The reader should note that the in-home interview dates lag behind the analysis
year for the years 1979 through 1985. In those years, the energy supplier survey included
data from the year following the in-home interview. In all cases, the analysis year coincides
with the end of the energy consumption history.
Table E-2. Data used for the study of low income home energy trends
Analyst* yaar^
197B
leei
ises
1965
1987
1990
Fyi993«
Sufvay*
NIECS
RECS
RECS
RECS
RECS
RECS
RECS
IntarvMwdat^
W78
OW)
amz
9/84
«B7
9/90
t
Billing data*
4/78.3/79
4/00-3/81
4/82.3/83
4/84-3/85
1/87-12^7
1/90-12/90
ia«2-9/93
Incom* data
197»I'
laeiZ'
leeaT
19652'
19672'
1990^
1903*
SampI* siza
4.061
6.0S1
4.724
5.682
6.229
5.095
5.095
^Iteprasanls Iha yaar Ihat Includai Via laat month tor wtWdi billing data war* collactad Iram lual auppliara.
*T)ia 1903 Raaidarrtlal Enargy Consumptnn Sunay (RECS) data wiH ba availabia m aarty 1995.
*Sunray« induda tha National Intwim Enargy ConsumpVon Survay (NIECS) and tha RECS.
*Month m which housahoM iiitaimaoi bagan.
i^Jata >xo)ac>ad (rom tha 1990 RECS uaing micraainiulation mathods to modal changai in waathar and pricaa.
*Tima parted in which rasidarTtial anargy bills wara collactad from lual tuppliart.
'Maan mcoma computad using calar>dar yaar data Irom tha March Currant Population Survay (CPS).
■Ei^anditira data wara dalatad to match availabia Incoma data feam tha March 1903 CPS.
Trends in consumption, expenditures, and burden
Since 1979, there have been important changes in the fuels used by households, the amount
of energy consumed for specific residential end uses (i.e., home heating, water heating, home
cooling, and other appliances), total residential energy expenditures, and the burden that
residential energy expenditures represent for low income households. In this section, data
that illustrate these changes are presented.
Figure's E-1 and E-2, on ttie next page, furnish information on the fuel choices by low income
households. Figure E-1 shows that low income households have increased their use of
electricity as a main heating fuel, from 10.4 percent in 1979 to 20J percent in 1990, wliile ~-
they have reduced their use of fuel oil as a main heating fuel, from 20.0 percent in 1979 to
12.6 percent in 1990. In addition, the use of wood or coal as a main iieating fuel (included
under 'other^ peaked in 198S but declined substantially by 1990.
Figvrc E-2 shorn that low income households have increased their use of electric central air-
conditioning systems from 7 percent in 1979 to 20 percent in 1990.' The proportion of low
income, households without any air conditioning fell from 63 percent in 1979 to 47 percent in
1990. Other thii^ being equal, the increased inddenoe of air-oonditioning equipment among
low income households can be expected to increase home cooling expenditures.
'This compare* to an iaaeaie from 27 peroeni to 39 percent for all bousebolds.
856
LIHEAP Report to Congress
•Appendix £•
Fiscal Year 1993
Figum E-1. Main heating hiel for households with incomes at or below 150 percent of the
poverty income guidelines, 1979 to 1990
Percent of Households
Analysis Year
Figure E-Z Main air conditioning type for households with incomes at or t>elow 150
percent of the poverty hcome guidelines, 1979 to 1990
Percent of Households
100%
80%
60%
.
--
--
;: .
1^-
■HgHj
40%
1
1881
--
■iai
--
laM
1
1987
20%
0%
1
1879
ftl
1983 1865
-■
1980
1 NoneO
{ Gas Central ACa
iFlectric Central AC IS
1 Electric Room AC ■
e^8
15
7.3
28.7
5&6
^£
1^9
29.3
56.4 1 5i2
0.1 0.7
laS 1 16.4
30 1 27.6
40.6
0.4
17
33
47
0.1
10.7
335
Analysis Year
857
LI HEAP Report to Congress
•Appendix E-
Fiscal Year 1993
Figures E-3 and E-4 furnish information on the trends in mean energy consumption and
expenditures for low income households from 1979 to FY 1993.
Figure E-3 shows that low income households substantially reduced their energy consumption
between 1979 and 1983. Examination of the componente of energy consumption indicates
that the reduction was the result of reductions in home heating consumption. Since 1983.
mean energy consumption has fluctuated from year to year, corresponding approximately to
changes in weather, though with a slight downward trend.'
Figure E-3. Mean residential energy consumption by end use for households writti
incomes at or below 150 percent of the poverty income guidelines, 1979 to FY 1993
mmBTUS
Analysis Year
Figure E-4, on the next page, shows that residential energy expenditures for low income
households increased rapidly from 1979 to 1983, despite reductions in consumption. —
Examination of the components of energy expenditures indicates that the greatest increases
were in home cooling and other residential expenditures, while increases in home heating
expenditures were more moderate. Since 1985, mean energy expenditures have remained
relatively stable, remaining between $900 and $1,000 for the years 1985 through 1990, with a
moderate rise to $1,028 in FY 1993. Mean home heating expenditures fell from $399 in 1985
to $318 in 1990, and then rose moderately to $353 in FY 1993. Mean home cooling
expenditures rose continuously from $51 in 1985 to $73 in FY 1993.
The numbers presented in (his (able are no( directly comparable to (he statistics (hat appear in Appendix B.
In this figure, electricity BTUs have been adjusted (o be comparable (o BTUs for other fuels. This adjustment
procedure is used account for BTUs lost in the generation and transmission of electhd(y (o (he housing unit and
thereby fymisb a bet(er picture of changes in energy eiEdency over time.
858
LI HEAP Report to Congress
-Appendix E-
Fiscal Year 1993
Figure E-4. Mean residential energy expenditures by end use for households with
incomes at or below 150 percent of the poverty income guidelines, 1979 to FY 1993
Current Dollars
Analysis Year
The next series of charts, E-5a through E-5c, furnishes information on energy burden for low
income households. Three different energy burden summary statistics are presented in the
three charts - mean group energy burden, mean individual energy burden, and median
individual energy burden. Each of the statistics offers somewhat different information and
gives somewhat different results.* All three are valid from a statistical p)erspective. The
statistics are defined as follows:
■ Mean Group Burden: Computed as the ratio between mean energy expenditures
and mean income for low income households. In this analysis, energy expenditures
are computed from the RECS. while income is computed from the CPS.
■ Mean Individual Burden: Computed by first computing the energy burden for each
individual low income household from the RECS and then taking the mean of the
energy burden statistic for all low income households.
■ Median Individual Burden: Computed by first computing the energy burden for
each individual low income household from the RECS and then finding the median
of the distribution of household-level energy burdens for low income households.
Mean group burden is the burden statistic that has been used in the series of LIHEAP
Annual Reports to Congress. Recent technical research has furnished additional insights on
the range of alternative burden summary statistics. (See Appendix B for additional
information on the interpretation of alternative burden statistics.)
*Th^ mean is the sum of all values divided by the iiumber of values. The median is the value at the midpoint
in the distribution of values.
859
LI HEAP Report to Congress
-Appendix E-
Fiscal Year 1993
Figure E-5a shows the time series for mean group energy burden^ by end use for low income
households. Mean group home energy burden was 7.7 percent of income in 1979. It grew to
8.0 percent in 1981 and then fell considerably after 1981. In FY 1993. home energy burden
was 4.7 percent. Mean home energy burdens declined because mean home energy
expenditures for low income households fell, while mean incomes for low income households
rose. By comparison, mean group residential energy burdens were roughly stable from 1979
to 1985, and then fell from 1985 until FY 1993.
Figure E-5a. Mean group residential energy burden by end use for households with
incomes at or tielow 150 percent of the poverty income guidennes, 1979 to FY 1993
Percent of Income
■
1979
1981
1963
1085
1067
1000
1003
Total
i5.e%
17.1%
14.0%
14.8%
13.1%
11.4%
11.3%
OtherOi
7.9%
9.1%
82%
8%
7.7%
6.8%
0.6%
Cooling ■;
0.5%
0.8%
0.5%
0.8%
0.0%
0.8%
0.8%
HaaUngSli
7.2%
7.2%
5.0%
0%
4.5%
3.8%
3.9%
Analysis Year
Tables E-5b and E-5c show how the mean individual and median individual energy burden
statistics compare to the group energy burden statistics. Table E-5b shows the trends in
residential energy burden for low income households, and Table E-5c shows the trends in
home energy burden for low income households.
In FY 1993, the mean individual residential energy burden was 16.2 percent, significantly
higher than the median individual burden of 11.2 percent and the group burden of 11 J
percent. In FY 1993. the mean individual home energy burden was 6.9 percent, the median
individual burden was 4.6 percent, and the group burden was 4.7 percent. (See Appendix B,
page 52, for information on how to interpret the alternative burden summary statistics.)
There are both similarities and differences in the trends for the three summary statistics. For
all three statistics, the highest home energy burden occurred in 1981, while the lowest
occurred in 1990. However, in 1990 both the mean individual home energy burden and
median individual home energy burden were about 35 percent lower than the 1981 peak
value, while the mean group home energy burden was 42 percent lower than the 1981 peak.
This difference arises because home energy burdens for the lowest income households have
not fallen as fast as those of the average low income household.
860
LIHEAP Report to Congress
-Appendix E-
Fiscal Year 1993
Figure E-5b. Comparison of mean group, mean individual, and median individual
residential energy burden for houseiiolds with incomes at or below 150 percent of the
poverty income guideline^;, 1979 to FY 1993
Percent of Income
Analysis Year
Figure E-Sc. Comparison of mean group, mean individual, and median individual home
energy burden for households with incomes at or below 150 percent of the poverty
income guidelines, 1979 to FY 1993
Percent of Income
Analysis Year
861
PLANNING AND ADMINISTRATIVE COSTS
Mr. Porter: Under the current authorization, States are
allowed to retain up to 10% of their allocations for planning aind
administrative costs . Please provide a table for the record
indicating for the two most recent years for which data are
available, the allocation for each State, the amount the State
reserved for planning and administrative expenses, and the percentage
of the allocation reserved for such purposes.
Ms. Bane: Tables for FY 1993 and FY 1994 are attached. The
LIHEAP statute allows States to spend up to 10% of funds payable,
which may include leveraging incentive awards, or oil overcharge or
State or other funds added to their block grant allocation. State
funds added to the program may all be spent on administrative and
planning costs, without regard to the 10% limit. Accordingly, some
States may exceed the 10% limit. However, we have verified in each
case that the States' administrative and planning costs did not
exceed 10% of their funds payable.
Note: In FY 1993, the 10% limit was calculated after deducting any
LIHEAP funds transferred to another HHS block grant program.
Beginning in FY 1994, States can no longer transfer LIHEAP funds to
another block grant .
862
FY 1993 LIHEAP administrative costs as a percentage of net allotments minus block grant transfers,
by state
Net
Transfers
Administrative
Admin. Costs
State
allotment
costs
/Allot-Transfers
Total
$1,307,182,655
$41,181,973
0
500,000
$125,341,683
10%
Alabama
11,280,337
764,656
7%
Alaska
4,717,311
0
622,312
13%
Arizona
4,834,769
0
559,613
12%
Arkansas
8,655,748
865,575
830,352
11%
California
60,489.538
6,048.954
5,743,219
11%
Colorado
21,218,391
1.060.920
2,082,050
10%
Connecticut
27.680,140
0
2,765,174
10%
Delaware
3.674,006
0
342,938
9%
Dist. of Col.
4,298,771
0
472,736
11%
Florida
17,935,527
1,793.552
1,588,364
10%
Georgia
14.191,481
1,419,148
1,142,403
9%
Hawaii
1,429,160
0
142,916
10%
Idaho
8,154,122
815.412
763,467
10%
Illinois
76,613,847
0
7,113,643
9%
Indiana
34,688,598
0
3,381,195
10%
Iowa
24,584,274
0
2,081.978
8%
Kansas
11,275,405
1,127.540
1.163.502
11%
Kentucky
18,051,829
0
2,448.448
14%
Louisiana
11,589,893
1.158,989
1.043,090
10%
Maine
17,332,318
0
1,932.717
11%
Maryland
21,194,333
300,000
2,774.442
13%
Massachusetts
55,359,810
0
5.719,560
10%
Michigan
72,601,649
1 ,900,000
5,300,000
7%
Minnesota
52,403,709
5,240,371
5,261,460
11%
Mississippi
9,714,872
0
971,487
10%
Missouri
30,602,562
0
3,179,726
10%
Montana
8,238,065
823,814
823,240
11%
Nebraska
12,157,867
1,215,786
1,215,786
11%
Nevada
2,576,577
208,079
314,599
13%
New Hampshire
10,480,307
0
970,333
9%
New Jersey
51,321,226
5,100.000
6,400,000
14%
New Mexico
6,369,423
0
625,022
10%
New York
167,660,542
0
17,847,384
11%
North Carolina
24,477,911
766,871
2,715,971
11%
North Dakota
9,365,661
936,566
1,025,941
12%
Ohio
67,776,399
0
4,473,578
7%
Oklahoma
9,678,967
0
750,042
8%
Oregon
16.445,150
1,644,515
1,142,550
8%
Pennsylvania
90,152,177
0
8,231,761
9%
Rhode Island
9,076,024
0
1,178,946
13%
South Carolina
9,009,177
0
983,870
11%
South Dakota
7,292.137
729,213
589,642
9%
Tennessee
18.286.116
1,445,400
347,168
2%
Texas
29.861.240
0
2,985,983
10%
Utah
9.693,988
969,399
695,844
8%
Vermont
7.855,363
0
785,536
10%
Virginia
25,817,067
0
2,785,398
11%
Washington
25,953.920
2,594,388
2,494,991
11%
West Virginia
11.946.266
897,165
1,104,910
10%
Wisconsin
47.170,863
1 ,600.000
4,264,472
9%
Wyoming
3.947,822
20,316
397,268
10%
863
FY 1 994 LIHEAP administrative costs as a percentage of net allotments, by state
Total
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Dist. of Col.
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Islsnd
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total
net
Administrative
Administrative
allotments
costs
costs/ net
allotments
$1,695,118,203
$151,166,664
9%
12,054,122
$1,160,000
10%
5,178,324
$650,974
13%
5,168,464
$585,069
11%
9.253,168
$909,609
10%
64,620,824
$6,697,794
10%
22,682,886
$2,280,593
10%
34,985,844
$2,933,647
8%
4,214,066
$421,234
10%
4,595.473
$447,298
10%
19,173,438
$1,917,343
10%
15.170,978
$1,289,533
8%
1,527,801
$152,780
'10%
8,716,921
$878,488
10%
93,921,206
$8,191,488
9%
39,407,935
$4,197,453
11%
34,335,165
$2,918,489
8%
12,058,203
$1,205,343
10%
24,638,883
$2,491,105
10%
12,390,034
$1,228,622
10%
26.365,346
$2,217,231
8%
29,288,356
$2,778,217
9%
73,053,759
$6,767,597
9%
126,360,604
$7,692,723
6%
93.420.464
$8,114,284
9%
10,379,303
$1,879,756
18%
32,714,753
$3,264,875
10%
8,806,656
$814,616
9%
12,997.004
$1,299,700
10%
2,754,413
$297,095
11%
14,351,322
$1,590,464
11%
61,739,044
$6,500,000
11%
6,786,674
$680,904
10%
240,645,272
$24,444,369
10%
26,242,725
$3,074,630
12%
16,546.795
$1,664,255
10%
96,381,778
$5,169,927
5%
10,276,943
$818,533
8%
17,570,961
$1,863,419
11%
116,857,601
$8,467,367
7%
11,422,761
$1,130,000
10%
9,630,991
$1,025,447
11%
9,493,377
$736,244
8%
19,548,225
$301,596
2%
31,922,264
$3,192,226
10%
10,334,889
$785,094
8%
13,196,404
$1,319,640
10%
28,277,434
$2,833,184
10%
27,788,023
$2,527,071
9%
16,503,089
$1,650,308
10%
65,146,937
$5,287,000
8%
4,220,301
$422,030
10%
864
LIHEAP CARRYOVER
Mr. Porter: Under the current law, a grantee may carry over up to 10% of its
allocation from one year to the next. For 1993 and 1994, what percentage of total
LIHEAP funding was carried over into the subsequent year by grantees?
Ms. Bane: The LIHEAP statute allows States to carryover 10% of funds payable,
which may include leveraging incentive awards, oil overcharge. State or other funds
added to the block grant. In FY 1993, a total of 38 States carried over $37,791,351
to the following fiscal year, which was 2.1 % of the total funds payable to the States
(funds payable include block grant allocations, leveraging incentive awards, oil
overcharge funds, and State and other funds added to the program). In FY 1994, a
total of 37 States carried over $61,098,141 to the following fiscal year, which was
3.4% of total funds payable.
HEAD START INCREASE
Mr. Porter: Ms. Bane, as you know, the Head Start program has grown
enormously in the past 5 years, from $1.5 billion in 1990 to $3.5 billion in 1995. And
you're requesting another $400 million increase for 1996. Can you tell us
approximately how many kids are being served in the program today versus 5 years
ago?
Ms. Bane: In FY 1990, Head Start served 540,930 children and families. In FY
1995, we estimate that 752,000 children and families will be served by the program
and, in FY 1 996, if the President's request is approved, that 784,000 children and
families will be served.
TEACHER SALARIES
Mr. Porter: Can you tell us what portion of the $2 billion increase in that period of
time has gone towards increasing teacher salaries, as opposed to increasing the number
of kids served.
Ms. Bane: Of the approximately $2 billion funding increase appropriated by the
Congress for Head Start since FY 1990, approximately $799 million has been used to
increase enrollment by 21 1,000 children and families. We do not know exactly how
much has been used for teacher salaries over that period. While one-half of quality
increases must be used for teacher salaries, portions of the remaining quality increases
as well as cost of living increases also may be used for teacher salary increases.
HEAD START APPROPRIATION
Mr. Porter: Provide for the record a chart showing the Head Start appropriation for
the past 1 0 years along with the number of children served each year:
Ms. Bane: The data follow:
Funding Enrollment
FY 1986 $1,040,315,000 451,732
FY 1987 $1,130,542,000 446,523
FY 1988 $1,206,324,000 448,464
FY 1989 $1,235,000,000 450,970
FY 1990 $1,552,000,000 540,930
FY 1991 $1,951,800,000 583,471
FY 1992 $2,201,800,000 621,078
FY 1993 $2,776,286,000 713,903
FY 1994 $3,325,728,000 740.493
FY 1995 $3,534,429,000 752,000 (est.)
FY 1996 $3,934,728,000 784,000(est.)*
* The President's FY 1 996 request
865
HEAD START GRANTEES
Mr. Porter: Given the rapid growth of Head Start in the past several years, to what
extent is the Department concerned about the ability of local grantees to effectively and
efficiently program the additional funds?
Ms. Bane: The Department believes that Head Start grantees have done quite well
at absorbing the funding increases which have been made available to them in the last
several years. Much of this increase was used to implement the recommendations of
the Secretary's bipartisan Advisory Committee on Head Start Quality and Expansion
through such efforts as increasing the low salaries and fringe benefits of current Head
Start staff or hiring additional staff in much needed areas such as family workers.
These funds have been absorbed by grantees with little difficulty. That portion of
grantees' increases which was used to increase enrollment, approximately 40% of the
funding increases since FY 1990, has resulted in some problems as grantees, in
implementing expansion, need to find additional classroom staff and quality facilities.
We have recognized this and allowed grantees, in the last several years, to take up to a
year, if necessary, to fully implement expansion. This additional time has allowed
grantees to expand in a strategic and well planned manner that has minimized program
disruption or difficulties by assuring that each grantee was fully ready before it was
expected to serve additional children and families. It is our judgment that this has
allowed grantees to absorb their expansion increases in an efficient and effective
manner.
Mr. Porter: Are there management problems at the local grantee level that concern
you?
Ms. Bane: It is our judgment that the vast majority of Head Start grantees do not
have any significant management problems. We have made management training a
priority in the last several years, in recognition of the rapid change which most Head
Start grantees have experienced. We have, consistent with the recommendations of
the Secretary's Advisory Committee, directed training and technical assistance
resources in this area, and have held a management institute directed at helping
grantees appreciate and improve their management capacities. Head Start has also
provided management training to over 200 Head Start directors through a cooperative
venture with the UCLA School of Business and the Johnson & Johnson Company. We
plan on training another 100 directors this summer.
We will continue to make management a top priority of this agency so that we can
develop in all Head Start grantees a management structure which will assure they are
able to provide quality Head Start services to their communities.
Mr. Porter: Can you tell the committee how the requested increase of $400 million
would be used?
866
Ms. Bane: The FY 1996 proposed funding increase is $400,299,000. These
funds would be used as follows:
A cost-of-living increase of 2.7% $ 91,530,000*
Quality Improvement $ 76,325,000*
Enhanced training and technical $ 8,000,000*
assistance
0-3 Program Expansion $ 51,360,000*
(Increase of 7,000 children)
3-5 Program Expansion $112,700,000
(Increase of 25,000 children)
Conversion of 22,000 current $ 60,384,000
part-day/part-year slots to
full-day /full-year
* Statutorily mandated
HEAD START CLASSES
Mr. Porter: In an effort to meet the needs of working families, and to provide more
services to children. Head Start has expanded more of its part-day classes into full-day
classes and some of its part-year programs to full-year programs. What is the
breakdown of Head Start classes by part-day versus full-day and part-year versus full-
year?
Ms. Bane: Approximately 4% of the children served in Head Start in FY 1 994 were
served in a full-day full-year option. Another 3% were served in a part-day full-year
option. Thus, 97% of children attend part-year programs.
Mr. Porter: What is driving the need for these expanded programs?
Ms. Bane: Most Head Start programs operate 32-34 weeks per year. Head Start
programs expanding the number of hours per day and days per year in which they
provide Head Start services are doing so for two primary reasons. The expansion of
weeks per year is being done in recognition of the fact that additional time for children
and families in Head Start is beneficial to families and communities. It also reduces the
time which children spend on summer breaks between Head Start years or the time
children spend between leaving Head Start and entering kindergarten. Many Head Start
agencies believe that three or more months is too long a hiatus for young children.
The movement towards full-day services is done in recognition of the fact that more
than 1/3 of Head Start children live in households where the head-of-household is
employed full-time and that expected changes to AFDC are likely to increase this
number as new Head Start families enter the work force or are in job training. Many of
these families are in need of full-day full-year child care. Many Head Start programs
have decided to meet this need by directly providing full-day Head Start services to the
children of working parents, thus providing these children with child development and
child care services at the same site.
Mr. Porter: What additional services, if any, are being provided in the full-day and
full-year programs?
Ms. Bane: The extra weeks in which Head Start services are provided in a full-year
option are the same, in terms of the scope and quality of services, as those that are
provided to children and families throughout the year. That is, it is simply more Head
Start. Full-day sessions, which can run as long as 9-10 hours, require programs to
develop lesson plans which will assure the provision of quality services throughout the
867
period of the day that the child is in Head Start, but recognize that a nine or ten hour
day must be configured very differently than a 3 1/2 hour day in terms of the manner in
which staff interact with children.
Mr. Porter: Do you foresee expanding all Head Start programs into full-day or full-
year programs, and why or why not?
Ms. Bane: We would not foresee expanding all Head Start programs into full-day
options, as full-day is only necessary when a Head Start child's parents are either
working or in job training. However, in that more than 1/3 of Head Start families have
a head of household employed in a full-time job, the Department believes that Head
Start should be one of the major players in the provision of full-day child care services
to low-income working families, but by no means the only one. Each Head Start
program, in the context of the needs of its community and the programs that are
available to meet those needs, must determine to what extent it should be providing
full-day services.
Mr. Porter: What would be the costs of making such a change?
Ms. Bane: The Department estimates the per child costs in a program which decides
to offer full-day, full-year Head Start are approximately 1 .6 times as great as the per
child costs for a part-day part-year program. The costs of adding additional weeks is
somewhat less than current per week costs as some Head Start costs are unaffected by
an increase in the program year (i.e., the salaries of full-year staff, some of the
occupancy costs, etc.) Currently, most Head start programs operate 32-34 weeks per
year.
Mr. Porter: How much money are Head Start grantees currently spending on facilities
costs of various kinds?
Ms. Bane: We estimate that approximately 8% of the funds allocated each year to
Head Start grantees are used to cover occupancy costs. In FY 1 995 that would be
approximately $270 million.
SOCIAL SERVICES BLOCK GRANT
Mr. Porter: The 104th Congress has shown significant interest in combining various
human service programs into large block grants to States. The Social Services Block
Grant already is a broad-purpose block grant with few Federal requirements. Are there
any currently existing categorical social services programs that you believe could be
folded in the Social Services Block Grant?
Ms. Bane: The Social Services Block Grant is used to provide a wide range of
services and the Administration will continue to look at our discretionary programs to
determine if any of them can be administered more efficiently.
Mr. Porter: If new block grants are created in the areas of cash welfare, child care,
child welfare and child nutrition, resulting in new sources of flexible funds for States, is
there still a need for the SSBG, or could its funds be divided among the other proposed
block grants?
Ms. Bane: The Administation believes that it is premature to comment on the
advisability of reconfiguring programs based on proposed block grants.
Mr. Porter: Based on 1 5 years of experience in administering the Social Services
Block Grant, what lessons have you learned that could be helpful to Congress in
designing additional block grants?
Ms. Bane: Because there are no requirements for program assessments, there is
little information available on the Social Services Block Grant to indicate how the funds
have been spent or what results the block grant has produced. According to the Ways
and Means Green Book, the real value of the Social Services Block Grant in constant
868
1994 dollars has declined from $5 billion in 1981 to $2.8 billion in 1995.
Mr. Porter: In the Omnibus Budget Reconciliation Act of 1993, Congress
authorized an additional $1 billion for the SSBG, to be used in designated empowerment
zones and enterprise communities. These funds were included in the FY 1994
appropriations act. Of the $1 billion provided in FY 1994 for SSBG in empowerment
zones and enterprise communities, what amount has been obligated? Will all of the
appropriated funds be used?
Ms. Bane: A total of $640 million has been obligated. In accordance with the
statute, the remaining $360 million will be obligated on October 1, 1995.
Mr. Porter: How are the designated zones and communities using or planning to use
their special SSBG funds? What is your source of information about the use of these
funds?
Ms. Bane: The Zones and Communities produced multi-year strategic plans in June
1 994 which outline activities and services to be financed with the SSBG and other
public and private funds over ten-year periods. Each plan includes a wide variety of
activities for revitalizing the highly distressed cenus tracts which make up the
designated Zones and Communities. Examples of activities these plans proposed to
fund with the Social Services Block Grant include:
o business development activities
o assistance for small and micro-business including the establishment of
revolving loan funds and business incubators
o job training and placement activities
o development and rehabilitation of low-income housing
o transportation services
o education programs for adults and children
o community schools
o child care services
o drug abuse prevention and treatment programs
o community-based crime and violence prevention activities
Mr. Porter: The Community Services Block Grant is unlike block grants currently
being considered in the 104th Congress, in that States are required to pass through at
least 90 percent of their allotments to local "eligible entities," which are primarily
Community Action Agencies.
Given the current interest in devolving decision-making authority to States
through flexible block grants, would you advocate changes in the Community
Services Block Grant to increase the States' authority over these funds?
Ms. Bane: No. The unique features of the CSBG are that the planning and the
administration of the services and activities are mandated at the local level in
partnership with States. Federal funding to "eligible entities" provides the necessary
resources to forge strong partnerships with public
agencies and private organizations at the community level.
These community-based organizations have developed the expertise over the past
31 years to plan and administer programs and the ability to leverage federal, state, and
private resources to assist low-income elderly and poor to achieve self-sufficiency, to
promote community participation and advocacy in the interest of the poor.
Mr. Porter: The Reagan and Bush Administrations both advocated elimination of
the CSBG, maintaining that States could use the Social Services Block Grant to fund
identical activities. Particularly in light of the current movement toward broad scale
block grants and maximum State flexibility, please comment on this idea.
Ms. Bane: The FY 1996 Budget continues both the Social Services Block Grant
and the Community Services Block Grant as separate programs because they are used
869
for distinct purposes.
Mr. Porter: The Administration, in its FY 1996 budget proposal, requests no
continued funding for several small categorical programs currently administered in
connection with the CSBG, except for community services for the homeless and the
Community Food and Nutrition Program. Why did you single out community services
for the homeless and the Community Food and Nutrition Program for continued funding
in FY 1996, while proposing to terminate all other categorical CSBG-related activities?
Ms. Bane: The Emergency Homeless, and Community Food and Nutrition programs
are both programs that provide funds to States to help meet the nutrition needs of low-
income families and to provide services to help homeless or about-to-become homeless
to help them make the transition out of poverty.
Mr. Porter: If you assume that States will continue the currently categorical
activities with the CSBG allotments, why didn't you propose to increase CSBG funding
by the amounts currently provided to the categorical programs?
Ms. Bane: This reflects the tight budget constraints we faced this year in planning
our budget.
TITLE IV-E PROGRAM
Mr. Porter: As you know, the House passed an FY 1995 rescission bill that would
limit States, in FY 1995, from receiving more than 1 10 percent of the amount received
in FY 1994 for administrative costs under Title IV-E foster care and adoption assistance.
This would result in a rescission of an estimated $150 million in FY 1995 appropriation.
This action was based on the Committee's ongoing concern about escalating
administrative costs under Title IV-E. Please explain the reasons for the rapid growth in
administrative costs for foster care and adoption assistance. What are the factors
fueling this growth, and do you expect these factors to continue?
Ms. Bane: Several factors have entered into this growth and some of them have
changed over time.
a. Children have been coming into care in greater numbers and a greater
percentage are being found eligible for title IV-E: the total estimated foster care
population at the end of 1988 was 309,000; at the end of 1993, it was
444,000, an increase of 43.7 percent.
b. Congress provided that this account should cover expenditures for child
placement services, case management, training and computer systems as well
as eligibility determinations.
c. A key factor in the recent increase from FY 1994 to FY 1995 is expenditures
for the State Automated Child Welfare Information Systems (SACWIS). States
have begun to develop and implement expanded and improved program
monitoring and operating systems in accordance with congressional
amendments to the IV-E program.
We expect continued increases, due to continuing caseload increases, SACWIS,
and inflation.
ADMINISTRATIVE COSTS
Mr. Porter: Under current law, with no cap on administrative costs, do you project
continued growth in this area and at what rate?
Ms. Bane: We expect continued increases, but not at the same rate that they have
in the past, except for SACWIS which allows a higher match rate for development
costs, but only through 1996. In FY 1995, we estimate the increase at 19.7%,
declining to 13.6% in FY 1996.
870
RESCISSION IMPACT
Mr. Porter: What impact would the rescission have on State child welfare agency
operations in FY 1995?
Ms. Bane: The rescission would limit the FY 1995 Federal payment to States for
child placement services and administrative costs (including training and automated
systems) to 1 10 percent of the FY 1994 payment.
In 1993, Congress provided that through FY 1996, for every dollar states spend to
computerize their child welfare systems, the Federal government will reimburse 75
cents. Using the enhanced match States may build tracking systems to monitor where
children are placed while in foster care, to know what services these children receive,
and to track both the costs and results of these services. In addition, a tracking system
could help workers from processing paper and work with families. The 10 percent cap
on child placement services and administrative costs would force a State to: a)
terminate its project, b) scale it back, or c) make up the lost Federal funds with State
dollars. Currently, 41 States have received approval to plan and/or implement an
automated system.
In addition, the 10 percent limitation on child placement services and administrative
costs would impede States ability to train workers and foster parents, reduce caseloads,
and strengthen case planning for permanency for abused and neglected children.
It should be noted that some States already have exceeded this limitation.
CRIME BILL PROGRAMS
Mr. Porter: You're requesting $105 million in 1996 for programs authorized by last
year's Crime Bill. This is an increase of $78,400,000 over the 1995 appropriation. As
you know, the House rescission bill that we recently passed proposed to rescind
virtually all of the 1995 appropriation for these programs (-$25.9 million). In addition,
the House has passed a series of bills this session that are designed to change the
Crime Bill passed last year; those bills are pending in the Senate. Why are you
requesting this rather large increase for programs authorized by last year's Crime Bill?
Ms. Bane: These amounts were authorized by the Crime Bill in response to the
need to address the serious crime problems in this country. It is important that crime
problems be addressed at the community level and that prevention be a critical part of
that effort.
Mr. Porter: Couldn't many of these activities that you are proposing to fund be
funded under some existing program, rather than starting up brand new programs at a
time when we are trying to consolidate and simplify and streamline?
Ms. Bane: The Crime Bill was passed in response to a need to balance crime
prevention and law enforcement efforts in communities. The bill included a strong
package of crime prevention programs intended to focus activities in the communities
on fighting crime by providing additional funding from the Trust Fund, a source of
funding that can not be used for anything else.
Mr. Porter: For example, you're proposing to spend $15 million for battered
women's shelters under the Crime Bill. You're also requesting $32.6 million under the
Family Violence Prevention and Services Act. Why do we need two separate programs
for this purpose?
Ms. Bane: The Violent Crime Control and Law Enforcement Act of 1 994
reauthorized the Family Violence Prevention and Services Act at $50 million for FY
1 996, and permitted funding for this program to be derived from the Violent Crime
Reduction Trust Fund.
Pursuant to this reauthorization, the FY 1 996 President's Budget requests a total of
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$47.6 million for the Family Violence Program. The Administration proposes funding
this program by using $32.6 million from general discretionary funding, and $15 million
from the Violent Crime Reduction Trust Fund. The Administration is not requesting
funding for two separate programs -- it is the Administration's intent that total funding
for the family violence program be $47.6 million.
Mr. Porter: Do you have any evaluation data on the Family Violence Act to show
whether the funds that have been spent have had any appreciable impact on the
problem of domestic violence?
Ms. Bane: The Family Violence Prevention and Services program (FVPS) has
enabled the expansion of shelters and domestic violence prevention and advocacy
programs into communities where services were non-existent — into rural areas and into
over 100 Indian tribal areas and reservations.
Approximately 80 to 90 percent of the 1,100 shelters serving battered women and
children nationwide receive funds from the Family Violence Prevention and Services
program.
In FY 1994, in 824 domestic violence projects funded in part by the FVPS
program, over 300,000 adults and 120,000 children were served. Almost 1 million
crisis calls were answered, and over 900,000 counseling hours and over 150,000
shelter nights were provided.
It is difficult to provide precise evaluation data on the impact of the FVPS program
on the problem of domestic violence for several reasons:
*■ Given the limited resources of most domestic violence programs, the Federal
Government has sought to minimize reporting burdens.
*■ Federal FVPS dollars are only a small portion of the money spent by states and
communities to operate shelters and provide other services for victims of domestic
violence.
*■ The definition of services provided vary state by state, making comparisons and
totals difficult to obtain.
However, we know that Federal support for this program has also helped to focus
and maintain attention and greatly needed resources on the problem of family violence,
and has raised the level of informed discussion on this issue as well as national interest.
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LIHEAP RECIPIENTS
Mr. Obey: Next week the House and Senate will go to conference to decide
whether to preserve the low income energy assistance program. Your budget this year
maintains funding at the current level for both 1996 and 1997. Would you review for
the subcommittee the latest data on who is served by this program.
Ms. Bane: Estimates from the March 1994 Current Population Survey (CPS)
indicate that of the households receiving heating assistance during October 1 993 -
March 1994:
o 74 percent had incomes below 110 percent of poverty, 82 percent had
incomes below 1 25 percent of poverty, and 92 percent had incomes below
150 percent of poverty.
o 15 percent had female-headed households with at least one child under 5
years of age.
o 55 percent had children less than 1 8 years old.
o 33 percent had at least one member 60 years or older.
o 36 percent received social security benefits other than SSI.
o 32 percent also received AFDC benefits.
o 25 percent also received SSI benefits.
o 67 percent also received food stamps.
o 27 percent lived in rent subsidized or public housing.
o A total of about 79 percent also received either AFDC, food stamps, SSI,
housing subsidy or other public assistance.
o 21 percent did not receive benefits under any of these other assistance
programs.
MANAGEMENT OF LIHEAP
Mr. Obey: The energy assistance program has been controversial from a budget
point of view but I am not aware of any significant problems with the way it is
managed or with widespread fraud or abuse. What do your evaluations show about the
management of the LIHEAP program?
Ms. Bane: We are not aware of any major problems in the way States administer
their LIHEAP programs. In general, we find that States' LIHEAP programs are very well
managed, and that the relatively few problems we have identified are minor and of
little substantive impact. Likewise, we have found no indication of extensive fraud and
abuse. To the contrary, those instances of which we are aware have been small in
scale, isolated, and promptly corrected. In most cases, the grantees themselves have
identified the problem and have taken steps, including legal action where necessary, to
correct them.
LIHEAP EMERGENCY FUND
Mr. Obey: Last year $300 million of the emergency fund was released because of
the very cold weather in January and February. Have States had difficulty in meeting
needs this year without the emergency funding?
Ms. Bane: Much of the country had warmer than normal weather this past winter.
873
thus relieving the stress on LIHEAP funding. We are not aware of any extraordinary
difficulty that States are experiencing this year, however, it should be noted that States
served 29 percent of the households they deem as LIHEAP eligible.
Mr. Obey: The Republican rescission currently does not effect the 1996
emergency fund of $600 million provided last year as an advance. What standards will
you use next winter In determining the release of these funds?
Ms. Bane: We do not have any specific criteria that have been established. We
will review each situation on a case-by-case basis, but will recommend additional
funding only in extraordinary circumstances, such as the case in 1994 when much of
the country experienced unusually bitter cold weather for an extended period of time.
OFFICE OF REFUGEE ASSISTANCE
Mr. Obey: As I think you are aware, I attempted last week to get the House to
adopt an amendment as part of welfare reform to increase Federal funding to the States
for refugee assistance. The amendment was blocked by a very restrictive rule which
severely limited amendments. I am still interested in this issue when we get to the
1996 appropriations bill. It seems to me that the Federal government should pay the
entire cost of cash, medical and educational services for these refugees for a reasonable
period of time. The basic refugee act anticipated a Federal obligation for 36 months.
How do you justify a budget which pays these costs for only 8 months?
Ms. Bane: The refugee program pays the costs of refugee cash assistance (RCA)
and refugee medical assistance (RMA) during a refugee's first 8 months after arrival in
the U.S. for needy refugees who do not meet the eligibility requirements of the AFDC,
SSI, and Medicaid programs. Throughout the 1980's the number of months for which
needy refugees were eligible for cash and medical assistance steadily declined. The FY
1996 budget includes the resources estimated to be able to continue 8 months as the
eligibility period for the RCA and RMA programs.
The 8-month time-limitation on RCA and RMA does not limit the eligibility of
refugees for the federally supported programs of AFDC, SSI, and Medicaid, under which
the costs of refugees are paid in part by the Federal government.
Mr. Obey: How much additional funding would be required in 1996 over your
current request if we were to pay the full 36 months of AFDC, Medicaid and refugee
cash and medical assistance costs?
Ms. Bane: An estimated $1.2 billion would be needed in additional funding in FY
1996 over our current request to pay for 36 months of AFDC, Medicaid, and refugee
cash and medical assistance costs. This estimate assumes 100% of funding for AFDC
and Medicaid costs through ORR. If 55% of these costs were funded through the
AFDC and Medicaid programs, this estimate would be reduced by $500 million.
Mr. Obey: Are these payments fully authorized at this time?
Ms. Bane: These payments are fully authorized through FY 1997.
Mr. Obey: I am particularly concerned in my district with the impact of refugees on
the schools which continues for many years for communities with high concentrations
of highly dependent refugees such as the Hmong. Hmong children now constitute
about 16% of the student body in my hometown. Would you explain how the current
targeted assistance program helps in this area?
Ms. Bane: Since FY 1990, under the targeted assistance 10% discretionary
program, the State of Wisconsin has received over $ 2 million for education,
employment, and health services for refugees. During this period of time, Wausau,
Wisconsin received over $288,000 for educational services for refugee children in the
public schools.
874
Mr. Obey: Apart from the additional cost, would you object to an expansion of the
targeted assistance program to pay a larger portion of educational expenses in those
communities with very high concentrations of refugees, say over 15% of enrollment?
Ms. Bane: In accordance with section 412(c)(2) of the Immigration and Nationality
Act (INA), targeted assistance funds are to be used primarily for the purpose of
facilitating refugee employment and achievement of self-sufficiency. By statute, the
primary focus of the refugee program, including the targeted assistance program, is to
assist adult refugees to obtain the employment and language skills necessary to achieve
economic self-sufficiency.
Mr. Obey: Is the basic authorization for targeted assistance broad enough to cover
an impact aid type program for refugees similar to what we do for Federal military
dependents?
Ms. Bane: No, the basic authorization for the targeted assistance program is not
broad enough to enable the provision of a school impact aid type program similar to the
one for Federal military dependents.
COMMUNITY SERVICES DISCRETIONARY PROGRAMS
Mr. Obey: Your budget eliminates all funding for 6 discretionary programs under
community Services. Starting with economic development tell us whether each is
considered to be effective and whether your proposal to terminate funding has any
programmatic basis?
Ms. Bane: While each of these programs - Economic Development, Rural Housing,
Community Facilities Development, Migrant and Seasonal Farmworkers Assistance,
National Youth Sports and Demonstration Partnership has contributed to community
programs benefiting low-income families, the decision to terminate these programs
reflects the concern of this Administration and the Congress that the number of
discretionary grant programs should be decreased.
CONSOLIDATION OF PROGRAMS
Mr. Obey: The Community Services and Energy Assistance programs serve very
similar populations and in many areas the activities are managed by the same local
agency. Assuming energy assistance survives the current rescission cycle, what are
your thoughts about the proposal recently put forward to merge these two programs.
Ms. Bane: The Administration has not recommended combining these two block
grant programs as part of its consolidation proposals.
875
IMPACT OF WELFARE CHANGES
Mr. Stokes: What impact will the overhaul of the welfare system
as passed by the new majority house have on the agency's operations,
the programs it administers, and the people served by these programs.
Elaborate and be as specific as possible.
Ms. Bane: The effects follow:
Agency Effects
It is not clear what the impact of H.R. 4 would be on ACF
operations. Clearly, a different Federal role is envisioned
under that bill. However, President Clinton and Vice President
Gore have already challenged us to examine each of our programs
and look for new ways of doing business. Thus, we have been
looking at ways to provide better service to our customers at a
lower cost to taxpayers. In fact, since I came to ACF, we have
been working on changing our Federal role --to focus less on
process and compliance and more on outcomes and performance.
And we have been working on streamlining our Federal operations.
At the same time, ACF's child support enforcement staff has
begun preparing for a larger Federal role. Thus, we stand in
fairly good stead if the type of changes envisioned in H.R. 4
were to take place .
Program Effects
H.R. 4 would produce substantial changes in the welfare, child
care, child welfare, and child support enforcement programs ACF
administers. The welfare and child welfare programs, in
particular, would lose much of their national character. With a
few notable exceptions. States would assume much more
responsibility for deciding who gets benefits and under what
circumstances. With this new responsibility. States would have
less access to Federal resources and support. In times of
recession and growing need. States would have inadequate
resources for meeting the needs of low- income children amd
families. The Federal government would have little ability to
respond, either financially or programmatically, if goals were
not being met .
H.R. 4 would make a number of improvements to the child support
enforcement program -- including many suggested by the
Administration --to help promote individual responsibility and
responsible parenting. However, we remain concerned about the
administrative complexity and burdens, including the added
burdens on employers, associated with some of the House
provisions .
Effects on Service Populations
H.R. 4 would remove many of the provisions in current law
providing basic protections for our most vulnerable families.
o In our child care programs, it would remove the guarantee of
child care for families trying to leave welfare for work, cap
fvinding, and eliminate quality, health, and safety
protections that are critical to children's well-being.
o In our welfare programs, it would punish innocent children by
denying them access to cash assistance --in some cases
because of mistakes by their parents, and in other cases
because of a weak economy or a poorly functioning State
876
bureaucracy. It would reduce access of welfare recipients to
education, training, and related services assisting them to
get jobs and move off the rolls. And it would deny aid to
legal immigrants who are facing temporary setbacks .
o Some of the children who are denied cash assistance could
well be pushed into a child protection system which also is
being dramatically changed by H.R. 4. The million children
who are abused or neglected each year depend upon State child
protective systems. Many of these already function poorly;
all of them could be further weakened by cuts in Federal
funding and substantially reduced Federal oversight.
Mr. Stokes: Are the work provisions in the legislation
realistic?
Ms. Bane: As you know, the President and this Administration
pushed the House very hard to strengthen the work requirements in the
legislation it was considering. The version of H.R. 4 which was
passed does include substantially stronger work requirements.
However, we do not believe they are entirely realistic (especially in
the case of two-parent families) , or that they adequately support and
reward work. Given the restrictive funding under H.R. 4, the
steadily increasing work expectations could force some States to
reduce their welfare benefits in order to fund work programs at the
scale recjuired.
H.R. 4 still fails to provide adequate resources to help
recipients become self-supporting. It does not ensure that adequate
child care, education, and training are provided to make work pay and
give welfare recipients the skills and supports they need to hold a
job. Rather, it imposes new limits on child care fxinding and repeals
the major funding source for welfare- to-work programs.
It continues to give States a perverse incentive to cut people
off welfare. It would allow States to meet their participation rates
by simply cutting people off the rolls, whether or not they had moved
into a job.
H.R. 4's definition of what counts as participation is very
stringent. For example, job search and education activities count
only under very limited circumstances. Thus, the standards in H.R. 4
are much more difficult than those in some alternative proposals.
Further, they tie the hands of the States in providing education and
training services . We recognize that many recipients can be moved
into the workforce without such investments. At the same time,
however, many have low basic skills and may have difficulty finding
viable employment in some local labor markets. Thus, States need
more flexibility in providing appropriate education and training
activities .
Also, the bill's work standards do not recognize the employment
barriers that welfare recipients face. They do not incorporate
"exemptions" which recognize some of the specific -- and legitimate
-- reasons why some welfare recipients do not work. For example, a
substantial number of adult recipients have health problems and
discibilities which preclude work, on either a permanent or temporary
basis. Others have responsibility for caring for disabled children
or elderly relatives. Finally, there are recipients who live in
economically depressed or remote, isolated areas where it may be
extremely difficult to locate work. The bill does not provide
adequate resources to develop work opportunities in such cases .
The bill's standards for two-parent families, in particular.
877
fail to recognize the administrative difficulties States would face
in achieving extremely high rates of work effort on an ongoing,
monthly basis. Standards must be set at levels which accommodate the
frictional inactivity which occurs when individuals become ill or
work assignments end --to provide time to recover or to locate,
secure, and enter new work. It is not realistic to expect
instantaneous transitions.
Given that the standards in H.R. 4 are not sufficiently flexible
or realistic, and the penalty for failing the standards would be less
than the cost of operating a work program at the required scale, we
believe some States may opt to take the penalty. Other States may be
tempted to start dropping families off the rolls (through benefit
reductions, time limits and other meeuis) since: 1) they can meet
their participation rate this way; cuid 2) it will be less expensive
for them.
Neither of these State responses would serve to promote work,
and neither would result in real reform.
Mr. Stokes: Having passed the House, the welfare reform measure
is now in the Senate's hands. We hear that the Senate expects to
maintain a level of flexibility similar to that in the House Bill.
While flexibility has its merits, flexibility should not be had at
the expense of accountability. What would be the impact of relaxed
accountability on welfare programs?
Ms . Bane : As the President said in his letter to the Speaker on
March 20, State flexibility should be provided in return for greater
accountability. H.R. 4 provides little accountability at the Federal
level for reducing fraud or protecting children. It also eliminates
the existing system for ensuring that welfare payments go to eligible
families and that payment amounts are correct.
H.R. 4 gives States broad flexibility to expend funds and even
to divert funds to other purposes. At the same time, it
substantially weakens Federal oversight authority. It would create
extensive reporting requirements, but these do not directly address
fiscal accountability issues.
States will be required to provide aggregate information on the
scope of benefits provided, the characteristics and status (e.g.,
marital or employment status) of recipients, and the length of time
they receive assistance. However, we question whether this
information will enable us to determine how effective State programs
are in maintaining program integrity, reducing dependency, and
protecting children. Across and within States, there are enormous
differences in the characteristics of welfare populations, service
infrastructures, and labor markets. These differences make
comparisons of State statistics and State performance problematic.
Furthermore, some States may accept the three percent penalty rather
than report the complex information that is required; thus, we might
not receive the expected programmatic data.
VIOLENT CRIME REDUCTION
Mr. Stokes: While the FY 1995 funding level for the Violent
Crime Reduction Program was $26.9 million, the FY 1996 Budget Request
level for the program totals $105 million. This increase is nearly
three times the FY 1995 funding level which was eliminated in the
House rescission package. What is the rationale for this tremendous
increase over the initial FY 1995 funding level?
Ms. Bane: These amounts were authorized by the Crime Bill in
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response to the need to address the serious crime problems in this
country. It is important that crime problems be addressed at the
community level and that prevention be a critical part of that
effort.
Mr. Stokes: What is the extent of violent crime against
children, the elderly, and women?
Ms. Bane: Violent crime against women and children is tragic.
Some experts estimate that a woman has between a l-in-3 and a l-in-5
chance of being physically assaulted during her lifetime; total
domestic violence, reported and unreported, affects as many as 4
million women a year ("Violence Against Women, A majority Staff
Report", Committee on the Judiciary, United States Senate, 103rd
Congress, October 1992, p. 3, citing the American Medical Association
and Dr. Angela Browne, respectively) . In addition, approximately 3
million children were the subject of reports of child abuse and
neglect. Of these, about 40% of the reports were substantiated.
Mr. Stokes: How are we going to get the full return in the
proposed investment?
Ms. Bane: These funds will be targeted in areas which will
address the specific problems of violent crime through prevention
activities. Many similar demonstrations have indicated that
prevention activities can make a difference.
RESCISSION
Mr. Stokes: While more than half of the Low- Income Home Energy
recipients are families with children, and while the program is part
of the basic safety net for many families with children, the elderly,
and the working poor, the House rescission bill eliminates the entire
funding amount for the program, $1.3 billion. Specifically, what is
the "people" impact of this action?
Ms. Bane: Six million households nationwide received heating
benefits londer the LIHEAP program in FY 1994, and 141,000 received
cooling assistance. In addition, about 126,000 low income households
received some form of weatherization assistance through the LIHEAP
program in FY 1994.
Mr. Stokes: Would you explain the impact of the $27 million
house rescission in the Community Services Block Grant Program, what
does this mean to the individuals served by the program?
Ms. Bane: The effect of a rescission in the Community Service
Block Grant program would have programmatic impacts as follows:
Rural Housing - $ 3 Million
Approximately 1,000 families would not have homes repaired and/or
weatherized.
Migrant and Seasonal Farmworkers - $3 Million
Twenty thousand farmworkers and their families would not receive
crisis nutritional relief, housing assistance, and emergency health
and social services referrals.
Emergency Homeless Program - $13 Million
Four hundred thousand persons would not receive needed social
services.
879
Demonstration Partnership Program - $8 million
Projects dealing with youth at risk (B projects); career development
for the poor in programs dealing with Environmental Justice and
Sustainable Community Development (8 projects); and projects working
with soon-to-be-released prisoners and their families to foster self-
sufficiency and reduce recidivism would not be funded.
It should be noted that most of the funds for the Emergency Homeless
Program have already been obligated. In addition, portions of the
Foster Care and Adoption Assistance and the Community Schools
rescissions have been obligated.
Mr. Stokes: To what extent is there an alternate source of
support to address their needs?
Ms. Bane: Similar activities may be supported under the Community
Services Block Grant and the Social Services Block Grant
Mr. Stokes; While we say that we are trying to move from a level
of dependence to independence, the opportunities for such are reduced
and/or eliminated by the House rescission bill (i.e., the Department
of Labor Employment Training Program) . The Senate rescission package
includes a $330 million cut in the Job Opportunities and Basic Skills
Training (JOBS) program under the Administration for Children and
Families. What impact will the $330 million reduction in the JOBS
progreun have on the families served by it? What job opportunities
would be foregone?
Ms. Bane: Since the enactment of the Faunily Support Act of 1988,
some States have been unable to provide the necessary State matching
dollars to draw down their full allocation of Federal JOBS matching.
While expenditures have increased each year, FY 1994 Federal spending
equaled $873 million of the $1.1 billion authorized under law. In FY
1995, the JOBS allocation increased from $1.1 billion to $1.3 billion
but Federal spending is expected to be $980 million.
Since both the JOBS and the unemployed parent participation rate
requirements increased significantly in FY 1995 (from 15 percent to 20
percent and from 40 percent to 50 percent respectively) , States are
expanding their programs to meet these requirements. In addition, we
have been encouraging States to put as many resources as possible into
the JOBS progr2un to help recipients obtain employment and achieve
self-sufficiency.
But even with these improvements, we estimate that collectively some
States will not draw down $330 million of their allocated statutory
authorization. The proposed substantive law change has been drafted
to ensure that every State will be entitled to their full Federal
allocation of the $1.3 billion. The rescission language reduces only
the funds within each State's limitation (allocation) for fiscal year
1995 that are not necessary to pay such State's allowable claims for
such fiscal year. Except for the impact of underfunding by some
States on program services, the rescission itself is not expected to
have any effect on the services available to families served by the
JOBS program.
HEAD START PROGRAM
Mr. Stokes: What steps are the agency taking to improve the
quality of and accountability in the Head Start progr2un?
Ms. Bane: This Administration has made significant efforts to
880
improve the quality of Head Start programs. In Jvine 1993 the
Secretary established a Task Force on Head Start Quality and
Expansion to provide her recommendations on how to improve Head Start
quality. Many of these recommendations were incorporated into Head
Start's legislation during the recent reauthorization of the program.
In FY 1994, the Department began implementing the Committee's
recommendations by allocating the FY 1994 funding increase of $550
million in a manner designed to address quality issues in the
program. Rather than allocating the majority of these funds to
enrollment increases, as was done in the past several years, the
Administration allowed each grantee, in concert with its responsible
ACF Regional Office, to determine how best to use its share of the FY
1994 increase. Approximately $360 million was used to maintain and
improve quality and another $57 million was used to extend the number
of hours per day and days per year Head Start programs were serving
children and families.
Head Start grantees used their quality funds in FY 1994 for
three major purposes:
To improve the salaries and fringe benefits of current staff.
Head Start staff have been relatively underpaid since the
program's inception. This has often resulted in high staff
turnover and low staff morale and has had a major impact on the
quality of services delivered to children and families. The
quality improvement funds of recent years have addressed these
problems and improved staff salaries.
To remedy program deficiencies found as a result of an ACF
monitoring review. Grantees were able to correct problems with
inadequate facilities or equipment, hire needed staff such as
component coordinators to provide adequate support and
supervision of Head Start staff, and reduce class sizes.
To hire additional staff necessary to providing quality Head
Start services. Of particular note were the significant number
of grantees who used some of their quality improvement funds to
hire additional family workers, as recommended by the Head Start
Advisory Committee .
However, in being granted greater authority to make judgments
about improving quality, grantees have also been informed of the
Department's expectations that all grantees are expected to assure
all children and families are being provided quality services.
Sxibstandard levels of quality are not acceptable.
The Department, in November 1993, sent a memorandum to all of
its Regional Offices asking them to identify those Head Start
grantees which they considered to be poorly performing and to develop
procedures to work with these programs to either improve their
performance or begin proceedings to revoke their Head Start grant .
We have resolved the quality problems with approximately 70% of these
grantees, generally by working with them to improve performance but
in several instances by terminating their grant.
Since November 1993 eight Head Start grantees have been
terminated and 13 have relinquished their grants. In addition, there
are currently 17 grantees which have been designated high risk.
We will continue to work with the remaining programs and will,
by September 1995, assure that all these programs are of an
acceptable level of quality or discontinued as Head Start grantees.
In addition, changes to the recently reauthorized Head Start Act
881
establish specific procedures, such as requiring that any Head Start
grantee with a program deficiency correct the deficiency within one
year, which will help us continue to assure that Head Start programs
are either striving towards providing high levels of quality services
or understand that they will be replaced by an agency which can
provide such services.
SENATE BILL
Mr. Stokes: The Senate Bill includes a $42 million cut in the
Head Start program. Explain what this cut will mean to program
participants?
Ms. Bane: At the FY 1995 estimated per child cost of $4,530, $42
million is sufficient to provide Head Start services to approximately
9,300 children. The Administration would make every effort to
minimize the number of children and families who could potentially be
affected by a mid-year funding reduction. However, at a minimum, the
statutorily mandated effort to serve children under age three would
be sharply reduced, with up to 3,500 children not receiving Head
Start services.
A reduction in FY 1995 appropriation levels of $42 million would
seriously undermine the Administration's ability to implement the
critical provisions of the Head Start Reauthorization of 1994, which
was enacted with bipartisan support. Likely consequences would
include :
Eliminating all new funding for the statutorily mandated
initiative to provide Head Start services to infant and toddler
age children. Without the rescission, about 3,500 additional
infants and toddlers would receive an Early Head Start
experience, to enable them to develop to their full potential.
Eliminating all new funding for the statutorily mandated
initiative to enhance the transition of Head Start children into
the public schools. Without the rescission, all grantees would
be allocated funds to work with schools to ensure that the
benefits of Head Start extend into the school years.
Eliminating the statutorily mandated increase in training and
technical assistance funds, resulting in a lack of funding for
such Congressionally supported activities as emergent literacy,
visual arts training and hands-on-science training. Training
and technical assistance is mandated in the Head Start statute
because it is a critical component of quality.
CONGRESSIONAL JUSTIFICATION
Mr. Stokes: According to the Congressional Justification, the
FY 1996 budget proposal would provide an additional 32,000 Head Start
slots, for a FY 1996 total of 784,000. At the 784,000 mark, what
percent of the Head Start population would be served and what
percent, and what number of children would go unserved?
Ms. Banes: In FY 1995, the Department estimates 752,000
children will be served by the Head Start program. The President's
FY 1996 proposed budget would increase that number to 784,000. We
estimate that this would serve 43 percent of the eligible children.
In calculating this percentage, it was first necessary to define
the eligible population. Head Start's authorizing legislation speaks
of serving children from birth through the age of compulsory school
attendance, an age range of several years. Historically, however.
882
Head Start has primarily been a program serving low-income pre-school
age children, typically 3 eind 4 year olds. The Administration's goal
is to move towards establishing a Head Start program which would
serve all the eligible 3 and 4 year old children whose parents are
interested in enrolling them in Head Start, while providing that 5
percent of Head Start's total appropriation would be used to serve
infant and toddler age children and their families.
Based on Census data, we estimate there are currently 1,950,000
low income children in the country who are either 3 or 4 years old.
We assume that 80% of these families would be interested in enrolling
their children in Head Start; the remaining 20% having alternative
child care arrangements . This would thus require the f vinding of
1,560,000 slots to serve all interested and eligible children.
Of the 752,000 children estimated to be enrolled in Head Start
in FY 1995, 90%, or 677,000, are either 3 or 4 years old and 95% of
these children, or 643,000, are low- income children (Head Start
programs may enroll up to 10 percent of their children from families
whose income exceeds the poverty line.) Thus, in FY 1995, 643,000 of
the estimated 1,560,000 eligible children, or 41%, are being served.
In FY 1996, this will increase to approximately 43%.
HEAD START SLOTS
Mr. Stokes: With respect to the 49,000 full-day, full-year Head
Start slots, how is the distribution of such slots made, what
criteria is used?
Ms. Bane: Decisions have not yet been made about how to
allocate the funds in FY 1996 to serve the additional 22,000 proposed
children in a full-day full-year option. It is likely that we will
award these funds to current Head Start programs through some type of
competitive effort, with programs having to justify their need for
full-day services.
CHILD CARE AND DEVELOPMENT BLOCK GRANT
Mr. Stokes: What is the rationale for the $100 million
increased investment in the Child Care and Development Block Grant?
Ms. Bane: The child care needs of working families continue to
grow:
o The General Accounting Office noted lengthy waiting lists for
working poor families in its May 1994 report to the Committee
on Education and Labor.
o If low- income mothers have child care assistance, they are
more likely to work.
o Without child care assistance, some families can't afford to
work. Low- income families are already paying 27 percent of
their income on child care (Bureau of Census, 1994) .
Mr. Stokes: What portion of the increase is for ongoing
initiatives and what portion for new initiatives?
Ms. Bane: We have not specified that new funding be designated
for ongoing or new initiatives. States have the flexibility to
prioritize the use of the new funding based on the individual needs
of their communities.
CHILD CARE SERVICES
Mr. Stokes: What is the extent of the need for child care
services provided by the Child Care and Development Block Grant
across the country.
Ms. Bane: There are an estimated 21 million children below 200%
of the poverty level. (200% of poverty is roughly equivalent to the
eligibility standards under the CCDBG) About 8 million of these
children lived with a single parent who worked at least part-time or
with two parents who both worked at least part-time. While exact
eligibility levels are up to the states, these 8 million children are
in working families whose incomes qualify them for assistance with
child care.
Mr. Stokes: To what extent will the FY 1996 budget request
cover that need?
Ms. Bane: About 750,000 children received federal child care
assistance through CCDBG in FY 1993 . Some of the rest of the
eligible children are receiving services through other federal or
state programs. However, we know from the experience of States,
Territories and Tribes, that in many communities more low- income
families need subsidized child care than our grantees can serve and
the number of families seeking child care subsidies greatly outstrips
existing resources:
o Many communities have extensive waiting lists for CCDBG
certificates or subsidized slots.
o In other areas, eligibility requirements are set so low that
many of the working poor do not qualify.
The FY 1996 budget request will begin to address the need for
additional child care resources.
FAMILY PROFILE
Mr. Stokes: What is the profile of the families that utilized
the services of the Child Care and Development Block Grant?
Ms. Bane: Families receiving CCDBG child care subsidies need
child care in order to work, attend a training or educational
program, or because the family receives or needs to receive
protective services. The family's income cannot exceed 75% of a
State's median income.
In FY 1993, the children served by CCDBG were in families with
incomes :
At or below poverty 68%
Above 100% but below 150% of poverty 22%
Above 150% but below 200% of poverty 10%
In FY 1993, the following percentages of families indicated
these reasons for requesting child care assistcuice:
Work 68% Training 16%
Education 9% Protective Services 7%
884
WELFARE REFORM BILL
Mr. Stokes: In your opening statement, you mentioned that the
welfare reform efforts will put new demands on child care support for
working families. Specifically, what impact will the House passed
welfare reform package have on child care support for hard working
families and what are the child care implications?
Ms. Bane: This Administration, as well as previous
Administrations, have increased funding for child care services in
order to address the needs of a growing number of low-income families
who rely on child care assistance to keep them in work and off
welfare. A reduced and capped discretionary program will reverse
these efforts to support work. HHS estimates that in FY 2000, there
would be approximately 300,000 fewer children receiving federal child
care assistance under H.R. 4 than vinder current law.
In addition, welfare reform efforts which call for increased
work requirements will require new child care services for many
families. Two-thirds of families receiving AFDC have at least one
preschool child. Existing law allows for an expansion of federally
funded child care to meet the needs of increased work participation.
However, a capped discretionary child care program, as is created in
H.R. 4, will not expand as welfare reform efforts intensify. It is
possible that states will begin to shift their child care subsidy
efforts from working poor families to welfare families xmder the new
limited program.
GRANDPARENTS RAISING CHILDREN
Mr. Stokes: The media has recently been giving increased
attention to "Grandparents raising their grandchildren." To what
extent is this happening across the country?
Ms. Bane: "Grandparents raising their grandchildren" is but one
aspect of an overall phenomenon- -a dramatic increase in the number of
children in kinship care.
In 1992 about 5 percent of all children under the age of 18
lived in homes maintained by grandparents. These children are more
likely than children as a whole to be AFDC recipients.
Data collected in a survey conducted by the Office of the
Inspector General, DHHS, indicate that, in 2 9 States with data for
1990, a total of 80,000 children in State custody were placed with
relatives, primarily their grandparents. This number grew from 18
percent to 31 percent of the foster care population between 1986 to
1990.
ASSISTANCE TO GRANDPARENTS
Mr. Stokes: What programs within the agency provide assistance
to grandparents in this regard?
Ms. Bane: No programs within ACF are specifically targeted to
assisting grandparents in raising and supporting their grandchildren.
However, a number of programs --such as Titles IV- A, B and E of the
Social Security Act, Medicaid, and WIC provide subsidies and services
which are available to them.
Mr. Stokes: What type of assistance do they provide?
Ms. Bcuie: These programs provide the same basic services to
grandparents as to other eligible families and individuals.
885
Specifically, they are:
o Title IV-B of the Social Security Act - Title IV-B, Subpart 1
authorizes Federal matching grants to States for child
welfare services which can be used for payments amd services.
Subpart 2 of title IV-B provides grants to States for Family
Preservation and Family Support services, including intensive
family preservation services for families at risk of losing
their children to foster care, and community -based family
support services designed to prevent family crises from
occurring.
o Title IV-E of the Social Security Act - Title IV-E authorizes
Federal matching funds for foster care, euid may be paid to
grandparents who are licensed or approved foster care
providers .
q Title IV-A of the Social Security Act - Aid to Families With
Dependent Children provides financial assistance (in the form
of a monthly check) to help families care for children who
need help and who have been deprived of parental support or
care. Grandparents may collect AFDC payments on behalf of
their eligible grandchildren.
o Title IV-A Emergency Assistance - This program provides
immediate temporary financial assistance and services to
prevent the destitution of children.
o MEDICAID - Medicaid provides medical assistance to people
with low incomes who are blind, disabled or part of a family
with dependent children.
o FOOD STAMPS - The Food Starts program provides low income
individuals amd/or families with coupons that can be used to
purchase food.
o WIC is a supplemental food program for low- income women,
infants amd children;
886
HEAD START COMMUNITY
Mr. Hoyer: When Secretary Riley came to speak with us, the
Chairman and I had a conversation about Head Start quality, which
concerns both of us. The Chairman expressed his belief that the Head
Start community will not believe that we in Congress are serious
about quality until the Head Start budget is cut . Do you think the
Head Start community has "gotten" the quality message?
Ms. Bane: Yes, we have had a very positive response from
grantees to the quality message; high quality grantees are the first
to say that no program should be allowed to call itself a Head Start
program if it is not delivering high quality services.
The Congress and this Administration have been quite clear to
Head Start programs about the need to provide high quality services
to every enrolled child and family. We believe that most grantees
have always understood this and provided quality services. The small
minority which have not have been sent clear messages about the need
to improve quality or face def landing proceedings.
Our current effort to assure that all Head Start programs are
providing quality services began in June 1993 when Secretary Shalala
established the Advisory Committee on Head Start Quality and
Expansion. Many of the recommendations of this Committee were
incorporated by the Congress into the Head Start Reauthorization Act,
signed by President Clinton on May 18, 1994. This Act states very
clearly the expectation that grantees must provide quality services
and that grantees which are not providing such services have one
year, at the most, to improve the quality of their program or face
de funding.
We have, in addition, been working with our Regional Offices on
the issue of Head Start quality. In November 1993 we sent the
Regional Offices a memorandum asking them to identify those Head
Start grantees which they considered to be poorly performing and to
develop procedures to work with these programs to either improve
their performance or begin proceedings to revoke their Head Start
grant. We have resolved the quality problems with approximately 70%
of these agencies, generally by working with them to improve
performance but, in several instances, by terminating their grant.
Since November 1993, for example, eight Head Start grantees have been
terminated and 13 have relinquished their grants. In addition, there
are currently 17 grantees which have been designated high risk.
We will continue to work with the remaining programs and will,
by September 1995, assure that all these programs are of an
acceptable level of quality or discontinued as Head Start grantees.
Mr. Hoyer: What indicators can we in Congress look to for
evidence 'of this?
Ms. Bane: This Administration's commitment is that by the end
of FY 1995 all Head Start programs will either be providing quality
Head Start services or will have implemented a quality improvement
plan designed to assure they are providing such services within a
specified time period, not to exceed one year. It is our judgment
that the Congress can expect to visit any Head Start program and
assure itself that the program is providing quality services.
We will, as well, be developing this year Head Start performance
measures which will help us and the Congress gauge the extent to
which Head Start programs are providing quality services.
887
LOCAL GRANTEES' PROBLEMS
Mr. Hoyer: In your statement, you tell us that "local grantees
made major investments to address critical problems identified by the
Inspector General". Can you give us specific examples of these
problems and the grantees responses?
Ms . Bane : Problems experienced by grantees which impeded their
abilities to provide high quality Head Start services, as noted by
the Inspector General, centered on not having sufficient numbers of
qualified staff and not having access to quality Head Start
facilities. Examples of how grantees began addressing these issues
with their FY 1994 funding increase include:
Improving the salaries and fringe benefits of current staff.
Head Start staff have been relatively underpaid since the
program's inception. This has often resulted in high staff
turnover and low staff morale and has had a major impact on the
quality of services delivered to children and families.
Remedying program deficiencies found as a result of an ACF
monitoring review. Grantees were able to correct problems with
inadequate facilities or equipment, hire needed staff such as
component coordinators to provide adequate support and
supervision of Head Start staff, and reduce class sizes.
Hiring the additional staff necessary to provide quality Head
Start services. Of particular note were the significant number
of grantees who used some of their quality improvement funds to
hire additional family workers, as recommended by the Head Start
Advisory Committee.
More specific information on the use of FY 1994 funds and how it
helped improve quality follows:
Family worker caseload was reduced by hiring new family workers.
Many grantees have had problems, uncovered on recent monitoring
visits, of not providing needed social services to Head Start
families. Reducing caseload ratios will be of tremendous impact
in improving the ability of grantees to meet the needs of Head
Start families.
New classroom staff were hired to reduce the number of double session
classes and reduce average class size from 20 to 17-18 children.
This direction is consistent with the recommendations of
the Head Start Advisory Committee Report and will help
improve the quality of services provided in the Head Start
classroom.
Staff in the area of disability services were hired.
Mental health staff were hired to work in classroom with children who
experience behavioral, emotional or social adjustment difficulties.
Many Head Start grantees have had problems fully meeting the
special needs of children with disabilities. Additional staff
will better enable Head Start to meet the needs of this
particularly vulnerable population.
New bus aides were hired to assure there is always a second adult on
the bus .
Many States require two adults be present on every bus
888
transporting pre- school age children. Some grantees have not
always been able to do this, posing a safety risk to Head Start
children.
In addition to hiring new staff other quality improvements include:
Facilities were renovated to comply with ADA requirements.
Old, high mileage vehicles were replaced.
Old, out-dated and potentially unsafe playgrovind equipment was
replaced.
Employees were offered new or improved health insurance plans .
The number of hours and days of service was increased. Some
grantees extended part of their program to full -day to meet the
child care needs of working parents, or parents in training.
HEAD START TRIENNIAL REVIEWS
Mr. Hoyer: Secretary Shalala told us of improvements in the
outcomes of the triennial reviews Congress mandated for all Head
Start programs. Can you describe the review process for us?
Ms . Bane : At least once every three years every Head Start
grantee is visited by a monitoring team of 6-7 reviewers, which is
led by one or more Federal staff and is composed of experts in the
early childhood field, including many Head Start program staff acting
as peer reviewers. This team observes all aspects of the Head Start
program's operations and reviews all Head Start components.
Interviews are held with Head Start grantee staff, parents, and
community members. Records are reviewed. At the end of one week,
the review team has an exit interview with the Head Start grantee,
sharing with grantee staff its findings. Subsequent to that, a
letter is also sent to the grantee specifying what, if any, areas in
its program are in need of improvement and in what time frames the
grantee is expected to implement this improvement. Follow-up
continues during the time the grantee is implementing its quality
improvements and on completion of these improvements the responsible
Regional office may make a subsequent on-site visit to assure the
grantee has remedied all identified quality problems. Grantees which
do not correct such problems within agreed to time periods face
def unding procedures .
Mr. Hoyer: Is this a comprehensive review?
Ms . Bane : Yes . Each review conducted as part of the required
triennial monitoring is comprehensive, evaluating all program
components and all aspects of the grantee's Head start program.
Mr. Hoyer: What does it mean ,if a program meets the standards?
Ms. Bane: A program meeting the standards is a program that, in
the judgment of the review team, is providing quality Head Start
services and is doing so consistent with all relevant statutory and
regulatory requirements. A program meeting the standards will
continue to receive Head Start funds.
BLOCK GRANTING HEAD START
Mr. Hoyer: As you know, there has been a lot of talk in this
House of reducing regulatory burden and block granting programs. My
889
wife is the head of child care programs in Prince George's county and
the regulations she has to deal with make it harder, not easier, to
take care of kids. I myself have thought a lot about block grauiting
Head Start and turning control over to the States . What role do Head
Start Performance Standards play in promoting Head Start quality?
Ms . Bane : The Performance Standards are the heart of the Head
Start program. They specify what it is that programs must do to be
able to call themselves Head Start. They constitute the core of
services that must be provided to every enrolled child and family eind
thus assure that all 752,000 children in Head Start, served by 1,400
programs, are receiving the same types and levels of services. They
are comprehensive in nature, touching on all aspects of Head Start,
education, health, social services and parent involvement.
Mr. Hoyer: What would be the impact on the program of block
granting Head Start?
Ms . Bane : Head Start should not be folded into a block grant to
the States . There are several reasons for this :
A key element of today' s Head Start is that Head Start is truly
a community-based program. It is located in neighborhoods all
over the country,- it is flexible based on community needs; and
it depends on parents and community volunteers for its success .
Head Start is an effective Federal to local program.
Head Start has just been redesigned to meet the needs of
America's children and families, through last year's bipartisan
reauthorization process which re-examined every feature of the
program. This redesign should serve as the blueprint for the
program as we move into the 21st Century.
This bipartisan reauthorization built on three decades of
support by Republican and Democratic Presidents and members of
Congress for this critically important investment in our
nation's most vulnerable children. We worked very hard in the
reauthorization process to ensure that every Head Start program
is of high quality and is responsive to the needs of today' s
families and communities. Our task now should be to move
together and complete this redesign.
The Administration does, however, believe strongly that Head
Start should be linked effectively to other programs at the
State and community levels. In fact, partnerships is one of the
key themes of the reauthorized legislation. We currently fund
State-Head Start Collaboration projects in 22 States and will be
expanding these State Collaboration grants to all 50 States, the
District of Columbia, and Puerto Rico.
As a nationwide program. Head Start plays a critical role as a
national laboratory for innovative approaches in early childhood
education. It is the testing ground for state-of-the-art
approaches to teaching young children and working with their
families. It serves as a catalyst for the whole early childhood
field because of its national prestige and comprehensiveness.
HEAD START PERFORMANCE STANDARDS
Mr. Hoyer: I understand that the Department is now finishing a
comprehensive revision of Head Start Performance Standards which was
mandated in the 1994 reauthorization. The old performance standards
have been criticized by some as outdated and overly burdensome. How
have you addressed these criticisms in the development of the new
890
performeuice standards?
Ms. Bane: The Department's work on the revision of the Head
Start Performance Standards will result in the promulgation of
requirements that will foster improvement in program quality- -a key
objective of the bipartisan 1994 reauthorization- -while at the same
time, making the Standards more user- friendly and allowing for
greater flexibility at the local community level. We are attempting
to simplify and clarify our requirements while also updating them to
reflect best practices and the suggestions we received through
extensive consultation with members of the Head Start community and a
broad array of child and family service experts.
Beyond meeting these objectives, it is our intent to include in
the revised Standards requirements addressing the newly authorized
Head Start program for low- income pregnant women and families with
infants and toddlers . Local programs operating programs for both
preschoolers as well as very yovmg children will find a consolidated
set of requirements addressing both age groups easier to deal with
than separate requirements for each program.
HEAD START RESCISSION
Mr. Hoyer: I understand that the Senate has recommended a $42
million rescission in the Head Start program. Would you describe for
the Committee which part of the program that funding would be taken
out of and the impact on the program of those cuts?
Ms. Bane: At the FY 1995 estimated per child cost of $4,530,
$42 million is sufficient to provide Head Start services to
approximately 9,300 children. The Administration would make every
effort to minimize the number of children and families who could
potentially be affected by a mid-year fvinding reduction. However, at
a minimum, the statutorily mandated effort to serve children under
age three would be sharply reduced.
A reduction in FY 1995 appropriation levels of $42 million would
seriously undermine the Administration's ability to implement the
critical provisions of the Head Start Reauthorization of 1994,
enacted with bipartisan support .
WELFARE REFORM BILL
Mr. Hoyer: As you know, the House passed a welfare reform bill
last week which included cuts below current funding levels in child
care programs . Even with the funding that was added in a floor
amendment, I am concerned that there simply won't be enough child
care available for poor and working poor families. Could you
describe the impact on the States and on kids and families of the
fiinding level for child care provided in the House welfare bill?
Ms. Bane: This Administration, as well as previous
Administrations, have increased funding for child care services in
order to address the needs of a growing number of low-income families
who rely on child care assistance to keep them in work and off
welfare. A reduced and capped discretionary program will reverse
these efforts to support work. HHS estimates that in FY 2000, there
would be approximately 320,000 fewer children receiving federal child
care assistance under H.R. 4 than under current law.
In addition, welfare reform efforts which call for increased
work requirements will require new child care services for many
families. Two-thirds of families receiving AFDC have at least one
preschool child. Existing law allows for an expansion of federally
891
funded child care to meet the needs of increased work participation.
However, a capped discretionary child care program, as is created in
H.R. 4, will not expand as welfare reform efforts intensify. It is
possible that states will begin to shift their child care subsidy
efforts from working poor families to welfare families under the new
limited program.
CHILD WELFARE PROGRAMS
Mr. Hoyer: The welfare bill also included a reduction ($4
billion over five years) in federal support for child welfare
programs --namely, adoption and foster care. At a time when several
States are under court order to improve their child welfare systems,
and when the need for foster care is likely to increase, this seems
to me to be a recipe for disaster. Could you describe for the
committee the current state of the child welfare system?
Ms. Bane: In 1993, nearly three million children- -4% of
America's children- -were the subjects of abuse and neglect reports.
This represents an increase of almost 25% since 1988. About 40% of
the reports were substantiated, affecting almost one million
children. At the end of 1993, almost 450,000 children were in foster
care. How well we respond to these vulnerable children and their
families has an important effect on children's safety, their ability
to spend most of their childhood in a permanent and nurturing home,
and their wellbeing and healthy development over the long-term.
Unfortunately, despite the best efforts of many committed and
talented people at all levels, the child welfare system today is in
crisis, overwhelmed by the increasing caseloads and the increasing
intensity of need of the families and children it serves. In the
past few years, courts in 22 states and the District of Columbia have
found that the child welfare system violates state and federal laws
for protecting abused and neglected children. Courts have found that
many reports of child abuse are not investigated, children in foster
care lack case plans and in some instances have no caseworker,
children are not provided with basic protections, and children under
agency care continue to be damaged both at home and in foster care.
FUNDING IMPACT
Mr. Hoyer: Would you describe the impact of the funding level
provided by the House bill on states and children?
Ms . Bane : The Administration has serious concerns about other
aspects of H.R. 4 that would:
o Jeopardize the health and nutrition of children,
families, and the elderly. H.R. 4 would cut the Food
Stamp program dramatically and cap spending levels.
The bill would further erode the nutritional safety
net by cutting funding and creating block grants to
replace existing child nutrition programs and the
Special Supplemental nutrition Program for Women,
Infants, and Children. These programs have produced
significant and measurable improvements in health
outcomes among the many who participate in them.
H.R. 4 would eliminate national nutrition standards
and the funding mechanisms that permit these programs
to expand to meet the increased needs that occur in
times of economic downturn. These changes would
leave working Americans vulnerable to shifts in the
economy and to changes in nutrition standards that
could be driven more by budgets theui the health of
892
children and mothers .
o Punish innocent children. H.R. 4 would deny cash
benefits to over 150,000 disabled children. The bill
also would cut off children whose parents have
received welfare for than five years, whether the
parent is able to work or not. Rather than letting
States decide whether to deny benefits for additional
children born to a mother on welfare, H.R. 4 would
impose a one-size-fits-all Federal mandate. Benefits
also would be reduced for 3.3 million children whose
paternity is not established, even if the mother is
cooperating fully and the State bureaucracy is at
fault.
Many of these children could well be pushed into the
child protection system. Rather than protecting
these children, H.R. 4 would cut funding for foster
care, adoption assistance, and child abuse prevention
activities. It also would virtually eliminate
Federal oversight of State child protective systems,
many of which are acknowledged to be functioning very
poorly. As a result, thousands of children will be
at increased risk of harm.
o Leave States with inadequate resources. H.R. 4 would
replace existing programs with capped grants to
States . In contrast to the funding mechanisms now in
place, funding would not adjust for a recession.
Without such an adjustment. States in recession would
encounter reduced revenues and increased caseloads .
In such times, it is the working poor who would most
likely need, but not receive, temporary assistance.
Thus, individuals needing a temporary lift could be
left without cash assistance, food stamps, child
care, or even school lunches for their children. In
addition, H.R. 4 would deny public assistance to
legal immigrants -- who pay taxes and contribute to
their communities -- thereby shifting substantial
burdens to State and local taxpayers .
HEAD START 0-3 FUNDING
Mr. Hoyer: Last week, I received the RFP for the 0-3 Early Head
Start initiative. I would like to commend you for an exceptionally
informative and well -developed RFP. However, the 1994
Reauthorization legislation required publication of this RFP in
December of last year to be certain that programs currently fujided
under authorizations which were repealed in that legislation would
have a fair chance at the new money without having to interrupt their
programs . Could you describe for the Committee your process for
evaluating and approving applications for 0-3 funding.
Ms. Bane: After an extensive consultation process with parents,
providers, and the research community, the program announcement for
Early Head Start was published in the Federal Register on March 17,
1995. All interested Head Start and public and private non-profit
entities capable of providing commvinity-based child and family
services that are consistent with recognized best practices are to
sxibmit an application by May 31, 1995. The ACF plans to have
independent panel reviews of all applications, based on the criteria
piablished in the Federal Register and, providing time and resources,
may also conduct site visits to programs whose applications fall
893
within certain rcmges of competitive rankings. Information from the
panel review and the site visits will be used by the Commissioner,
ACYF to determine which applicants should be funded.
Mr. Hoyer: Are you committed to awarding grants in a timely
manner which will prevent lapses in service for the current grantees
who are ultimately approved for further funding.
Ms . Bane : We are committed to awarding grants in a timely
manner for all programs, both the existing programs (i.e., the Parent
and Child Center Programs and the Comprehensive Child Development
Programs) as well as the new Early Head Start programs.
COORDINATION WITH OTHER DEPARTMENTS
Mr. Hoyer: One of the problems of our welfare system is the
lack of coordinated services. Cities and counties are working to
provide case management, and to coordinate the different resources
that are available to move people from welfare to work. But too meiny
legislative and regulatory barriers stand in the way. I proposed an
amendment to the welfare bill to require the Secretaries of HHS, HUD,
Agriculture, Leibor and Education to report to the Congress on
barriers to coordinated services. Unfortunately, my amendment was
not made in order. What efforts do you currently have underway to
coordinate HHS programs with other assistance programs?
Ms. Bane: HHS coordinates extensively with HUD, Agriculture,
Labor and Education.
Interagency Technical Assistance Efforts -- HHS. DOL. Education
With the passage of the Family Support Act, HHS, EXDL and
Education made a commitment to work together to enhance the
coordination of human resource development programs for low-
income families. By combining our resources and working
together, we have improved services and fostered hundreds of new
collaborative efforts at all levels of government.
For example, through an interagency agreement, HHS, DOL and
Education committed over $7 million for a technical assistance
contract to help States implement the JOBS program. Under the
JOBS technical assistance contract, we have provided annual
national and regional conferences, regional workshops on
integrated services, a videoconference on employer needs,
training materials and "best practices" publications.
Under the auspices of the National Institute for Literacy
(NIFL) , grants have been awarded to several States to develop
either a coordinated performeince measurement system or an
interagency staff development system for all agencies providing
basic skills and literacy- related services.
The three agencies are also working with the Departments of
Commerce (Census Bureau) and Agriculture (FNS) , the GAO, NGA and
other interest groups to develop a uniform, core set of data
elements across all employment and training programs . Begun as
a collaborative effort and required by the JTPA amendments of
1992, the final report will be sent to Congress soon.
We all worked very closely on the President's Welfare Reform
Working Group in framing the Administration's proposal, the Work
euid Responsibility Act euid on related enployment and training
initiatives.
894
Interagency Coordination with the Department of Agriculture
The ACF and the Food and Nutrition Service (FNS) of the
Department of Agriculture have had a longstanding interest and
concern in achieving increased consistency between the AFDC and
Food Stamp programs .
Both agencies serve many of the same individuals and collect
similar information. However, because of different program
rules, the same information may be treated differently by each
program in determining eligibility.
Developing compatible program policies and procedures is a
difficult process because so many of the program differences are
statutorily based. Further, achieving a significant level of
compatibility would require changes which would either
disadvantage AFDC recipients or cause substantial increases in
program costs .
The differences between the two programs have been analyzed and
prioritized. A report entitled "Time for a Change, Remaking the
Nation's Welfare System" was prepared and submitted to Congress
in Jvine 1993 . It contained numerous recommendations for
reforming the current service delivery system.
Subtitle D of the Social Security Act Amendments of 1994
contains several provisions supporting program consistency and
collaboration between ACF and FCS. Two provisions reduce
administrative complexity at the State level by allowing
uniformity across programs of the alien declaration rule and
monthly reporting and retrospective budgeting rules. Another
provision requires the Secretary of HHS in consultation with
Secretary of Agriculture to develop indicators and predictors of
welfare receipt. We have initiated that consultation.
In addition to the ongoing consistency efforts between AFDC and
Food Stamps and coordination between JOBS and DOL, we have
included representatives from both Departments in the
"Streamlining AFDC Quality Control" Academy.
The purpose of the Academy is to develop a more results -oriented
quality improvement system for AFDC and JOBS with a strong
emphasis on work. In addition to staff from ACF, it includes 20
program experts from State welfare agencies, the Departments of
Labor and Agriculture and a member of the Association for
Providers of Employment cuid Training. They plan to develop a
final consensus report of recommendations which will serve as
guidance for ACF in streamlining the current QC system.
The interaction on systems issues between ACF and FCS mirrors
the interaction at the program level . ACF and FCS coordinate
extensively across a broad spectrum of systems activities. This
coordination includes :
The establishment of systems requirements for integrated
public assistance systems at the State level.
Daily coordination on their fvinding decisions on State
systems .
Streamlining State systems regulatory requirements to
minimize Federal oversight.
This effort has already resulted in reduced reporting for States
895
and eased the conditions under which States may expense the cost
of personal computers under both the AFDC and Food Stamps
programs (and Medicaid) . Each agency is drafting regulations
which would provide States further flexibility and reporting
burden reductions .
ACF and FCS are working closely together on Electronic Benefit
Transfer (EBT) . In order to facilitate the approval of State
EST projects, ACF has agreed to the designation of FCS as the
lead agency for the receipt of State requests for funding for
EBT projects involving both the Food Stamp and AFDC programs.
FCS serves as the single point of contact for States, and has
the responsibility to coordinate the review and approval of
requests. This interagency agreement is helping to streamline
the approval process for States, and ensure a coordinated and
timely Federal response to State funding requests .
HUD/HHS Interagency Efforts
Through interagency agreements, the Departments of HHS and HUD
have collaboratively committed staff and resources to support
the efforts of housing authorities, communities and States in
increasing the self-sufficiency of low- income families. These
efforts have focused on providing flexibility, fiscal,
technological and policy support to help communities improve the
delivery of Head Start, education and training programs and to
make work pay for recipients living in public housing. HUD
funding allows local governments to develop jobs, housing and
economic opportunities for low- income individuals, while HHS
provides the income support, job skills training and supportive
services that facilitate the employment of these families.
For example, the Economic Empowerment Demonstrations funded 14
projects in 12 States to help low- income families move toward
economic self-sufficiency and homeowner ship. The projects
include a JOBS program with an enhanced work requirement and a
mix of training, education, and supportive services.
Preliminary findings suggest that coordinated community efforts
improve the likelihood of self-sufficiency.
We have also worked together collaboratively to develop
Priority: Home! The Federal Plan to Break the Cycle of
Homelessness . Emphasizing a new continuum of care approach, the
plan commits the Federal agencies to increase homeless
assistance and to make mental health, physical health, and
substance abuse health services work for the poor .
Another example is the STEP-UP program, an innovative training
and employment preparation program in construction and
maintenance occupations for public housing residents. With 12
approved sites, HHS and HUD are continuing efforts to expand the
number of communities and the number of JOBS participants.
CONGRESSIONAL STEPS
Mr. Hoyer: What steps could Congress take to make this work
easier?
Ms. Bane: Both Congress and the American people rightfully
expect Federal and State governments to be accountable for results in
return for the billions of tax dollars spent for these needs-based
programs. Performance accountability is a means of judging policies
and programs by measuring their results (changes in people's lives)
against agreed-upon standards. Policy accountability looks at
896
whether a complex set of programs and actions are achieving broad
goals and objectives.
We are convinced that substantial complexity could be eliminated
if the Congress, the States, the Departments and advocates worked
collciboratively to specify appropriate, complementary goals,
objectives and measurable results to be achieved by the programs.
The key is to focus on what is to be achieved and leave States and
localities with the flexibility to decide how to achieve those
desired results.
897
JUSTIFICATION OF THE BUDGET ESTIMATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES
ADMINISTRATION FOR CHILDREN AND FAMILIES
FY 1996 Estimate Page
Organizational Chart A-1
Entitlement Programs
Family Support Payments to States . $18,014,307,000 B-1
Job Opportunities and Basic Skills 1,000,000,000 C-1
State Legalization Impact
Assistance Grants D-1
Payments to States for Foster Care
and Adoption Assistance 4,307,842,000 E-1
Social Services Block Grant .... 2,800,000,000 F-1
Family Preservation and Support . . 225,000,000 G-1
Discretionary Programs
Low Income Home Energy Assistance . 1,319,204,000 H-1
Children and Families Services . . 5,234,257,000 I-l
Child Care and Development .... 1,048,825,000 J-1
Refugee Resettlement 414,199,000 K-1
Violent Crime Reduction Programs . 105,300,000 L-1
to
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899
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Fiunily Support Payments to States
FY 1996 Budget Ease
Appropriation language and explanation of language changes • B-2
Language Analysis B-4
Amounts available for obligation B-5
Summary of changes B-6
Budget authority by activity B-9
Budget authority by object B-11
Authorizing legislation B-12
Appropriation history table B-14
Justification:
A. General Statement B-17
B. Program Accomplishments B-20
C. Aid to Families with Dependent Children B-23
D. Child Support Enforcement B-39
E. State Tables B-44
B-1
900
FAMILY SUPPORT PAYMENTS TO STATES
For naking payments to States or other non-Federal entities,
except as otherwise provided, under titles I, rv-A (other than
section 402(g)(6)) and D, X, XI, XIV, and XVI of the Social
Security Act, and the Act of July 5, 1960 (24 U.S.C. ch. 9),
[$12,761,788,000] $13,614,307,000, to remain available until
expended .
For naking, after May 31 of the current fiscal year, payments
to States or other non-Federal entities under titles I, IV-A and
D, X, XI, XIV, and XVI of the Social Security Act, for the last
three months of the current year for unanticipated costs,
incurred for the current fiscal year, such sums as may be
necessary.
For making payments to States or other non-Federal entities
under titles I, IV-A, (other than section 402(g)(6)) and D, X,
XI, XIV, and XVI of the Social Security Act and the Act of
July 5, 1960 (24 U.S.C. ch. 9) for the first quarter of fiscal
year [1996, $4,400,000,000] 1997, $4,800,000,000, to remain
available until expended.
[The Secretary shall provide payments under titles IV-A and
XIX of the Social Sec\irity Act to carry out a demonstration
project for a qualified program in accordance with this section
which shall take effect on January 1, 1995. For each calendar
quarter in which there is a qualified program as defined below,
the Secretary shall pay to the State for the purpose of
B-2
901
transBittal to the operator of the qualified program, for no nore
than 20 calendar quarters, an aaount equal to the aggregate
amount that would otherwise have been payable to the State with
respect to the participants in the progrem for such a calendar
quarter, in the absence of the program, for cash assistance and
child care under part A of title IV of the Social Security Act,
for medical assistance under such assistance. The term
"qualified program" means a program operated by the New Hope
Project, Inc. , which assists low-income residents of Milwaukee,
Wisconsin, move from welfare to work, in accordance with an
application to be prepared by the operator to the qualified
program, transmitted by the State to the Secretary, and defined
by and approved by the Secretary. The application shall provide
for evaluation of the demonstration project; funds provided
herein may not be used for said evaluation.] (Department of
Health and Human Services Appropriations Act, 1995.)
B-3
902
Language Analysis
Language Provision
Explanation
"...to remain available until
expended ..."
"...under titles I, IV-A
(other than section
402(g)(6)..."
This language provides
authority to use funds
appropriated but not obligated
in one fiscal year for
obligations and expenditures
in subsequent years.
Section 402(g)(6) authorizes
funds for the Child Care
Licensing Improvement Grants
progreun for which no
appropriation is requested for
FY 1996.
"For making, after May 31 of
the current fiscal year,
payments to States or other
non-Federal entities under
titles I, IV-A and D, X, XI,
XIV, and XVI of the Social
Security Act, for the last
three months of the current
year for unanticipated costs,
incurred for the current
fiscal year, such sums as may
be necessary . "
"For making payments to States
or other non-Federal entities
under titles I, IV-A (other
than section 402 (g)(6)) and
D, X, XI, XIV, and XVI of the
Social Security Act and the
Act of July 5, 1960 (24 U.S.C.
ch. 9) for the first quarter
of fiscal year 1997,
$4,800,000,000, to remain
available until expended.".
Provides that Federal matching
for unanticipated increases in
costs, to which States become
entitled during the last 3
months of the current fiscal
year, can be funded from an
indefinite appropriation in
the current year. The
indefinite appropriation is
available as necessary in
addition to the regular
appropriation for the current
fiscal year.
This language provides for an
advance appropriation of funds
for the first quarter of
fiscal year 1997. This
ensures that welfare payments
by States will not be delayed
at the beginning of a fiscal
year.
B-4
903
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Fzuaily Suppozrt Payments to States
SXJHKARY OF CHANGES
1995 Appropriation (definite) $16,961,788,000
1995 Appropriation (indefinite) $398,909,000
Total, gross budget authority $17,360,697,000
Transfer to other account -$1,500,000
Total, net budget authority $17,359,197,000
[Obligations] [$17,396,343,000]
1996 Estimate $18,014,307,000
Transfer to other account -$1,500,000
Total, net budget authority $18,012,807,000
[Obligations] [$18,012,807,000]
Net change +$653,610,000
[Obligations] +[$616,464,000]
1995 Current Change from
Estimate Base Base
Increases;
A. Built-in;
1. AFDC Payments: $12,424,136,000
a. Increases in
State AFDC
average payments .... +$139,000,000
b. Increases in AFDC
caseload from
economic and
demographic
changes +456,000,000
c. Financial adjustment to
offset the absence of
unobligated carryover
balances in FY 1996 +37,146,000
d. Adjustment to reconcile
differences between
actual expenditures
and projections +34 , 718 , 000
2. Emergency Assistance:
Increase due to
higher caseloads and
average payments 864,000,000 +110,000,000
B-6
905
3. AFDC and Transitional
Child Care:
Increase in
participation 865,000,000 •t-89,000,000
4. AFDC State
Administrative Costs:
Increases due
to larger
caseload and
inflation 1,716,000,000 -t-54,000,000
5. Child Support Enforcement
State Administrative
Costs: Increases due
to greater
State enforcement
efforts and
inflation 1,966,000,000 -(-191,000,000
6. Increase in CSE
incentive payments
due to increased
collections 402,000,000 -1-37,000,000
Total increases -i-l, 147, 8 64, 000
B-7
906
Decreases;
A. Built-in;
1. Reduction in AFDC
expenditures due to
increases in
CSE Collections -101,000,000
2. Increase in Federal
share of AFDC
recovered
overpayments -1 , 000 , 000
B. Program:
1. Return to regular
State ceiling
level for child
care available to
"at-risk" non-AFDC
families; -57,000,000
2. Decrease in CSE
administrative
costs due to
the expiration of
90% AOP match rate
at the end of
FY 1995.... -214,000,000
3. Change in recovery of
QC liabilities -30,254,000
4. Revised matching rate
based on Federal Medical
Assistance Percentage
(FMAP) -91,000,000
Total decreases -$494,254,000
Net change ■•-$653,610,000
B-8
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914
Justification
Faunily Support Payments to States
FY 1995 Increase
Current FY 1996 or
Estimate Estimate Decrease
Benefit Payments:
AFDC payments^'. $12,383,269,000 $12,927,879,000 +$544,610,000
Net CSE
collections... -811.000.000 -875.000.000 -64.000.000
Subtotal 11,572,269,000 12,052,879,000 480,610,000
Payments to
territories 19,428,000 19,428,000
Emergency assistance 864,000,000 974,000,000 +110,000,000
Repatriation 1,000,000 1,000,000
AFDC child care. . . 666,000,000 734,000,000 +68,000,000
Trans, child care.. 199,000,000 220,000,000 +21,000,000
At-Risk Child Care. 357,000,000 300,000,000 -57,000,000
State/Local AFDC
administrative
costs 1.716.000.000 1.770.000.000 +54.000.000
Subtotal, AFDC $15,394,697,000 $16,071,307,000 +$676,610,000
CSE State/Local
Administrative
Costs 1,966,000,000 1,943,000,000 -23,000,000
Total , budget
authority $17,360,697,000 $18,014,307,000 +$653,610,000
Total ,
obligations^'. . $17,396,343,000 $18,012,807,000 +$616,424,000
^' The FY 1996 request for AFDC payments of $12,927,879,000 assumes
$71,121,000 in QC Collections, which offsets gross AFDC Federal
payments of $12,999,000,000.
^ The FY 1995 current year estimate includes obligation of
$282,000 from prior no-year appropriations to support
implementation of the Child Support Enforcement Network (CSENET) .
B-16
915
FAMILY SUPPORT PAYMENTS TO STATES
General Statement
Programs Financed;
Feunily Support Payments to States support State-administered
programs of financial assistance and supportive services for low-
income fzunilies to promote their economic security and self-
sufficiency. The account funds seven basic activities:
• AFDC benefit payments to needy families with children;
• Payments to territories for adult-only benefits to residents of
Guam, Puerto Rico, and the Virgin Islands;
• Emergency Assistance benefits and services to families with
children to meet temporary emergency needs;
• Repatriation of American citizens and dependents returned from
foreign countries as a result of illness, destitution or war
crises, who need emergency cash and services;
• Child care services to employed AFDC recipients, applicants,
and recipients in approved education and training programs
including JOBS participants, as well as transitional child care
for former recipients who have left AFDC because of increased
earnings;
• Child care services for feunilies at risk of becoming AFDC
recipients; and,
• State administrative expenses for AFDC and for Child Support
Enforcement .
The Federal share of child support collections on behalf of AFDC
recipients offsets the costs of AFDC benefit payments. The first
$50 of current monthly collections are passed through to the AFDC
family and do not offset benefits. In addition, part of these
collections are retained by States as incentive payments under
section 458 of the Social Security Act. Enforcement of child
support orders helps reduce or avoid a family's dependence on
welfare assistance.
B-17
916
Synopsis of Trends;
Requested budget authority for AFDC payments in FY 1996 is
estimated to increase by $544.6 million to $12.9 billion.' This
increase reflects the impact of rising caseloads and higher
benefit payments on program expenditures. While the average
number of monthly AFDC cases is expected to decrease by 17 , 000
between FY 1994 and 1995, the caseload is expected to increase by
approximately 181,000 between FY 1995 and FY 1996. The
anticipated growth in the AFDC caseload in FY 1996 reflects an
increase in the projected unemployment rate along with the impact
of long-term demographic trends, such as continued increases in
the number of female-headed families and out-of-wedlock births.
In addition. State average annual payments per feimily are
projected to rise from approximately $4,533 in FY 1995 to $4,583
in FY 1996.
Continuing efforts by State, county, and municipal government
agencies to secure financial contributions from absent parents
for the support of their children are expected to yield
increasing amounts of child support assistance, thereby helping
families avoid welfare dependency and attain self-sufficiency.
In FY 1996 $8.9 billion in child support collections is expected
to be distributed to custodial parents of AFDC and non-AFDC
children. In addition, $2.3 billion in collections is expected
to be available to help offset Federal and State AFDC program
costs . '
' Gross benefit payments are expected to increase by $574 . 9
million, from an estimated $12,424.1 million in FY 1995 to
$12,999.0 million in FY 1996. In addition, the anticipated
collection of Quality Control sanctions is expected to increase by
$30.2 million from an estimated $40.9 million in FY 1995 to $71.1
million in FY 1996.
' The first $50 of current child support collected in a month
for an AFDC recipient are passed through to the family and
disregarded as income. The remainder of the child support
collection is divided between Federal and State governments to
offset the cost of the family's welfare benefits. If all current
and prior welfare benefits have been reimbursed through current and
past support payments, remaining collections are passed along to
the family.
B-18
917
Budget authority required to support the Emergency Assistance
program is expected to increase from an estimated $864 million in
FY 1995 to $974 million in FY 1996. In recent years, many States
have broadened the scope of their EA activities on behalf of
needy families with children to include the provision of urgently
needed child welfare, child protective and juvenile justice
services. As a result, a significant expansion in program costs
is anticipated.
Budget authority to fund child care costs for JOBS participants
and certain former AFDC recipient families who have left the
rolls as a result of increased earnings or higher Income is
expected to increase from an estimated $865 million in FY 1995 to
$954 million in FY 1996. As the utilization and per child costs
of care Increases overall, child care costs for JOBS participants
and AFDC recipients can be expected to increase as well.
Budget authority requested for the At-Rlsk Child Care progreun
decreases by $57 million to $300 million in FY 1996. There is
$357 million available in 1995 because $57 million in prior year
(1994) appropriations were not used by 19 States and 4
Territories. This situation often occurs. Some States continue
to use less than their ceiling limitation. Under statute, these
States can increase their cxirrent year's spending up to the level
they did not spend in the prior year. States are expected to use
their entire FY 1996 authorized ceiling allocation of $300
million in FY 1996.
B-19
918
Program Accomplishments
1) AFDC Benefits; In FY 1994, ACF provided grants to States to
administer the Aid to Families with Dependent Children (AFDC)
progreun to 5 million families comprising 14.3 million recipients.
The average monthly payment per family was $376. The monthly
caseload for FY 1996 is estimated to rise to 5.2 million families
and include 14.6 million recipients. In addition, the average
monthly benefit is estimated to increase to $382 per family.
(2) Payments to Territories; In FY 1994, this program provided
assistance to 44,144 aged, blind and disabled individuals per
month in Guam, Puerto Rico, and the Virgin Islands. In 1995 and
1996, assistance will be provided to approximately the same
number of persons.
(3) Emergency Assistance; In FY 1994, the Federal government
outlayed $507 million in matching funds to help States meet the
urgent and critical requirements of needy families, such as
shelter and medical services. Emergency financial assistance was
provided to an average of 62,000 recipients per month.
(4) Repatriation; Assistance was provided to 367 cases in FY
1994, comprising 494 persons. Nearly all of the repatriations of
individuals or families were due to destitution or illness with
only 24 cases repatriated through the mentally ill program.
(5) Child Care; In FY 1994, Federal outlays for AFDC child care
and transitional child care totalled $707 million. These
expenditures are expected to increase to $854 million in FY 1995
and $947 million in FY 1996.
Under the IV-A funded child care program for AFDC families, for
FY 1992 States reported serving an average of 166,682 families
per month. In FY 1993, an average of 210,859 families and
339,238 children received AFDC child care services each month.
Approximately 61% of these AFDC families participated in the JOBS
program in FY 1993. In FY 1994, it is estimated that the average
monthly number served will increase to 260,000 families and
410,000 children.
In addition, 39,870 former AFDC families received child care
services in FY 1992. In FY 1993, transitional child care was
provided to an average of 51,775 families and 84,682 children
each month. It is estimated that in FY 1994, an average of
67,000 families and 109,000 children will be served.
For the At-Risk child care program for FY 1993, the average
monthly number of families served was 123,000 and the average
monthly number of children served was 219,000. Of the type of
care arrangements utilized by children, 66.7% of care was
provided by centers, 28.5% in family/group homes, and the
B-20
919
remaining 4.8% by a relative outside the home or in-home care by
a relative or non-relative.
(6) Child Support Enforcement Collections; Child support
payments by non-custodial parents in FY 1994 reached another
record high, totaling nearly $9.6 billion, $700 million greater
than FY 1993.
(7) Paternity Establishment: With ACF Office of Child Support
Enforcement (OCSE) assistance and oversight. States have made
significant progress in putting in place the child support
provisions of the Family Support Act. Nationally, the number of
paternities established rose by almost 100% percent from FY 1988
to FY 1994, to over 600,000.
(8) Child Support Award Guidelines; As of the close of 1994, 50
States and four territories had fully approved State plans for
the use of State guidelines as a rebuttable presumption for
setting and modifying all support awards in the State.
(9) CSE Training and Technical Assistance; By the end of FY
1995, OCSE will accomplish the following training and technical
assistance activities;
design, develop, and deliver a fifth National Training
workshop. The workshop will focus on issues regarding case
processing and legal issues related to interstate cases and
will be targeted for State and local support enforcement
agency attorneys and trainers.
- deliver two "Training of Trainers" courses to provide State
agency trainers with instruction on how to design, deliver,
and evaluate child support enforcement training.
provide state-specific training and technical assistance at
conferences sponsored by the various State child support
enforcement agencies or associations.
identify and promote successful state child support
practices .through publications and training curricula.
(The above activities were funded from the Program Administration
activity. Children and Families Services Programs account.)
(10) State Crossmatch; The Family Support Act of 1988 authorizes
OCSE access to the wage and unemployment information maintained
by the State Employment Security Agencies (SESAs) . The SESAs
provide address and employment information which is a valuable
source to assist State and local child support agencies in
locating non-custodial parents and/or their employers in
interstate support enforcement cases. These computerized
B-21
920
crossaatches are conducted nonthly. During FY 1994,
approxlaately 2.8 Billion cases were sent to the SESAs.
(11) Welfare Rcfora Waivers; In FY 1994, ACF approved waivers to
carry out 15 welfare refora deaonstration projects in 14 States
under authority of section 1115 of the Social Security Act.
B-22
921
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922
Purpose and Method of Operation
Aid to Families with Dependent Children (AFDC)
The AFDC progrzun provides transitional financial assistance to
needy families with dependent children to cover basic needs such
as food, shelter, and clothing. In order to be eligible,
families must have a dependent child who is deprived of parental
support or care because of a parent's death, incapacity,
continued absence or the unemployment of the principal family
earner in a two parent family.
The AFDC program is administered by State and local welfare
agencies under approved State plans in accordance with Federal
statutes and regulations. A State takes into consideration the
needs as well as the income and resources of all individuals in
the feunily in determining the amount of the assistance payment.
Each State determines its own need and payment standards. The
program is jointly funded by Federal, State, and, in some cases,
local governments.
Payments to Territories - Adults fAaed. Blind and Disabled^
Maintenance assistance progreuns for the aged, blind and disabled
were federalized under Title XVI of the Social Security Act as
the Supplemental Security Income program on January 1, 1974. A
small residual program, however, remains for the residents of
Puerto Rico, Guam, and the Virgin Islands. These grants are
subject to spending limitations under Section 1108 of the Social
Sec\irity Act. The limitations, which were most recently eunended
by P.L. 100-485, are: $82,000,000 for Puerto Rico, $3,800,000 for
Guam, and $2,800,000 for the Virgin Islands. Section 601 of the
Family Support Act (P.L. 100-485) provides a limitation of
$1,000,000 for American Samoa.
Emergency Assistance
The Emergency Assistance (EA) program is an optional program
established to provide temporary assistance to needy families
with children. This program is administered by State and local
welfare agencies under State plans approved in accordance with
Federal statutes and regulations. As of January 1995, 50 States
operate EA programs. Assistance may be in the form of cash
payments, in-kind assistance, or vendor payments to prevent
destitution of children and to meet emergency needs resulting
from natural disasters, homelessness, feunily violence, or child
abuse and neglect. Emergency Assistance benefits may include
payments for rent, utilities, food, clothing, temporary shelter,
alternative living arrangements, medical assistance, and family
support services. Federal matching at fifty percent of the total
EA costs is available.
B-24
923
Repatriation
This program provides assistance to U.S. citizens and their
dependents rettiming from foreign countries who have been
certified by the Department of State to be destitute or 111 or
requiring emergency repatriation due to threatened armed
conflict, civil strife or natural disaster abroad. The funding
level for the repatriate progrzun, except for the mentally ill, is
set by the authorizing statute. Section 1113 of the Social
Security Act. Spending is entirely dependent upon external
events, and is affected substantially by the extent of conflict
and natural disasters abroad.
The repatriate program currently reimburses States directly for
assistance provided by them to individual repatriates and for
State administrative costs. Dxiring FY 1995, it is expected that
the progreun will initiate a contract with a national, private
organization for provision of some of the services currently
provided by States. Individuals receiving assistance are
expected to repay the cost of such assistance. These repatriate
debts are collected by the Health Resources Services
Administration, the HHS component charged with collecting debts
owed by individuals.
AFDC Child Care
The Family Support Act of 1988 (P.L. 100-485) requires States to
guarantee child care as a condition of participation in approved
education and training activities (including JOBS) and for
employed AFDC recipients. Federal financial participation is
available for the actual cost of child care up to a statewide
limit established by the State welfare agency in its State
supportive services plan, but not for more than the applicable
local market rate. The Federal matching rate for AFDC child care
payments is the same as AFDC benefit payments and is available as
an open-ended entitlement.
Transitional Child Care
The Family Support Act of 1988 also requires States to guarantee
up to 12 months of child care for employed former AFDC recipients
who leave AFDC as a result of Increased hours of work, earnings
from employment, or expiration of the time-limited income
disregards. Child care provisions for transitional assistance
are essentially the seune as the provisions for child care
received during participation in the JOBS program, except that:
(1) child care is limited to a period of 12 months after the last
month for which the family was eligible for assistance and (2)
families receiving child care assistance must contribute to the
cost of the care in accordance with a sliding scale formula
established by the State, based on the faunily's ability to pay.
The Federal matching rate for transitional child care payments is
B-25
924
the seune as for AFDC benefit payments and is available as an
open-ended entitlement.
At-Risk Child Care
The Omnibus Budget Reconciliation Act of 1990 amended the Social
Security Act to provide States with the option to provide child
care to low-income families who: (1) are not receiving AFDC; (2)
need child care in order to work; and (3) would otherwise be at
risk of becoming eligible for AFDC. Feunilies contribute to the
cost of providing the care according to the feunily's ability to
pay. Section 403 (n) of the Social Security Act authorizes $300
million in Federal funds for allocation to States each fiscal
year beginning with FY 1991. The statute allows States which
underspend their allocation in any year to increase, subject to
certain limits and for one year only, their ceiling allocation
for the subsequent year. In FY 1995, 50 States and the District
of Columbia have At-Risk Child Care progreuns.
state and Local Administration
The Federal government reimburses 50 percent of State and local
administrative costs related to Assistance Payments programs.
Activities include State and local administrative determination
of eligibility for assistance, case maintenance, and AFDC quality
control reviews.
B-26
925
RATIONALE FOR BUDGET REOtJEST
A. Key Economic Assumptions — The estimates for the Maintenance
Assistance progreuss are based on the following economic
assumptions:
1. Unemployment Rate — The Administration's unemployment rate
assumptions anticipate a decrease in FY 1995, relative to
FY 1994, followed by a slight increase in FY 1996.
Fiscal Year Unemployment Rate
1994 6.3%
1995 5.8%
1996 6.0%
2. Consximer Price Index (CPI) — State AFDC benefit payment
standards tend to reflect not only changes in consumer
living costs, but also decisions affecting State funding
availability and budget priorities. Projected increases in
average benefit payments are not expected to keep pace with
the anticipated rise in prices.
Increase From
Calendar Year ££I Prior Year
1994 145.67 -(-2.5%
1995 150.21 •f3.1%
1996 155.01 •t-3.2%
3. Demographics — Continuing grotrth is expected in the number
of families headed by single-parents and unwed mothers.
This growth has a direct and significant impact on the
number of eligible AFDC households and contributes to a
rising caseload.
Single-Parent Increase From
Calendar Year FfllQiiigg PriffC YMC
1994 12,198,000 251,000
1995 12,454,000 256,000
1996 12,691,000 237,000
B-27
926
The AFDC caseload is expected to rise in FY 1996, reflecting the
related increase in both the unemployment rate and in the number
of low- income single-parent feu&ilies:
Cfllgndar Ygar
AFDC Average
Monthly C5i9?s
Increase From
Pripr Y^ar
1994
1995
1996
5,048,000
5,031,000
5,212,000
67,000
(17,000)
181,000
Recovery of Erroneous
P?iYinents ~ The
Omnibus Budget
B.
Reconciliation Act of 1989 (P. L. 101-239) established new criteria
for promoting the efficiency and integrity of the AFDC program.
State payments owed for excess error rate liabilities incurred
prior to FY 1991 have been waived and penalties in the future are
to be assessed against an error rate standard based on the
national average (or 4 percent, whichever is higher) .
Approximately $17 million in error rate liabilities for FY 1991
were collected in FY 1994. Estimates for FY 1995 - FY 2000
assume that collections begun in FY 1994 will continue. The
estimate for FY 1996 represents an acceleration in the amount
collected for prior year penalties; it includes the collection of
the entire amount of FY 1993 penalties, plus the remaining amount
of FY 1992 penalties.
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Payment
Error
Rate
5.0%
5.6%
5.8%
5.5%
5.4%
5.3%
5.2%
5.2%
5.2%
5.1%
Excess
Error
Amount
$36,995,000
45,345,600
46,798,500
45,202,412
44,320,024
45,129,206
45,902,382
47,516,123
49,078,866
49,667,731
C. Kev Program AsgnrnptTJ^ons —
Collections
Estimate
17,152,000
40,866,591
71,120,509
45,202,412
44,320,024
45,129,206
45,902,382
FY 1994
FY 1995
FY 1996
Aver. Monthly Cases (thous.) 5,048 5,031 5,212
AFDC-Basic 4,684 4,692 4,872
AFDC-Unemployed Parent (UP) 364 339 340
Aver. Monthly Recipients (ths) 14,259 14,149 14,624
AFDC-Basic 12,745 12,744 13,218
AFDC-UP 1,514 1,405 1,406
B-28
927
Average Recipients Per Case. 2.83 2.81 2.81
AFDC-Basic 2.72 2.72 2.71
AFDC-UP 4.16 4.14 4.13
Aver. Monthly Payment/Case $376.21 $377.74 $381.93
AFDC-Basic 362.74 365.06 369.51
AFDC-UP 548.92 552.52 559.22
Aver. Monthly Paynt/Recipient $133.19 $134.33 $136.13
AFDC-Basic 133.32 134.42 136.20
AFDC-UP 131.98 133.33 135.27
B-29
928
REVISIONS TO FY 1995 BUDGET ESTIMATES
Benefit Payments: AFDC payments decrease (-$225,718,000), as do
child support collections (■f$91,000,000) and collections of
quality control sanctions (-<-$9,958,000) . In addition, the FY
1995 current estimate reflects a financial adjustment
(-$37,146,000) due to the carryover of unobligated balemces from
FY 1994. The benefit payments activity consists of three
components: AFDC payments and an offsetting amount from the
Federal share of child support enforcement collections and the
collection of quality control sanctions. The decrease in AFDC
benefit payments is due primarily to an anticipated decrease in
the AFDC monthly caseload in FY 1995. Estimated child support
collections are running below previous estimates, based on more
recent trend information.
Payments to Territories - Adults (Aged, Blind, and Disabled) :
(+$815,000) Payments to Territories are expected to increase
slightly above previous estimates.
Emergency Assistance: (■•-$208,000,000) Estimates of budget
authority required for Emergency Assistance have been increased.
States are continuing to expand the range of their Emergency
Assistance activities to incorporate child welfare, child
protective and juvenile justice services. As a result. States
are expected to claim a higher level of reimbursement under the
EA program in FY 1995 than previously estimated.
AFDC and Transitional Child Care: (+$154,000,000) Estimated
budget authority for AFDC and Transitional Child Care has been
increased due to higher than anticipated utilization and per
child costs.
At Risk Child Care: (-t-$57,000,000) The increase in available
budget authority for the At-Risk Child Care program in FY 1995
reflects lower than anticipated State utilization of funds
available for FY 1994. The statute allows States to increase a
current year's funding ceiling, tinder certain conditions, when
funds are not used in the previous year; this has the effect of
increasing total budget authority available for FY 1995.
AFDC Administrative Costs: (•(-$104,000,000) Budget authority for
State and Local Administrative costs is expected to increase due
to a higher expenditure rate than was previously projected.
B-30
929
Aid to Families with Dependent Children (AFDC)
Progreun Data:
(dollars in thousands)
Service Grants
Formula
Discretionary
Research
Demons tr at ion
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
Total Progreun
Number of Applicants
Number of Grants
New Starts:
#
$
Continuations :
$
Contracts :
FY 1994
Actual
$12,569,554
54
$12,569,554
FY 1995
Current
Estimate
54
$12,424,136
1996
Request
$12,424,136 $12,999,000
$12,569,554
$12,424,136
$12,999,000
54
54
54
54
54
54
54
$12,999,000
B-31
930
Payments to Territories - Adults (Aged, Blind, Disabled)
Program Data:
FY 1994
AVtMAl
FY 1995
Current
FY 1996
R^qu^st
Service Grants
Formula
Discretionary
$19,
,428,000
$19,428,000
$19,428,000
Research
~
~
—
Demonstration
—
~
—
Development
—
~
—
Training/Technical
Assistance
—
~
—
Evaluation
—
~
~
Progreua Support
~
~
—
Other
—
—
~
Total Program
$19
,428,000
$19,428,000
$19,428,000
Number of Applicants
3
3
3
Number of Grants
New Starts:
3
3
3
$
—
~
—
Continuations :
#
$
$19
3
,428,000
3
$19,428,000
3
$19,428,000
Contracts :
#
_.
$
—
—
~
B-32
931
Emergency Assistance
Program Data:
FY 1995
FY 1994 Current FY 1996
££i^UAl Estimate Request
Service Grants
Formula $552,979,000 $864,000,000 $974,000,000
Discretionary
Research — — —
Demonstration — —
Development — --
Training/Technical
Assistance — —
Evaluation — — —
Progreun Support — — —
Other (footnote) — ~
Total Program
$552,
,979,
,000
$864,
,000,
,000
$974,000,000
Number of Applicants
49
50
50
Number of Grants
New Starts:
#
49
50
50
$
—
—
--
Continuations :
#
$
$552 <
,979,
49
,000
$864,
,000,
50
,000
50
$974,000,000
Contracts :
#
..
$
—
—
—
B-33
932
Repatriation
FY 1994
FY 1995
Current
FY 1996
Reouest
Service Grants:
Formula
Discretionary
~
—
Research
~
—
~
Demonstration
—
~
~
Development
~
—
—
Training/Technical
Assistance
~
—
~
Evaluation
~
—
~
Program Support
~
~
~
Other*/
$156,000*
$1,000,000
$1,
,000,000
TOTAL PROGRAM
$156,000
$1,000,000
$1,
,000,000
Number of Applicants
~
~
—
Number of Grants
~
~
—
New Starts:
#
_^
$
—
—
—
Continuations :
$
—
—
—
Contracts: **
# _- 1 1
$ — $200,000 $150,000
* The Repatriation Program reimburses States directly for
assistance provided by States to individual repatriates and for
State administrative costs. The Health Resources and Services
Administration in PHS is responsible for collection of the
repayments from repatriates.
** During FY 1995, ACF will initiate a l2-month contract for
provision of some of the services to repatriates previously
provided by the States. Larger contract value for FY 1995
includes program start-up costs.
B-34
933
AFDC Child Care
PrograB Data:
FY 1994
FY 1995
Current
FY 1996
Request
Service Grants
Formula
Discretionary
$569,
,824,000
$666,000,000
$734
,000,000
Research
~
—
~
Demonstration
—
~
~
Development
~
—
~
Training/Technical
Assistance
—
—
—
Evaluation
—
~
~
Progreun Support
~
~
~
Other
—
~
~
Total Program
$569,
,824,000
$666,000,000
$734,
,000,000
Number of Applicants
51
51
51
Number of Grants
New Starts:
#
$
Continuations :
$
51
51
51
$569,
51
,824,000
51
$666,000,000
$734,
51
,000,000
Contracts :
#
$
—
—
—
B-35
934
Transitional Child Care
Program Data:
FY 1995
FY 1994 Current FY 1996
Actual Estimate Recpiest
Service Grants
Formula $160,720,000 $199,000,000 $220,000,000
Discretionary
Research ~~
Demonstration ~~ ~~ ~~
Development ~~
Training/Technical
Assistance —
Evaluation -~
Program Support —
Other
Total Program
$160,720,000
$199,000,000
$220,000,000
Number of Applicants
54
54
54
Number of Grants
New Starts:
54
54
54
$
—
—
~~
Continuations :
t
$
54
$160,720,000
54
$199,000,000
54
$220,000,000
Contracts :
#
..
__
$
—
—
— '
B-36
935
At-Risk Child Care
Progran Data:
FY 1994
FY 1995
Current
Estimate
FY 1996
Reqvest
Service Grants
Formula
Discretionary
$275,585,000
$357,000,000
$300,
,000,000
Reseetrch
~
—
~
Demonstration
~
~
—
Development
~
—
—
Training/Technical
Assistance
—
—
—
Evaluation
—
—
~
Program Support
~
—
—
Other
—
—
—
Total Program
$275,585,000
$357,000,000
$300,
,000,000
Number of Applicants
51
54
54
Number of Grants
New Starts:
#
$
51
2
$142,000
54
54
Continuations :
#
$
49
$274,165,000
54
$357,000,000
$300,
54
,000,000
Contracts :
#
$
—
—
—
B-37
936
AFDC State and Local Administrative Costs
Progreun Data:
FY 1995
FY 1994 Current FY 1996
AS^UAl Estimate Request
Service Gremts
Formula $1,667,892,000 $1,716,000,000 $1,770,000,000
Discretionary —
Research ~ ~
Demonstratlon -- ~
Development — ~ —
Training/Technical
Assistance — —
Evaluation — ~
Progran Support ~ —
Other
Total Progreun $1,667,892,000 $1,716,000,000 $1,770,000,000
Number of Applicants 54 54 54
Number of Grants 54 54 54
New Starts:
Continuations :
# 54 54 54
$ $1,667,892,000 $1,716,000,000 $1,770,000,000
Contracts :
$
B-38
937
Child Support Enforcement
Authorizing legislation: Title IV-D of the Social Secvirity Act,
as eunended
(Dollars in Thousands)
1995 Increase Increase
1995 Current or 1996 or
Appropriation Estimate Decrease Estimate Decrease
CSE admin.
costs Si. 929. OOP SI. 966. OOP -t-S37.PPP Sl.943.PPP -$23,Q9P
Total, budget
authority $1,929,PPP $1,966,PPP +$37,0PP $1,943, PPP -$23,PPP
Purpose and Method of Operation:
The Child Support Enforcement (CSE) progreun is a Federal/State
effort to ensure that children are supported financially by both
of their parents, to foster family responsibility, and to reduce
the need for welfare and its cost to the taxpayer. All people
with custody of children who need or are owed child support can
get help from their State or local CSE agency. These agencies
locate non-custodial parents, establish paternity when necessary,
and establish and enforce orders for support.
The program strengthens families by helping children get the
support they deserve from non-custodial parents. By securing
support from non-custodial parents on a consistent and continuing
basis, non-welfare families may avoid the need for public
assistance, thus reducing welfare spending.
In non-AFDC cases, child support collections are forwarded to the
custodial family. Applicants for AFDC assign their rights to
support payments to the State as a condition of receipt of
assistance. The AFDC family receives up to the first $5P of each
month's current child support collected, in addition to the AFDC
payment. The remaining child support collections in AFDC cases
are shared between the State and Federal government. A portion
of the Federal share of child support collections is paid to the
States as incentive payments based on their cost effectiveness in
operating the program and collections achieved.
The Federal government provides funding in three ways. It
provides a 66% match rate for general State administrative costs,
a 9P% match rate for paternity testing and development of
approved Statewide computer systems (due to end on September 3P,
1995) , and full funding of incentive payments.
B-39
938
Rationale for Budget Request
In accordance with the provisions of the Family Support Act of
1988 States have intensified their efforts to secure increased
child support collections from non-custodial parents. Expanded
outlays for the development, implementation, and operation of
improved automatic data processing systems have promoted greater
program efficiency. These outlays have been supported by an
enhanced (90%) match rate that will expire on September 30, 1995.
The expiration of this match rate accounts for a $214,000,000
reduction in administrative expenditures in FY 1996.
In addition, estimated program costs reflect increases in State
employee's salaries and other cost increases. The Federal share
of these expenses is further increased by the payment of an
incentive to States to encourage improvement in program
effectiveness .
The Office of Child Support Enforcement (OCSE) has been
designated by OHB to be a Government Performance and Results Act
(GPRA) pilot agency. Beginning in FY 1995, and continuing
through FY 1996, OCSE will pilot test the GPRA principles of
results-oriented management and performance measurement in
partnership with State and local child support enforcement
progreuns across the nation.
OCSE will, in essence, develop both strategic plans and annual
performance plans for the child support enforcement program over
the next two years. As a GPRA pilot, OCSE must conduct
performance planning for FY 1995 and FY 1996. Starting with a
basic performance plan for FY 1995, OCSE's two measures of
successful program results, tied to the objectives of the
national strategic plan, are the total number of paternities
established and the total child support dollars collected.
OCSE is establishing new liaison positions to better serve the
recipients of the child support program. Major coordination
linkages will be established, including: with the Department of
State focusing on international child support issues; with Native
American organizations focusing on child support Issues on Indian
reservations; with all branches of the Military focusing on child
support issues and the military; with the Department of Justice
focusing on criminal non-support matters; and with a variety of
social service programs focusing on an array of child support
issues and problems. In addition, outreach activities will be
expanded to non-governmental groups to stress the importance of
paternity establishment and parental rights and responsibility.
B-40
939
CHILD SUPPORT ENFORCEMENT COLLECTIONS AND COSTS
(dollars in nillions)
(Outlays)
Total Federal and State;
Total Collections
Non-AFDC Collections
AFDC/FC Collections
Distributed to Feuailies
Balance, Available to Offset
Program Costs
Administrative Costs
1994
199$
199$
Change
95-9§
S9.608
$7,124
$1Q.??2
$7,721
S11.244
$8,371
+§992
+$650
$2,484
$454
$2,631
S479
$2,873
$52Q
+$242
+S41
$2,030
$2.?71
$2,152
$2.9$4
$2,353
$2,927
+$201
+§??
Net Costs
Federal Share;
(+)
Share of Admin. Costs
Federal Incentive Payments
Federal Costs
Share of AFDC/FC Collections
AFDC Offset
Foster Care Offset
Total Federal Cost (+)
Net AFDC Program Cost (+)
State Share;
Share of AFDC/FC Collections
Federal Incentive Payments
State Revenues
Share of Admin. Costs
Total State Savings (-)
Total FC State Savings (-)
Total AFDC State Savings (-)
+$541 +$712
+$574 -$138
$1,757
+$379
$2,136
$1,146
10
$1,957
+$402
$2,359
$1,213
10
$1,952
+$439
$2,391
SI. 325
$1,314
11
-$5
+$37
+$32
+$102
+$101
+$1
+$980
+$990
+$1,136
+$1,146
+$1,066
+$1,077
-$70
-$69
-$874
-$?79
$1,253
$914
-$929
-$492
-$1,331
S907
-$1,028
-$439
-$1,467
$975
-$99
-$37
-$136
+$§9
-$439
-8
-$431
-$424
-8
-$416
-$492
-9
-$483
-$68
-1
-$67
B-41
940
In the aggregate, the financial payments provided by non-
custodial parents for child support have exceeded the costs
Incurred to operate this program. In 1994, for example, total
collections of $3.74 were realized for every dollar spent.
However, since collections on behalf of non-AFDC feunllles are not
available to help offset Federal and State operating costs, the
amount of shared AFDC collections alone is not sufficient to meet
anticipated child support enforcement expenditures.
REVISIONS TO FY 1995 BUDGET ESTIMATES
Child Support Enforcement State administrative costs
(■i-$37,000,000) : The Federal share of expenditures for program
administration in FY 1995 is expected to increase at a somewhat
faster rate than anticipated. An increase of $21 million is due
to a greater than expected rise in States' ADP expenditures in
order to teJce advantage of the enhanced match rate (90%) which
expires at the end of FY 1995. The remaining $16 million growth
is due to greater increases In State employee salaries and
collection estimates.
B-42
941
Child Support Enforcement
Progran Data:
(dollars in thousands)
FY 1994
FY 1995
Current
Egtiaatg
FY 1995
R?qV?st
Service Grants
Fomula*
Discretionary
Research
$1,789,492
$1,964,500
$1,941,500
Demonstration
—
—
—
Development
—
~
~
Training/Technical
Assistance
—
—
—
Evaluation
~
~
~
Prograun Support
~
—
~
Other
~
—
—
Total Progreun
$1,789,492
$1,964,500
$1,941,500
Number of Applicants
54
54
54
Number of Grants
New Starts:
#
$
Continuations :
#
$
54
54
54
54
$1,789,492
54
$1,964,500
54
$1,941,500
Contracts :
#
$
—
—
—
* In FY 1994 $1,010,000 vas transferred to the Children and
Families Services Progreun account for carrying out the activities
of the Federal Parent Locator Service. In FY 1995 and FY 1996,
an estimated $1,500,000 will be transferred for this purpose.
B-43
942
STATE TABLES
B-44
943
AFDC BENEFIT PAYMENTS
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$64,212,777
55,607,907
172,710,542
45,683,809
2,958,137,436
Colorado 87,650,900
Connecticut 193,056,909
Delaware 19,775,476
Dist. of Columbia65,433,196
Florida 439,548,660
Georgia
Guaun
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
272,235,955
2,836,681
84,322,337
23,867,769
459,897,621
147,353,440
102,689,773
74,156,996
141,199,225
118,657,035
56,969,816
148,743,711
369,197,953
669,768,573
204,205,959
62,692,051
170,362,343
34,770,969
36,320,286
24,205,706
$63,154,355
54,691,320
169,863,747
44,930,801
2,909,378,338
86,206,147
189,874,744
19,449,516
64,354,658
432,303,563
267,748,679
2,789,924
82,932,449
23,474,356
452,317,110
144,924,607
100,997,133
72,934,663
138,871,833
116,701,206
56,030,780
146,291,962
363,112,448
658,728,751
200,840,024
61,658,695
167,554,254
34,197,838
35,721,617
23,806,722
$66,076,503
57,221,884
177,723,332
47,009,746
3,043,995,093
90,194,900
198,660,237
20,349,444
67,332,344
452,306,221
280,137,394
2,919,014
86,769,728
24,560,513
473,245,795
151,630,260
105,670,264
76,309,345
145,297,424
122,100,964
58,623,321
153,060,882
379,913,638
689,208,089
210,132,879
64,511,639
175,306,979
35,780,170
37,374,454
24,908,258
B-45
944
AFDC BENEFIT PAYMENTS (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Hampshire
New Jersey
New Mexico
New York 1
North Carolina
32,249,125
272,708,393
105,321,116
,630,007,691
230,261,258
31,717,561
268,213,330
103,585,104
1,603,140,209
226,465,852
33,185,131
280,623,544
108,377,980
1,677,317,407
236,944,413
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
18,399,076
624,257,179
115,505,529
127,041,877
507,397,479
18,095,803
613,967,523
113,601,647
124,947,841
499,034,026
18,933,095
642,375,762
118,857,988
130,729,170
522,124,299
Puerto Rico
Rhode Island
South Carolina
South D2Jcota
Tennessee
56,826,624
74,416,373
82,669,325
17,175,777
150,046,063
55,889,948
73,189,765
81,306,683
16,892,668
147,572,848
58,475,972
76,576,251
85,068,738
17,674,291
154,401,034
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
347,206,663
61,871,886
37,043,996
2,209,036
127,956,840
336,830,156
341,483,642
60,852,049
36,433,398
2,172,624
125,847,722
331,278,171
357,284,069
63,667,670
38,119,169
2,273,151
131,670,688
346,606,391
West Virginia
Wisconsin
Wyoming
93,074,952
261,811,087
13,796,313
91,540,794
257,495,644
13,568,908
95,776,381
269,409,951
14,196,741
Financial
Adjustments
(62,801,625)
Total, Budget
Authority $12,569,554,000
$12,424,136,000 $12,999,000,000
B-46
945
PAYMENTS TO TERRITORIES
State
1994
Actual
1995
Estimate
1996
Estimate
Guam $900,718 $900,718 $900,718
Puerto Rico 18,053,940 18,053,940 18,053,940
Virgin Islands 473,459 473,459 473,459
Total, Budget
Authority
$19,428,117
$19,428,117
$19,428,117
B-47
946
EMERGENCY ASSISTANCE
State
1994
Actual
1995
Estimatey
1996
Estimatel'
Alabama
Alaska
Arizona
Arkansas
California
$1,771,115
0
4,375,798
1,951,058
82,372,422
$5,113,240
0
6,245,205
1,549,841
121,514,381
$5,573,866
0
7,191,249
1,761,534
139,833,893
Colorado
Connecticut
Delaware
Dist. of Col.
Florida
2,838,989
23,000,000
243,058
21,206,214
2,663,114
11,920,020
40,553,281
6,682,475
1,785,226
9,962,002
13,643,480
44,206,527
7,284,467
1,946,048
10,859,429
Georgia
Guam
Hawaii
Idaho
Illinois
8,368,623
0
1,112,500
945,632
7,122,610
8,238,928
1,297,264
560,693
3,702,691
19,879,924
9,459,236
1,626,031
614,086
4,439,873
21,670,808
Indiana
Iowa
Kansas
Kentucky
Louisiana
20,000,000
879,492
4,048,837
200,000
0
22,524,703
1,421,569
1,115,215
595,075
0
25,779,132
2,066,175
1,274,301
648,683
0
Maine
Maryland
Massachusetts
Michigan
Minnesota
381,020
6,159,023
33,856,839
6,042,232
7,055,201
1,641,526
5,143,655
28,233,018
8,022,497
5,274,571
1,789,403
5,694,473
46,152,575
8,841,305
6,026,983
Mississippi
Missouri
Montana
Nebraska
Nevada
0
4,575,504
261,427
249,273
2,772,421
0
10,138,320
68,323
422,283
4,490,835
0
11,532,137
78,322
483,389
5,385,508
B-48
947
EMERGENCY ASSISTANCE (continued)
State
1994
Actual
1995
Estimatel'
1996
Estimate^
New Hampshire
New Jersey
New Mexico
New York
North Carolina
844,893
28,893,659
0
186,260,549
3,518,086
711,446
19,267,657
1,322,390
310,596,701
7,506,765
790,912
21,633,329
1,513,593
337,192,012
8,183,012
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
1,357,011
4,277,277
930,087
4,515,249
53,782,884
3,357,106
3,174,617
54,218
4,659,660
145,506,496
3,748,906
3,493,757
59,102
5,112,100
158,933,515
Puerto Rico
Rhode Island
South Carolina
South Dzikota
Tennessee
145,839
4,883,079
541,573
940,227
4,212,055
88,159
1,937,301
528,956
883,356
9,050,434
96,101
2,421,268
605,437
991,764
10,359,223
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
1,391,034
337,915
575,943
(480)
27,912
4,720,736
8,610,520
227,451
1,140,341
423,165
38,790
11,037,545
12,322,089
252,746
1,305,054
461,285
44,207
12,015,046
West Virginia
Wisconsin
Wyoming
2,737,902
1,790,905
1,841,919
2,622,739
1,737,620
1,419,806
2,888,320
2,089,239
1,625,070
Total , Budget
Authority $552,978,656 $864,000,000 $974,000,000
[' - Amounts reflect estimated State share of total expenditures.
B-49
948
AFDC STATE AND LOCAL ADMINISTRATION
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$12,501,577
4,992,999
22,820,238
6,812,864
290,395,603
$12,859,228
5,135,841
23,473,089
7,007,769
298,703,371
$13,263,889
5,297,458
24,211,753
7,228,293
308,103,128
Colorado 12,746,468
Connecticut 17,217,173
Delaware 3,519,866
Dist. of Columbial5,867,708
Florida 83,047,121
13,111,125
17,709,729
3,620,564
16,321,658
85,422,969
13,523,713
18,267,028
3,734,498
16,835,277
88,111,104
Georgia
Guam
Hawaii
Idaho
Illinois
32,774,255
626,362
4,898,026
4,282,414
44,161,821
33,711,875
644,281
5,038,151
4,404,927
45,425,222
34,772,738
664,556
5,196,694
4,543,544
46,854,687
Indiana
Iowa
Kansas
Kentucky
Louisiana
26,500,705
9,863,227
20,515,773
17,881,096
14,264,728
27,258,849
10,145,399
21,102,697
18,392,646
14,672,820
28,116,645
10,464,660
21,766,768
18,971,436
15,134,552
Maine
Maryland
Massachusetts
Michigan
Minnesota
3,578,320
46,041,326
38,658,316
80,845,855
34,070,723
3,680,690
47,358,496
39,764,270
83,158,729
35,045,433
3,796,516
48,848,798
41,015,593
85,775,612
36,148,261
Mississippi
Missouri
Montana
Nebraska
Nevada
6,822,568
19,836,011
5,007,029
7,304,387
8,002,733
7,017,751
20,403,488
5,150,272
7,513,354
8,231,679
7,238,589
21,045,556
5,312,343
7,749,788
8,490,718
B-50
949
AFDC STATE AND LOCAL ADMINISTRATION (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Hampshire
New Jersey
New Mexico
New York
North Carolina
3,305,734
76,641,379
8,277,786
269,530,478
32,990,767
3,400,306
78,833,969
8,514,601
277,241,324
33,934,581
3,507,309
81,314,758
8,782,543
285,965,701
35,002,452
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
2,232,041
49,195,143
18,507,035
26,004,153
54,844,822
2,295,896
50,602,539
19,036,492
26,748,091
56,413,847
2,368,144
52,194,927
19,635,542
27,589,814
58,189,108
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
6,403,776
7,231,958
9,813,485
1,960,232
26,449,838
6,586,978
7,438,853
10,094,233
2,016,311
27,206,527
6,794,261
7,672,943
10,411,884
2,079,761
28,062,676
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
67,926,209
9,921,927
2,837,029
332,693
23,326,044
44,971,979
69,869,472
10,205,778
2,918,192
342,211
23,993,366
46,258,557
72,068,162
10,526,939
3,010,023
352,980
24,748,402
47,714,246
West Virginia
Wisconsin
Wyoming
3,830,249
23,624,787
2,256,469
3,939,826
24,300,655
2,321,023
4,063,807
25,065,361
2,394,062
Financial
Adjustment
(381,305)
Total, Budget
Authority $1,667,892,000
$1,716,000,000 $1,770,000,000
B-51
950
AFDC/JOBS CHILD CARE
1994
1995
1996
State
Actual
Estimate
Estimate
Alabeuna
$8,912,466
$10,416,729
$11,480,299
Alaska
1,570,120
1,835,128
2,022,498
Arizona
7,571,296
8,849,194
9,752,715
Arkansas
1,251,065
1,462,222
1,611,518
California
24,645,871
28,805,649
31,746,766
Colorado
4,719,539
5,516,112
6,079,319
Connecticut
7,679,328
8,975,460
9,891,873
Delaware
3,131,053
3,659,518
4,033,162
Dist. of Coliunbia 3,205,641
3,746,695
4,129,240
Florida
13,656,595
15,961,582
17,591,293
Georgia
31,526,546
36,847,658
40,609,881
Hawaii
1,663,023
1,943,711
2,142,168
Idaho
1,259,996
1,472,661
1,623,023
Illinois
18,305,202
21,394,789
23,579,242
Indiana
11,545,572
13,494,256
14,872,048
Iowa
2,493,919
2,914,847
3,212,459
Kansas
4,912,786
5,741,976
6,328,244
Kentucky
11,014,984
12,874,114
14,188,588
Louisiana
8,745,134
10,221,155
11,264,756
Maine
790,730
924,191
1,018,553
Maryland
16,718,835
19,540,672
21,535,816
Massachusetts
25,666,856
29,998,958
33,061,915
Michigan
6,732,404
7,868,712
8,672,124
Minnesota
12,763,543
14,917,799
16,440,938
Mississippi
3,661,384
4,279,359
4,716,291
Missouri
11,484,421
13,422,784
14,793,278
Montana
1,637,428
1,913,796
2,109,199
Nebraska
7,540,565
8,813,276
9,713,130
Nevada
522,065
610,180
672,481
New Hampshire
2,666,762
3,116,863
3,435,101
B-52
951
AFDC/JOBS CHILD CARE (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
6.
,159,095
7,198,639
7,933,635
New Mexico
4,
,539,192
5,305,326
5,847,011
New York
41,
,560,553
48,575,224
53,534,856
North Carolina
47,
,089,521
55,037,382
60,656,815
North Dakota
1,
,435,348
1,677,609
1,848,896
Ohio
36,
,644,759
42,829,733
47,202,739
Oklaihoma
17,
,159,885
20,056,164
22,103,941
Oregon
9.
,475,848
11,075,200
12,206,001
Pennsylvania
29,
,771,643
34,796,559
38,349,361
Rhode Island
4,
,685,209
5,475,988
6,035,098
South Carolina
2,
,558,898
2,990,794
3,296,160
South Dedcota
820,496
958,981
1,056,895
Tennessee
24,
,296,979
28,397,870
31,297,352
Texas
25,
,812,965
30,169,727
33,250,120
Utah
8,
,015,756
9,368,671
10,325,232
Vermont
2,
,134,275
2,494,502
2,749,196
Virginia
7,
,738,451
9,044,562
9,968,031
Washington
26,
,448,696
30,912,758
34,069,016
West Virginia
4,
,722,712
5,519,820
6,083,405
Wisconsin
8,
,956,387
10,468,063
11,536,874
Wyoming
1,
,802,203
2,106,382
2,321,448
Total, Budget
Authority
$569,
,824,000
$666,000,000
$734,000,000
B-53
952
TRANSITIONAL CHILD CARE
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$3,530,162
409,332
3,989,709
368,415
4,721,469
$4,370,970
506,826
4,939,971
456,163
5,846,020
$4,832,228
560,310
5,461,274
504,301
6,462,937
Colorado
Connecticut
Delaware
Dist. of Col.
Florida
1,325,433
3,490,604
484,902
164,275
9,443,935
1,641,122
4,321,990
600,395
203,402
11,693,274
1,814,306
4,778,079
663,753
224,867
12,927,238
Georgia
Hawaii
Idaho
Illinois
Indiana
4,213,335
79,849
245,197
4,875,865
4,277,421
5,216,860
98,867
303,598
6,037,190
5,296,209
5,767,383
109,300
335,636
6,674,280
5,855,105
Iowa
Kansas
Kentucky
Louisiana
Maine
1,089,934
2,244,290
2,303,472
2,471,944
525,494
1,349,533
2,778,831
2,852,109
3,060,707
650,655
1,491,946
3,072,074
3,153,085
3,383,696
719,317
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
1,718,826
7,826,810
2,699,734
4,663,459
482,425
2,128,213
9,690,986
3,342,752
5,774,193
597,328
2,352,798
10,713,653
3,695,505
6,383,530
660,363
Missouri
Montana
Nebraska
Nevada
New Hampshire
4,275,317
680,852
1,584,721
475,999
548,274
5,293,604
843,016
1,962,167
589,372
678,861
5,852,226
931,977
2,169,230
651,567
750,500
B-54
953
TRANSITIONAL CHILD
CARE (continued)
1994
1995
1996
state
Actual
Estimate
Estimate
New Jersey
2,264,690
2,804,090
3,099,999
New Mexico
2,012,885
2,492,310
2,755,318
New York
4,925,270
6,098,362
6,741,908
North Carolina
9,111,645
11,281,840
12,472,386
North Daikota
414,342
513,029
567,168
Ohio
10,272,962
12,719,758
14,062,044
Oklahoma
1,570,146
1,944,121
2,149,279
Oregon
6,196,973
7,672,957
8,482,666
Pennsylvania
4,808,861
5,954,227
6,582,563
Rhode Island
457,382
566,320
626,082
South Carolina
883,432
1,093,846
1,209,277
South DeJcota
467,536
578,893
639,982
Tennessee
7,509,997
9,298,715
10,279,986
Texas
16,312,952
20,198,340
22,329,825
Utah
2,260,365
2,798,735
3,094,079
Vermont
963,020
1,192,390
1,318,220
Virginia
4,375,001
5,417,031
5,988,677
Washington
5,586,861
6,917,529
7,647,519
West Virginia
906,831
1,122,818
1,241,306
Wisconsin
3,802,980
4,708,767
5,205,672
Wyoming
404,415
500,738
553,580
Total, Budget
Authority
$160,720,000
$199,000,000
$220,000,000
B-55
954
AT-RISK CHILD CARE
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$4,373,571
903,270
4,708,783
2,271,030
36,591,920
$5,665,634
1,170,119
6,099,876
2,941,949
47,402,092
$4,761,037
983,293
5,125,946
2,472,226
39,833,689
Colorado 4,061,715
Connecticut 4,573,662
Delaware 771,463
Dist. of Columbia 536,943
Florida 13,903,804
5,261,647
5,924,836
999,373
695,569
18,011,336
4,421,552
4,978,854
839,809
584,512
15,135,577
Georgia
Gu2un
Hawaii
Idaho
Illinois
3,904,624
1,318,040
1,438,507
13,426,268
5,058,148
1,707,422
1,863,478
17,392,724
4,250,544
1,434,808
1,565,948
14,615,735
Indiana
Iowa
Kansas
Kentucky
Louisiana
6,539,470
3,176,853
5,162,425
4,108,845
8,471,393
4,115,375
6,687,535
5,322,701
7,118,818
3,458,298
5,619,777
4,472,858
Maine
Maryland
Massachusetts
Michigan
Minnesota
1,335,153
5,397,817
6,239,983
11,522,366
5,358,597
1,729,591
6,992,467
8,083,430
14,926,362
6,941,661
1,453,438
5,876,023
6,792,799
12,543,161
5,833,328
Mississippi
Missoxiri
Montana
Nebraska
Nevada
351,302
5,926,418
841,943
1,929,249
1,352,382
455,085
7,677,230
1,090,674
2,499,198
1,751,910
382,425
6,451,454
916,533
2,100,166
1,472,193
B-56
955
AT-RISK CHILD CARE (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New H2unpshire
New Jersey
New Mexico
New York
North Carolina
1,260,808
8,271,876
1,942,722
19,646,983
7,274,110
1,633,282
10,715,596
2,516,651
25,451,194
9,423,064
1,372,506
9,004,702
2,114,833
21,387,558
7,918,542
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
549,964
12,333,962
3,733,875
3,351,616
12,501,961
712,437
15,977,724
4,836,955
4,341,767
16,195,354
598,687
13,426,658
4,064,668
3,648,544
13,609,541
Puerto Rico
Rhode Island
South Carolina
South DaUcota
Tennessee
0
923,000
4,796,764
487,671
2,859,200
0
1,195,677
6,213,848
631,741
3,703,879
0
1,004,771
5,221,721
530,875
3,112,504
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
19,600,985
2,825,628
636,844
0
6,782,758
6,037,741
25,391,607
3,660,389
824,984
0
8,786,555
7,821,441
21,337,485
3,075,957
693,264
0
7,383,659
6,572,640
West Virginia
Wisconsin
Wyoming
1,801,604
5,402,361
536,382
2,333,843
6,998,354
694,843
1,961,213
5,880,970
583,901
Total, Budget
Authority
$275,585,218
$357,000,000
$300,000,000
B-57
956
CHILD SUPPORT ENFORCEMENT
NET FEDERAL SHARE OF AFDC COLLECTIONS
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$8,359,885
3,361,626
6,925,500
6,134,182
108,563,636
$8,827,951
3,549,842
7,313,255
6,477,632
114,642,069
$9,524,609
3,829,978
7,890,380
6,988,814
123,689,037
Colorado 8,983,317
Connecticut 12,563,881
Delaware 2,021,492
Dist. of Columbia 1,224,284
Florida 24,823,409
9,486,290
13,267,328
2,134,674
1,292,831
26,213,262
10,234,899
14,314,318
2,303,132
1,394,855
28,281,879
Georgia
Gueun
Hawaii
Idaho
Illinois
7,706,999
596,924
2,808,882
4,138,217
13,975,686
8,138,511
630,346
2,966,150
4,369,914
14,758,178
8,780,761
680,089
3,200,224
4,714,765
15,922,819
Indiana
Iowa
Kansas
Kentucky
Louisiana
16,013,868
14,628,571
8,584,713
15,385,526
10,685,730
16,910,477
15,447,619
9,065,368
16,246,956
11,284,019
18,244,966
16,666,667
9,780,761
17,529,083
12,174,497
Maine
Maryland
Massachusetts
Michigan
Minnesota
5,624,637
11,345,488
15,547,521
52,863,141
19,353,895
5,939,558
11,980,717
16,418,020
55,822,926
20,437,511
6,408,277
12,926,174
17,713,647
60,228,188
22,050,336
Mississippi
Missouri
Montana
Nebraska
Nevada
9,846,305
18,904,238
2,587,981
3,371,444
1,236,065
10,397,595
19,962,678
2,732,881
3,560,210
1,305,272
11,218,121
21,538,031
2,948,546
3,841,163
1,408,277
B-58
957
CHILD SUPPORT ENFORCEMENT
NET FED
ERAL SHARE OF
AFDC COT.T.KCTIONS
(continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Hanpshire
New Jersey
New Mexico
New York
North Carolina
2,422,059
24,252,993
6,795,904
50,277,124
25,588,219
2,557,670
25,610,908
7,176,404
53,092,119
27,020,892
2,759,508
27,631,991
7,742,729
57,281,879
29,153,244
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
2,539,873
39,891,820
9,504,644
9,653,875
34,751,202
2,682,080
42,125,346
10,036,805
10,194,392
36,696,908
2,893,736
45,449,664
10,828,859
10,998,881
39,592,841
Puerto Rico
Rhode Island
South Carolina
South DeJcota
Tennessee
530,163
4,843,137
10,346,033
2,196,249
13,277,638
559,847
5,114,302
10,925,303
2,319,216
14,021,047
604,027
5,517,897
11,787,472
2,502,237
15,127,517
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
28,756,433
10,176,184
2,468,203
141,377
9,060,878
33,066,462
30,366,494
10,745,944
2,606,397
149,292
9,568,193
34,917,840
32,762,864
11,593,960
2,812,081
161,074
10,323,266
37,673,378
West Virginia
Wisconsin
Wyoming
5,596,165
22,079,325
1,616,997
5,909,492
23,315,537
1,707,532
6,375,839
25,155,481
1,842,282
Total, Budget
Authority
$768,000,000
$811,000,000
$875,000,000
B-59
958
CHILD SUPPORT ENFORCEMENT
FEDERAL SHARE OF STATE AND LOCAL ADMINISTRATIVE COSTS
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$30,355,593
8,444,709
35,467,955
14,865,908
214,246,569
$33,349,739
9,277,659
38,966,363
16,332,218
235,378,937
$32,959,584
9,169,121
38,510,500
16,141,149
232,625,266
Colorado 20,060,318
Connecticut 23,021,640
Delaware 8,097,081
Dist. of Columbia 7,950,193
Florida 67,403,693
22,038,982
25,292,396
8,895,743
8,734,366
74,052,106
21,781,151
24,996,503
8,791,673
8,632,184
73,185,779
Georgia
Guam
Hawaii
Idaho
Illinois
38,902,026
3,034,987
9,097,854
8,003,457
61,776,926
42,739,156
3,334,345
9,995,228
8,792,884
67,870,339
42,239,156
3,295,337
9,878,295
8,690,017
67,076,332
Indiana
Iowa
Kansas
Kentucky
Louisiana
15,857,599
15,212,760
20,636,329
25,467,798
20,615,438
17,421,725
16,713,282
22,671,809
27,979,833
22,648,857
17,217,910
16,517,755
22,406,574
27,652,500
22,383,891
Maine
Maryland
Massachusetts
Michigan
Minnesota
9,051,091
39,596,727
49,146,818
77,039,675
47,163,104
9,943,852
43,502,379
53,994,451
84,638,540
51,815,072
9,827,520
42,993,450
53,362,776
83,648,364
51,208,894
Mississippi
Missouri
Montana
Nebraska
Nevada
21,159,040
42,265,578
5,396,768
13,066,221
11,463,253
23,246,078
46,434,475
5,929,082
14,355,017
12,593,939
22,974,125
45,891,244
5,859,718
14,187,079
12,446,604
B-60
959
CHILD SUPPORT ENFORCEMENT
FEDERAL SHARE OF STATE AND LOCAL ADMINISTRATIVE COSTS
(continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Heunpshire
8,
,596,660
9,444,598
9,334,107
New Jersey
70,
,979,749
77,980,889
77,068,600
New Mexico
12,
,478,781
13,709,635
13,549,248
New York
120,
,128,240
131,977,178
130,433,193
North Carolina
50,
,526,306
55,510,006
54,860,601
North Dedcota
3,
,549,757
3,899,890
3,854,266
Ohio
95,
,487,043
104,905,478
103,678,201
Oklahoma
12,
,037,290
13,224,597
13,069,884
Oregon
24,
,502,479
26,919,299
26,604,373
Pennsylvania
82,
,956,215
91,138,663
90,072,443
Puerto Rico
19,
,196,972
21,090,480
20,843,745
Rhode Island
4,
,692,861
5,155,745
5,095,429
South Carolina
20,
,223,549
22,218,314
21,958,385
South Dedcota
2,
,930,157
3,219,175
3,181,514
Tennessee
21,
,524,613
23,647,709
23,371,057
Texas
104,
,057,692
114,321,499
112,984,065
Utah
15,
,394,889
16,913,375
16,715,507
Vermont
3,
,863,694
4,244,792
4,195,133
Virgin Islands
1,
,301,428
1,429,795
1,413,068
Virginia
31,
,481,140
34,586,306
34,181,685
Washington
67,
,632,320
74,303,284
73,434,019
West Virginia
12,
,009,197
13,193,733
13,039,381
Wisconsin
34,
,895,279
38,337,201
37,888,699
Wyoming
5,
,178,702
5,689,507
5,622,946
Total , Budget
Authority $1,789,492,121
$1,966,000,000 $1,943,000,000
B-61
960
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Payments to States for the Job Opportunities and Basic
Skills Training Program
FY 1996 Budget Page
Appropriation language and explanation of language changes . C-2
Amount available for obligation C-3
Summary of changes C-4
Budget authority by activity C-5
Budget authority by object C-6
Authorizing legislation C-7
Appropriation history table C-8
Justification:
A. General Statement C-9
B. Program Accomplishments C-10
C. Payments to States for the Job Opportunities
and Basic Skills Training Program C-12
D. State Tables C-15
C-1
961
PAYMENTS TO STATES FOR THE
JOB OPPORTUNITIES AND BASIC SKILLS TRAINING PROGRAM
For carrying out aid to feunilies with dependent children work
progreuns, as authorized by part F of title IV of the Social
Security Act, [$1,300,000,000] $1,000,000,000. (Department of
Health and Human Services Appropriations Act, 1995.)
C-2
962
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963
Payments to States for the Job Opportunities and Basic
Skills Training Program
SUMMARY OF CHANGES
1995 Appropriation (definite) . . . $1,300,000,000
Total estimated budget authority $1,300,000,000
(Obligations - current estimate) . ($980,000,000)
1996 Estimate $1,000,000,000
(Obligations) ($930,000,000)
Net change -$300,000,000
(Obligations - current estimate) . (-$50,000,000)
1995 Current Change from
Estimate Base Base
Decreases;
A. Built-in:
a. Decrease in
statutory budget
authority $1,300,000,000 -$300,000,000
C-4
964
Payments to States for the Job Opportunities and Basic
Skills Training Progreun
1. JOBS
Program
Budget Authority by Activity
1994
Actual
1995
Appropriation
1996
Estimate
Si. 100.000. OOP SI. 300. 000.000 Si.ooo.ooo.nnn
Total,
budget
authority $1,100,000,000 $1,300,000,000 $1,000,000,000
c-s
965
Payments to States for the Job Opportunities and Basic
Skills Training Progrsun
Budget Authority by Object
Increase
1995
1996
or
Appr9priati9n
Decrease
Grants ,
subsidies and
contributions Si. 300.000. OOP Si.ooo.ooo.ooo -S300.ooo.ooo
Total, budget
authority $1,300,000,000 $1,000,000,000 -$300,000,000
C-6
966
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H H H H t-l H5|(04JHia
968
Justification
Payments to States for the Job Opportunities and Basic
Skills Training Program
Increase
1995 1996 or
Appropriation Estimate Decrease
Grants to States
Total, budget
authority $1,300,000,000 $1,000,000,000 -$300,000,000
General Statement
This account provides payments to States, Territories, Indian
Tribes, and Alaska Native Organizations to fund the Job
Opportunities and Basic Skills Training (JOBS) program authorized
under sections 201 and 301 of the Family Support Act of 1988
(P.L. 100-485) . This prograun makes it possible for AFDC
recipients to obtain jobs and leave the AFDC rolls. All States
are currently operating a JOBS program.
The JOBS program provides an array of education, training and
employment services to recipients of AFDC, and at State option,
applicants. The State plans must be updated biennially outlining
the method of operation for the program.
State JOBS programs must include educational activities such as
high school or equivalent education, basic and remedial
education, and education for those with limited English
proficiency. All JOBS programs must also provide job skills
training, job readiness, and job development and placement
services. Finally, each State's program must offer at least two
(and Tribal programs at least one) of the following programs:
group and individual job search, on-the-job training, work
supplementation, and community work experience or other work
experience approved by the Secretary.
Section 301 of the Family Support Act provides for transportation
and other work-related expenses or supportive services while an
AFDC applicant/recipient participates in JOBS education, training
or employment activities. For the Territories, child care to
permit participation in JOBS activities or employment is paid for
under this account.
The President's appropriation request of $1,000,000,000 for this
account represents current law authorization. No proposed law
amounts are included.
C-9
969
Program Accomplishments
The Family Support Act required that all States offer a statewide
JOBS program by October 1, 1992, or request a waiver by
demonstrating that it was infeaslble to be statewide. Fifty
states and territories met the regulatory definition of
statewideness by 10/1/92; 4 States were granted waivers after
demonstrating that it was infeaslble to be statewide. Seventy-
six Tribes and Alaska Native organizations also run JOBS
programs .
To the extent resources are available, a State must require non-
exempt AFDC recipients to participate in the JOBS program.
Certain minimum participation rates are established for fiscal
years 1990 through 1995, and States face a reduced Federal match
if those participation rates are not met. States and Territories
determine and report the number of individuals mandated to
participate in the JOBS program, the number of JOBS participants,
and the number of JOBS participants countable for participation
rate purposes. These data are then used to calculate the
participation rates for each State.
During FY 1993, all States except California, Hawaii and Guam met
the participation rate requirement of 11%. California and Hawaii
were granted waivers because they demonstrated that they were
making a good faith effort to meet the requirement and had a plan
to meet it in the next fiscal year. Gmm did not have to match
the first $200,000 in expenditures and so there were no
consequences for its failure to meet the 11% requirement.
During FY 1994, ACF has continued to provide technical assistance
to States to help them operate better JOBS programs. On-site
assistance was provided to several States in maximizing resources
and in program design. "Self -Sufficiency" training was delivered
to AFDC/JOBS/Child Support caseworkers in ten States to promote
client self-sufficiency through better interagency coordination.
A workshop on staff development/capacity building was conducted
jointly with the National Institute for Literacy. To aid public
agencies in developing better relationships with employers, and
to increase job opportunities for welfare recipients, an audio
tape and discussion guide ("Making the Job Connection") was
distributed June 1994 to JOBS, JTPA and Adult and Vocational
Education Directors and Literacy Resource Centers. In addition,
a videoconference of an employer panel was conducted June 15,
1994, "The National Employment Forvim: From Welfare to Work" to
help these agencies better understand and address the needs of
employers. A national JOBS Directors Conference was held in July
1994. ACF has recently held two workshops for 16 States on
"Shifting Focus to Self-Sufficlency" to help States change the
culture of welfare offices to focus on the goal of work, not
welfare.
C-10
970
There were approximately 600,000 individuals participating in
JOBS progreun activities per month in FY 1994.
Shown below for fiscal years 1991 through 1996 are preliminary
estimates for the number of JOBS participants, mandatory
individuals, and the statutory participation rates. It is
estimated that the number of JOBS participants will continue to
increase as States expand their programs.
Preliminary Estimates, FY 1991-1996
Number of JOBS Participants
JOBS Program
Participant?
Mandatory
Individuals
Participation
Rate Recniirements
FY
1991*
498,195
1,747,215
7%
FY
1992**
510,000
1,888,450
11%
FY
1993**
550,000
2,043,000
11%
FY
1994**
600,000
2,152,000
15%
FY
1995**
641,000
2,228,000
20%
FY
1996**
631,000
2,300,000
none
* Based on actual average monthly data reported by the States for
April through September, 1991.
** Estimates based on data reported by the States on forms
ACF-108 and ACF-103 for FY 1992, 1993 and 1994.
Beginning in FY 1992, States began submitting monthly case record
data for a sample of JOBS participants. The case sample
reporting system will allow for a more detailed analysis of
additional information such as satisfactory participation,
increased earnings, information on job entry, hourly wage rate,
and occupational area.
C-11
971
Payments to States for the Job Opportunities and Basic Skills
Training Program
Authorizing Legislation - Title IV-F of the Social Security Act,
as amended
Increase
1995 1996 or
Estimate Estimate Decrease
Total , budget
authority $1,300,000,000 $1,000,000,000 -$300,000,000
1996 Authorization $1,000,000,000
Purpose and Method of Operation
The Job Opportunities and Basic Skills Training Program (JOBS)
program assures that needy families with children obtain the
education, training and employment needed to avoid long-term
welfare dependency. State JOBS programs provide educational
activities, job skills training, job readiness, and job
development and placement services. Additionally, each State's
program offers at least two, and Tribal programs at least one, of
the following optional program components: group and individual
job search; on-the-job training; work supplementation; community
work experience or other work experience approved by the
Secretary.
Fifty States, D.C., and Territories met the statutory deadline of
October 1, 1992, for having a statewide program; 4 States were
granted waivers of the requirement because they demonstrated it
was infeasible to do so as provided in the law. In addition to
the States and Territories, 76 Indian Tribes and Alaska Native
Organizations operate JOBS programs.
Each State and Tribe submits a plan, updated biennially,
outlining its implementation and operation of JOBS. A State's
JOBS "limit of entitlement," i.e., its share of the funds
appropriated for JOBS, is based on a combination of its FY 1987
allocation for the Work Incentive Program (WIN) and its share of
AFDC adult recipients. Funds provided to a State for JOBS are
matched at 90 percent up to the total that the State received in
FY 1987 for WIN. Additional State expenditures for program costs
are matched at the FHAP (Federal Medical Assistance Percentage)
with a floor of 60 percent. Administrative costs and
expenditures for transportation and other work-related supportive
services are matched at 50 percent. Federal matching in any year
is available up to a State's limit of entitlement.
A Tribe's JOBS program receives a portion of the State's JOBS
funds based on the number of adult members of the Indian Tribe or
Alaska Native organization receiving AFDC who live within the
designated service area of the State. Tribal JOBS programs are
not required to match Federal funds.
C-12
972
Rationale for the Budget: Request
The $1,000,000,000 request is the amount to which States are
entitled by law in FY 1996. While some States may not be able to
utilize the full amount available, the full amoxint authorized in
law has been requested for this program to allow States which are
spending at the level of their entitlement to receive the entire
eunount to which they are entitled. The appropriation for JOBS is
allocated eunong States by formula. Many States are, or will be,
using all or nearly all of their allocations. Other States,
however, due to limitations on the availability of State matching
funds, may not be able to obligate funds up to their allocated
maximum. Nevertheless, if the requested appropriation were
reduced to the aggregate level of expected obligations, some
States already at the maximum level would have to reduce their
programs. Therefore, the appropriation request is based upon the
total ceiling authorized by law.
C-13
973
Payments to States for the Job Opportunities and Basic Skills
Training Prograun
Program Data:
FY 1994 FY 1995 FY 1996
Ag^Vfll Current Estimate Request
Service Grants
Formula 1,100,000,000 1,300,000,000 1,000,000,000
Discretionary
Obligations [872,978,000] [980,000,000] [930,000,000]
Research — —
Demonstration — —
Development -- — —
Training/Technical
Assistance ~ ~ ~
Evaluation
~
~
—
Progrzun Support
~
~
—
Other
—
—
—
Total Program $1,100,000,000
$1,300,
,000,
,000
$1,000,000,000
Number of Applicants
131
131
131
Number of Grants
New Starts:
#
$
131
$980,
000,
131
131
,000
131
Continuations :
#
$
131*
$872,978,000
—
131
$930,000,000
Contracts :
..
$
—
—
—
* states are required to submit a biennial update to the State plan
for the FY 1995 JOBS program. Because of this two-year cycle, one
year funds are counted as new starts, and the following year as
continuations .
C-14
974
STATE TABLES
C-15
975
PAYMENTS TO STATES FOR THE JOB OPPORTUNITIES AND BASIC
SKILLS TRAINING PROGRAM
FEDERAL OBLIGATIONS TO STATES
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$9,543,565
$10,347,028
$8,000,721
Alaska
3,270,308
3,979,161
3,077,527
Arizona
11,189,202
17,308,474
13,111,672
Arkansas
5,143,208
5,752,185
4,467,953
California
133,231,710
228,673,066
174,645,072
Colorado
7,999,257
12,145,681
9,642,557
Connecticut
7,616,400
15,641,949
12,111,944
Delaware
2,333,485
2,691,216
2,112,921
Dist. of Columbia 4,732,704
7,008,689
5,511,679
Florida
17,482,011
54,268,731
40,886,543
Georgia
20,677,063
32,203,647
24,504,853
Gu2un
318,017
663,566
522,146
Hawaii
4,673,985
6,021,426
4,668,166
Idaho
2,593,266
3,006,488
2,515,658
Illinois
30,886,991
63,553,361
48,903,502
Indiana
11,202,257
19,596,043
15,006,616
Iowa
8,740,687
11,165,166
8,659,325
Kansas
6,770,414
8,002,308
6,194,187
Kentucky
15,314,034
19,303,176
14,687,743
Louisiana
16,607,277
18,244,533
13,817,746
Maine
3,122,421
6,842,864
5,275,274
Maryland
16,026,630
20,398,532
15,794,614
Massachusetts
20,476,307
31,941,259
24,839,910
Michigan
59,428,995
66,548,201
51,861,920
Minnesota
14,659,180
18,466,670
14,393,628
Mississippi
11,019,152
11,851,464
9,067,894
Missouri
11,608,546
23,828,797
18,196,187
Montana
2,580,387
3,670,791
2,885,928
Nebraska
2,545,325
4,058,054
3,132,289
Nevada
1,350,346
3,227,929
2,495,792
C-16
976
PAYMENTS TO STATES FOR THE JOB OPPORTUNITIES AND BASIC
SKILLS TRAINING PROGRAM
FEDERAL OBLIGATIONS TO STATES (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Hampshire
2,527,745
3,041,408
2,330,684
New Jersey
26,595,700
32,122,690
25,143,677
New Mexico
1,841,846
9,625,8! ■)
7,300,091
New York
98,492,666
122,716,44^
94,138,384
North Carolina
20,655,228
29,629,604
22,514,864
North Dakota
1,834,777
1,845,025
1,480,671
Ohio
52,046,137
65,149,706
50,293,216
Okledioma
7,572,632
11,147,995
8,492,841
Oregon
11,946,488
13,148,745
10,683,726
Pennsylvania
47,967,542
57,057,646
43,937,855
Puerto Rico
11,058,660
15,557,938
11,778,863
Rhode Island
5,140,000
6,146,331
4,758,525
South Carolina
5,008,498
10,400,008
7,973,158
South DeJcota
1,753,874
1,926,500
1,572,303
Tennessee
5,750,025
25,657,949
19,416,896
Texas
35,633,940
62,864,039
47,464,446
Utah
4,795,629
5,340,829
4,257,664
Vermont
3,273,006
3,633,736
2,946,432
Virgin Islands
338,947
382,892
317,810
Virginia
10,800,000
17,131,669
13,215,185
Washington
18,151,861
31,585,343
24,804,810
West Virginia
8,997,804
12,488,094
9,739,847
Wisconsin
26,051,136
29,229,401
23,027,682
Wyoming
1,600,422
1,669,970
1,328,711
American Seunoa
0
89,692
89,692
Lapsed
27,022,307
Unobligated
Balance
200,000,000
Total, Budget
Authority $1,100,000,000
$1,300,000,000 $1,000,000,000
C-17
977
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Interim Assistance to States for Legalization
(State Legalization Impact Assistance Grants)
FY 1996 Budget PAGE
Appropriation language and explanation of language changes . D-2
Amount available for obligation D-4
Summary of changes D-5
Budget authority by activity D-6
Budget authority by object D-7
Authorizing legislation D-8
Appropriation history table D-10
Justification:
A. General Statement D-12
B. Grants to States D-14
C. Citizenship Grants D-19
D. State Tables D-22
D-1
978
[STATE LEGALIZATION IMPACT-ASSISTANCE GRANTS]
[Including Rescission]
[Funds not obligated by the State by June 29, 1995, under
section 204(b)(4) of the Immigration Reform and Control Act of
1986 are hereby rescinded.]
[For Federal administration and allotments of funds to the
States made by the Secretary of Health and Human Services for the
purpose of making payments to public and private nonprofit
organizations for public information and outreach activities; and
English language and civics instruction provided to any adult
eligible legalized alien who has not met the requirements of
section 312 of the Immigration and Nationality Act for purposes
of becoming naturalized as a citizen of the United States,
$6,000,000: Provided, That the Secretary of Health and Human
Services shall allocate such amounts among the States not later
than August 15, 1995: Provided further. That each State's share
of these funds shall be equal to that State's percentage share of
the total costs of administering and providing educational
services to eligible legalized aliens in all States through
fiscal year 1994, as determined by the Secretary; Provided
further. That the definition of "eligible legalized alien"
contained in section 204(j)(4) of the Immigration Reform and
Control Act of 1986 is amended by inserting before the period at
the end ", except that the five-year limitation shall not apply
for the purposes of making payments from funds appropriated under
the fiscal year 1995 Labor, Health and Human Services, and
D-2
979
Education, and Related Agencies Appropriations Act for providing
public information and outreach activities regarding
naturalization and citizenship; and English language and civics
instruction to any adult eligible legalized alien who has not met
the requirements of section 312 of the Immigration and
Naturalization Act for purposes of becoming naturalized as a
citizen of the United States": Provided further. That each State
may designate the appropriate agency or agencies to administer
funds under this heading: Provided further. That section
204(b)(4) of the Immigration Reform and Control Act of 1986 is
amended by striking the fourth sentence and inserting the
following: "Funds made available to a State pursuant to the
preceding sentence of this paragraph shall be utilized by the
State to reimburse all allowable costs within 90 days after a
State has received a reallocation of funds from the Secretary,
but in no event later than July 31, 1995."] (Department of Health
and Human Services Appropriations Act, 1995.)
D-3
980
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
State Legalization Impact Assistance Grants
Amounts Available for Obligation
1994
1995
1996
Actual
ADProoriation
Estimate
Appropriation. . .
$812,000,000
$6,000,000
$ —
Reappropriation
of obligated
balances
227,604,000
Unobligated
balance
expiring
-99,000
Total,
Obligations..,. $ 811,901,000
$233,604,000
D-4
981
SUMMARY OF CHANGES
1995 Appropriation
1995 Reappropriation
Subtotal
1996 Estimate
Net Change
$ 6,000,000
227,604,000
233,604,000
-$233,604,000
1995 Current
Estimate Base Change from Base
Decreases;
Program;
1. Federal
Administration... $ 200,000 -$200,000
2. Citizenship grants
to States 5,800,000 -5,800,000
3 . Grants to
States 355,410,000 -227,604,000
Total Decrease.... -$233,604,000
Net Change -$233,604,000
D-5
982
Budget Authority by Activity
1. Grants to
States. . .
2. Federal
Administra-
tion
3. Citizenship
Grants . .
4. Federal
Administration-
Citizenship
Grants . .
1994
Actual
$809,858,000
2,142,000
1995
Appr opr i a t i on
$227,604,000
5,800,000
1996
Estimate
200,000
Total
Budget
$812,000,000
$233,604,000
$
D-6
983
Budget Authority by Object
1995
Appropriation
1996
Estimate
Increase
or
Decrease
Personnel
Compensation
$
95,
,804
Benefits
15,
,329
Travel
12,
,000
Rental Payments
29,
,000
Other Services
45,
,867
Supplies
2,
,000
Grants , Sub-
sidies and
Contribu-
tions
233,
,404,
,000
-$95,804
-15,329
-12,000
-29,000
-45,867
-2,000
-233,404,000
Total budget
authority by
object 233,604,000
-233,604,000
D-7
984
Authorizing Legislation
1995 1995 1996
Amount Appro- Amount 1996
Authorized priation Authorized Estimate
Citizenship
Grants
Department of
Health and
Human Services
Appropriations
Act, 1995,
P.L. 103-333 $6,000,000 $6,000,000
State
Legalization
Impact
Assistance
Grants, IRCA
Section 204 227,604,000
Total -
Appropri-
ation $6,000,000 $233,604,000
D-8
985
Derivation of the FY 1994 Permanent Appropriation Level
Original 1992 Appropriation 2,000,000,000
FY 1990 and FY 1991 Offsets - 290,000,000
Subtotal 1,710,000,000
Reduction - FY 1990 Grants - 300,941,784
Reduction - FY 1991 Grants - 271,386,000
Subtotal 1,137,672,216
Deferred into FY 1993 -1,137,672,216
FY 1993 Appropriation 325,672,216
Amount Deferred into FY 1994 812,000,000
FY 1994 Appropriation 812,000,000
FY 1995 Estimate a/ $
a/ In FY 1995, approximately $227 million will be reallotted to
States with unreimbursed costs that exceed their allocation.
D-9
986
Interim Assistance to States for Legalization
(State Legalization Impact Assistance Grants)
APPROPRIATION HISTORY TABLE
Budget
Estimate
Year To Congress
1988 *'/ $
1989
1990 444,000,000
Seq.
1991 ^7 302,597,000
1992 ^
1993 5 300,000,000
1994 812,000,000
1995 ^[
1996
House
Allowance
561,245,619
812,000,000
Senate
Allowance
314,756,000
149,900,619
812,000,000
8,000,000
Appropriation
$930,000,000
900,000,000
314,756, 000
-12,180,000
273,146,000
325,672,216
812, 000,000
6,000,000
*' Appropriations for each of fiscal years 1988-1993 are made by the
Immigration Reform and Control Act of 1986 (IRCA) , P.L. 99-603, as
amended by P.L. 101-166, P.L. 101-517, and P.L. 102-394. Section
204(a) of IRCA requires that the estimated expenditures of the Federal
government incurred to provide assistance to legalized aliens who
would be barred by IRCA from certain Federal assistance programs
(Medicaid, AFDC, and Food Stamps) but for exceptions to these bars for
certain aliens be deducted from $1 billion in order to determine the
amount appropriated. This reduction is called the Federal offset.
^' The FY 1991 appropriation, P.L. 101-517, reflects the remainder of
the funds in the appropriation after the reduction of the estimated
Federal offset and a legislative reduction of $566,854,000.
!' The FY 1992 appropriation reflects the approved deferral of $1,137
billion into FY 1993.
f The FY 1993 Appropriations Act deferred $812 million into FY 1994.
^ By December 30, 1994, all States must make final claims. Some
States will have obligated balances in excess of eligible claims,
and a few States will have eligible claims in excess of obligated
987
balances. In FY 1995, approximately $227 million of funds
previously obligated under current law will be deobligated and
reallotted to those States whose claims exceed available
balances.
f' The FY 1996 appropriation represents a new discretionary
program authorized in P.L. 103-333.
988
Justification
Interim Assistance to States for Legalization
(State Legalization Impact Assistance Grants)
1995
Appropriation
1996
Estimate
Increase
or
Decrease
Citizenship
Grants
Program
Administration
Total Budget
Authority
$5,800,0000
200,000
$6,000,000
$ —
-$5,800,000
-200,000
$
-$6,000,000
General Statement
This account subsidizes State costs of assimilating legalized
aliens, most of whom have been living and working in the United
States for ten years.
Section 204 of P.L. 99-603 (the Immigration Reform and Control
Act of 1986, or "IRCA") established a time-limited program of
State Legalization Impact Assistance Grants (SLIAG) . These
grants are made available to States, upon application to the
Department of Health and Human Services, to offset costs incurred
by State and local governments in providing certain public
assistance, public health assistance, and educational services to
certain categories of aliens legalized by P.L. 99-603.
The Immigration Reform and Control Act originally appropriated,
for each of fiscal years 1988 through 1991, an amount equal to $1
billion less the amount of the "Federal offset," which is the
Federal cost of providing benefits to certain eligible aliens.
The original appropriation amount was based on virtually no
information about the number of illegal aliens who resided in the
United States at the time, the number that would apply and be
found eligible for legalization, their characteristics, their
eligibility for State and locally funded programs, or their
propensity to participate in such programs.
D-12
989
Congress deferred funds appropriated for FY 1990, 1991, 1992, and
1993. Public Law 101-166 reduced the FY 1990 SLIAG appropriation
by $555,244,000, but restored a similar amount in FY 1992.
Public Law 101-517 reduced the FY 1991 SLIAG appropriation by
$566,854,000, and redefined the FY 1992 appropriation. Public
Law 102-170 deferred the entire FY 1992 appropriation into FY
1993. Public Law 102-394 deferred $812,000,000 of the
appropriation into FY 1994. It also mandated that funds
unexpended by States as of December 30, 1994, be reallocated to
States with unreimbursed SLIAG-related costs.
The Office of Refugee Resettlement in the Administration for
Children and Families is responsible for implementation and
administration of the State legalization Impact Assistance Grant
(SLIAG) program. Final regulations, including the allocation
formula for distribution of funds to the States, were published
in the Federal Register on March 10, 1988.
Forty-two States received grants in FY 1988 and FY 1989. Twenty-
nine States received grants in FY 1990. Twelve States, whose
applications were approved, received no grants in FY 1990 because
they had sufficient unexpended funds on hand from prior years to
fulfill their funds allocation under the program. Thirty-nine
States had applications approved for FY 1991; 30 States received
grants. Thirty-three States had applications approved for FY
1993; 32 States received grants. Thirty-two States applied for
and received grants in FY 1994.
The Office of Refugee Resettlement conducted a series of
implementation workshops to help States apply for funds and
establish costs. In addition, the Department has made available
to States a computer-based matching system that allows them to
establish costs chargeable to SLIAG in a simple and cost-
effective manner.
In the FY 1995 Appropriations Act, Congress provided $6,000,000
to provide assistance for legalized aliens to become naturalized
citizens. Since no authorization exists to continue a SLIAG
program, the President's budget does not include funds for this
activity.
The President's request represents current law requirements.
Total appropriation current law request $ o
D-13
990
state Legalization Impact Assistance Grants
Grants to States
Authorizing Legislation - The Immigration Reform and Control Act
of 1986 (IRCA), as amended by P.L. 101-166, P.L. 101-517, P.L.
102-170, and P.L. 102-394.
1994
Actual
1995 1996
Appropriation Estimate
Increase
or
Decrease
Grants to
States. . .$809,8 58,000
Program
Adminis-
tration
2,142,000
$227,604,000
-$227,604,000
Total $812,000,000
1996 Authorization...,
$227,604,000 $
None
-$227,604,000
Purpose and Method of Operation:
The Immigration Reform and Control Act of 1986, or "IRCA," Public
Law 99-603, provided for the legalization of certain aliens then
residing illegally in the U.S. Approximately 2.7 million aliens
will receive legal status under IRCA.
Grants are awarded to States with approved applications. Funds
may be drawn in accordance with normal Federal procedures on the
basis of actual costs incurred. Under SLIAG, State and local
governments may receive Federal reimbursement for costs they
incur in providing benefits or services to certain aliens
legalized by the Immigration Reform and Control Act of 1986
(IRCA) in on-going, generally available public assistance and
public health assistance programs.
The Immigration Reform and Control Act also provides for the use
of SLIAG funds for providing adults with educational services,
including the English language and citizenship skills required of
certain newly legalized aliens as a precondition to their
retaining lawful residence status.
D-14
991
Amendments to IRCA made by P.L. 101-238 added two new uses of
SLIAG funds. States may use small amounts of each year's SLIAG
grant for outreach activities and to prevent employment
discrimination. This latter activity is not limited to aliens
legalized under IRCA.
The Department of Health and Human Services, Administration for
Children and Families, is responsible for administering the SLIAG
program. Federal activities include: development and
promulgation of regulations and program operations and policy
guidance; provision of training and technical assistance to State
agencies; review and approval of State applications; review of
State program operations; development and implementation of the
allocation formula; issuance of grants; review and analysis of
State program and financial reports; review and clearance of
audit findings; enforcement of statutory and regulatory
requirements; and preparation of statutorily required reports to
Congress. The Immigration Reform and Control Act authorizes
SLIAG appropriations to be used for Federal Administration.
Funds available for grants to States are allocated according to a
formula specified in regulation at 45 CFR Part 402, Subpart D.
This formula takes into account factors prescribed in IRCA, i.e.,
the number of newly legalized aliens in each State, the costs
States incur in providing services and benefits to such aliens,
and the ratio of legalized aliens to a State's general
population.
In order to claim Federal reimbursement. States must establish
that allowable costs were actually incurred. The regulations
implementing SLIAG provide for a variety of options for
establishing costs. In addition, the Department has made
available to States a computer-based matching system that allows
States to establish SLIAG-allowable costs by matching routinely
collected data on program recipients against a central file with
similar data on newly legalized aliens.
D-15
992
Funding for Grants to States and Federal Administration over the
past five years has been:
FY 1991 273,146,000
FY 1992 ^
FY 1993 325,672,216
FY 1994 812,000,000
FY 1995 227,604,000
FY 1996
^ In the absence of a SLIAG appropriation. Federal
administrative activities were funded from Program Direction,
Children and Families Services Programs account.
Rationale for the Budget Request;
For FY 1996, no new budget authority is requested to support this
program as its authorizing statute will have expired and the
purpose of the program will have been accomplished. As the law
provides, States have until December 30, 1994, to submit final
claims. Once the eligibility of all claims has been determined,
funds will be deobligated in those States where Federal
obligations exceed eligible claims and will be reallocated to
those States whose eligible claims exceed Federal obligations. At
the time of the publication, it is estimated that approximately
$227 million will be available for reallotment.
The FY 1995 Appropriations Act rescinds funds not obligated by
the States by June 30, 1995.
D-16
993
Program Data
Legalized Aliens Eligible for SLIAG Funding
1988
1,
,688,217
1989
2,
,731,330
1990
2,
,758,739
1991
2,
,754,719
1992
2,
,578,601
1993
1,
,065,984
1994
29,260 ''
1995
NA
*' The reduced number of eligible legalized aliens (ELAs) in FY
1994 results from the ending of the five-year period following
application for legalization during which the costs of services
to ELAs by State and local governments are reimbursable under
SLIAG.
D-17
994
Interim Assistance to States for Legalization
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Estimate
Service Grants:
Formula $809,858,000 $227,604,000 $
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program
Support ^ 2,142,000
TOTAL PROGRAM $812,000,000 $227,604,000 $
Number of Applicants 32
Number of Grants 32
New Starts: NA NA NA
Continuations :
/ 32
$ $809,858,000 $ $
Contracts :
# 2
$ $1,224,000 $
^ Funds used for administrative support.
D-18
995
state Legalization Citizenship Grants
Grants to States
Authorizing Legislation - Department of Health and Human Services
Appropriations Act, 1995, P.L. 103-333.
Grants to
States. . .
Program
Adminis-
tration
1994 1995
Actual Appr opr i a t i on
$
$5,800,000
200,000
1996
Estimate
$ —
Increase
or
Decrease
■$5,800,000
-200,000
Total $
1996 Authorization.
$6,000,000
$ .-$6,000,000
Not authorized
Purpose and Method of Operation:
Funds are awarded to public and private nonprofit organizations
to provide public information and outreach activities, and
English language and civics instruction to eligible legalized
aliens who have not met the requirements of section 312 of the
Immigration and Nationality Act for purposes of becoming
naturalized citizens of the United States.
Funding for this activity over the past five years has been:
FY 1991 $0
FY 1992 $0
FY 1993 $0
FY 1994 $0
FY 1995 $6,000,000
Rationale for the Budget Request;
In the FY 1995 Appropriations Act, Congress provided $6,000,000
to provide assistance for legalized aliens to become naturalized
citizens. Since no authorization exists to continue a SLIAG
program, the President's budget does not include funds for this
activity.
D-19
996
Interim Assistance to States for Legalization
Citizenship Grants
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $ $5,800,000 $—
Discretionary
Research —
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program
Support a/ 2 00,000
TOTAL PROGRAM $ $6,000,000 $
Number of Applicants 4 2
Number of Grants 40
New Starts: 4 0
Continuations :
$ $5,800,000
Contracts :
$ $ $—
a/ Funds used for administrative support.
D-20
997
STATE LEGALIZATION IMPACT ASSISTANCE GRANT (SLIAG) PROGRAM
1994
1995
1996
State
Actual
Estimate a/
Estimate
Alabama
Alaska
Arizona
15,878,330
Arkansas
California
507,500,460
194, 100,
,736
"""
Colorado
5,358,488
Connecticut
1,195,151
Delaware
Dist. of Columb
ia 2,389,817
363,
,002
Florida
793,838
___
~~~
Georgia
4,377,757
Hawaii
424,774
Idaho
1,724,670
Illinois
40,170,227
Indiana
...
Iowa
501,439
Kansas
1,459,749
Kentucky
Louisiana
932,445
___
Maine
___
— — _
Maryland
2,302,287
Massachusetts
5,844,495
765.
,993
Michigan
1,148,518
Minnesota
1,670,043
2,436
,709
Mississippi
_— —
Missouri
Montana
Nebraska
586,977
Nevada
4,012,141
New Hampshire
D-21
998
STATE LEGALIZATION IMPACT ASSISTANCE GRANT (SLIAG) PROGRAM
(continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total, Budget
Authority
8,421,279
4,482,188
63,613,554
2,618,889
5,999,843
1,850,461
1,052,796
686,101
105,516,182
1,615,458
3,624,927
11,490,782
613,934
$809,858,000
26,104,342
3,412,416
420,444
$227,603,642
a/ The FY 1996 President's Budget includes a reapproproation of
$355.4 million dollars in FY 1995. This distribution is an
estimate of funds which will be reallotted to states whose claims
exceed obligated balances currently available.
D-22
999
STATE LEGALIZATION IMPACT ASSISTANCE GRANT (SLIAG) PROGRAM
CITIZENSHIP GRANTS
1994 1995 1996
State Actual Estimate' Estimate
Alabama §
Alaska
Arizona 54,195
Arkansas 1,180
California 3,568,242
Colorado 51,636
Connecticut 3,347
Delaware
Dist. of Columbia 6,345
Florida 267,660
Georgia 19,061
Hawaii 1,362
Idaho 13,212
Illinois 351,213
Indiana 5,445
Iowa 1,251
Kansas 23,319
Kentucky
Louisiana - — 389
Maine
Maryland 3,835
Massachusetts - — 21,810
Michigan 4,915
Minnesota 886
Mississippi
Missouri 1,4 05
Montana —
Nebraska 2,596
Nevada 44,138
New Hampshire 522
' Based on SLIAG Education costs as of December, 1994.
Final distribution of these funds will be based on the final
SLIAG state allocations, which will not be known until late March
or April.
D-23
1000
STATE LEGALIZATION IMPACT ASSISTANCE GRANT
(SLIAG) PROGRAM
CITIZENSHIP
GRANTS
(continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
25,521
New Mexico
25,331
New York
273,034
North Carolina
22,196
North Dakota
Ohio
30
Oklahoma
16,380
Oregon
51,584
Pennsylvania
14,839
Puerto Rico
— — -
Rhode Island
8,153
South Carolina
327
South Dakota
Tennessee
1,236
Texas
840,578
Utah
8,980
Vermont
Virginia
17,869
Washington
38,238
West Virginia
10
— —
Wisconsin
5,819
Wyoming
1,911
___
Total, Budget
Authority
$
$5,800,000
$ —
D-24
1001
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children «md Families
Payments to States for Foster Care emd Adoption Assistance
FY 1996 Budget Page
Appropriation language and explanation of language changes E-2
Amount available for obligation E-3
Summary of changes E-4
Budget authority by activity E-5
Budget authority by object E-6
Significant Items in House and Senate Appropriation
Committee Reports E-7
Authorizing legislation E-9
Appropriation history table E-11
Justification :
A. General Statement E-13
B. Foster Care E-14
C. Adoption Assistance E-18
D. Independent Living E-21
E. State Tables E-23
E-1
1002
PAYKEMTS TO STATES FOR FOSTER CARE AMD ADOPTION AS8ISTAHCB
For making payments to States or other non-Federal entities,
under title IV-E of the Social Security Act, ($3,597,371,000,]
$4,307,842,000. (Department of Health and Human Sezrvices
Appropriations Act, 1995.)
E-2
looa
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Payments to States for Foster Care and Adoption Assistance
ftp^nnts Available for Obligation
1995
1994 1995 Current 1996
Actual Appropriation Estimate ' Estimate
Appro-
tionT. $2,992,900,000 $3,597,371,000 $3,623,662,000 $4,307,842,1
Unobli-
gated
balance,
lapsing - $5,306,000
Total
tionl%2,987,594,000 $3,597,371,000 $3,623,662,000 $4,307,842,000
' Includes $26,291,000 proposed supplemental for Adoption
Assistance.
E-3
/ 1004
Payments to States for Foster Care and Adoption Assistance
SUMMARY OF CHANGES
1995 Appropriation $3,597,371,000
1995 Proposed Supplemental 26.291.000
1995 Current Estimate $3 , 623 , 662 , 000
1996 Request 4,307,842,000
Net change +$684,180,000
1995 Current Change
Estimate Base from Base
Increases;
A. Increases;
Built-in:
1. Increase in expected
Foster Care
costs $3,127,023,000 -l-$622,802,000
2 . Increase in expected
Adoption Assistance
payments 425,639,000' +62,378,000
Total Increases +$685,180,000
B. Decreases;
1. Monitoring system
development 1,000,000 -1,000,000
Total Decreases ... -$1 , 000 , 000
Net change +$684,180,000
' Includes $26,291,000 proposed supplemental for Adoption
Assistance.
E-4
1005
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1007
SIGNIFICANT ITEMS IN HOUSE AND SENATE
APPROPRIATIONS COMMITTEE REPORTS
FY 1995 House Report
Item
Review System
1 . ... the Committee is
extremely concerned that the
current review system applies
complex technical standards
which are measured under
informal guidance to States.
The system does little to
address issues of quality of
care for children in State
child welfare programs. The
Committee believes that
penalizing States for non-
compliance under this system
takes away much-needed funds
from protective and preventive
services. Therefore, the
Committee is pleased that the
Administration for Children
and Families recognizes the
inadequacies of the current
system and is developing a new
monitoring system of State
programs which may be piloted
as early as January, 1995. It
is the Committee's intent that
this review system be one
which adequately addresses
States' quality of care issues
with clear, unambiguous,
uniform compliance criteria
described in regulation.
Furthermore, the Committee
intends that ACF not conduct
any reviews in Fiscal Year
1995 of State compliance with
the foster care protections
under Section 427 or any on-
site federal financial reviews
of payments under Title IV-E
using the current
methodologies .
Action to be Taken
1. The Administration for
Children and Families (ACF)
agrees that the current review
system is inadequate, and
needs to address the issue of
whether children in substitute
care are well served and
receive Federally mandated
child protections. ACF is re-
drafting the regulations
governing the review process
and expects to promulgate the
new regulations by mid-1995.
However, as the Administration
stated in its statement of
Administration position on
August 4, 1994, in response to
Senate Labor, Health and Human
Services appropriation report
language, absent a legislative
change, in 1995 and
subsequently, the
Administration must continue
to follow current procedures
that protect children's well-
being while in substitute care
and protect Federal payment
integrity, as set out by
statute.
E-7
1008
FY 1995 senate Report:
Review of Child Welfare Systems
1. The Connittee notes that
since 1989, Congress has
established annual noratoria
on penalties and disallowances
resulting from State failvire
of reviews of their child
welfare systems. In the
absence of regulations, the
Committee is extremely
concerned that the current
review system applies complex
technical standards which are
measured under informal
guidance to States. The
system does little to address
issues of quality of care for
children in State child
welfare systems. The
Committee believes that
penalizing States for
noncompliance under this
system teJces away much needed
funds from protective and
preventive services.
Therefore, the Committee is
pleased that ACF recognizes
the inadequacies of the
current system and is
developing a new monitoring
system of State programs which
may be piloted as early as
January of 1995. It is the
Committee's intent that this
review system be one which
adequately addresses States'
quality of care issues with
clear, uneunbiguous , uniform
compliance criteria described
in regulation. Furthermore,
the Committee intends that ACF
not conduct any reviews in
fiscal year 1995 of State
compliance with the foster
care protection under section
427 or any on-site Federal
financial reviews of payments
under title IV-E using the
current methodologies.
1. The Administration for
Children and Families (ACF)
agrees that the current review
system is inadequate, and
needs to address the issue of
whether children in substitute
care are well served and
receive Federally mandated
child protections. ACF is re-
drafting the regulations
governing the review process
and expects to promulgate the
new regulations by mid-1995.
However, as the Administration
stated in its statement of
Administration position on
August 4, 1994, in response to
Senate Labor, Health and Human
Services appropriation report
language, absent a legislative
change, in 1995 and
subsequently, the
Administration must continue
to follow current procedures
that protect children's well-
being while in substitute care
and protect Federal payment
integrity, as set out by
statute .
E-8
1009
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1010
Payments to States for Foster Care and Adoption Assistance
APPROPRIATION HISTORY TABLE
Budget
Estimate House Senate
Year To Congress Allowance Allowance Appropriation
1986i' 740,994,000 745,019,000 810,412,000 777,092,000
1986
Sequest-
er -16,407,000 -16,407,000 -16,407,000 -16,407,000
1986
Rescis-
sion -6,157,000
1987 817,837,000 1,005,223,000 889,717,000 939,567,000
1987
Supple-
mental 165,227,000 165,227,000 165,227,000 165,000,000
1988^' 682,040,000 811,178,000 811,178,000 811,178,000
1989 1,074,907,000 1,119,907,000 1,119,907,000 1,119,907,000
Supple-
mental 598,679,000 532,275,000
1990 1,286,447,000 1,556,364,000 1,336,447,000 1,374,916,000
1991^' 2,471,283,000 2,583,929,000 2,583,929,000 2,583,929,000
1992-' 2,367,734,000 2,614,005,000 2,614,005,000 2,614,005,000
1993 2,988,668,000 2,988,668,000 2,924,014,000 2,924,014,000
1994 2,992,900,000 2,992,900,000 2,992,900,000 2,992,900,000
1995 3,440,871,000 3,597,371,000 3,597,371,000 3,597,371,000
1995
Sup. 26,291,000
1996 4,307,842,000
-' Appropriation reflects withholding of $145,000 pursuant to P.L.
99-190.
E-10
1011
V FY 1988 amounts reflect the transfer of four programs to the
former Office of Hximan Development Services. Prior year amounts
are non-comparable.
^ Budget Estimate to Congress included a legislative proposal to
reduce Foster Care and Adoption Assistance costs by $160,909,000.
- Budget Estimate to Congress included a legislative proposal to
reduce Foster Care administrative costs by $246,631,000.
E-11
1012
Justification
Payments to States for Foster Care and Adoption Assistance
(dollars in thousands)
1995
1995 Current
Appropriation Estimate
1996
Estimate
Increase
or
Decrease
A. Foster
Care... $3,128,023 $3,128,123 $3,749,825 +$621,702
B. Adoption
Assistance 399,348 425,639 488,017 +62,378
C. Independent
Living. 70,000 70,000 70,000
Total... $3,597,371 $3,623,662
$4,307,842
'$684,180
General Statement
Payments to States for Foster Care and Adoption Assistance
include those entitlement programs which assist States with the
costs of: maintaining eligible children in foster care; preparing
children for living on their own; and the adoption of children
under special conditions. Administrative and training costs are
also supported. The President's appropriation request of
$4,307,842,000 for this account represents current law
requirements. No proposed law amounts are included.
In addition: because this is an entitlement account, and States
are entitled to reimbursement for claims deemed eligible; because
the number of children for whom adoption assistance payments will
be made is expected to be almost 2,000 children higher than was
estimated when the FY 1995 budget was developed; and because of
the rising cost per child per month for administration, a
supplemental of $26,291,000 is requested for Adoption Assistance.
Current law appropriation request.
$4,307,842,000
' Includes $26,291,000 proposed supplemental for Adoption
Assistance.
E-12
1013
Foster Care
Authorizing legislation - Section 470, Title IV-E of the Social
Security Act, as amended.
Increase
1994
1995
1996
or
Actual
Appropriation
Estimate
Decrease
$2,605,500,000 $3,128,023,000 $3,749,825,000 +$621,802,000
Of the $2,605,500,000 appropriated, $5,306,000 lapsed.
1996 Authorization Indefinite
Purpose and Method of Operations:
This program provides funds to States to assist with: the costs
of foster care maintenance payments for eligible children;
administrative costs to manage the program, including costs for
statewide automated information systems; and training of staff
and foster and adopting parents. The purpose of the program is
to help States provide proper care for children who need
placement outside their homes, either in a foster family home or
an institution.
This program is an annually appropriated entitlement program.
Federal financial participation in State expenditures for foster
care maintenance payments is provided at the Medicaid match rate
for medical assistance payments, which varies among States from
50 percent to 79 percent. Federal financial participation for
State administrative expenditures is made at a 50 percent match
rate and at a 75 percent rate for the training of State or local
agency personnel, foster parents, or staff of State licensed or
approved institutions.
The 1980 amendments to the Social Security Act link the title IV-
E programs, including Foster Care, to the Child Welfare Services
State Grant Program (Title IV-B) . The same State agency must
administer, or supervise, the administration of the programs.
The goal of both programs is to strengthen families in which
children are at risk. The 1993 amendments to the Social Security
Act created the new Family Preservation and Support Services
Program. The same State agency must administer, or supervise the
administration of all three programs. Taken together, these
three programs provide a continuum of services to assist children
and their families.
E-13
1014
During calendar year 1993, final regulations were published for
the Adoption and Foster Care Analysis and Reporting System
(AFCARS) . This system requires that States collect and maintain
data on all foster children and children adopted (except for some
private adoptions) , regardless of whether or not they receive
Title IV-E benefits. Beginning in FY 1995, States are required
to provide semi-annual reports on the status of these children.
The 1993 amendments to the Social Security Act set conditions for
funding comprehensive statewide automated child welfare
information systems. Under these amendments and the regulations
implementing them, between FY 1994 and FY 1996 enhanced Federal
funding is available at 75 percent for the planning, design,
development, and installation of such a system, which must
include AFCARS, and be able to interface with State child abuse
and neglect systems and State eligibility systems for title IV-A.
The appropriations for Foster Care maintenance payments,
administration, and training over the past five fiscal years are
as follows:
1991 $2,334,097,000 !'
1992 $2,323,279,000 f
1993 $2,574,214,000 ^
1994 $2,605,500,000
1995 $3,128,023,000
*' Includes $520,911,000 specifically for prior year claims.
- Includes $118,476,000 specifically for prior year claims, and
excludes $18,865,000 reprogrammed for Adoption Assistance and
Adoption Assistance prior year claims.
-' Reflects reprogramming of $35,836,000 to Adoption Assistance.
E-14
1015
Rationale for the Budget Request - The FY 1996 request for Foster
Care is $3,749,825,000. This request is based on current law
estimates and includes funds for maintenance payments, state
administration, and training.
The amount requested will provide Federal Financial Participation
for an estimated average of 272,900 children per month.
The average monthly number of foster children for whom claims
have been paid is increasing substantially due to new types of
cases including: crack babies, children orphaned by AIDS,
extension of payments to relative caregivers in some States,
children staying in care longer because of the nature of their
problems, and States making greater efforts to review their
foster children more thoroughly for possible eligibility under
title IV-E. This trend is expected to continue for at least the
next few years.
E-15
1016
Title IV-E-Foster Care
Program Data:
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $2,605,500,000 $3,128,023,000 $3,749,825,000
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM $2,605,500,000 $3,128,023,000 $3,749,825,000
Number of Applicants 51 51 51
Number of Grants 51 51 51
New Starts:
Continuations :
# 51 51 51
$ $2,605,500,000 $3,128,023,000 $3,749,825,000
Contracts:
E-16
1017
Adoption Assistance
Authorizing legislation - Section 470, Title IV-E of the Social
Security Act, as amended.
(dollars in thousands)
1995 1995 Increase Increase
1994 Appro- Current or 1996 or
Actual priation Estimate Decrease Estimate Decrease
$317,400 $399,348 $425,639 +$26,291 $488,017 +$62,378
1996 Authorization Indefinite
Purpose and Method of Operations;
The Adoption Assistance program was begun in FY 1981. It
provides funds to States to assist in paying maintenance costs
for adopted children with special needs. To receive adoption
assistance benefits, a child must:
o be a child with special needs, e.g., older; a member of a
minority or sibling group; or have a physical, mental, or
emotional disability;
o have been receiving or be eligible to receive Aid to Families
with Dependent Children benefits; or
o have been receiving or be eligible to receive Supplemental
Security Income benefits.
Funds are also used for the administrative costs of managing the
program and training staff and adoptive parents. The goal of
this program is to facilitate the placement of hard-to-place
children in permanent adoptive homes and thus prevent long,
inappropriate stays in foster care.
Adoption Assistance is an annually appropriated entitlement
program. Federal financial participation in State maintenance
expenditures is provided at the Medicaid match rate for medical
assistance payments, which varies among States from 50 percent to
79 percent. State adoption subsidy payments made on behalf of
individual children also vary from State to State but may not
exceed comparable foster family care rates. State administrative
costs are matched at 50 perceht match rate and training for State
and county employees and adoptive parents at 7 5 percent match
rate.
E-17
1018
The number of adopted children subsidized by this program and the
level of Federal reimbursement have increased significantly as
permanent homes are found for more children. Over the past five
years, the average monthly number of children for whom payments
were made has more than doubled - from just under 50,000 to over
118,000.
The appropriations for Adoption Assistance payments,
administration, and training over the past five fiscal years are
as follows:
FY 1991 189,832,000
FY 1992 220,726,000*'
FY 1993 273,386,486^
FY 1994 317,400,000
FY 1995 399,348,000
FY 1995
Supplemental 26,291,000
^ Funds available after reprogramming from Foster Care of
$6,941,000 for the regular program and $11,924,000 for prior year
claims.
-' Includes $35,836,000 reprogrammed from Title IV-E Foster Care,
and excludes $6,413,514 in lapsed funds, and $2,000 in payments
reported after the Treasury Annual Report had been completed.
Rationale for the Budget Request
The FY 1996 request for Adoption Assistance is $488,017,000. This
request is based on current law estimates, including maintenance
payments, state administration, and training.
The amount requested will provide Federal Financial Participation
for an estimated average 118,800 children per month.
FY 1995 Current Estimate
A supplemental of $26,291,000 is requested for FY 1995.
Because this is an entitlement account and States are entitled to
reimbursement for all claims deemed eligible; because the number of
children for whom adoption assistance payments will be made is
expected to be almost 2,000 children higher than was estimated when
the FY 1995 budget was developed; and because of the rising cost
per child per month for administration, a supplemental is requested
to meet the revised estimate of eligible claims.
E-18
1019
Title IV-E-Adoption Assistance
Program Data:
FY 1995
FY 1994 Current FY 1996
Actual Estimate^ Request
Service Grants:
Formula $317,400,000 $425,639,000 $488,017,000
Discretionary
Research
— —
___
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL
PROGRAM $317,400,000
$425,639,000
$488,
,017
,000
Number of Applicants 51
51
51
Number of Grants 51
51
51
New Starts:
#
—
—
$
—
Continuations:
# 51
$ $317,400,000
51
$425,639,000
$488,
,017
51
,000
Contracts :
#
—
—
$
- Includes $26,291,000 proposed supplemental.
E-19
1020
Independent Living
Authorizing Legislation - Sections 470 and 477 of Title IV-E, of
the Social Security Act.
Increase
1994 1995 1996 or
Actual Estimate Estimate Decrease
$70,000,000 $70,000,000 $70,000,000
1996 Authorization $70,000,000
Purpose and Method of Operation; This program provides services
to foster children who are 16 or older to help them to make the
transition to independent living by helping them earn a high
school diploma or receive vocational training, receive training
in daily living skills such as budgeting, locating housing,
career planning and job finding, or otherwise make the transition
to independent living.
Funds are awarded to States in the form of grants. Each State is
eligible to receive a portion of the funds appropriated that is
equal to each State's proportion of the national total of foster
children that received maintenance payments under the IV-E Foster
Care program in fiscal year 1984.
In order to be awarded Federal funds in addition to their share
of an initial $45,000,000, States must match the additional
Federal funds dollar for dollar. In the aggregate. States are
expected to provide the match necessary to receive the additional
funds .
Appropriations for Independent Living over the past five years
have been:
1991 $60,000,000
1992 $70,000,000
1993 $70,000,000
1994 $70,000,000
1995 $70,000,000
Rationale for the Budget Request; The FY 1996 request for this
program is $70,000,000, the same level as the FY 1995
appropriation, and the amount authorized for FY 1996. This
program is an entitlement program with a fixed funding level.
E-20
1021
Title IV-E-Independent Living
Program Data:
FY 1994
Actual
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
$70,000,000
FY 1995
Appropriation
FY 1996
Request
$70,000,000 $70,000,000
TOTAL PROGRAM $70,000,000
$70,000,000 $70,000,000
Number of Applicants
Number of Grants
New Starts:
#
$
Continuations :
51
51
Contracts ;
51
$70,000,000
51
51
51
51
51 51
$70,000,000 $70,000,000
E-21
1022
STATE TABLES
E-22
1023
FOSTER CARE
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$7,
,568,964
$9,
,105,423
$10
,915,438
Alaska
4,
,540,475
5,
,462,167
6
,547,960
Arizona
26,
,938,090
32,
,406,377
38
,848,257
Arkansas
19,
,270,948
23,
,182,847
27
,791,234
California
555,
,293,447
668,
,015,024
800
,805,952
Colorado
25,
,246,664
30,
, 371,601
36,
,408,999
Connecticut
32,
,497,704
39,
,094,563
46,
,865,950
Delaware
3,
,983,915
4,
,792,628
5,
,745,328
Dist. of Columbi
a 14,
,671,093
17,
,649,246
21,
,157,640
Florida
70,
,351,906
84,
,632,964
101,
,456,672
Georgia
17,
,871,211
21,
,498,971
25,
,772,629
Hawaii
8,
,779,184
10,
,561,311
12,
,660,734
Idaho
2,
,985,245
3,
,591,234
4,
,305,115
Illinois
148,
,254,103
178,
,348,887
213,
,801,853
Indiana
38,
,172,603
45,
,921,436
55,
,049,898
Iowa
16,
,403,479
19,
,733,297
23,
,655,967
Kansas
20,
,570,030
24,
,745,635
29,
,664,680
Kentucky
36,
,374,795
43,
,758,682
52,
,457,223
Louisiana
29,
,181,266
35,
, 104,906
42,
,083,211
Maine
11,
,618,860
13,
,977,426
16,
,755,919
Maryland
51,
,547,966
62,
,011,925
74,
,338,925
Massachusetts
82,
,638,286
99,
,413,413
119,
, 175,243
Michigan
111,
,614,180
134,
,271,257
160,
,962,281
Minnesota
36,
,202,533
43,
,551,452
52,
,208,799
Mississippi
4,
,731,762
5,
,692,284
6,
,823,821
Missouri
30,
,751,574
36,
993,978
44,
,347,801
Montana
6,
,108,396
7,
,348,367
8,
,809,108
Nebraska
10,
,693,551
12,
864,284
15,
,421,503
Nevada
3,
198,533
3,
847,818
4,
,612,704
New Hampshire
7,
812,675
9,
398,606
11,
266,902
E-23
1024
FOSTER CARE
(continued)
1994
1995
1996
state
Actual
Estimate
Estimate
New Jersey
29,
,337,857
35,293,284
42,
,309,036
New Mexico
7,
,255,662
8,728,522
10,
,463,616
New York
590,
,216,487
710,027,250
851,
,169,555
North Carolina
21,
,842,120
26,275,953
31,
,499,201
North Dakota
7,
,065,940
8,500,288
10,
,190,012
Ohio
103,
,197,971
124, 146,603
148,
,825,004
Oklahoma
9,
,786,590
11,773,215
14,
,113,546
Oregon
18,
,966,149
22,816,175
27,
,351,673
Pennsylvania
176,
,582,547
212,427,852
254,
,655,184
Rhode Island
7,
,579,053
9,117,560
10,
,929,988
South Carolina
8,
,258,220
9,934,594
11,
,909,436
South Dakota
3,
,204,040
3,854,443
4,
,620,646
Tennessee
11,
,196,561
13,469,403
16,
,146,909
Texas
75,
,229,175
90,500,292
108,
,490,333
Utah
6,
,803,540
8,184,622
9,
,811,597
Vermont
7,
,461,682
8,976,363
10,
,760,724
Virginia
14,
,400,781
17,324,062
20,
,767,814
Washington
17,
,962,354
21,608,615
25,
,904,069
West Virginia
5,
,248,975
6,314,489
1 ,
,569,710
Wisconsin
41,
,125,328
49,473,548
59,
,308,115
Wyoming
1,
,602,549
1,927,858
2,
,311,086
Total Budget
Authority $2,600,500,000^' $3,128,023,000 $3,749,825,000
^' Includes $5,302,981 that lapsed.
E-24
1025
ADOPTION ASSISTANCE
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$1
1
3
1,
39,
,625,840
,105,943
,778,328
,568,134
,506,789
$2,180,301
1,483,103
5,066,853
2,102,915
52,979,804
$2,499,827
1,700,454
5,809,407
2,411,101
60,744,069
Colorado
Connecticut
Delaware
Dist. of Columbia
Florida
2,
4,
1,
10,
,987,837
,703,149
328,079
,927,603
,237,597
4,006,780
6,307,066
439,964
2,584,974
13,728,928
4,593,979
7,231,375
504,441
2,963,806
15,740,922
Georgia
Hawaii
Idaho
Illinois
Indiana
3,
11,
9,
,130,436
450,412
570,056
,378,560
,332,416
4,198,010
604,016
764,462
15,258,994
12,515,053
4,813,234
692,536
876,495
17,495,222
14,349,152
Iowa
Kansas
Kentucky
Louisiana
Maine
3,
2,
3,
9,
2,
,714,684
,213,813
,172,019
,591,998
,766,006
4,981,504
2,968,790
4,253,774
12,863,161
3,709,298
5,711,551
3,403,871
4,877,170
14,748,275
4,252,901
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
3,
24,
4,
,708,686
,011,790
,426,715
,523,816
418,963
4,973,461
5,379,932
32,756,966
6,066,575
561,842
5,702,328
6,168,369
37,557,546
6,955,640
644,181
Missouri
Montana
Nebraska
Nevada
New Hampshire
4,
1,
,484,058
829,476
,503,853
459,443
671,463
6,013,258
1,112,352
2,016,713
616,127
900,452
6,894,509
1,275,369
2,312,265
706,421
1,032,415
E-25
1026
ADOPTION ASSISTANCE (continued)
State
1994
Actual
New Jersey
New Mexico
New York
North Carolina
North Dakota
6,
1,
65,
2,
,253,506
,801,817
,551,556
,567,406
474,783
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
29,
2,
3,
5,
4,
,527,191
,099,295
,276,286
,138,937
,753,691
South Carolina
South Dakota
Tennessee
Texas
Utah
2,
3,
13,
1,
,621,365
608,114
,787,917
,201,909
,080,778
Vermont
Virginia
Washington
West Virginia
Wisconsin
1,
2,
3
1 ,
,621,174
,534,244
,708,637
357,929
,265,100
1995
Estimate
1996
Estimate
Wyoming
37,393
Total Budget
Authority $317,400,000^'
8,386,141
2,416,291
87,906,627
3,442,969
636,698
39,596,860
2,815,218
4,393,599
6,891,471
6,374,844
3,515,330
815,499
5,079,712
17,704,161
1,449,356
2,174,044
3,398,498
4,973,395
479,994
9,742,720
50,145
$425,639,0002^
9,615,142
2,770,402
100,789,469
3,947,541
730,007
45,399,836
3,227,793
5,037,487
7,901,425
7,309,086
4,030,507
935,012
5,824,151
20,298,731
1,661,761
2,492,653
3,896,553
5,702,253
550,337
11,170,529
57,494
$488,017,000
-' Includes $3,010 that lapsed.
2' Includes $26,291,000 proposed supplemental.
E-26
1027
INDEPENDENT LIVING
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$1
,038,490
$1,038,490
$1,038,490
Alaska
13,444
13,032
13,032
Arizona
358,768
347,763
347,763
Arkansas
279,513
270,940
270,940
California
12
,876,756
12,481,777
12,481,777
Colorado
825,854
825,854
825,854
Connecticut
778,394
754,518
754,518
Delaware
209,459
203,034
203,034
Dist. of Columbia
701,995
1,091,992
1,091,992
Florida
1
,018,279
987,045
987,045
Georgia
1
,133,624
1,098,852
1,098,852
Hawaii
18,398
17,834
17,834
Idaho
110,390
107,004
107,004
Illinois
2
,906,239
2,817,094
2,817,094
Indiana
1,
,019,970
1,019,970
1,019,970
Iowa
464,205
449,966
449,966
Kansas
737,477
717,477
717,477
Kentucky
791,557
791,557
791,557
Louisiana
1,
,073,084
1,358,131
1,358,131
Maine
583,795
565,888
565,888
Maryland
1,
,238,095
1,238,095
1,238,095
Massachusetts
655,973
635,852
635,852
Michigan
4,
,081,869
4,171,796
4,171,796
Minnesota
1,
,178,206
1,142,066
1,142,066
Mississippi
514,444
514,444
514,444
Missouri
1,
,336,006
1,295,026
1,295,026
Montana
244,190
244,190
244,190
Nebraska
449,345
435,562
435,562
Nevada
158,509
153,647
153,647
New Hampshire
330,463
320,326
320,326
E-27
1028
INDEPENDENT LIVING
(continued)
state
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
2,370,562
213,704
11,952,589
972,010
198,135
2,297,848
207,149
11,585,958
1,045,349
192,058
2,297,848
207,149
11,585,958
1,045,349
192,058
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
2,951,527
639,697
960,253
4,784,999
324,803
2,860,992
620,076
930,799
4,638,225
314,840
2,860,992
620,076
930,799
4,638,225
314,840
South Carolina
South Dakota
Tennessee
Texas
Utah
597,947
193,430
650,039
1,841,708
208,752
579,606
193,430
777,838
1,841,708
202,348
579,606
193,430
777,838
1,841,708
202,348
Vermont
Virginia
Washington
West Virginia
Wisconsin
304,988
875,289
848,168
335,123
1,603,490
295,633
1,361,561
825,168
521,302
1,554,305
295,633
1,361,561
825,168
521,302
1,554,305
Wyoming
45,996
44,585
44,585
Total, Budget
Authority $70,000,000 $70,000,000 $70,000,000
1. Reflects $26,291,000 proposed supplemental for Adoption Assistance
E-28
1029
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Social Services Block Grant
FY 1996 Budget Page
Appropriation language and explanation of language changes . F-2
Amount available for obligation F-3
Summary of changes F-4
Budget authority by activity F-5
Budget authority by object F-5
Authorizing legislation F-6
Appropriation history table F-7
Justification:
A. General Statement F-8
B. Social Services Block Grant F-9
C. SSBG Empowerment Zones & Enterprise Communities . . . F-11
D. State Table F-13
F-1
1030
SOCIAL SERVICES BLOCK GRANT
For making grants to States pursuant to section 2002 of the
Social Sectirity Act, $2,800,000,000. (Department of Health and
Human Services Appropriations Act, 1995.)
F-2
1031
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Fcimilies
Social Services Block Grant
Amounts Available for Obligation
1994 1995 1996
Actual Appr opr i a t i on Estimate
Appropriation :
Annual $3,800,000,000 $2,800,000,000 $2,800,000,000
Real Transfer from:
Public Health
Service for Earth-
quake Supple-
mental 7,000,000 -0- -0-
Offsetting
collections from:
Trust funds 5,457,000 -0- -0-
Unobligated balance
start of year . -0- 1,000,000,000 360,000,000
Unobligated balance
end of year -1.000.000.000 -360.000.000 -0-
Total obligations $2,812,457,000 $3,440,000,000 $3,160,000,000
F-3
1032
SUMMARY OF CHANGES
1995 Appropriation $2,800,000,000
1996 Estimate S2 .800. 000.000
Net Change -0-
F-4
1033
Budget Authority by Activity
(Dollars in thousands)
1994 1995 1996
Actual Appropriation Estimate
Social Services
Block Grant $2,800,000 $2,800,000 $2,800,000
SSBG Empowerment
Zones 1,000,000 -0- -0-
Real Transfer from:
Public Health
Service for
Earthquake Supp-
lemental 7.000 -0- -0-
Total Budget
Authority $3,807,000 $2,800,000 $2,800,000
Obligations $2,812,457 $3,440,000 $3,160,000
Budget Authority by Object
Grants, svibsidies
and contributions $3,807,000 $2,800,000 $2,800,000
Total Budget
Authority $3,807,000 $2,800,000 $2,800,000
F-5
1034
\e n
Oi 0
a
K
c
a
■P N
«0 C-H
Ot O 0
c
I 0
in o-H
9> u *i
0
■P N
in C-H
» 9 U
« O 0
rt a j:
^1
£ 44 o
♦•■H-O
M C
C n o u a
« o o «
0 M O X to
« (9 CN X a
pH O rH «
«-H J^ • « «
•H > O O ^-H <'
U i4 O « 4) O 4i
O O ^ CO-H O O
CO m m^t* CO <
1035
APPROPRIATION HISTORY TABLE
Social Services Block Grant
Budget
Estimate
Year To Congress
1987 2,700,000,000
1988 2,700,000,000
1989 2,700,000,000
1990 2,700,000,000
1990
Supple-
mental
1990
Sequester
1991 2,800,000,000
1992 2,800,000,000
1993 2,800,000,000
1994 2,800,000,000
1994
Supple-
men-
tal 7,000,000
1995 2,800,000,000
1996 2,800,000,000
House
Allowance
Senate
Allowance
Appropriation
2,700,000,000 2,700,000,000 2,700,000,000
2,700,000,000 2,700,000,000 2,700,000,000
2,700,000,000 2,700,000,000 2,700,000,000
2,700,000,000 2,700,000,000 2,700,000,000
100,000,000 100,000,000 . 100,000,000
-37,800,000
2,800,000,000 2,800,000,000 2,800,000,000
2,800,000,000 2,800,000,000 2,800,000,000
2,800,000,000 2,800,000,000 2,800,000,000
2,800,000,000 3,800,000,000 3,800,000,000
7,000,000 7,000,000 7,000,000
2,800,000,000 2,800,000,000 2,800,000,000
F-7
1036
SOCIAL SERVICES BLOCK GRANT
Justification
(Dollairs in thousands)
Increase
1994
1995
1996
or
Actual
Appropriation
Estimate
Decrease
Block
Grant $2,800,000
$2,800,000
$2,800,000
-0-
SSBG
Empowement
Zones 1,000,000
-0-
-0-
-0-
Real Transfer
from:
'
Public Health
Service for
Earthquaike
Supple-
mental 7 . 000
-0-
-9-
0-
Total $3,807,000 $2,800,000 $2,800,000 -0-
General Statement
The Social Services Block Grant is designed to promote social and
economic needs to prevent, reduce or eliminate dependency;
achieve or maintain self-sufficiency; prevent neglect, abuse or
exploitation of children and adults; prevent or reduce
inappropriate institutional care; and secure admission or
referral for institutional care when other forms of care are not
appropriate.
F-8
1037
Social Services Block Grant
Authorizing Legislation - Section 2003 of Title XX of the Social
Security Act, as lunended.
Increase
1994 1995 1996 or
M^UAl Appropriation Sgtiffiatg pggfgjigg
$2,807,000,000 $2,800,000,000 $2,800,000,000 $-0-
1996 Authorization $2,800,000,000
Purpose and Method of Operations;
The Social Services Block Grant is an appropriated entitlement
program. Social Services Block Grant funds are distributed to
Puerto Rico, Guam, American Szunoa, the Virgin Islands, and the
Commonwealth of the Northern Marianas, based on the S2une ratio
allotted to them in 1981 to the total 1981 appropriation. The
remainder is distributed to the States and the District of
Columbia in proportion to the percentage of their population to
the National population. There are no matching requirements.
This program encovirages each State, as far as practicable under the
conditions in the State, to furnish a variety of social services best
suited to the needs of individuals residing within the State.
The five year funding history for this program is:
1991 $2,800,000,000
1992 $2,800,000,000
1993 $2,800,000,000
1994 $2,807,000,000*
1995 $2,800,000,000
* Includes real transfer of $7,000,000 from Public Health
Services for earthquake supplemental.
Rationale for the Budget Request;
An amovint of $2,800,000,000 is requested for FY 1996. This is
the full authorization for this program. These block grant funds
are used by States to carry out programs that address the needs
of communities, many of which strengthen families and reduce
welfare dependency.
F-9
1038
Nana of Prograa: Social Services Block Grant
Procrram Datat
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $2,807,000,000 $2,800,000,000 $2,800,000,000
Discretionaxy
Research -- ~ —
Demonstration ~ ~
Developnent — — — •
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM $2,807,000,000 $2,800,000,000 $2,800,000,000
Number of J^plicants 57 57 57
Number of Grants 57 57 57
New Starts:
# 57 57 57
$ $2,807,000,000 $2,800,000,000 $2,800,000,000
Continuations :
Contracts :
F-10
1039
SSBG Empowerment Zones t Enterprise Comminlties
Authorizing Legislation - Section 2007 of Title XX of the Social
Security Act, as amended.
Increase
1994 1995 1996 or
AStUAl Appropriation Estimate Decrease
$1,000,000,000 $-0-
1996 Authorization None
Purpose and Method of Operations;
The community empowerment initiative authorizes the designation
of a maximum of nine empowerment zones and 95 enterprise
commxinities in America's most distressed areas. Total funding
for the Initiative is $3.5 billion, comprised of $2.5 billion in
tax incentives and $1 billion in Title XX social services
funding. A total of $100 million in Social Services
Block Grant funds goes to each of six urban empowerment zones,
and $40 million to each of three rural empowerment zones. In
addition, each of the 95 enterprise communities will receive
about $3 million.
Social services funds provide designated areas with a highly
flexible funding sotirce to conduct activities such as: programs
to train and employ zone residents in the construction and
rehabilitation of public infrastructure and affordable housing;
after-school programs to keep schools open in the evenings and on
weekends, and drug and alcohol prevention and treatment programs
that provide comprehensive services for pregnant women, mothers,
and their children.
Rationale for the Budget Request;
No funds are requested for the Empowerment Zones Program for FY
1996. This was a one-time authorization. Funds are available
until expended.
F-ll
1040
Name of Program: SSBG Empowerment Zones & Enterprise Communities
Program Data:
FY 1994 FY 1995 FY 1996
Actual 1/ Apprppriatjpn R^gM^st
Service Grants:
Formula $1,000,000,000
Discretionary
Research
Demonstration —
Development
Training/Technical
Assistance ---
Evaluation — -
Program Support - —
Other
TOTAL PROGRAM $1,000,000,000
Number of Applicants 57
Number of Grants 40
New Starts:
# 40
$ $1,000,000,000
Continuations :
Contracts:
#
$
1/ One-time funding available until expended.
P-12
1041
SOCIAL SERVICES BLOCK GRANT
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$45,147,699
6,293,516
41,404,713
26,189,861
342,433,377
$45,146,563
6,407,406
41,828,247
26,186,317
336,929,151
$45,146,563
6,407,406
41,828,247
26,186,317
336,929,151
Colorado 37,286,324
Connecticut 36,336,776
Delaware 7,508,055
Dist. of Columbia 6,602,671
Florida 146,583,724
37,876,831
35,813,799
7,520,789
6,429,237
147,228,444
37,876,831
35,813,799
7,520,789
6,429,237
147,228,444
Georgia
Hawaii
Idaho
Illinois
Indiana
73,126,243
12,531,826
11,471,866
127,438,184
61,941,450
73,690,631
12,661,996
11,646,853
126,958,336
61,803,637
73,690,631
12,661,996
11,646,853
126,958,336
61,803,637
Iowa
Kansas
Kentucky
Louisiana
Maine
30,860,312
27,547,935
40,996,186
46,947,423
13,635,952
30,694,424
27,539,840
40,987,753
46,794,806
13,480,659
30,694,424
27,539,840
40,987,753
46,794,806
13,480,659
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
53,660,507
66,192,334
103,434,492
48,934,850
28,618,937
53,573,340
65,471,249
103,009,700
48,901,500
28,533,152
53,573,340
65,471,249
103,009,700
48,901,500
28,533,152
Missouri
Montana
Nebraska
Nevada
New Heunpshire
56,950,802
8,921,335
17,588,722
14,176,974
12,200,589
56,684,261
8,994,383
17,530,314
14,484,886
12,127,135
56,684,261
8,994,383
17,530,314
14,484,886
12,127,135
F-13
1042
SOCIAL SERVICES BLOCK GRANT (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
85,
,680,152
85,
,020,934
85,020,934
New Mexico
17,
,091,865
17,
,257,427
17,257,427
New York
199,
,383,013
197,
,778,187
197,778,187
North Carolina
74,
,384,946
74,
,694,858
74^694,858
North Dakota
7,
,011,198
6,
,942,267
6,942,267
Ohio
120,
,780,307
120,
,245,295
120,245,295
Oklahoma
35,
,055,990
35,
,060,629
35,060,629
Oregon
32,
,262,552
32,
,495,483
32,495,483
Pennsylvania
132,
,064,471
131,
,084,400
131,084,400
Rhode Island
11,
,085,422
10,
,970,091
10,970,091
South Carolina
39,
,306,874
39,
,328,595
39,328,595
South Dakota
7,
,762,003
7,
,760,930
7,760,930
Tennessee
54,
,687,344
54,
,839,539
54,839,539
Texas
191,
,543,721
192,
,724,304
192,724,304
Utah
19,
,543,024
19,
,789,826
19,789,826
Vermont
6,
,260,393
6,
,221,843
6,221,843
Virginia
69,
,405,339
69,
,608,229
69,608,229
Washington
55,
,405,026
56,
,062,077
56,062,077
West Virginia
19,
,885,303
19,
,778,910
19,778,910
Wisconsin
54,
,709,427
54,
,653,975
54,653,975
Wyoming
5,
,078,978
5,
,097,545
5,097,545
American Seunoa
104,188
104,188
104,188
GueuD
482,759
482,759
482,759
Northern Mariana
96,552
96,552
96,552
Puerto Rico
14,
,482,759
14,
,482,759
14,482,759
Virgin Islands
482,759
482,759
482,759 .
Total, Budget
Authority $2,807,000,000^'
$2,800,000,000 $2,800,000,000
^' Includes $7,000,000 supplemental appropriation for California
earthquake relief.
F-14
1043
EKTERPRISE COMMUNITIES
State
1994
Actuali'
1995
Estinate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$8,842,104
0
5,894,736
8,842,104
17,684,208
Colorado 2,947,368
Connecticut 5,894,736
Delaware 2,947,368
Diet, of Columbia 2,947,368
Florida 8,842,104
Georgia
Hawaii
IdzQio
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
8,842,104
0
0
5,894,736
2,947,368
2,947,368
1,043,294
4,567,569
11,789,472
0
0
8,842,104
8,842,104
5,894,736
5,894,736
7,798,810
0
2,947,368
2,947,368
F-15
1044
ENTERPRISE COMMUNITIES (continued)
State
1994
Actual^'
1995
Estimate
1996
Estimate
New Hampshire
New Jersey
New Mexico
New York
North Carolina
2,947,368
2,947,368
5,894,736
11,789,472
8,842,104
North Dakota
Ohio
Okleihoma
Oregon
Pennsylvania
0
11,789,472
5,894,736
5,894,736
8,842,104
Rhode Island
South Carolina
South Deikota
Tennessee
2,947,368
5,894,736
2,947,368
10,169,271
Texas
Utah
Vermont
Virginia
14,736,840
2,947,368
2,947,368
5,894,736
Washington
West Virginia
Wisconsin
Wyoming
8,842,104
8,842,104
2,947,368
0
Undistributed
40
Total , Budget
Authority
$280,000,000
1' Awarded to States in FY 1995.
F-16
1045
EMPOWERMENT ZONES
1994
1995
1996
State
Actual^'
Estimate
Estimate
Georgia
$100,000,000
Illinois
100,000,000
Kentucky
40,000,000
Maryland
100,000,000
Michigan
100,000,000
Mississippi
40,000,000
New Jersey
20,835,936
New York
100,000,000
Pennsylvania
79,164,064
Texas
40,000,000
Total, Budget
Authority
$720,000,000
^' Awarded to States in FY 1995.
P-17
1046
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Feunily Preservation and Support
FY 1996 Budget Page
Appropriation language and explanation of language changes . G-2
Amount available for obligation G-3
Summary of changes G-4
Budget authority by activity G-5
Budget authority by object G-6
Authorizing legislation G-7
Appropriation history table G-8
Justification :
A. General Statement G-9
B. Family Support and Preservation G-10
C. State Tables G-14
6-1
1047
FAMILY PRESERVATION AND SUPPORT
For carrying out Section 430 of the Social Security Act,
[$150,000,000] $225,000,000. (Departnent of Health and Human
Services Appropriations Act, 1995.)
G-2
1048
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
FAMILY PRESERVATION AND SUPPORT
Amounts Available for Obligation
1994
Actual
1995
ADorooriation
1996
Estimate
Appropriation :
Annual
$60,000,000
$150,000,000
$225,000,000
Unobligated
balance,
expiring
-17.000
-9-
-0-
Total obligations
$59,983,000 $150,000,000 $225,000,000
6-3
1049
SUMMARY OF CHANGES
1995 Appropriation $150,000,000
1996 Estimate S225.000.000
Net Change +$75,000,000
1995 Current
Estimate Base Change from Base
Increase
A. Program
1. Increase of program
funds for Family
Preservation &
Support $150,000,000 +$75,000,000
Total Increase +$75 , 000 , 000
Net Change +$75,000,000
G-4
1050
Budget Authority by Activity
1994 1995 1996
AS^liai Appropriation Estimate
Grants to
States $58,000,000 $144,000,000 $219,000,000
Training & Technical
Assistance &
Evaluation $2.000.000 $6.000.000 $6.000.000
Total Budget
Authority $60,000,000 $150,000,000 $225,000,000
G-5
1051
Budget Authority by Object
Consulting
Services
1995
Appropriation
$6,000,000
1996
Estimate
$6,000,000
Increase
or
Decrease
-0-
Grants , subs idles
& contribu
tions S144.000.000 S219.000.000 -t-STS . OOP . OOP
Total Budget
Authority
$150,000,000 $225,000,000 +$75,000,000
G-6
1052
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1053
APPROPRIATION HISTORY TABLE
Family Preservation and Support
Year
Budget
Estimate
To Conoress
House
Senate
Allowan<??
Appropriation
1994
$60,000,000
-0-
$60,000,000
$60,000,000
1995
$150,000,000
$150,000,000
$150,000,000
$150,000,000
1996
$225,000,000
G-8
1054
Justification
Feunily Preservation and Support
Increase
1995
1996
or
ADorooriation
Estimate
Decrease
Family Preservation
and Support
$150,000,000
$225,000,000
+$75,000,000
Total, Budget
Authority
$150,000,000
$225,000,000
+$75,000,000
General Statement
The Feuttily Preservation and Support program is a capped
entitlement progreun. Its purpose is to encourage and enable each
State to develop and establish, or expand, and to operate a
program of family preservation services and community-based
family support services.
The President's appropriation request of $225,000,000 for this
account represents current law requirements. No proposed law
eunounts are included.
"Family preservation services" are services designed to help
families alleviate crises; maintain the safety of children in
their own homes; support families who are preparing to reunify or
adopt, and assist families to obtain services and other support
necessary to address their multiple needs in a culturally and
community sensitive manner.
"Family support services" are primarily community-based
preventive activities designed to promote parental competencies
and behaviors that will increase the ability of families to
successfully nurture their children; enable families to use other
resources and opportunities available in the community; and
create supportive networks to enhance child-rearing abilities of
parents and help compensate for the increased social isolation
and vulnerability of families.
Both family support and family preservation services are based on
a common set of principles or characteristics which help assure
their responsiveness and effectiveness for children and their
feunilies.
G-9
1055
Family Preservation and Support
Authorizing Legislation - Subpart 2 Title IV-B of the Social
Security Act.
1994 1995 1996
Actual Appropriation Estimate
Increase
or
Decrease
$60,000,000 $150,000,000 $225,000,000 -t-$75, 000, 000
1996 Authorization $225,000,000
Purpose and Method of Operations;
The Family Preservation and Support program provides grants to
States to develop and expand two types of services: (1)
innovative child welfare services including family preservation,
family reunification and other services and (2) community-based
family support services. States will be required to use a
portion of these funds for each group of services.
One percent of the amount appropriated is reserved for allotment
to tribal organizations of Indian tribes that have submitted a
plan and whose allotment is greater than $10,000. Tribal
allotments are based on the number of children in the tribe
relative to the nvimber of children in all tribes with approved
plans. The allotment to Puerto Rico, Guam, the Virgin Islands,
the Northern Mariana Islands and American Samoa is determined by
a formula. The remaining funds are distributed to States based on
the State's share of children in all States receiving food stamp
benefits. States are entitled to payments equal to their
allotments, for use in paying not more than 75 percent of the
costs of activities under the approved State plan. The remaining
25 percent of costs must be paid with funds from non-Federal
sources .
Funds provided to the States will be used to provide both
preventive services (family support) and more intensive services
for families at risk or in crisis (family preservation services) .
States will carry out a comprehensive planning process,
consulting with a broad range of public and private agencies
providing services to families, as well as with parents and
families themselves, to ensure that services are coordinated and
that funds are spent in a manner responsive to the needs of
families.
G-10
1056
Fiinding for the Family Preservation and Support program during
the last five years has been as follows:
1991 $-0-
1992 $-0-
1993 $-0-
1994 $60,000,000
1995 $150,000,000
Rationale for the Budget Request;
The FY 1996 request for Family Preservation and Support program
is $225,000,000. These funds will support activities conducted
by States and certain Indian Tribes in the second year under the
five-year plans developed with funding supplied in FY 1994. This
is the second year under this provision of title IV-B in which
the funds will be primarily devoted to the development and
delivery of family preservation and support services. In FY
1996, from the $75 million increase, $10 million will be reserved
for State court assessment activities and $750,000 will be
reserved for Indian Tribes, as required by the authorizing
legislation.
G-11
1057
Name of Progreun: Feunily Preservation and Support
Program Data;
1994
Actual
1995
Appr<?pri?ition
1996
Reouest
Service Grants:
Formula
Discretionary
58,000,000
139,000,000
209,000,000*
Demons tr at i on
—
—
—
Development
—
~
~
Training/Technical
Assistance 1,
,000,
000
2,000,000
2,000,000
Evaluation 1,
,000.
,000
4,000,000
4,000,000
Progreun Support
~
—
—
Other
~
~
—
TOTAL PROGRAM 60,
,000,
,000
145,000,000
215,000,000*
Number of Applicants
90
98
100
Number of Grants
90
96
100
New Starts:
$ 58,
,000,
90
,000
2
20,000
8
80,000
Continuations :
#
—
94
138,980,000
92
208,920,000
Contracts :
t
$ 2,
,000,
4
,000
4
6,000,000
4
6,000,000
* Does not include $10,000,000 for Court Improvement Projects.
G-12
1058
Neune of Progrzun: Court Improvement Progreun
Program Data;
Service Grants:
Formula
Discretionary
FY 1994
actual
FY 1995
Aooropriation
5,000,000
10,
FY 1996
Recmest
,000,000
Research
~
~
~
Demonstration
—
~
~
Development
—
~
—
Training/Technical
Assistance
—
—
—
Evaluation
~
~
~
Program Support
—
~
~
Other
—
~
~
TOTAL PROGRAM
—
5,000,000
10
,000,000
Number of Applicants
~
50
51
Number of Grants
~
50
51
New Starts:
#
$
~
50
5,000,000
1
100,000
Continuations :
#
$
~
~
9
50
,900,000
Contracts :
G-13
1059
FAMILY PRESERVATION AND SUPPORT
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$1
,199,639
$2,880,911
$4,334,445
Alaska
77,754
186,726
280,936
Arizona
1
,005,253
2,414,096
3,632,104
Arkansas
577,604
1,387,105
2,086,955
California
6
,925,694
16,631,924
25,023,389
Colorado
616,481
1,480,468
2,227,423
Connecticut
444,311
1,067,004
1,605,350
Delaware
105,524
253,413
381,271
Dist. of Columbia
I
194,386
466,814
702,341
Florida
2
,615,879
6,281,986
9,451,497
Georgia
1,
,555,088
3,734,514
5,618,724
Hawaii
194,386
466,814
702,341
Idaho
155,509
373,451
561,872
Illinois
2,
,504,802
6,015,235
9,050,160
Indiana
938,606
2,254,046
3,391,302
Iowa
427,649
1,026,991
1,545,149
Kansas
372,110
893,616
1,344,481
Kentucky
1,
,083,007
2,600,822
3,913,040
Louisiana
1,
,888,321
4,534,767
6,822,737
Maine
244,371
586,852
882,942
Maryland
760,882
1,827,244
2,749,162
Massachusetts
960,822
2,307,396
3,471,569
Michigan
2,
,304,862
5,535,083
8,327,752
Minnesota
655,358
1,573,831
2,367,891
Mississippi
1,
,155,208
2,774,210
4,173,910
Missouri
1,
,149,654
2,760,873
4,153,843
Montana
133,293
320,101
481,605
Nebraska
233,263
560,177
842,809
Nevada
161,063
386,789
581,939
New Hampshire
94,416
226,738
341,137
G-14
1060
FAMILY PRESERVATION AND SUPPORT (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
1
,132,992
2,720,860
4,093,642
New Mexico
455,419
1,093,679
1,645,484
New York
4
,043,228
9,709,736
14,608,684
North Carolina
1
,160,762
2,787,548
4,193,976
North Deikota
99,970
240,076
361,204
Ohio
2
,782,496
6,682,112
10,053,503
OkleQioma
694,236
1,667,194
2,508,359
Oregon
510,957
1,227,055
1,846,152
Pennsylvania
2
,360,401
5,668,459
8,528,421
Rhode Island
188,832
453,477
682,274
South Carolina
805,313
1,933,945
2,909,697
South Dakota
127,739
306,764
461,538
Tennessee
1,
,327,378
3,187,674
4,795,983
Texas
5,
,376,160
12,910,748
19,424,733
Utah
294,356
706,890
1,063,544
Vermont
105,524
253,413
381,271
Virginia
927,499
2,227,371
3,351,168
Washington
938,606
2,254,046
3,391,302
West Virginia
572,050
1,373,768
2,066,888
Wisconsin
821,975
1,973,957
2,969,897
Wyoming
77,754
186,726
280,936
American Samoa
90,857
122,095
149,102
Guam
129,726
219,181
296,518
Northern Mariana
80,428
96,047
109,551
Puerto Rico
1,
,442,746
3,498,785
5,276,321
Virgin Islands
117,401
188,397
249,776
Indian Tribe
Set aside
600,000
1,500,000
2,250,000
Discretionary
2,
,000,000
11,000,000
16,000,000
Total, Budget
Authority
$60^
,000,000
$150,000,000
$225,000,000
G-15
1061
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low Income Home Energy Assistance
FY 199$ Bv<aq9t Page
Appropriation language and explanation of language changes H-2
Language Analysis „ .
Amoiints available for obligation j,_5
H-6
H-8
H-9
H-10
Summary of changes
Budget authority by activity
Budget authority by object
Authorizing legislation
Appropriation history table j^_^^
Justification:
A. General Statement jj_j^4
B. Program _ j,.^g
C. Contingency Funds jj.j^g
D. State Tables jj_22
H-1
1062
LOW INCOME HOME ENERGY ASSISTANCE
[Of the funds made available beginning on October 1, 1994 under
this heading in Piiblic Law 103-112, $155,796,000 are hereby
rescinded. ]
[The ftinds remaining after said rescission shall be available
for obligation through September 30, 1995.]
For madcing payments under title XXVI of the Omnibus Budget
Reconciliation Act of 1981, $1,319,204,000 to be available for
obligation in the period October 1, [1995] 1996 through September
30, [1996] 1997: Provided, That the fourth paragraph under this
heading in Public Law 103-333 is amended by adding, "to remain
availeUsle until expended", before the phrase, ": Provided, That".
1
[For making payments under title XXVI of the Omnibus Budget
Reconciliation Act of 1981, an additional $600,000,000: Provided,
That all of the funds available under this paragraph are hereby
designated by Congress to be emergency requirements pursuant to
section 251(b) (2) (D) of the Balanced Budget and Emergency Deficit
Control Act of 1985: Provided further. That these funds shall be
' Language is added to medce the funds appropriated in FY
1995 for emergency requirements as designated by the President
available until expended.
H-2
1063
made available only after submission to Congress of a formal
budget request by the President that includes designation of the
entire amount of the request as an emergency requirement as
defined in the Balanced Budget and Emergency Deficit Control Act
of 1985.] (Department of Health and Human Services
Appropriations Act, 1994.)
H-3
1064
Language Analysis
Provided That balances
remaining from funds made
available under the heading
for FY 1995 and designated by
Congress to be emergency
requirements pursuant to
section 251(b)(2)(D) of the
Balanced Budget and Emergency
Deficit Control Act of 1985,
shall remain available until
expended .
Congress included $600,000,000
in FY 1995 for emergency
contingencies to be made
available only upon submission
to Congress of a formal budget
request designating the entire
amount of the request as an
emergency requirement as
defined in the Balanced Budget
and Emergency Deficit Control
Act of 1985. Language is
added to allow these funds to
remain available until
expended .
H-4
1065
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Low Income Home Energy Assistance Program
Amounts Available for Obligation
1994 1995 1996
Actual Appropriation Estimate
Advance Appro-
priation ... 1,437,408,000 1,475,000,000 1,392,204,000
Emergency
Supplemental 300,000,000
Emergency
Fund (600,000,000)* (600,000,000)
Enacted
rescission.... -15,640 -155,796,000
P.L. 103-333
reductions -1,521
Unobligated
balance,
lapsing -1
___2
Total
obligations.. $1,737,392,359 $1,319,202,479 $1,319,204,000
' Of the $600,000,000 made available contingent on the
designation by the President as emergency requirements,
$300,000,000 was in fact designated as emergency requirements and
appropriated in an emergency supplemental, P.L. 103-211.
^ It is proposed in FY 1996 bill language that the
$600,000,000 made available in FY 1995 pursuant to section
251(b)(2)(D) of the Balanced Budget and Emergency Deficit Control
Act of 1985 remain available until expended.
H-5
1066
SUMMARY OF CHANGES
Regular Program
1995 Appropriation
Appropriated in FY 1994 $1,475,000,000
1995 Enacted rescission -155,796,000
1995 Procurement reduction -1.521
Revised 1995 $1,319,202,479
1996 Appropriation
Appropriated in FY 1995 $1.319.204.000
Net change +$1,521
1997 Appropriation
Requested in FY 1996 $1,319,204,000
Emergency Funds
1995 Appropriation $ 600,000,000
1996 Request a/
a/ The FY 1995 Labor/HHS/ Education appropriation act contained a
contingency fund in the amount of $600,000,000, to be made
available only if requested by the President and designated as an
emergency under the Budget Enforcement Act. The 1996 request
proposes that these funds remain available until expended.
Increases:
1995 Current
Estimate Base Change from Base
Program:
1. Leveraging grants.... $30,000,000 +$2,500,000
2. Training and technical
assistance 248,479 +1,521
Total increases +$2,501,521
H-6
1067
Decreases:
Program:
1. Grants to States $1,288,954,483 -$2,500,000
Total decreases -$2,500, 000
Net change +$1,521
H-7
1068
Budget Authority by Activity
1994
1995
Appropriation
1996
Estimate
Training and
Technical
Assistance.
$484,360
$248,479
$250,000
Program
Grants ....
1,
411,908,000
1,288,954,000
1,286,454,000
Leveraging
Incentive
Fund
25,000,000
30,000,000
32,500,000
Emergency
Fund
(600
,000,000)a/
(600,000,000)
b/
Emergency
Supplemental 300,000,000a/
Amount available
for obligation
in FY 1997.
(1,319,204,000)
Total Budget
Authority
$1,737,392,360 $1,319,202,479 1,319,204,000
a/ As reflected in the FY 1994 Emergency Earthquake
Supplemental, P.L. 103-211, $300,000,000 of the $600,000,000 in
the Emergency Fund was made available to States who experienced
record cold temperatures in the winter of 1994.
b/ FY 1996 requested appropriation language would make the
contingency fund established by the FY 1995 Labor/HHS/Education
appropriation act available until expended.
H-8
1069
Budget Authority by Object
Increase
1994 1995 1996 or
APPrgpri^tiPn Estimate Estimate Decrease
Other Services 484,360 248,479 250,000 +1,521
Grants,
Subsidies,
and Contri-
butions 1,736,908,000 1,318,954,000 1,318,954,000
Total,
Budget
Authority
by Object. $1,737, 392, 360 $1,319,202,479 $1,319,204,000 +$1,521
Advance Requested
for FY 1997 ($1,319,204,000)
H-9
1070
Authorizing Legislation
1995 1996
Amount 1995 Amount 1996
Authorized Appropriation Authorized Appropriation
Home Energy
Assistance
Activity:
l.Sec.2602
(b)o£ the
Low Income
Energy
Assistance
Act of
1981, as
amended. $2 billion 1,289,202,479 $ 2 billion 1,286,704,000
2 . Leveraging
Incentive Fund,
Section 2607
A(d) of the
Low-Income
Home Energy
Assistance
Act of
1981, as
amended.. 50,000,000 30,000,000 50,000,000 32,500,000
3. Energy Emergency
Contingency Fund,
The Department
of Labor, Health
and Human Services,
and Education and
Related Agencies
Appropriations Act
of 1994, (P.L.103-
112) 600.000.000 r600.000.000)a/ 600,000,000 ( )
Appropriation 1,319,202,479 1,319,204,000
Total Appropriation
against definite
authorizations. 1,319,202,949 1,319,204,000
a/ FY 1996 requested appropriation language would make these
funds available until expended.
H-10
1071
Low Income Home Energy Assistance Program
APPROPRIATIONS HISTORY TABLE
Budget
Estimate House Senate
to Congress Allowance Allowance Appropriation
1984 $1,300,000,000 $1, 875, 000, 000$1,875, 000, 000 $1,875,000,000
Supl. 200,000,000
1985 1,875,000,000 1,975,000,000 2,140,000,000 2,100,000,000
1986 2,097,765,000 2,097,765,000 2,097,765,000 2,100,000,000
Seq. -90,204,000
1987 2,097,642,000 Deferred 1,822,265,000 1,825,000,000
1988a/l,237,000,000 1,822,26,000 1,237,000,000 1,531,840,000
1989 1,187,000,000 1,567,000,000 1,400,000,000 1,383,200,000
1990 1,100,000,000 1,400,000,000 1,278,654,000 1,443,000,000
Supl. 50,000,000
1991 1,050,000,000 Deferred 1,450,000,000 1,415,055,000
Seq. 18,396
Contingency
Fund 195,180,000
Seq. 2,537
1992 b/ 925,000,000 1,000,000,000 1,500,000,000 1,500,000,000
Contingency
Fund £/ 100,000,000
Emergency
Alloc. d/ (600,000,000) (300,000,000) (300,000,000)
1993
e/ 1,065,000,000 891,000,000 1,356,905,000 1,346,030,000
Emergency
Alloc. (600,000,000) (600,000,000) (595,200,000)
1994 tl
1,507, 408, OOOg/ 1,437,408,000 1,437,408,000 1,437,408,000
H-11
1072
1994
Emergency
Alloc.
d/j/ (600,000,000) (600,000,000)
1994
Supl. 100,000,000 300,000,000 300,000,000 300,000,0001/
1994
Recs. -15,640
1995 1,475,000,000 1,475,000,000 1,475,000,000 1, 475, 000, OOOh/
1995
Resc. -750,000,000 -250,000,000 -89,592,000 -155,796,000
1995
Adm.
Red. -1,521
1995
Emergency
Alloc. (600,000,000) (600,000,000) (600, 000, OOO))^/
1996
h/ 745,000,000 1,225,000,000 1,475,000,000 1,319,204,000
1997 1,319,204,000
a/ All of the eunounts shown, beginning with FY 1998, exclude
Federal Administration which was consolidated into the Family
Support Administration's Program Administration budget activity.
b/ Of the $1.5 billion appropriated, $1,094,393,000 was
available for obligation 10/1/91 and $405,607,000 was not
available until 9/30/92.
£/ The request included Contingency funding of $ 100,000,000 to
be available for obligation after January 15, 1992, providing
certain provisions were met.
d/ Available only upon submission of a formal budget request
designating the need for funds as an emergency under the Budget
Enforcement Act.
£/ Of the $1,065 million requested, $798,750,000 was requested
as delayed obligations, not available for obligation until
September 30, 1993. Of the amount appropriated, $682,218,240 was
not available for obligation until September 30, 1993.
H-12
1073
£/ Appropriated in the FY 1993 Appropriations Act, available for
obligation October 1, 1993, of which $141,950,240 was available
for reimbursement of costs incvirred in FY 1993.
g/ Advance appropriation requested: $70,000,000 to become
available July 1, 1994, and $1,404,780,000 to become available
for obligation October 1, 1994 through June 30, 1995.
h/ Of the amount appropriated for FY 1995, $745,000,000 shall be
made available in the period October 1, 1995 through September
30, 1996, with the balance of $730,000,000 available October 1,
1994 through September 30, 1995.
1/ As reflected in the FY 1994 Emergency Earthquake
Supplemental, up to $300,000,000 was made available to States who
experienced record cold temperatures in January of 1994.
1/ FY 1995 appropriation language requested that the balance of
these funds remain available until expended. Congress did not
approve this request.
k/ FY 1996 appropriation language will propose that these funds
remain available until expended.
H-13
1074
Justification
Low Income Home Energy Assistance Progreun
Increase
1994 1995 1996 or
Appropriation Estimate Estimate Decrease
Program
Grants $1,411,908,000 $1,288,954,000 $1,286,454,000 -$2,500,000
Leveraging
Incentive
Grants 25,000,000 30,000,000 32,500,000 +2,500,000
Subtotal 1,436,908,000 1,318,954,000 1,318,954,000
Emergency
Fund (600,000,000)3/ (600,000,000) hi
Emergency
Suppl. 300,000,000a/
Training and
Technical
Assistance 484,360 248,479 250,000 +1,521
Total,
Budget
Authori-
ty $1,737,392,360 $1,319,202,479 $1,319,204,000 +$1,521
a/ Includes up to $300,000,000 which was made available as part
of the enacted FY 1994 Emergency Earthquake Supplemental, P.L.
103-211.
b/ FY 1996 appropriation language will make these funds
available until expended.
H-14
1075
General Statement
The Low Income Home Energy Assistance ProgreuD (LIHEAP) provides
assistance to low income households in meeting the costs of home
energy: heating and cooling their homes. The budget request
takes into account the essential requirement to reduce the
Federal deficit, as well as to maintain essential assistance in a
critical health and safety area. Approximately twenty-five
percent of LIHEAP recipients are "working poor" or elderly, who
do not receive any other public assistance through AFDC, food
steunps, SSI, or subsidized housing.
Legislation enacted in 1994 made it easier for States to use
LIHEAP funds more effectively to target assistance to households
with high energy biurdens or need and authorized States to use a
portion of their funds to assist households in reducing their
need for home energy. A number of States have already completed
or are in the process of examining their programs to target
resources more effectively.
A leveraging incentive fund has been successful in encouraging
States to develop increased non-Federal energy assistance
resources to be used in conjunction with LIHEAP funds. Beginning
in FY 1996, a new Residential Energy Assistance Challenge Grant
program will become a component of the leveraging incentive fund.
It will assist States in developing and operating programs to
help LIHEAP-eligible households reduce their energy
vulnerability.
This program is not intended to meet the entire home energy costs
of low income households. Rather, it is intended to supplement
assistance available through such programs as AFDC, SSI, and
housing subsidies, as well as households' own resources and State
resources. Appropriations for this program were increased in the
early 1980 's to offset continually escalating energy costs.
Energy costs declined in the mid-to-late 1980' s, and have been
relatively stable ever since.
Under the LIHEAP statute, funding is to be appropriated one year
in advance in order for States to have adequate time for
planning. Advanced funding was implemented in 1994.
H-15
1076
Low Income Home Energy Assistance Program
Authorizing Legislation - Section 2602(b) and 2607 A(d) of the
Low Income Home Energy Assistance Act of 1981, as eunended.
Increase
1994 1995 1996 or
Appr opr i a t i on Estimate Estimate Decrease
$1,737,392,360 $1,319,202,479 $1,319,204,000 +$1,521
Advance
Appropriation for FY 1997: $1,319,204,000
1996 Authorization $2,000,000,000
1997 Authorization $2,000,000,000
Purpose and Method of Operations
The Low Income Home Energy Assistance Program provides grants to
States, Indian Tribes (and tribal organizations) and territories
to aid low income households through payments to eligible
households and energy suppliers. Funds are provided through
block grants to States, Indian Tribes and tribal organizations,
Puerto Rico and five other territories for their use in programs
tailored to meet the unique requirements of their jurisdictions.
This program assists eligible households in meeting the costs of
home energy, defined by the statute to include sources of
residential heating and cooling.
In FY 1995, the statute allows States to make payments to, or on
behalf of, eligible households meeting the following criteria:
o One or more individuals receive either Aid to Families with
Dependent Children, Supplemental Security Income payments.
Food Stamps, or certain needs-based veterans benefits; or
o The household's total income does not exceed the higher of
150 percent of the poverty level or 60 percent of the State
median income level. States may establish lower income
eligibility criteria, but they may not exclude households
with incomes below 110 percent of the poverty level solely
on the basis of income. States may give priority to
households with highest home energy costs or needs in
relation to income.
H-16
1077
states are allowed flexibility in determining payment levels and
types of payments, including unrestricted cash payments, payments
to vendors on behalf of eligible households, or energy vouchers.
Beginning with FY 1994, grantees are no longer permitted to
transfer funds to other block grants. Up to ten percent of the
funds payable to a State may be used to pay State planning and
administrative costs. A grantee may hold up to ten percent of
the funds payable to it for obligation in the subsequent year.
Beginning in FY 1992, a portion of the appropriation may be made
available to reward those grantees that leverage their federal
LIHEAP dollars so that they cover more services or benefits.
Continuing to earmark a portion of program grant appropriations
for leveraging purposes is recommended. In FY 1994, $25,000,000
was made available for this purpose; $30,000,000 in FY 1995.
This request includes $32,500,000 for FY 1996.
In FY 1995, States will be encouraged to refocus and target
resources, based on new legislation.
FY 1991 1,610,216,604 a/
FY 1992 1,500,000,000
FY 1993 1,346,030,000
FY 1994 (advance appropriation-FY 1993)1,437,392,760 b/
FY 1994 Emergency Supplemental 300,000,000
FY 1995 (advance appropriation-FY 1994)1,319,202,479 c/
a/ Includes $195,180,000 in emergency funds.
b/ The FY 1994 advance appropriation (appropriated in FY 1993 for
obligation in FY 1994) of $1,437,408,000 was reduced by an
administrative cost rescission of $15,640.
c/ The FY 1995 advance appropriation (appropriated in FY 1994
for obligation in FY 1995) of $1,475,000,000 was reduced by two
rescissions: one of $155,786,000, and an administrative cost
rescission of $1,521.
H-17
1078
Rationale for the Budget Recmest
In the FY 1995 appropriations bill, Congress provided an advance
appropriation of $1,319,204,000 for FY 1996. No change in that
appropriation is proposed. The amount requested is an increase
of $1,521 over the comparable amount made available for
obligation in FY 1995. The initial advance appropriation for FY
1995 of $1,319,204,000 was reduced by an administrative cost
rescission of $1,521. Consistent with the authorizing statute,
the request also contains an advance appropriation of
$1,319,204,000 for obligation in FY 1997, continuing the program
at its cvirrent level of support.
H-18
1079
Low Income Home Energy Assistance Program
Authorizing Legislation - Section 2602 (e) and 2604 (g) of the Low
Income Home Energy Assistance Act of 1981, as eunended.
1994
Appropriation
($600,000,000)
$300,000,000 a/
1995
Estimate
($600,000,000)12/
1996
Estimate
b/
Increase
or
Decrease
hi
1996 Authorization - FY 1996 appropriation language will m2ike the
balance of the $600,000,000 appropriated in FY 1995 available
until expended.
Purpose and Method of Operation
The contingency funds were made available initially in January,
1991, because the national average retail price of home heating
oil in December 1990 exceeded by more than 20 percent the average
of the national average retail price for home heating oil for the
corresponding month for 1986, 1987, 1988, and 1989. These were
the criteria included in the appropriation act. These funds were
allotted to the fifty States and the District of Columbia in
proportion to the consumption of home heating oil, liquid
petroleum gas, and kerosene by low-income households.
The Labor/HHS Education Appropriation Act for FY 1992 contained a
contingency fund in the amount of $300,000,000; the FY 1993
Appropriation Act contained a contingency fund in the amount of
$595,200,000; and the FY 1994 and FY 1995 Appropriation Acts
contained contingency funds in the amount of $600,000,000. In
each of these years the funds were/are to be made available only
if requested by the President and designated as an emergency
under the Budget Enforcement Act. None of the contingency funds
was requested by the President in either FY 1992 or FY 1993. In
FY 1994, the 1994 Emergency Earthquake Supplemental provided that
up to $300,000,000 be made available to States who experienced
record cold temperatures in January of 1994.
a/ The FY 1994 Emergency Earthquake Supplemental, P.L. 103-211,
provided that up to $300,000,000 be made available to States who
experienced extremely cold temperatures in January of 1994, and
these funds were awarded.
b/ FY 1996 appropriation language will make the balance of the
funds appropriated in FY 1995 available until expended.
H-19
1080
In the 1994 eunendnents to the authorizing statute, language was
added to by-pass the formula for the regular block grant funds in
making grants to meet emergency needs.
Recent appropriations for this program have been:
FY 1991 $195,463,000
FY 1992 ($300,000,000)
FY 1993 ($595,200,000)
FY 1994 ($600,000,000) a/
FY 1995 ($600,000,000)
a/ The FY 1994 Emergency Earthguake Supplemental provided that
up to $300,000,000 was made available to States who experienced
record cold temperatures in January of 1994.
Rationale for the Budget Recmest
As reflected in the FY 1994 Emergency Earthguake Supplemental, up
to $300,000,000 in emergency funds was made available to assist
low income households adversely affected by the bitter cold of
the 1993/1994 winter.
No funds have been released for FY 1995.
For FY 1996, appropriation language is added to make the
contingency funds appropriated in FY 1995, but not obligated,
available until expended. These funds would become available in
FY 1996 only if the President requests them as part of an
emergency designated under the Budget Enforcement Act.
H-20
1081
Low Income Home Energy Assistance Program (LIHEAP)
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Recmest
Service Grants:
Formula 1,411,908,000 1,288,112,483 1,286,454,000
Discretionary a/ 325,000,000 30,000,000 32,500,000
Research
- —
Demonstration
200,
,000
Development
—
Training/Technical
Assistance 484,360
248,
,479
250,
,000
Evaluation
—
Prograun Support
—
Other b/
841,
,517
—
TOTAL
PROGRAM $1,737,392,360
$1,319,202,
,479
$1,319,204,
,000
Number of Applicants 192 190 190
Number of Grants 309 255 275
New Starts:
# 117 65 85
$ 325,000,000 30,000,000 32,500,000
Continuations :
# 192 190 190
$ 1,412,061,448 1,288,112,483 1,286,454,000
Contracts :
# 4 4 4
$ 330,912 248,479 250,000
a/ Includes $300,000,000 in Emergency Earthquake Supplemental
funds in FY 1994, and leveraging incentive funds of $25,000,000
in FY 1994, $30,000,000 in FY 1995, and $32,500,000 in FY 1996.
b/ Payment of prior year debt, per Section 1405 of P.L. 101-510.
H-21
1082
LOW INCOME HOME ENERGY ASSISTANCE
1994
1995
1996
State
Actual
Estimate
Estimate
Alabeuna
$12,
,126,599
$11,063,344
$11,063,344
Alaska
7,
,740,680
7,061,980
7,061,980
Arizona
5,
,864,568
5,350,365
5,350,365
Arkansas
9,
,253,168
8,441,854
8,441,854
California
65,
,055,673
59,351,618
59,351,618
Colorado
22,
,682,886
20,694,060
20,694,060
Connecticut
29,
,590,625
26,996,131
26,996,131
Delaware
3,
,927,586
3,583,217
3,583,217
Dist. of Columbia
4,
,595,473
4,192,544
4,192,544
Florida
19,
,187,901
17,505,513
17,505,513
Georgia
15,
,170,978
13,840,792
13,840,792
Hawaii
1,
,527,801
1,393,844
1,393,844
Idaho
8,
,847,837
8,072,062
8,072,062
Illinois
81,
,901,740
74,720,629
74,720,629
Indiana
37,
,082,807
33,831,402
33,831,402
Iowa
26,
,281,082
23,976,768
23,976,768
Kansas
12,
,069,452
11,011,207
11,011,207
Kentucky
19,
,297,768
17,605,747
17,605,747
Louisiana
12,
,397,586
11,310,571
11,310,571
Maine
19,
,170,008
17,489,189
17,489,189
Maryland
22,
,657,167
20,670,596
20,670,596
Massachusetts
59,
,191,049
54,001,202
54,001,202
Michigan
77,
,758,523
70,940,688
70,940,688
Minnesota
56,
,020,617
51,108,752
51,108,752
Mississippi
10,
,396,675
9,485,099
9,485,099
Missouri
32,
,714,753
29,846,336
29,846,336
Montana
10,
,377,950
9,468,016
9,468,016
Nebraska
12,
,997,004
11,857,432
11,857,432
Nevada
2,
,754,413
2,512,907
2,512,907
New Hampshire
11,
,203,658
10,221,326
10,221,326
H-22
1083
LOW
INCOME HOME
ENERGY ASSISTANCE
(continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
54,949,683
7,342,032
179,419,029
26,738,880
11,273,594
50,973,234
6,698,285
163,687,641
24,394,426
10,285,130
50,973,234
6,698,285
163,687,641
24,394,426
10,285,130
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
72,454,330
11,146,835
17,580,195
96,374,487
9,743,184
66,101,564
10,169,485
16,038,771
87,924,411
8,888,906
66,101,564
10,169,485
16,038,771
87,924,411
8,888,906
South Carolina
South Dakota
Tennessee
Texas
Utah
9,630,991
9,156,133
19,548,225
31,922,264
10,540,791
8,786,550
8,353,327
17,834,245
29,123,333
9,616,579
8,786,550
8,353,327
17,834,245
29,123,333
9,616,579
Vermont
Virginia
Washington
West Virginia
Wisconsin
8,397,541
27,598,963
28,916,999
12,770,798
50,426,599
7,661,248
25,179,097
26,381,569
11,651,060
46,005,216
7,661,248
25,179,097
26,381,569
11,651,060
46,005,216
Wyoming
American Samoa
Guam
Mariana Island
Marshall Island
4,220,301
31,383
68,807
23,898
0
3,850,267
28,632
62,774
21,803
0
3,850,267
28,632
62,774
21,803
0
Micronesia
Palau
Puerto Rico
Trust Territory
Virgin Island
0
17,937
1,708,030
0
65,064
0
13,627
1,558,270
0
59,359
0
13,627
1,558,270
0
59,359
Indian Set Aside
Leveraging
Discretionary
25,000,000
481,360
30,000,000
248,479
30,000,000
250,000
Total, Budget
Authority $1,437,392,360
$1,319,202,479 $1,319,204,000
H-23
1084
LOW INCOME HOME ENERGY ASSISTANCE
DISASTER RELIEF
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
0
Alaska
0
Arizona
0
Arkansas
0
California
0
Colorado
0
Connecticut
5
395
219
Delaware
286
480
D.C.
0
Florida
0
Georgia
0
Hawaii
0
Idaho
0
Illinois
12
019
466
Indiana
2
325
128
Iowa
8
054
083
Kansas
0
Kentucky
5
341
115
Louisiana
0
Maine
8
104
664
Maryland
6
631
189
Massachusetts
13
880
163
Michigan
48
845
949
Minnesota
37
399
847
Mississippi
0
Missouri
0
Montana
0
Nebraska
0
Nevada
0
New Hampshire
3
147
664
H-24
1085
LOW INCOME HOME ENERGY ASSISTANCE
DISASTER RELIEF (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
6,944,103
0
61,460,518
0
8,124,772
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
23,927,448
0
0
20,483,114
1,727,532
South Carolina
South Dakota
Tennessee
Texas
Utah
0
1,971,583
0
0
0
Vermont
Virginia
Washington
West Virginia
Wisconsin
4,798,863
678,471
0
3,732,291
14,720,338
Wyoming
0
Total , Budget
Authority
$300,000,000
__
__
H-25
1086
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Children and Families Services Programs
FY 1996 Budget Page
Appropriation Language and explanation of
language changes 1-3
Amounts Available for Obligation 1-5
Summary of Changes 1-7
Budget Authority by Activity I-IO
Budget Authority by Object 1-13
Administrative Costs 1-16
Significant Items in House and Senate Appropriations
Committee Reports 1-17
Authorizing Legislation 1-19
Appropriation History Table 1-3 4
Justification: General Statement 1-36
Narrative
1. Head Start 1-40
2. Comprehensive Child Development Centers. . . . 1-46
3. Comprehensive Runaway and Homeless Youth . . . 1-49
4. Runaway and Homeless Youth Program 1-51
5. Transitional Living Program for Homeless Youth 1-53
6. Drug Education and Prevention Program for
Homeless Youth 1-55
7. Youth Initiative/Youth Gangs Program 1-57
8. Family Violence 1-59
9. Child Abuse State Grants 1-64
10. Child Abuse Discretionary Activities 1-67
11. Advisory Board on Child Abuse and Neglect . . . 1-70
12. Community-Based Resource Centers 1-72
13. Emergency Child Abuse Prevention
- Substance Abuse 1-75
14. Community-Based Prevention Grants 1-77
15. Family Resource Centers 1-80
I-l
1087
16. Family Support Centers 1-83
17. Temporary Child Care and Crisis Nurseries . . . 1-85
18. Child Welfare Services 1-88
19. Child Welfare Training 1-91
20. Child Welfare Research and Demonstration. . . . 1-94
21. Adoption Opportunities 1-97
22. Abandoned Infants Assistance Program I-lOO
23. Developmental Disabilities: State Grants. . . . 1-102
24. Developmental Disabilities
Protection and Advocacy 1-105
25. Developmental Disabilities Projects of
National Significance 1-108
26. Developmental Disabilities University-
Affiliated Programs I-llO
27. Native American Programs 1-113
28. Social Services Research and Demonstration. . . 1-118
29. Community Services Block Grants 1-123
30. Emergency Community Services for the Homeless . 1-126
31. Community Services Discretionary Activities . . 1-129
32. Community Demonstration Partnership 1-135
33. Community Food and Nutrition 1-137
34. Federal Administration 1-140
35. EBT Task Force 1-147
State Tables 1-148
1-2
1088
CHILDREN AND FAMILY SERVICES PROGRAM
For carrying out, except as otherwise provided, the Runaway
and Homeless Youth Act, the Developmental Disabilities Assistance
and Bill of Rights Act, [the State Dependent Care Development
Grants Act,]' the Head Start Act, [the Child Development
Associate Scholarship Assistance Act of 1985,]^ the Child Abuse
Prevention and Treatment Act, chapters 1 and 2 of subtitle B of
title III of the Anti-Drug Abuse Act of 1988, the Family Violence
Prevention and Services Act, the Native American Programs Act of
1974, title II of Public Law 95-266 (adoption opportunities), the
Temporary Child Care for Children with Disabilities and Crisis
Nurseries Act of 1986, the Abandoned Infants Assistance Act of
1988, subtitles D and F of title VII of the Stewart B. Mckinney
Homeless Assistance Act, and part B (1) of title IV and section
1110 of the Social Security Act[,]; for making payments under the
Community Services Block Grant Act; and for necessary
administrative expenses to carry out said Acts and titles I, IV,
X, XI, XIV, XVI, and XX of the Social Security Act, the Act of
July 5, 1960 (24 U.S.C. ch. 9), the Omnibus Budget Reconciliation
Act of 1981, [section 204 of the Immigration Reform and Control
Act of 1986,] title IV of the Immigration and Nationality Act,
section 501 of the Refugee Education Assistance Act of 1980,
* Activities funded under this authority in FY 1994 have been
proposed for consolidation in the Child Care and Development Block
Grant account for FY 1995.
^ Activities funded under this authority in FY 1994 have been
proposed for consolidation in the Child Care and Development Block
Grant account in FY 1995.
1-3
1089
Public Law 100-77, sections 30401, 40155, 40211, 40241, 40251,
and subtitle K, title III of Public Law 103-322, and section 126
and titles IV and V of Public Law 100-485, [$4,419,888,000],
$5,234,257,000. (Department of Health and Human Service
Appropriations Act, 1995.)
COMMUNITY SERVICES BLOCK GRANT
[For neJcing payments under the Community Services Block Grant
Act, section 406 of Public Law 9-425, and the Stewart B. McKinney
Homeless Assistance Act, $472,920,000, of which $12,000,000 shall
be for carrying out the National Youth Sports Program: Provided,
That payments from such amount to the grantee and subgrantees
administering the National Youth Sports Program may not exceed
the aggregate amount contributed in cash or in kind by the
grantee and subgrantee: Provided further, That amounts in excess
of $9,400,000 of such amount may not be made available to the
grantee and subgrantees administering the National Youth Sports
Program unless the grantee agrees to provide contributions in
cash to such program in an amount that equals 29 percent of such
excess amount] . (Department of Health and Human Services
Appropriations Act, 1995.)
1-4
1090
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Children and Feunily Services Programs
Amounts Available for Obligation
1994 1995 1996
Actual Appropriation Estimate
Appropriation :
Annual $4,234,272,588 $4,204,530,895 $4,416,704,793
Section of P.L.
103-333 reductions -1,773,000
Section of P.L
103-331 reductions -39,000
Head Start Investment
initiatives.... 209,000,097 400,299,207
Subt Ota 1 , ad j ust ed
appropriation.. $4,234,272,588 $4,411,542,243 $4,817,004,000
Real transfer from
earthquake
supplemental... 13,000,000
Real transfer from
Payment to States for
Federal Parent Locator
Services 1,010,169 1,500,000 1,500,000
Comparative
transfer from
Community Services
Program 464,219,058 472,920,000 417,252,000
Comparative
transfer to
Child Care &
Development
Block Grant... -14,311,000 -14,183,000
Subtotal, adjusted
budget authority $4,698,190,815 $4,876,813,243 $5,234,257,000
1-5
1091
Offsetting collections
from:
Federal funds. 18,514,000 10,200,000 10,200,000
Recovery of Prior
year obligations 121,000
Unobligated balance,
start of year 1,459,000 9,059,000
Unobligated balance,
end of year... -9,059,000
Unobligated balance,
lapsing -2.203 .000
Total
Obligations... $4,707,022,815 $4,911,755,243 $5,245,957,000
1-6
1092
SUMMARY OF CHANGES
FY 1995 Appropriation
FY 1996 Estimate
Net Change
1995 Oirrent
Estimate Base
Increases;
A. Built-in t
1. Annualization of January
1995 pay raise, within
grade increases, and
Jan. 1996 pay raise $105,463,000
2. Related Personnel
benefits 19,980,000
3. Transportation of things 100,000
4. Rental Payments to GSA. . 13,329,000
5. Communications/Utilities/
Misc 3,700,000
Subtotal Increases...
B. PROGRAM;
Increases :
1. Investment in the Head Start
Program 3,534,4289,000
2. Consolidation of Runaway &
Homeless Youth Program. .
3. Increase in Community Based
Resource Center to include
Family Support Centers.. 31,363,000
$4,876,813,000
$5,234,257,000
$ 357.444.000
Change from Base
+ $3,540,000
+172,000
+25,000
+871,000
+1,514,000
+ $6,122,000
+ 400,299,000
+68,572,000
+7,371,000
1-7
1093
4. Travel for Technical
Assistance and
Monitoring 2,494,000 +2,062,000
5. Consulting Services 67,768,000 +10,687,000
6. Other Services ( includes
ADP, EBT support) 7,179,000 +4,520,000
7. Supplies and materials.. 502,000 +498,000
8. Equipment/Consolidation. 1,501,000 +1,501,000
Subtotal Program Increases +$495,510,000
Total INCREASES +$501,632,000
Decreases:
1. Consolidation of current
Runaway and Homeless Youth
Program in order to consoli-
date related programs.... 40,458,000 -40,458,000
2. Consolidation of current
Transitional Living for
Homeless Youth Program into
consolidated related programs 13,649,000 -13,649,000
i. Elimination of Drug Education
and Prevention for Homeless
Youth in order to consolidate
related programs 14,666,000 -14,666,000
4. Redirection of Family Support
Centers to the Community Base
Resource Centers 7,371,000 -7,371,000
5. Reduction in Community Food
and Nutrition program... 8,676,000 -2,676,000
6. Elimination of Community
Services discretionary
programs 52,992,000 -52,992,000
7. Reduction in printing and
reproduction 1,805,000 -86,000
1-8
1094
8. Reduction of goods and
services from government
accounts 21,014,000 -8,113,000
9. Reduction of research and
development contracts 5,621,000 -3,321,000
10. Reduction of Working Capitol
Fvind 9,456,000 -788,000
11. FTS 2000 reduction -68,000
Subtotal, Program Decreases -$144,188,000
Total +S357.444.000
Met Change +$357,444,000
1-9
1095
Budget Authority by Activity
1994 1995 1996
Actual Appropriation Estimate
1. Head Start 3,325,728,000 3,534,429,000 3,934,728,000
2 . Comprehensive
Child Development
Centers 46,560,000 1/
3 . Comprehensive
Runaway and
Homeless Youth.. 63,713,000 68,572,000 68,572,000
4 . Runaway and
Homeless Youth
Program [36,910,000] [40,458,000] [40,458,000]
5. Transitional
Living Program
for Homeless
Youth [12,200,000] [13,649,000] [13,649,000]
6. Drug Education and
Prevention Program
for Homeless Youth [14,603,000] [14,466,000] [14,466,000]
7. Youth Initiative/
Youth Gang Drug
Prevention Program 10,620,000 10,520,000 10,520,000
8. Family Violence. 27,648,000 32,645,000 32,645,000
9. Child Abuse
State Grants 22,854,000 22,854,000 22,854,000
10. Child Abuse
Discretionary
Activities 15,577,000 15,385,000 15,385,000
11. Advisory Board
on Child Abuse and
Neglect. . 291,000 288,000 288,000
12 . Community-Based
Resource Centers 31,363,000 38,734,000
13. Community-Based
Prevention Program.. 5,270,000
14. Emergency Child Abuse
Prevention-Substance
Abuse 19,039,000
15. Family Resource
Centers 5,810,000
16. Family Support
Centers 7,374,000 7,371,000
17. Temporary Child
Care and Crisis
Nurseries 11,912,000 11,835,000 11,835,000
18. Child Welfare...
Services 294,624,000 291,989,000 291,989,000
I-IO
1096
19. Child Welfare
Training 4,439,000 4,398,000 4,398,000
20. Child Welfare
Research and
Demonstration... 6,466,000 6,395,000 6,395,000
21. Adoption
Opportunities... 12,117,000 13,000,000 13,000,000
22. Abandoned Infants
Assistance
Program 14,539,000 14,406,000 14,406,000
2 3 . De ve lopment a 1
Disabilities:
State Grants 69,343,000 70,438,000 70,438,000
24. Developmental
Disabilities
Protection and
Advocacy 23,753,000 26,718,000 26,718,000
2 5 . De ve 1 opment a 1
Disabilities
Projects of National
Significance 3,723,000 5,715,000 5,715,000
2 6 . De ve 1 opment a 1
Disabilities
University-
Affiliated Programs 18,272,000 18,979,000 18,979,000
27. Native American
Programs 38,491,000 38,461,000 38,461,000
28. Social Services
Research and
Demonstration... 13,664,000 14,961,000 14,961,000
29. Community Services
Block Grants 397,000,000 391,500,000 391,500,000
30. Community Services
for the Homeless 19,840,000 19,752,000 19,752,000
31. Community Services
Discretionary
Activities 30,640,000 33,015,000
32. National Youth
Sport 12,000,000 12,000,000
33. Community
Demonstration
Partnership 7,995,000 7,977,000
34. Community Food
and Nutrition. .. 7,944,000 8,676,000 6,000,000
35. Federal
Administration.. 159,935,000 163,171,000 173,983,000
36. EBT 2,000,000
Total,
Budget Authority... $4,697,181,000 $4,876,813, 000 $5,234,257,000
I-ll
1097
Total, FTE (1,965) (1,983)1/ (2009)2/
Investment
Initiative [208,700,890] [400,299,000]
1/ Comprehensive Child Care Development Centers (CCDP) was
consolidated into the Head Start, the second cohort will continue
providing services to low income families under the original CCDP
through FY 1996.
2.1 Includes the effect of transfers from Departmental
Management. See the Departmental Management section for details.
1-12
1098
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Administrative Costs
1995
Personnel Compensation:
Full-time
Permanent (11.1)... $102,116,000
Other than Full -Time
Permanent(11.5) . . . 1,800,000
Other Personnel
Compensation(11.9) 1,547,000
Total Personnel
Compensation (11. 9) 105,463,000
Civilian Personnel
Benefits (12.1)...
18,505,000
Benefits to
Former Personnel (13.0) 1,475,000
Travel (21.0)
Transportation
of Things (22.0)..
Communications, Utilities
& Miscellaneous
charges (23.3) ....
Printing &
Repr oduct ion (24.0)
Consulting
Services (25.1)....
Other Services (25.2).
Supplies &
Materials (26.0)...
Purchase of Goods &
Services from Govt,
accounts (25.3)....
2,494,000
100,000
3,700,000
1,805,000
67,768,000
7,179,000
502,000
Research & Development
contracts (25.5)...
Increase
1996 or
Estimate Decrease
$105,563,000 +$3,447,000
1,940,000 +140,000
1,500,000 -47,000
109,003,000 +3,540,000
18,677,000 +172,000
1,475,000
4,556,000 +2,062,000
125,000
+25,000
5,214,000 +1,514,000
1,719,000 -86,000
78,455,000 +10,687,000
9,698,000 +2,519,000
1,000,000 +498,000
19,514,000 13,001,000 -6,513,000
TOTAL.
5,621,000 2,300,000 -3,321,000
$ 234,126,000 $ 245,223,000 +$11,097,000
1-16
1102
SIGNIFICANT ITEMS IN HOUSE AND SENATE
APPROPRIATIONS COMMITTEE REPORTS
Children and Families Services Account
FY 1995 Senate Report
Head Start
1. The authorization for the
Comprehensive Child Development
Program (CCDP) was repealed in
Public Law 103-252, the Human
Services Amendments of 1994. In
accordance with this new
legislation the Committee
expects activities similar to
those previously funded through
the CCDP program to be continued
as part of a new Head Start
initiative for families with
infants and toddlers.
Social Services Research
The Committee directs that funds
for section 505 be administered
by the Office of Community
Services within HHS and that
funds be made available on a
priority basis to community
development corporations with a
record of achievement in job and
business creation for low-income
people.
The Conference Report
Community Services Block Grant
[National Youth Sports Program
grants] The conferees are aware
that the 1994 competitive grant
for NYSP was not released until
May 17, 1994. This created
serious problems for the large
number of colleges and
universities which support the
program on their campuses with
their staff and resources. The
conferees expect the Secretary
to review this process and
Activities formerly supported
under the Comprehensive Child
Development Centers are now
authorized under the Head Start
Program. Similar activities
will be continued under the
early Head Start initiative.
ACF will publish a program
announcement requesting
applications for these funds in
the early spring. From the $5.5
million available for JOLI, ACF
will set aside $1 million
exclusively for applications
from Community Development
Corporations with a record of
achievement in job and business
creation for low-income people.
The Secretary will review the
competitive grant process and
report to the committees on
changes that can be made to
ensure the release of these
funds as early in the fiscal
year as possible to allow the
grant recipient or recipients to
coordinate the program without
disruption to participants.
1-17
1103
report to the committees on
changes ^hat can be made to
ensure the release of these
funds as early in the fiscal
year as possible to allow the
grant recipient or recipients to
coordinate the progreun without
disruption to participants.
1-18
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1121
Justification
Children and Feunily Services Programs
(dollars in thousands)
Increase
FY 1995
1996
or
Appropriation
Estimate
Decrease
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18,
Head Start
Comprehensive Runaway
and Homeless Youth.
Youth Initiative/
Youth Gang Progreun.
Family Violence. . . .
Child Abuse
State Grants
Child Abuse
Discretionary
Activities
Advisory Board on
Child Abuse and
Neglect
Community-Based
Resource Centers . . .
Family Support
Centers
Temporary Child Care
and Crisis Nurseries
Child Welfare
Services
Child Welfare
Training
Child Welfare
Research and
Demonstration
Adoption
Opportunities
Abandoned Infants . .
Developmental
Disabilities Basic
State Grants
Developmental
Disabilities
Protection and
Advocacy
Developmental
Disabilities
Special
Projects
$3,534,429
$3,
,934,
,728
+$400,299
68,572
68,
,572
10,520
10,
,520
32,645
32,
,645
22,854
15,385
6,395
13,000
14,406
70,438
26,718
5,715
22,854
15,385
288
288
31,363
38,734
+7,371
7,371
-7,371
11,835
11,835
291,989
291,989
4,398
4,398
6,395
13,000
14,406
70,438
26,718
5,715
1-36
1122
19 . Developnental
Disabilities
University
Affiliated
Programs 18,979 18,979
20. Native Anerican
Prograiw 38,461 38,461
21. Social Services
Research and
Demonstration 14,961 14,961
22. Connunity Services
Block Grant 391,500 391,500
23. Conmunity Services
for the Homeless... 19,752 19,752
24. Community Services Food
and Nutrition 8,676 6,000 -2,676
25. Community Services
Discretionary Act. 33,015 -33,015
26. National Youth Sports 12,000 -12,000
27. Community Demonstration
Partnership 7,977 -7,977
28 . Federal
Administration 163,171 173,983 +12,812
29. EBT Task Force +2 . OOP +2.000
Total, Budget
Authority $4,867,813 $5,234,257 +357,444
Investment Initiative. . [208,701] [400,299]
Total, FTE (1»983) (2,009) fi/
A/ Includes the effect of transfers from Departmental
Management. See the Departmental Management section for details.
1-37
1123
General Statement
The Fiscal Year 1996 request for Children and Family Services
Programs is $5,234,257,000 and 2,009 FTE, an increase of
$357,444,000 over the 1995 comparable appropriation of
$4,876,813,000.
The FY 1996 request consolidates two programs formerly in this
account with the Child Care and Development Block Grant. The two
programs are the Dependent Care Planning and Development, and the
Child Development Associate Scholarship progrcuns.
This budget request includes an increase of $400,299,000 over the
FY 1995 level for the Head Start program. This increase will
support a significant and on-going investment. This investment
will: strengthen quality in all aspects of the program; fund
strategic expansion of services; and provide local flexibility to
respond to family and community needs. A portion of this
proposed increase will be used to increase Head Start enrollment
by an estimated 32,000 new children and families, bringing total
Head Start enrollment to an estimated 784,000.
The request includes a consolidation of programs which serve
runaway and homeless youth into the Comprehensive Runaway and
Homeless Youth Program. This program will be used to provide
direct support to comprehensive youth services centers in all 50
states, the District of Colxunbia, and the Territories. Funds
will also support the nationwide toll-free hotline for runaway
and homeless youth and their families; training and technical
assistance to grantee staff; and research and development,
dissemination, evaluation, coordination, and related activities.
The FY 1996 budget request for the Community-Based Resource
Centers Progreun of $38,734,000 reflects efforts to improve the
quality of services to children and families by providing
streamlined service delivery through program consolidation. The
budget proposes to consolidate the Family Support Program with
the newly authorized Community-Based Family Resource Program,
itself a consolidation of the Family Resource and Support
ProgreuD, the Emergency Child Abuse Prevention Grants Program and
the Community-Based Prevention Program. This new program will
assist each State to develop and implement, or expand and
enhance, a comprehensive, statewide system of preventive family
resource services through innovative funding mechanisms and
collaboration with existing education, vocational rehabilitation,
health, mental health, employment and training, child welfare,
and other social services agencies within the State. It will
result in increased flexibility for each State to provide the mix
of preventive services it deems best to meet the needs of its
clients.
1-38
1124
The requested increase in Federal Administration will improve
prograunmatic and financial monitoring of Federally funded
activities; accelerate improvements in ADP systems; improve
telecommunications capabilities; and, provide technical
assistance, training and evaluation services necessary to support
initiatives in child support enforcement and welfare reform.
The Administration for Children and Fzunilies will jointly fund
with the Department of Agriculture a continuation of a
demonstration of electronic benefits transfer (EBT) . EBT is
popular with States as a highly manageable, safe and cost
effective method of providing benefit access to Federal payment
recipients.
Effect of Proposed Legislation
The President's appropriation request of $5,165,685,263 for ACF
programs in the Children and Families Services Program
appropriation represents c\irrent law requirements adjusted by an
increase of $68,572,000 assuming Congressional action on proposed
legislation as follows:
Current law appropriation request $5 , 165 , 685 , 263
Impact of proposed legislative changes:
o Consolidation of the Runaway and
Homeless Youth Program
(under ctirrent law would be funded at: $40,458,000)
o Consolidation of the Runaway and
Homeless Transitional Living
Progreun
(under current law would be funded at: $13,648,000)
o Consolidation of the Runaway Youth
Drug Prevention Program
(under current law would be funded at: $14,466,000)
o Establish a new authorization for
the Consolidated Runaway and Homeless
Youth Program ■i-$68.572.000
Subtotal , legislative changes -<-$68 , 572 , 000
Total, appropriation request in the
President's budget $5,234,257,263
1-39
1125
Head Start
Authorizing Legislation - Section 639 of the Head Start Act, as
amended .
Increase
1994
1995
1996
or
Actual
Appr9priati9n
G9tim?(te
Decrease
$3,325,728,000 $3,534,429,000 $3,934,728,000 +$400,299,000
1996 Authorization Such sums.
Purpose and Method of Operations;
Head Start provides grants to local, public and private non-
profit agencies for comprehensive child development services to
children and feunilies. Intended primarily for preschoolers from
low-income fsunilies, the progreun fosters the development of
children and enables them to deal more effectively with both
their present environment and later responsibilities in school
and community life. Head Start programs emphasize cognitive and
language development, socio-emotional development, physical and
mental health, and parent involvement to enable each child to
develop and function at his or her highest potential. At least
ten percent of enrollment opportunities in each State are made
available to children with disabilities.
Grantees must contribute 20 percent of the total cost of the
program from non-Federal funds. The Head Start Act was amended
in October 1992 to expand the authority of the Secretary to waive
the amount of matching funds required to be provided by
particular Head Start agencies. This legislation also gives the
Secretary the authority to allow grantees to purchase facilities.
The Head Start Act requires that HHS distribute at least 87
percent of Head Start's appropriation by formula. The total
minimum allocation to Head Start programs in a State is based on
the State's relative number of poor children, ages 0-5, and its
relative number of children, ages 0-18, in families receiving
AFDC benefits, as compared to all other States. HHS uses the
remaining 13 percent to fund American Indian and Migrant Head
Start progreuns as well as progriuns in the territories; to fund
grants, contracts, and cooperative agreements in the areas of
research, demonstration and evaluation; to make discretionary
grants; and to fund the required 2 percent of Head Start's
appropriation which must be spent on training and technical
assistance activities.
1-40
1126
Head Start's authorizing legislation requires that funds be set
aside for transition projects to assist in the transition of
children from Head Start to public school and for Parent and
Child Centers, which provide comprehensive services to children
under three and their families, including pregnant women. The
authorizing legislation also requires the Secretary to award a
collaboration grant to each State to facilitate the collaboration
of activities in the State designed to benefit low-income
children and families.
Head Start children receive comprehensive health services,
including immunizations, physical and dental exams and treatment,
and hot meals to help meet daily nutritional requirements. The
Head Start program also emphasizes significant involvement of
parents in their child's development.
Most Head Start programs now provide center-based services to
children for 3 to 4 hours per day, 4 or 5 days per week for 8 to
9 months (corresponding to the normal school year) . Grantees
have the option of providing full-day and/or full-year services.
Funding for the Head Start program during the last five years has
been as follows:
1991 $1,951,774,62 6
1992 $2,2 01,800,000
1993 $3,2 76,285,604
1994 $3,326,285,000
1995 $3,534,429,000
Rationale for the Budget Request:
The budget request for FY 1996 is $3,934,728,000, an increase of
$400,299,000 over FY 1995. This increase will be used to
maintain and improve program quality, to increase the amount of
contact time provided to Head Start children and families and to
increase the number of children and families receiving the
benefit of a Head Start experience.
The President's objectives for Head Start during the next few
years will be to improve the quality of the program, to give
programs greater flexibility to respond to the needs of their
communities and to increase the program's enrollment.
Quality will be addressed in this request by providing every
grantee a cost-of-living increase equal to the rise in the
Consumer Price Index and by making available quality improvement
funds equal to at least 25% of the FY 1996 increase, after
adjusting for inflation. Based on current CPI projections the
cost-of-living increase will require $91.5 million and the
quality allocation another $76.3 million, at a minimum.
1-41
1127
Programs will have greater flexibility to use part of the
proposed FY 1996 increase to increase the hours per day and days
per year in which Head Start services are provided. Some
additional children will, using these funds, be able to be served
in a full-year prograun, others will be provided full-day services
so that working parents or parents in training will be able to
have Head Start meet their child care needs as well as providing
their child a comprehensive child development program.
In addition to improving the program's quality and responsiveness
to the needs of its constituents, it is also important to
increase the number of children who receive the benefits of a
Head Start experience. Consequently, a portion of this proposed
increase will be used to increase Head Start enrollment by an
estimated 32,000 new children and families, bringing total Head
Start enrollment to an estimated 784,000.
In FY 1996, Head Start will continue its statutorily mandated
early Head Start program for serving infants and toddlers.
Consistent with Head Start's authorizing legislation, 4% of the
FY 1996 appropriation, or $157 million will be spent on this
effort, an increase of $51 million over the FY 1995 funding level
of $106 million. Programs funded under this initiative will
provide comprehensive Head Start services to children under the
age of three and their families, including pregnant women. The
program is designed to promote the development of children and to
enable parents to fulfill their roles as parents and to move
toward self-sufficiency.
In FY 1996 Head Start expects to implement the revised Head Start
performance standards, the development of which is required in
the Head Start Act. These standards, currently under
development, are designed to more clearly articulate the types
and scope of services which are expected of all Head Start
programs. Fiscal Year 1996 will also see the implementation of
Head Start measures, designed to provide the means of assessing
the extent to which Head Start programs are having positive
impacts on the children and fzunilies they serve.
Evaluation funds are requested to meet the President's long term
commitment to make Head Start a program of the highest quality,
able to provide a Head Start experience to all eligible children
and families.
The performance of Head Start grantees will be closely assessed
through an improved monitoring system designed to help programs
improve progreun quality as well as to assure their compliance
with required standards. In addition, funds will be targeted to
provide training and technical assistance to poorly performing
grantees. Those grantees found to be substantially out of
compliance with the Performance Standards or other requirements
will develop, with HHS oversight, a quality improvement plan
1-42
1128
specifying the steps that will be taken to correct the
deficiencies. If projects do not make satisfactory progress,
appropriate steps to fxind new sponsors will be tcJcen.
J
1-43
1129
Name of Program: Head Start
Program Data;
FY 1994 FY 1995 FY 1996
AS^Ufil Appropriation Request
Service Grants:
Formula
Discretionary 3,215,946,000 3,403,978,000 3,796,277,000
(0-3 Set Aside) (38,000,000) (106,000,000) (157,389,000)
Research 5,000,000 5,000,000 5,000,000
Demonstration — ~
Development ~ —
Training/Technical
Assistance 66,526,000 70,695,000 78,695,000
Children
w/Disabilities 3,000,000 3,000,000 3,000,000
Evaluation 7,000,000 7,000,000 7,000,000
Panel Reviews 756,000 756,000 256,000
Monitoring 7,500,000 9,000,000 9,500,000
Other 1/ 20.000.000 35.000.000 35.000.000
TOTAL PROGRAM 3,325,728,000 3,534,429,000 3,934,728,000
Number of Applicants
NumJaer of Grants 1,578 1,491 1,571
New Starts:
#
$
30
5,000,000
5,000,
30
,000
80
24,000,000
Continuations :
S 3.
1,548
,271,719,000
1,
3,475,730,
,461
,000
1,491
3,855,301,000
Contracts :
#
$
59
49,009,000
53,699,
62
,000
62
55,423,000
1/ Head Start Transition Projects
1-44
1130
Name of Program: Head Start
Program Data;
FY 1994
FY 1995
Appr9priflti9n
FY 1996
Number of Grantees
1,405
1,449
1,500
Children in Head
Start Projects
740,493
752,000
784,000
Average ACYF Cost
Per Child
4,343
4,530
4,845
Number of Staff
136,850
138,875
144,780
Volunteers
1,194,000
1
212,000
1,263,000
Numbers of Classrooms
40,295
40,890
42,630
1-45
1131
Comprehensive Child Develooment Centers
Authorizing Legislation - The Human Services Amendments of 1994
repealed this authority. Similar activities are authorized under
the Head Start Act.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estipat^ Decrease
$46,560,000
1996 Authorization None. Consolidated under the Head
Start Prograun.
Purpose and Method of Operations;
The Comprehensive Child Development Centers Program is a program
designed, through legislation, to provide services to children
and families for a five year period.
The Comprehensive Child Development Centers Program provides
discretionary grants to local agencies or organizations to
provide intensive, comprehensive, integrated and continuous
health care, child care, early educational intervention, prenatal
care, parenting education, employment counseling, vocational
training and education, nutritional assistance and housing
assistance services for infants and young children from
low- income feunilies and to their parents. These services are
intended to enhance the physical, emotional and intellectual
development of these children and to provide support to their
parents and other family members to enhance their
self-sufficiency .
These services are particularly directed toward infants and young
children from low-income families who, because of health,
environmental or other factors, need intensive, continuous,
integrated and comprehensive support to enhance their growth and
development. Services begin prenatal ly, and continue until the
child reaches school age. Services are also provided to all
members of the family through a coordinated community-wide effort
involving many participating human service delivery agencies.
Starting in 1990, grants for operating projects have been awarded
competitively to eligible public and private non-profit agencies
including Head Start agencies, community-based organizations,
institutions of higher education, public hospitals, community
development organizations and organizations specializing in the
delivery of services to infants or young children.
1-46
1132
The statute requires the Secretary to evaluate these projects.
ACF awarded evaluation contracts in FY 1989 and FY 1990 to
collect and analyze project impact data. A report to Congress on
the evaluation of these projects will be submitted in the Spring
of 1994.
Funding for the Comprehensive Child Development Centers Program
during the last five years has been as follows:
1991 $24,398,000
1992 $44,398,000
1993 $46,790,000
1994 $46,790,000
1995 $-0-
Rationale for the Budget Request;
There is no budget request for this progreun in FY 1996. The
Human Services Amendments of 1994 removed the need for a separate
line-item for the Comprehensive Child Development Centers Program
and consolidated these similar activities under Head Start
through the new infant/ toddler initiative. The first cohort demo
is finished and the second cohort will continue through FY 1996
to provide services to low income feuailies.
1-47
1133
Nane of Program: Comprehensive Child Development Centers
Program Data;
FY 1994
FY 1995
Appr9pri9ti9n
FY 1996
Reouest
Service Grants:
Formula
Discretionary
40,646,000
~
~
Research
—
—
—
Demonstration
~
~
~
Development
~
~
~
Training/Technical
Assistance
2,160,000
—
__
Evaluation
3,754,000
—
~
Program Support
~
~
—
Other
~
—
~
TOTAL PROGRAM
46,560,000
~
~
Nximber of Applicants
~
—
—
Number of Grants
34
—
—
New Starts:
#
—
—
—
$
—
—
—
Continuations :
$
34
40,646,000
—
~
Contracts :
#
$
2
5,914,000
~
—
1-48
1134
Comprehensive Runaway and Homeless Youth Procpram
Authorizing Legislation - Section 311 of Part A of the Runaway
and Homeless Youth Act, as amended; Section 3511-3515 of the
Anti-Drug Act of 1988, as zunended; and Section 321(a) of Part B
of the Runaway and Homeless Youth Act, as amended. New
legislation will be proposed.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$63,712,000 $68,572,000 $68,572,000
FY 1996 Authorization Such sums for current
authorizations. New authorizing legislation will be proposed for
the Consolidation.
Rationale for the Budget Recniest:
The FY 1996 request of $68,572,000 for the Comprehensive Runaway
and Homeless Youth Program is the seune as the FY 1995
appropriation for the three current runaway and homeless youth
programs that include the Basic Center, Transitional Living and
Drug Abuse Prevention programs.
The request will support more than 630 runaway and homeless youth
centers that provide emergency shelters, residential programs,
family and individual counseling, life skills training, drug
prevention activities and other services needed by youth in at-
risk situations. These funds also support a national runaway
hotline and a training and technical assistance network.
The new program will be phased in so as not to disrupt services
provided by existing programs. Each applicant for a
Comprehensive Runaway and Homeless Youth Program grant will be
able to identify the services that are most needed in the local
community and will be able to apply for a grant to implement
these services through a single application rather than through
the three applications that are currently required.
The range of services that will be authorized for implementation
under the consolidation will include short-term shelter for up to
15 days; the provision of food, clothing, counseling, referrals
and related services addressing the immediate needs of runaway
and homeless youth; interventions to prevent and reduce the use
of illicit drugs by runaway and homeless youth; and long-term
shelter for older homeless youth up to 18 months with the
provision of training and practice in developing the skills,
knowledge, and values required for independent living as adults
outside the welfare system.
1-49
1135
Name of Program:
Program Data;
Comprehensive Runaway and Homeless Youth
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Tr a i n ing / Techn i ca 1
Assistance
Evaluation
Program Support
Other 1/
TOTAL PROGRAM
FY 1994
Actual
FY 1995
Appropriation
FY 1996
Request
62,836,000
1,000,000
2,904,000
254,000
617,000
961,000
68,572,000
Number of Applicants
Number of Grants
New Starts:
*
$
Continuations :
$
Contracts :
$
i/ Includes peer reviews, youthnet, switchboard.
637
50
12,572,000
587
53,725,000
2,275,000
1-50
1136
Rxinaway and Homeless Youth
Authorizing Legislation - Section 385(a) (1) of the Rtinaway and
Homeless Youth Act, as amended.
Increase
PY 1994 FY 1995 FY 1996 or
ASJm&l Appropriation Estimate Decrease
$36,110,000 $40,458,000 -$40,458,000
1996 Authorization such sums
Purpose and Method of Operations;
The Runaway and Homeless Youth Program provides grants to local
public and private organizations to establish and operate local
runaway and homeless youth centers to address the crisis needs of
runaway and homeless youth and their families. Grants are used
to develop or strengthen community-based centers which are
outside the law enforcement, juvenile justice, child welfare and
mental health systems. The Runaway and Homeless Youth Act
mandates that 90 percent of the progreun funds be used to
establish and operate basic centers which meet the immediate
needs of runaway and homeless youth. By statute, funds are
allocated eunong States based on each State's population under 18
years of age. Applications are selected for funding through a
competitive review process.
In addition to the funds which directly support temporary
shelters for runaway and homeless youth, approximately 10 percent
of the funds in each of the past five years have been used to
fund projects which support and strengthen the work of the
shelters. These include: the national toll-free runaway and
homeless youth hotline, for which the Act earmarks $826,900 in FY
1994; training and technical assistance activities; research and
demonstration projects on a wide variety of topics; increasing
utilization of centers by minority youth; and methods to improve
program administration, outreach, and prevention activities among
local shelters.
Funding levels for the last five years have been as follows:
1991 $35,131,543
1992 $35 , 751 , 000
1993 $35, 109 , 856
1994 $36 , 110 , 000
1995 $40,458,000
Rationale for the Budget Recfuest:
In FY 1996, this program has been proposed for consolidation
under the Comprehensive Rxinaway and Homeless Youth Program.
1-51
1137
N2une of Program; Runaway and Homeless Youth
Program Data;
FY 1994
Actual
FY 1995
ADDrooriation
FY 1996
Request
Service Grants:
Formula
Discretionary
32
,982,000
37,256,000
—
Research
~
—
~
Demonstrat ion
346,000
650,000
~
Development
~
~
—
Training/Technical
Assistance
Evaluation
1,
,771,000
1,470,000
—
Program Support
184,000
200,000
~
Other 1/
36,
827,000
882,000
~
TOTAL PROGRAM
,110,000
40,458,000
~
Number of Applicants
150
300
—
Number of Grants
483
510
~
New Starts:
#
$
13,
134
,849,000
160
15,847,000
—
Continuations :
#
$
21,
349
,107,000
350
22,937,000
—
Contracts :
$
1,
5
154,000
5
1,674,000
~
1/ Includes peer reviews, youthnet, switchboard.
1-52
1138
Transitional Living for Homeless Youth
Authorizing Legislation - Section 385(b)(1) of the Runaway and
Homeless Youth Act, as zunended.
Increase
FY 1994 FY 1995 FY 1996 or
ACt^al Appropriation Estimate Decrease
$12,200,000 $13,649,000 -$13,649,000
1996 Authorization $25,000,000
Purpose and Method of Operations;
The Transitional Living for Homeless Youth program provides
grants to local public and private organizations to address the
shelter and service needs of homeless youth. This program is
designed to meet the more complex, long-term needs of homeless
youth ages 16-21.
Grants are used to: (1) develop or strengthen community-based
prograuns which assist homeless youth in making a smooth
transition to a productive adulthood and social self-sufficiency;
and (2) provide technical assistance to transitional living
programs to enhance their capacity to acquire and maintain
resources and service linkages in their local communities.
It is estimated that between one-third and one-half of all youth
served by the current runaway and homeless youth centers are
homeless either through mutual agreement with their families or
because they have been pushed out by a parent or legal guardian.
A homeless youth accepted into the progreun is eligible to receive
shelter and services continuously for up to 540 days (18 months) .
The services include: information and counseling services in
basic life skills, such as money management and housekeeping;
interpersonal skill building, such as decision-meUcing and
priority-setting; educational advancement; job attainment; and
mental and physical health care.
Funding levels for the last five years have been as follows:
1991 $9,939,000
1992 $12,000,000
1993 $11,785, 000
1994 $12 , 200 , 000
1995 $13,649,000
Rationale for the Budget Request;
In FY 1996, this program has been proposed for consolidation
under the Comprehensive Runaway and Homeless Youth Program.
1-53
1139
Naae of Prograa: Transitional Living For Honeless Youth
Prooraa Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Fomula — —
Discretionary 11,534,000 13,223,000
Research — —
Deaonstration — — -
Developnent — - —
Training/Technical
Assistance 590,000 425,000
Evaluation — —
Program Support
Other 1/ 76,000
TOTAL PROGRAM 12,200,000 13,649,000
Number of Applicants 150 150
Number of Grants 79 80
New Starts:
# 37 37
$ 6,217,000 6,586,000
Continuations :
# 42 43
$ 5,742,000 6,888,000
Contracts:
# 4 3
$ 241,000 174,000
1/ Includes peer reviews.
1-54
1140
Drug Education and Prevention for Homeless Youth
Authorizing Legislation - Section 3513 of the Anti-Drug Abuse Act
of 1988, as 2UDended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$14,603,000 $14,466,000 -$14,466,000
1996 Authorization None
Purpose and Method of Operations:
The pvirpose of the Drug Education and Prevention for Runaway and
Homeless Youth program is to reduce and prevent the illicit use
of drugs by runaway and homeless youth. This is accomplished
through research, demonstration and service grants awarded to
public and private non-profit organizations. These projects are
designed to: provide individual, family and group counseling to
youth and their feunilies to reduce or prevent drug abuse; develop
and support peer counseling programs; develop and support
community education programs including outreach to individual
youth; provide assistance to runaway and homeless youth in rural
areas through the development of support groups; provide training
and information on drug abuse to persons involved in providing
services to riinaway and homeless youth; support research on the
illicit use of drugs by r\uiaway and homeless youth, and the
effect on those youth of drug use by family members and any
correlation between such use and suicide or attempted suicide;
and, improve the availability and coordination of local service
programs assisting riinaway and homeless youth. This program also
funds technical assistance to r\inaway and homeless youth service
providers .
In selecting grantees, the statute requires ACF give priority to
agencies and organizations which have experience serving runaway
and homeless youth.
Funding for the last five years has been as follows:
1991 $14 , 785, 808
1992 $15,286,000
1993 $14 , 602 , 695
1994 $14 , 603 , 000
1995 $14 , 466 , 000
Rationale for the Budget Request:
In FY 1996, this program has been proposed for consolidation
under the Comprehensive Runaway and Homeless Youth Program.
1-55
1141
Name of Progrsua: Drug Education and Prevention for Homeless Youth
Procrram Data;
FY 1994
FY 1995
Appropriation
FY 1996
Request
Service Grants:
Formula
Discretionary
12,453,000
12,242,000
.-
Research
~
~
—
Demonstration
670,000
600,000
~
Development
~
~
~
Training/Technical
Assistance
1,024,000
1,150,000
~
Evaluation
76,000
59,000
—
Program Support 1/
380,000
415,000
~
Other
~
—
—
TOTAL PROGRAM
14,603,000
14,466,000
~
Number of Applicants
150
200
—
Number of Grants
131
145
~
New Starts:
#
$
26
3,046,000
62
5,595,000
__
Continuations :
#
$
105
10,451,000
83
7,548,000
~
Contracts:
#
$
5
1,106,000
6
1,323,000
—
1/ Includes peer reviews and printing.
1-56
1142
Youth Initiative /Youth Gang Drug Prevention Program
Authorizing Legislation - Section 3505 of the Anti-Drug Abuse Act
of 1988, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$10,620,000 $10,520,000 $10,520,000
1996 Authorization Reauthorizing legislation will be
proposed .
Purpose and Method of Operations:
The current Youth Gang Drug Prevention progreun deters youth from
participating in gangs and drug-related activities. The program
provides funds directly to national. State, and local public and
non-profit private organizations through a competitive
grants/ contracts process. Grants are designed to: (1) increase
our understanding of why youth become involved in gangs and of
gang formation and dyneunics; (2) demonstrate and assess effective
measxires for preventing further recruitment and involvement of
at-risk youth in gang activities, particularly criminal and drug-
related activities; and (3) develop successful, replicable model
approaches that prevent youth involvement in gangs and illegal
drug activities. This program also funds technical assistance to
grantees to improve services to at-risk youth.
Reauthorizing legislation will be proposed.
Funding for the Youth Gang Drug Prevention program during the
last five years has been as follows:
1991 $14,785,808
1992 $10,943,000
1993 $10,647,328
1994 $10 , 647 , 000
1995 $10, 520, 000
Rationale for the Budget Reouest:
The FY 1996 agency request for the Youth Initiative/Drug
Education Prevention Program for Youth Gangs is $10,520,000 the
same as the FY 1995 appropriation for the Drug Education and
Prevention Progriun. This program supports 15 demonstration
grants. Comprehensive and coordinated activities will continue
to be emphasized in order to demonstrate effective strategies for
reducing and preventing the involvement of at-risk youth in gang
activities.
1-57
1143
Name of Program: Youth Initiative/Youth Gangs
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula —
Discretionary 9,506,309 9,405,000 8,986,000
Research 222,000 —
Demonstration — —
Development ~ —
Training/Technical
Assistance 500,000 1,080,000 1,163,000
Evaluation 121,000 — 250,000
Program Support 1/ 271,000 35,000 120,000
Other
TOTAL PROGRAM 10,620,309 10,520,000 10,520,000
Number of Applicants
300
21
—
Number of Grants
52
20
15
New Starts:
*
$
2,337,
25
,309
4.
-381,
9
,210
~
Continuations :
#
$
7,391,
27
,000
5,
r023,
11
,313
15
9,086,348
Contracts :
#
$
892,
7
,000
1,
,115,
7
,000
8
1,433,175
1/ Includes peer reviews and printing.
1-58
1144
Family Violence
Authorizing Legislation - Sections 310 and 311(g) of the Fzunily
Violence Prevention and Services Act, as juaended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$27,648,000 $32,645,000 $32, 645, 000^/
1996 Authorization: $50,000,000
a/ An Additional $15 million is requested under the Violent
Crime Reduction Progreuns account.
Purpose and Method of Operation:
The Feunily Violence Prevention and Services program provides
grants to States and Indian Tribes to assist in supporting
programs and projects to prevent incidents of feunily violence and
provide immediate shelter and related assistance for victims of
family violence and their dependents.
By statute, 80 percent of Family Violence funds are awarded in
grants to States. State grants are allocated based on the
State's population. Grants to territories and insular areas are
equal to one-eighth of 1 percent of the amounts available for
grants for that fiscal year.
The Act specifies that a State may keep 5 percent of its
allotment for administrative costs and must distribute the
remaining funds to local public agencies and non-profit private
organizations, including religious and charitable organizations
and voluntary associations. Sixty percent of the funds must be
used to provide immediate shelter and related assistance to
victims of family violence and their dependents. Most States
exceed the 60 percent requirement. States may use the remaining
funds to: establish new shelters in under-served areas; expand
counseling, self-help, and substance abuse services; set up
demonstrations programs, e.g., elder abuse shelters; or, provide
training for staff and volunteers.
By statute, 10 percent of Family Violence funds is allocated for
grants to Indian Tribes and tribal organizations. The amount of
the Indian grants is based on the population of the tribe.
Tribes use these funds primarily for emergency shelter and
related assistance. Grants under the Act have assisted Tribes to
focus on and improve services to victims and their families.
Some Tribes also have used these funds for public education
efforts to breeik patterns of alcoholism and family violence.
1-59
1145
The statute also authorizes ACF to fund activities relating to
the issue of faunily violence through grants, contracts or
interagency agreements. These activities include funding of
State domestic violence coalitions to further the purposes of
domestic violence intervention and prevention; the training of
law enforcement personnel by the Department of Justice; support
for a National Resource Center and Special Issue Resource
Centers; research activities with the Department of Justice; and
the provision of technical assistance in the conduct of programs
for the prevention and treatment of family violence.
Funding for the Family Violence Prevention and Services program
during the last five years has been as follows:
1991 $10, 734,859
1992 $20,000,000
1993 $24 , 678 , 619
1994 $27,679,000
1995 $32,645,000
Rationale for the Budget Request
The Family Violence request for FY 1996 is $32,645,000 the same
as the FY 1995 appropriation.
Funds will continue to support activities that address the needs
of service providers and advocates in the f€unily violence area
for technical assistance, information, and training. Through the
national resource center and the three technical assistance
centers, support for technical assistance and infomnation will
increase as services providers, shelter operators, and advocacy
organizations continue to require assistance to operate their
programs on a more effective and efficient basis.
The collaborative training projects, recently begun and supported
by the family violence prevention and services program, between
Child Protective Services agencies and domestic violence advocacy
organization and service providers, will continue to be supported
during fiscal year 1996. These projects address the need for
increased coordination and cooperation among service providers in
the areas of child abuse and neglect, and in the area of
partner/ spouse abuse. The collaborative projects hold the
promise of improved responses and more appropriate services to
victims of family violence in situations where there is child
abuse also.
The national resource center and three technical assistance
centers constitute a vital link in the information and technical
assistance efforts, and constitute a domestic violence resource
network. The network in turn reflects the ongoing commitment to
provide support to the many State and local private nonprofit
organizations focused on feunily violence prevention. Projects
1-60
1146
will continue to focus on increasing the community's awareness
and the flow of accurate information on family violence
prevention and services.
During fiscal year 1996 we will expand our support projects with
Historical Black Colleges and Universities in the identification
and demonstration of violence prevention paradigms that utilize
the family and its unique ties to the neighborhood and its
institutions.
1-61
1147
Name of Prograa; Faaily Violence (FV)
Program Data;
FY 1994
FY 1995
Apprqpriatjgn
FY 1996
R«gv»?st
Service Grants:
Formula
Discretionary
Coalitions
22,633,000
256,000
2,500,000
27,130,000
585,000
2,500,000
27,130,000
585,000
2,500,000
Research
~
~
—
Demonstration
—
—
~
Development
—
~
~
Training/Technical
Assistance
1,259,000
1,507,000
1,507,000
Evaluation
—
—
—
Program Support
—
~
~
Other 1/ 1,000,000 1/
923,000 i/
923,000 2.1
TOTAL PROGRAM
$27,648,000
$32,645,000
$32,645,000
Number of Applicants
197
197
197
Number of Grants
193
193
193
New Starts:
#
$
193
25,889,000
193
30,890,000
193
30,890,000
Continuations :
#
$
4
1,259,000
4
1,507,000
4
1,507,000
Contracts :
$
2
500,000
2
248,000 1/
2
248,000 1/
1-62
1148
XI Includes $250,000 for proposed Elder Abuse Study; $200,000
for Native American Technical Assistance; $200,000 for
Cooperative Project with CSAP, CDC et. al; $50,000 for I/A with
Justice for Cities in Schools; $250,000 for Baseline Study with
CDC; and $50,000 for reviewers costs for FY 1994 discretionary
program.
2.1 Includes $250,000 I/A with Aging; $125,000 I/A with PHS for
National Academy of Science; $132,522 for Institute; $50,000 I/A
with DOJ for Cities in schools; $15,000 for Battered Woman's
Syndrome; $50,000 for FVPSA grantee conference; $100,000 for T/TA
with Native American; $150,000 for CSAP/CDC Collaborative
Project; and $50,000 reviewer Costs.
3/ Includes $132,522 for Institute on Domestic Violence;
$100,000 for Native American Technical Assistance; and $15,000
for NIMH Study on Battered Woman's Syndrome.
1-63
1149
Child Abuse State Grants
Authorizing Legislation - Section 114 of the Child Abuse
Prevention and Treatment Act, as amended. Expires 9/30/95.
FY 1994 FY 1995 FY 1996 or
&S£ual Appropriation EgtiMtS Decrease
$22,854,000 $22,854,000 $22,854,000
1996 Authorization Authorizing legislation expires
September 30, 1995. Reauthorizing legislation will be proposed.
Purpose and Method of Operations;
The Child Abuse and Neglect State Grant program provides grants
to States to improve each State's child protective service
system. Grants are based on the population of children under the
age of 18 in each State that applies for a grant. Beginning in
FY 1994, States must submit every four years a plan which
specifies the child protective service system area or areas that
the State intends to address with funds received under this
grant.
In past years, this program served as a catalyst to assist States
to: develop and strengthen programs of prevention and treatment;
educate law enforcement and judicial personnel in the causes,
problems, and management of child abuse and neglect; improve 24-
hour capability to respond to reports of child abuse and neglect;
improve the management of sexual abuse and medical neglect cases;
establish and strengthen self-help groups; recruit and train
volunteers; develop crisis hotlines; disseminate information on
child abuse and neglect to schools, hospitals, day care centers,
and r\maway and homeless youth facilities; develop statewide
public awareness ceunpaigns; and establish programs and procedures
for the identification, prevention and treatment for the growing
numbers of infants/children victimized by substance abusers.
Funding for the Child Abuse and Neglect State grant program
during the last five years has been as follows:
1991 $19, 517 , 747
1992 $20 , 518 , 000
1993 $20 , 353 , 856
1994 $22 ,854 , 000
1995 $22,854,000
1-64
1150
Rationale for the Budget Request:
The FY 1996 budget request is $22,854,000, the same as the FY
1995 appropriation. Current research and data collection efforts
indicate increasing numbers of child abuse and neglect reports
and greater severity in outcomes and forms of maltreatment.
Continued support for this progreun will help contain and resolve
problems in the child abuse and neglect area.
FY 1996 funds will support activities in the areas of: the intake
and screening of reports of child abuse and neglect;
investigating reports of abuse and neglect; creating and
improving multi-disciplinary teams and interagency protocols to
enhance investigations; improving legal preparation and
representation; improving case management; and, improving
assessment tools, automated systems, information referral systems
and staff training.
1-65
1151
Name of Program: Child Abuse State Grants
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula 1/ 22,854,000 22,854,000 22,854,000
Discretionary
Research — — —
Demonstration —
Development — ~ —
Training/Technical
Assistance ~ — —
Evaluation — —
Program Support
Other
TOTAL PROGRAM 22,854,000
Number of Applicants
51
Number of Grants
51
New Starts:
#
$
51
22,854,000
Continuations :
$
__
Contracts :
#
$
~
22,854,000
22,
,854,000
51
51
51
51
51
51
22,854,000
22,
,854,000
1/ Estimates based on the assumption that all states will be
eligible.
1-66
1152
Child Abuse Discretionary Activities
Authorizing Legislation - Section 114 of the Child Abuse
Prevention and Treatment Act, as aunended. Expires 9/30/95.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$15,577,000 $15,385,000 $15,385,000
1996 Authorization Authorizing legislation expires
September 30, 1995. Reauthorizing legislation will be proposed.
Purpose and Method of Operations;
The Child Abuse and Neglect Discretionary Program funds a number
of research, demonstration and service improvement grants and
contracts. The program funds research on the causes, prevention,
identification and treatment of child abuse and neglect;
investigative, administrative and judicial procedures; and the
national incidence of child abuse and neglect. The program also
funds projects to: compile, publish and disseminate training
materials; provide technical assistance; and demonstrate and
evaluate improved methods and procedures to prevent and treat
child abuse and neglect. In addition, the program funds several
resource centers on issues relating to child abuse and neglect
and the national Clearinghouse on Child Abuse and Neglect
Information. The Clearinghouse gathers and disseminates
information on promising programs of prevention and treatment and
on the incidence of child abuse and neglect.
Research, demonstration and service improvement grants are
awarded competitively to public and private nonprofit agencies,
including State and local government agencies, universities and
voluntary organizations. Contracts may be awarded to nonprofit
or proprietary organizations. Projects supported by grants and
contracts awarded under this program may run up to five years,
depending upon the availability of funds.
Funding for the Child Abuse and Neglect Discretionary program
during the last five years has been as follows:
1991 $14,282,000
1992 $14,339,000
1993 $15,927,239
1994- $15,927,000
1995 $15,438,000
1-67
1153
Rationale for the Budget Request;
The FY 1996 budget request is $15,385,000 the sane as the FY 1995
appropriation. These funds will be used to: 1) continue
development of a national data collection system in collaboration
with other agencies; 2) achieve greater dissemination of
discretionary grants research and demonstration findings, and
develop and disseminate other publicatio.is to advance the state
of the art in prevention, interven.ion and treatment; 3) expand
research, including longitudinal studies, evaluations, studies of
etiology, and collaborative efforts, using guidance from the
National Academy of Sciences and other national organizations; 4)
enhance progreun evaluation activities in both the state grants
progreun and prevention activities; and 5) expand training and
technical assistance activities. Emphasis will be placed on
linking these activities to the Feuaily Preservation and Support
initiative.
1-68
1154
Neune of Program: Child Abuse Discretionary Activities
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Recruest
Service Grants:
Formula — —
Discretionary — —
Research
4,418,000
2
,758
,000
4,000,000
Demonstration
3,758,000
3
,758
,000
4,000,000
Development
~
—
~
Training/Technical
Assistance
3,741,000
3
,850,
,000
3,000,000
Evaluation
2,413,000
3
,000,
,000
2,500,000
Program Support
—
~
~
Other 1/
1,247,000
2,
,020,
,000
1,885,000
TOTAL PROGRAM
15,577,000
15,
,385,
,000
15,385,000
Number of Applicants
231
300
300
Number of Grants
53
55
63
New Starts:
#
$
37
5,290,000
1,
400,
15
000
35
5,000,000
Continuations :
$
16
3,101,000
8,
543,
40
000
28
3,000,000
Contracts :
#
19
7,186,000
5,
442,
19
000
15
7,385,000
1/ Included in this amount are funds for printing logistics and
funding for additional emergency supplies provided.
1-69
1155
Advisory Board on Child Abuse and Neglect
Authorizing Legislation - Section 102 of the Child Abuse
Prevention and Treatment Act, as eunended. Expires 9/30/95.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$290,616 $289,000 $288,000 -0-
1996 Authorization Authorizing legislation expires
September 30, 1995. Reauthorizing legislation will be proposed.
Purpose and Method of Operation;
The mission of the U.S. Advisory Board on Child Abuse and Neglect
is to report at least once annually to the Congress, the
Secretary, and the Director of the National Center on Child Abuse
and Neglect with recommendations on coordinating Federal Child
Abuse and Neglect activities for the purpose of preventing
duplication, ensuring efficient allocations of resources and
ensuring progreun effectiveness.
By statute, the board consists of 15 members appointed by the
Secretary of HHS, each of whom is recognized for expertise in an
area of child abuse. Two members of the board must be members
of the Interagency Task Force on Child Abuse and Neglect.
Thirteen are members of the general public and may not be Federal
employees. The Secretary appoints members from the general
public who are knowledgeable in child abuse and neglect
prevention. Intervention, treatment, or research. In making
appointments, the Secretary is required by law to consider
representation of ethnic and racial minorities and diverse
geographic areas. Members are appointed for four year terms.
Rationale for the Budget Request;
The FY 1996 request of $288,000 is slightly less than the FY 1995
level. During FY 1996 the Board will be working simultaneously
on three major reports; (a) finalizing work on the 1995 report,
which will be a detailed statistical assessment of the nation's
progress in addressing the national child protection emergency,
(b) continuing work on the 1996 report, and (c) initiating work
on the 1997 report.
1-70
1156
Name of Program: Advisory Board on Child Abuse and Neglect
Program Data;
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
FY 1994 FY 1995
Actual Appropriation
FY 1996
Request
Program Support 1,/
290,
,616
188,
,000
188,
,000
Other 2/
100,
,000
100,
,000
Total Program
$290,
,616
$288,
,000
$288,
,000
Number of Applicants
Number of Grants
New Starts:
#
$
Continuations :
#
$
Contracts :
$100,
1
,000
$100,
1 ]
000
L
$100,
$
000
XI Advisory Board Travel and per diem costs, printing and other
administrative support.
2/ Logistic contract to support the Advisory Board.
1-71
1157
rmrnimnity Based Family Resource Programs
Legislative Authority - Section 201 (i) of the Child Abuse
Prevention and Treatment Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$ — $31,363,000 $38,734,000 +7,371,000
1996 Authorization Such sums.
Purpose and Method of Operations;
The purpose of the Community Based Family Resource Program is
(1) To assist each State in implementing/enhancing a statewide
system of family resource services through innovative funding
mechanisms and broad collaboration; and (2) To support a broad
range of community-based child abuse and neglect prevention
activities and family resource program services that support
families.
Part of the grant amount will be calculated on the basis of the
number of children under 18 in the State, with a minimum award of
$100,000 per State. In the aggregate, this will total fifty
percent of the Congressional appropriation. The other part of
the grant award will be a 25% Federal match of the amount
collected in the Trust Fund or other pooled funding mechanism by
each eligible State for integrating family resource services in
Federal fiscal year 1994 (October 1, 1993 - September 30, 1994.)
If the aggregate of these 25% matches exceeds 50% of the
appropriation, the amounts for this part of the grant award will
be reduced pro rata.
The funds are to be used to establish a network of local,
culturally competent family resource programs that provide core
services — education and support services to improve parenting,
early developmental screening of children, outreach, and follow-
up — and other direct services or referrals for services,
including — early care and education (including child care and
Head Start) , respite services, job training and counseling,
education and literacy services, nutritional education, life
management skills training, peer counseling and crisis
intervention, family violence counseling, referrals for health
(including prenatal care) and mental health services, substance
abuse treatment, and services to support families of children
with disabilities. In making local grant awards the State must
give priority to programs serving low income communities and
those serving young parents or parents with young children.
1-72
1158
Rationale for the Budget Recmest:
The FY 1996 request for Child Abuse Community-Based Resource
Centers is $38,734,000. This is the seune level as the two
progreuns consolidated into this program. This progreun is
designed to assist States in implementing and enhancing a
statewide system of community-based, fsunily centered, faunily
resource programs and child abuse neglect prevention through
innovative fvinding mechanisms and broad collaboration with
education, vocational, rehabilitation, health, mental health,
employment and training, child welfare and other social services
within the State.
1-73
1159
Neune of Program: Community-Based Family Resource Programs
Program Data;
FY 1994
Actual
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM
Number of Applicants
Number of Grants
New Starts:
#
$
Continuations :
#
$
Contracts :
#
$
1/ State formula grants.
FY 1995
Appropriation
30,963,000
400,000
400,000
FY 1996
Recmest
38,734,000
31,363,000
38,734,000
51
51
51
51
48
26,313,000
51
38,734,000
3
4,650,000
::
1-74
1160
Emergency Child Abuse Prevention -Substance Abuse
Authorizing Legislation - was repealed by the Human Services
Amendments of 1994, P.L. 103-252.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appr opr i a t i on Estimate Decrease
$19,039,000 —
1996 Authorization None.
Purpose and Method of Operations
The Emergency Child Abuse Prevention Services program provided
grants to eligible local public and nonprofit organizations to
provide services on behalf of children whose parents or care-
givers are substance abusers in order to prevent child abuse
and/ or neglect.
Applications were selected for funding through a competitive
review process. Applications included: (1) assurance that the
applicant operates in a geographic area where child abuse has
placed substantial strains on State and local agencies and has
resulted in substantial increases in the need for services that
cannot be met without funds available under this program; (2)
identification of the responsible agency or agencies that will be
involved in the use of these funds; (3) a description of
emergency situations with regard to children of substance abusers
who need services; (4) a plan of improving the delivery of such
services; and (5) assurance that these services will be provided
in a comprehensive, multi-disciplinary, and coordinated manner.
Funding for the Emergency Child Abuse Prevention Services program
during the last five years has been as follows:
1991 $19,517,746
1992 $19,518,000
1993 $19,039,065
1994 $19,039,000
1995 $-0-
Rationale for the Budget Request;
No fluids are requested for this program in FY 1996. Activities
previously funded by this program have been redirected to the
Community-Based Resource Centers by the Human Services Amendments
of 1994.
1-75
1161
Neune of Program: Emergency Protection Grants /Substance Abuse
Program Data;
FY 1994
FY 1995
Appropriat
ipn
FY 1996
Request
Service Grants:
Formula
Discretionary
15,100,000
~
—
Research
1,000,000
~
~
Demonstration
—
~
—
Development
~
~
~
Training/Technical
Assistance
1,792,596
—
—
Evaluation
478,668
~
~
Program Support
367,736
—
— .
Other 1/
300,000
—
—
TOTAL PROGRAM
19,039,000
—
~
Number of Applicants
183
~
~
N\imber of Grants
41
~
~
New Starts:
t
%
41
15,200,000
~
M.M
Continuations :
#
200,000
~
—
Contracts :
#
$
3,639,000
—
—
XI Included in this zuDount is administrative expenses: such as
logistics support for grant reviews, and printing of the Federal
Register.
1-76
1162
Community-Based Prevention Grants
Authorizing Legislation - Repealed in the Human Services
Amendments of 1994.
FY 1994 FY 1995 FY 1996 or
Actual Appropr i a t i on Estimate Decrease
$5,270,000
1996 Authorization None.
Purpose and Method of Operations:
The Child Abuse and Neglect Community-Based Prevention Grants
program provides grants to States to support activities to
prevent child abuse and neglect.
Each State must apply for grants which are awarded based on a
formula under which 50 percent of the appropriation is allotted
among each State based on the number of children under the age of
18 in the State, except that each State shall receive not less
than $30,000; and the remaining 50 percent of the appropriation
is allotted in an amount equal to 25 percent of the total amount
collected by the State in the previous fiscal year for the
children's trust fund of the State for child abuse and neglect
prevention activities. When appropriations exceed $10,000,000,
not less than 50 percent of the amount of the grant to a State
shall be utilized to support community-based prevention programs.
To be eligible, a State must have established or maintained in
the previous fiscal year a children's trust fund, including
appropriations, which includes (in whole or part) legislative
provisions making funding available only for the broad range of
child abuse and neglect prevention activities.
States must provide in the application: a description of
coordination with other child abuse and neglect prevention
activities and agencies at the State and local levels; a
description of the outcome of funded services and activities;
evidence that Federal assistance received under this grant
program has been supplemented with non-Federal public and private
assistance at the local level; and, a description of the extent
to which funds are used to support community prevention
activities in under served areas.
1-77
1163
Funding for the Child Abuse and Neglect Prevention Grants program
during the last five years has been as follows:
1991 $5,366,930
1992 $5 , 367 , 000
1993 $5, 270,496
1994 $5 , 270 , 000
1995 $-0-
Rationale for the Budget Request:
No funds are requested in FY 1996. Activities formerly funded by
this progrzuD are now authorized under the Community-Based Family
Resource Program as a result of the Human Services Amendments of
1994.
1-78
1164
Name of Progriun: Community-Based Prevention Program
Program Data;
FY 1994
FY 1995
ADorooriation
FY 1996
Reouest
Service Grants:
Formula
Discretionary
5,270,000
~
~
Research
—
~
—
Demonstration
~
~
—
Development
~
~
~
Training/Technical
Assistance
-.
__
__
Evaluation
~
~
~
Progreun Support
~
~
—
Other
—
~
—
TOTAL PROGRAM
5,270,000
~
~
Number of Applicants
51
—
—
Number of Grants
51
~
~
New Starts:
#
— —
— —
—
$
~
--
—
Continuations :
#
— —
— —
—
$
—
~
—
Contracts:
#
— —
—
—
$
~
--
—
1-79
1165
Family Resoiirce Centers
Authorizing Legislation - Repealed by the Human Services
Amendments of 1994, P.L. 103-252.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$5,810,000 -0- -0- -0-
1995 Authorization None.
Purpose and Method of Operations;
The Family Resource and Support Program (FRS) provides
competitive grants to States for the purpose of developing,
expanding and operating a network of local family resource and
support programs in collaboration with existing health, mental
health, education, employment and training, child welfare and
other social service agencies within the State. By statute, the
size of the grants to States shall not exceed $6 million nor be
less than $1.5 million. FY 1993 was the first year for which
funds were appropriated for this program.
The goal of the FRS program is to reduce the need for future
expensive social services or public assistance by strengthening
and empowering families. The program enhances families'
abilities to stay together and thrive by providing community-
based services that: promote and build family and parenting
skills; promote and assist families in the use of formal and
informal family support services; create a network to strengthen
and reinforce good parenting; and are linked closely with, but
not duplicative of, other community resources.
In awarding local grants. States will give priority to programs
serving low-income communities and programs serving young
parents. FRS programs are designed to assist families before
crises arise, and to be available to a wide range of parents in a
community (i.e., without imposing categorical restrictions on
eligibility) . FRS programs will serve parents, children (under
21 years of age) , and families in diverse structures and
settings.
Section 919 of the Claude Pepper Young Americans Act of 1990
allows the Federal government to use up to 10 percent of the
funds appropriated for this program for Federal administrative
activities.
1-80
1166
Funding for the Feunily Resource Program during the last five
years has been as follows:
1991 $-0-
1992 $-0-
1993 $-0-
1994 $5, 510, 000
1995 $-0-
Rationale for the Budget Request i
No funds requested in FY 1996. Activities previously authorized
by this program have been redirected to the Community-Based
Resource Centers in the Human Services Amendments of 1994.
1-81
1167
Neune of Program: Family Resource Centers
Program Datai
FY 1994
Ac1;wal
FY 1995
AppropriatiPh
FY 1996
Request
Service Grants:
Formula
Discretionary
4,
,560,000
~
—
Research
~
—
~
Demonstration
~
—
~
Development
~
~
~
Training/Technical
Assistance
710,000
—
—
Evaluation
150,000
—
—
Program Support
—
—
~
Other 1/
5,
300,000
—
—
TOTAL PROGRAM
,810,000
~
—
Number of Applicants
~
~
~
Number of Grants
4
~
~
New Starts:
#
$
~
~
—
Continuations :
$
4
4
,650,000
~
::
Contracts :
#
$
1
2
,160,000
~
~
1/ Included in this amount is administrative expenses: such as
logistics support for grant reviews, and printing of the Federal
Register.
1-82
1168
Family Support Centers
Authorizing Legislation - Section 779 of the Stewart B. McKinney
Homeless Assistance Act, as eunended.
1994
Actual
1995
Estimate
1996
Estimate
Increase
or
Decrease
$6,874,000
$7,371,000
-$7,371,000
1995 Authorization,
. .None.
Purpose and Method
of Operation
The Family Support Centers program provided discretionary grants
to eligible State and local public and non-profit agencies for
demonstration projects. These demonstration projects provided
intensive and comprehensive supportive services to enhance the
physical, social and educational development of low-income
individuals and families, especially very low-income individuals
and families who were homeless and who are currently residing in
governmental subsidized housing or who are at risk of becoming
homeless. Grants were awarded through a competitive process.
Funding for the Family Support Centers program during the last
five years has been as follows:
1991 $-0-
1992 $5,500,000 a/
1993 $6,874,560
1994 $7,734,000
1995 $7,731,000
a/ In FY 1992, funds for similar grants were appropriated under
the Social Services Research and Demonstration authority.
Rationale for the Budget Request;
No funds requested in FY 1996. This will continue the activities
of the Family Support Centers Program which addresses the
Departmental themes of prevention, independence, and improvement
of services to customers are authorized in the Community-Based
Resource Centers as established by the Human Services Amendments
of 1994.
1-83
1169
Name of Program: Feunily Support Centers
Program Data;
FY 1994 FY 1995 FY 1996
AS^Ual Appropriation Request
Service Grants:
Formula
Discretionary
Research
Demonstration 7,354,000 6,777,000
Development ~ —
Training/Technical
Assistance 20,000 147,000
Evaluation — 447,261
Progreun Support — ' —
Other
TOTAL PROGRAM
7,
r374,
,000
7,371,
,000
Number of Applicants
30
200
Number of Grants
30
29
New Starts:
$
^^
4,774,
19
,000
Continuations :
#
$
7.
,354,
30
,000
2,000,
10
,000
Contracts :
#
$
20.
1
,000
597,
1
,480
1/ Includes "competitive renewals for 3rd year of 3 year program
grants. These grants are limited to one year duration.
2.1 Includes one $450,000 evaluation study and four TA efforts.
1-84
1170
Temporary Child Care and Crisis Nurseries
Authorizing Legislation - Section 206 of the Temporary Child Care
for Children with Disabilities and Crisis Nurseries Act of 1986,
as amended. Expires 9/30/95.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$11,912,000 $11,835,000 $11,835,000
1996 Authorization Authorizing legislation
expires September 30, 1995. Reauthorizing legislation will be
proposed .
Purpose and Method of Operations;
The Temporary Child Care and Crisis Nurseries program provides
grants to States to demonstrate the effectiveness of two types of
services: 1) temporary non-medical child care for children with
special needs to alleviate social, emotional and financial stress
among children and the families of such children; and, 2) crisis
nurseries for children who are abused and neglected, at risk of
abuse and neglect or who are in families receiving child
protective services.
ACF awards grants to States through a competitive process to
support demonstration projects by local governments and private
non-profit agencies. One-half of available funds are to be used
for grants for Temporary Child Care and one-half for Crisis
Nurseries. The State may use up to five percent of its total
funds for administrative costs.
The State is required to give priority consideration in the award
of Temporary Child Care funds to agencies and organizations with
experience in working with children with disabilities and
chronically ill children and their faunilies. The fees charged to
families for temporary child care are based on a sliding fee
schedule .
The State also is required to give priority consideration in the
award of Crisis Nurseries funds to agencies and organizations
with experience in working with abused and neglected children and
their families. Crisis nurseries programs are required to
provide referral to supportive services which can help address
and resolve the family problems that lead to the crisis. There
are no costs to families for crisis services for up to 30 days in
any year.
For both programs, the State must give consideration to projects
which serve communities demonstrating the greatest need for
services .
1-85
f
1171
Funding for the Temporary Child Care and Crisis Nurseries program
during the last five years has been as follows:
1991 $11,055,000
1992 $11,055,000
1993 $11,942,000
1994 $11,942,000
1995 $11,835,000
Rationale for the Budget Request;
The FY 1996 request for Temporary Child Care and Crisis Nurseries
is $11,835,000, the same as the FY 1995 appropriation. These
funds will continue the support of demonstration grants to States
to assist public and private agencies in developing temporary
child care or respite care services for children with
disabilities and crisis nurseries for children who are abused or
neglected, at risk of abuse or neglect, or in families receiving
protective services. This amount will also support the provision
of training and technical assistance to states and community-
based organizations which deliver or wish to deliver these
services.
1-86
1172
Name of Program; Teaporary Child Care and Crisis Nurseries
Program Data:
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula — ~ —
Discretionary ~ — —
Research — ~ —
Demonstration 11,122,000 11,144,000 11,044,000
Development — — —
Training/Technical
Assistance
549,000
550,000
550,
,000
Evaluation
—
~
~
Program Support 1/
241,000
141,000
241,
,000
Other
~
—
TOTAL PROGRAM
11,912,000
11,
,835,000
11,835,
,000
Number of Applicants
49
0
55
Number of Grants
56
56
58
New Starts:
#
$
32
6,575,020
0
0
4,394,
26
,000
Continuations :
#
$
24
5,096,000
11,
56
,694,000
6,750,
32
,000
Contracts:
#
$
2
241,000
1
141,000
241,
2
,000
X.I Printing and misc. administrative expenses including:
subscriptions, program support- logistics contract and meeting
support .
1-87
1173
Child Welfare Services
Authorizing Legislation - Section 420, title IV-B of the Social
Security Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$294,624,000 $291,989,000 $291,989,000 -0-
1996 Authorization $325,000,000
Purpose and Method of Operations
The Child Welfare Services program helps State public welfare
agencies improve their child welfare services with the goal of
keeping families together. State services include: preventive
intervention so that, if possible, children will not have to be
removed from their homes; services to develop alternative
placements like foster care or adoption if children cannot remain
at home; and, reunification so that children can return home if
at all possible. Child welfare services are available to
children and their families without regard to income.
Funds are distributed to States in the form of grants. Each
State receives a base amount of $70,000. Additional funds are
distributed in proportion to the State's population of children
under age 21 multiplied by the complement of the State's average
per capita income. The State match requirement is 25 percent.
Under current law, all States are eligible to receive a share of
the first $141 million appropriated for Child Welfare Services.
However, as an incentive to States, only those States which have
implemented the specific protection for children contained in
P.L. 96-272, the Adoption Assistance and Child Welfare Act of
1980, are eligible to share in any amount appropriated for this
program in excess of $141 million.
The 1980 amendments to the Social Security Act link this program
(Title IV-B) to the Title IV-E-Foster Care and Adoption
Assistance Programs. The same State agency must administer, or
supervise the administration of the programs. The broad goal of
all the programs is to strengthen families in which children are
at risk. The 1993 amendments to the Social Security Act created
the new Family Preservation and Support Services Program as
subpart 2 of the Title IV-B Program and joined it to this program
(now subpart 1 of Title IV-B) and to the Title IV-E programs.
The same State agency must administer, or supervise the
administration of the programs. Taken together, these programs
provide a continuum of services to help children and their
families.
1-88
1174
The protection which States must implement to receive the
incentive funds under the Child Welfare Services Progreun include:
(1) conducting an inventory of all children in foster care for at
least six months; (2) establishing an information and locator
system for all children in foster care; (3) conducting periodic
case reviews of all foster children; (4) providing due process
protection for families; and, (5) conducting in-home and
permanent placement service programs, including preventive and
reunification services.
In FY 1994, fifty-six States and jurisdictions were eligible for
incentive funds. In FY 1995, it is estimated that the same
number of States will be eligible to share in the additional
funds .
Since 1983, under Section 428 of the Social Security Act, grants
have been awarded directly to eligible Indian tribal
organizations meeting State plan requirements for child welfare
services. In FY 1993, grants totaling $760,447 were made to
fifty-seven Indian Tribal Organizations in 20 States: Alabama,
Alaska, Arizona, Colorado, Louisiana, Maine, Massachusetts,
Minnesota, Mississippi, Montana, Nevada, New Mexico, North
Carolina, North Dakota, Oklahoma, Oregon, South Dakota, Utah,
Washington, and Wyoming. All of the funds were awarded from the
allotment of the States in which the Indian Tribal Organizations
are located.
Funding for the Child Welfare Services program during the last
five years has been as follows:
1991 $273,907,440
1992 $273,911,000
1993 $294,624,000
1994 $294,624,000
1995 $291,989,000
The appropriations cited above do not include additional funds
States voluntarily transfer to Title IV-B Child Welfare Services
from Title IV-E Foster Care.
Rationale for the Budget Request;
The FY 1996 request for the Child Welfare Services program is
$291,989,000, the same as the appropriation for FY 1995.
These funds will enable States to continue to provide services
aimed at assisting children and their feunilies in achieving the
best and most appropriate outcome for the child — preventing the
placement of the child in foster care, helping the child return
home from foster care, or enabling fzunilies to adopt the child.
1-89
1175
Name of Program: Title IV-B Child Welfare Services
Program Data;
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
FY 1994
Actual
294,624,000
FY 1995
Appropriation
FY 1996
Request
291,989,000 291,989,000
Program Suppoirt
~
—
—
Other
294,
—
~
~
TOTAL PROGRAM
,624,
,000
291,989,000
291,989,000
Number of Applicants
56
56
56
Number of Grants
56
56
56
New Starts:
#
$
~
~
~
Continuations :
#
$
294,
-624.
,000
291,989,000
291,989,000
Contracts :
#
—
~
~
1-90
1176
Child Welfare Training
Authorizing Legislation - Section 426 of title IV-B of the Social
Security Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$4,439,000 $4,398,000 $4,398,000 -0-
1996 Authorization such sums
Purpose and Method of Operations;
The Child Welfare Training progreun provides discretionary grants
to public and private non-profit institutions of higher education
to develop and improve education and training programs and
resources for child welfare service providers. Applications are
selected for funding through a competitive review process. These
grants upgrade the skills and qualifications of child welfare
workers through their participation, full-time or part-time, in
programs focused specifically on child welfare services and
provide traineeships to full-time students seeking undergraduate
and advanced degrees. Activities supported include:
o providing stipends to students to increase the nuiobers of
trained workers in the field of child welfare, with
emphasis on minority students;
o improving the ability of State or local child welfare
agencies to provide practice-relevant child welfare
services training, or to implement staff development
activities ;
o providing mechanisms to increase communication among
post-secondary educational institutions and public child
welfare agencies in the area of training;
o providing interdisciplinary training in the field of child
welfare.
Funding for the Child Welfare Training program during the last
five years have been as follows:
1991 $3,647,000
1992 $3,559,000
1993 $4,441,184
1994 $4,441,000
1995 $4,398,000
1-91
1177
Rationale for the Budget Recmesi:;
The FY 1996 request is $4,398,000, the szune as the amount
appropriated in FY 1995. These funds will be used to continue
and fund new child welfare services traineeship projects,
inservice training projects, and other capacity building
projects.
1-92
1178
Name of Progreun: Child Welfare Training
FY 1994
Actual
FY 1995
ADDrooriation
FY 1996
Request
Service Grants:
Formula
Discretionary
~
__
~
Research
—
~
~
Demons tr at ion
—
~
~
Development
~
~
—
Training/Technical
Assistance
4,413,035
4,248,087
4
,248,087
Evaluation
~
~
—
Program Support 1/
26,401
150,000
150,000
Other
~
~
~
TOTAL PROGRAM
4,439,436
4,398,087
4,
,398,087
Number of Applicants
—
50
50
Number of Grants
50
48
51
New Starts:
#
$
0
0
25
1,777,921
1,
20
,633,455
Continuations :
$
50
4,413,035
23
2,470,166
2,
31
,614,632
Contracts :
i
$
1
26,401
2
150,000
2
150,000
1/ Printing and misc. administrative expenses including:
subscription, program support-logistics contract and meeting
support .
1-93
1179
Child Welfare Research and Demonstration
Authorizing Legislation - Section 426 of title IV-B of the Social
Security Act, as amended.
FY 1994
Actual
FY 1995
Appropriation
FY 1996
Estimate
Increase
or
Decrease
$6,466,000 $6,395,000 $6,395,000
1996 Authorization such sums
Purpose and Method of Operations;
The Child Welfare Research and Demonstration program funds grants
and contracts to public and private organizations to support
activities which improve the services provided for children,
youth and families in the child welfare system. This program
funds a variety of research, demonstration and evaluation
projects related to child welfare services. Applications are
selected for funding through a competitive review process.
In recent years, these funds have supported demonstration
projects in the following areas: specialized foster care for
older children and for drug-exposed children, day treatment,
family reunification, services to homeless families. State and
Indian Tribal agreements, reducing child welfare agency staff
turnover, mental health and child welfare services.
Research studies and evaluations are supported in the following
areas: National Child Welfare Research Centers, National Study
of the Recruitment and Retention of Foster Parents, National
Study of Child Welfare Services Delivered to Children and Their
Families, field initiated research by both new and experienced
researchers, evaluation of homeless programs, study of the impact
of substance abusing families on child welfare services, the
development of systems to collect and analyze adoption and foster
care data, and the collection and analyses of those data.
Finally, these funds support the provision of technical
assistance to public child welfare agencies in the form of
telephone and on-site consultation and the development and
dissemination of materials by five Child Welfare Resource
Centers .
1-94
1180
Funding for the Child Welfare Research and Demonstration program
during the last five years have been as follows:
1991 $6, 651, 899
1992 $6 , 652 , 000
1993 $6,467,000
1994 $6 , 467 , 000
1995 $6 , 395, 000
Rationale for the Budget Recpiest;
The 1996 request is $6,395,000, the same as the amount
appropriated in FY 1995. These funds will be used primarily to
provide technical assistance to state child welfare programs, and
will also support a limited number of research, demonstration and
evaluation projects which will provide information to improve
child welfare services.
1-95
1181
Name of Prograun: Child Welfare Research & Demonstration
Procfram Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula — — —
Discretionary — — —
Research
1,
,801,
,000
1,
,559,
,000
1,
,495,
,000
Demonstration
1,
,049,
,000
800,
,000
700,
,000
Development
~
~
~
Training/Technical
Assistance
3,
,164,
,000
2,
,878,
,000
3,
,000,
,000
Evaluation
403,
,000
565,
,000
600,
,000
Program Support
~
~
—
Other 1/
6,
48,
,000
593,
,000
600,
,000
TOTAL PROGRAM
-466,
,000
6,
,395,
,000
6
,395,
,000
Number of Applicants
17
50
50
Number of Grants
22
12
17
New Starts:
#
$
2,
,674,
8
,000
462,
3
,000
995,
5
,000
Continuations :
#
$
2,
,562,
14
,000
3
,178,
9
,000
2
,900,
12
,000
Contracts :
$
1,
,230,
12
,000
2
,755,
13
,000
2
,500,
10
,000
1/ Printing and misc. administrative expenses including:
subscription, program support-logistics contract and meeting
support .
1-96
1182
Adoption Opportunities
Authorizing Legislation - Section 205 of the Child Abuse
Prevention and Treatment and Adoption Reform Act of 1978, as
amended. Expires 9/30/95.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$12,117,000 $13,000,000 $13,000,000
1996 Authorization Authorizing legislation
expires September 30, 1995. Reauthorizing legislation will be
proposed.
Purpose and Method of Operations;
The Adoption Opportunities program funds grants and contracts to
public and private organizations to help eliminate barriers to
adoption and help find permanent families for children who would
benefit by adoption, particularly children with special needs.
The five major project areas, as mandated by the authorizing
legislation, are: (1) the development and implementation of a
national adoption and foster care data gathering and analysis
system; (2) the development and implementation of a national
adoption information exchange system; (3) the development and
implementation of an adoption training and technical assistance
program; (4) increasing the placements in adoptive feunilies of
minority children who are in foster care and have the goal of
adoption with a special emphasis on recruitment of minority
families; and (5) post-legal adoption services for families who
have adopted children with special needs. In these areas,
research and demonstration grants are awarded through a
competitive process to public and private non-profit agencies
including State and local governments, universities and voluntary
agencies. Contracts may be awarded to non-profit or voluntary
organizations .
When appropriations are in excess of $5 million, the law requires
the award of grants to States for improving State efforts to
increase the placement of foster care children legally free for
adoption (according to a pre-established plan and goals for
improvement) . These grants may not exceed $1 million during any
fiscal year.
1-97
1183
Funding for the Adoption Opportunities program during the last
five years has been as follows:
1991 $12,686,83 6
1992 $12,687,000
1993 $12,162,520
1994 $12,163,000
1995 $13,000,000
Rationale for the Budget Request;
The FY 1996 request of $13,000,000 is the same level as the FY
1995 appropriation. These funds will be used to help remove the
barriers to adoption, especially for special needs children.
There are approximately 33,000 special needs children in the
child welfare system who are free for adoption. A
disproportionate number of these children are of minority
heritage. Funding will permit the removal of systemic barriers,
assist in recruiting families and placing minority children,
train adoption workers, develop and support adoptive parent
groups and provide post-legal adoption and respite care service
models to assist families and children once the adoption is
consummated.
1-98
1184
Name of Program: Adoption Opportiinities
Program Data;
FY 1994
Actual
FY 1995
Appropriation
FY 1996
Recmest
Service Grants:
Formula
Discretionary
10,
,964,000
11,086,000
11,
,250,000
Research
—
~
~
Demonstration
~
~
~
Development
~
~
~
Training/Technical
Assistance
—
—
—
Evaluation
~
—
~
Program Support
855,000
1,646,000
1,
,500,000
Other 1/
12,
298,000
269,000
250,000
TOTAL PROGRAM
,117,000
13,000,000
13,
,000,000
Number of Applicants
156
160
160
Number of Grants
104
104
105
New Starts:
*
6,
62
,181,000
42
4,200,000
6,
63
,800,000
Continuations :
*
$
4,
42
,783,000
62
6,886,000
4,
42
,200,000
Contracts :
#
$
1,
5
,152,000
5
1,914,000
2,
5
,000,000
1/ Printing and misc. administrative expenses including:
subscription, program support-logistics contract and meeting
support .
1-99
1185
Abandoned Infants Assistance Program
Authorizing Legislation - Section 104(a) of the Abandoned Infants
Assistance Act of 1988, as amended. Expires 9/30/95.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$14,539,000 $14,406,000 $14,406,000 -0-
1996 Authorization Authorizing legislation
expires September 30, 1995. Reauthorizing legislation will be
proposed.
Purpose and Method of Operations;
The Abandoned Infants Assistance program provides grants to
public and nonprofit private entities for development,
implementation and operation of projects to demonstrate how to:
(1) prevent abandonment; (2) identify and address the needs of
abandoned infants, especially those with AIDS and those born with
drug dependence; (3) assist these children to reside with their
natural families, if possible, or in foster care; (4) recruit,
train and retain foster parents; (5) carry out residential care
programs for abandoned children and children with AIDS; (6)
establish programs of respite care for families and foster
families; (7) recruit and train health and social services
personnel to work with families, foster families and residential
care staff. This program also funds technical assistance,
including training, with respect to the planning, development and
operation of the projects. All projects are evaluated.
Funding for the Abandoned Infants Assistance program during the
last five years has been as follows:
1991 $12,556,837
1992 $12,557,000
1993 $13,562,624
1994 $14,563,000
1995 $14,406,000
Rationale for the Budget Request:
The FY 1996 request for Abandoned Infants is $14,406,000, the
same as appropriated in FY 1995. This amount will continue
service demonstration grants to prevent the abandonment of
infants and young children with AIDS and drug-exposed infants and
young children and to reunify and strengthen families impacted by
substance abuse.
I-lOO
1186
Neune of Program: Abandoned Infants Assistance
Procfram Data:
FY 1994
FY 1995
Appropri?itio|i
FY 1996
Recruest
Service Grants:
Formula
Discretionary
_-
—
Research
~
~
~
Demonstration
13,
,605,000
13,531,000
13.
,331,000
Development
~
~
~
Training/Technical
Assistance
650,000
600,000
600,000
Evaluation
~
~
150,000
Program Support 1/
284,000
275,000
325,000
Other
14
~
~
~
TOTAL PROGRAM
,539,000
14,406,000
14
,406,000
Number of Applicants
2
0
85
N\]mber of Grants
33
33
33
New Starts:
*
1
600,000
0
0
13
32
,331,000
Continuations :
$
13
32
,605,000
33
14,131,000
1
600,000
Contracts :
#
$
3
334,000
2
275,000
3
475,000
i/ Printing and misc. administrative expenses including:
subscription, progreun support-logistics contract and meeting
support .
I-lOl
1187
Developmental Disabilities Basic State Grants
Legislative Authority - Section 130 of the Developmental
Disabilities Assistance and Bill of Rights Act of 1990, as
eonended .
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$69,343,000 $70,438,000 $70,438,000 $-0-
1996 Authorization Such s\ims.
Purpose and Method of Operation;
The Developmental Disabilities State Councils program assists
each State to promote the development of a comprehensive,
statewide, consumer and family-centered system which provides a
coordinated array of culturally-competent services, supports and
other assistance for individuals with developmental disabilities.
In order to qualify for funds. States must submit a plan to the
Administration on Developmental Disabilities and establish a
State Developmental Disabilities Council to plan and advocate for
the broad spectrum of developmental disabilities. Up to fifty
percent of the Council's membership includes representatives of
major State agencies, nongovernmental agencies and other
concerned groups. At least fifty percent of the membership must
include persons with developmental disabilities, their guardians,
and other relatives. Councils engage in a broad range of
activities including, but not limited to, program and policy
analysis, demonstration of new approaches, training, outreach,
supporting communities, interagency collaboration and
coordination, public education, and prevention.
Developmental Disabilities State Councils funds are allotted
among the States on the basis of: population, the extent of need
for services for persons with developmental disabilities, and the
financial need of the respective States. By statute, the minimum
allotment is $400,000 to each State and $210,000 for the Virgin
Islands, American Samoa, the Commonwealth of the Northern Mariana
Islands, Guam, and the Republic of Palau (until the Compact of
Free Association with Palau takes effect) . The grants are made
to designated state agencies to implement the approved State
plan. The aggregate Federal share of projects under such grants
may not exceed seventy-five percent except in the case of
projects in poverty areas, in which case the Federal share may
not exceed ninety percent.
1-102
1188
Funding for the Developmental Disabilities State Councils program
(Basic State Grants through FY 1994) during the last five years
has been as follows:
1991 $64,408,000
1992 $67,706,000
1993 $67,372,000
1994 $69,343,000
1995 $70,438,000
Rationale for the Budget Recmest;
The FY 1996 request is $70,438,000 the same as the FY 1995
appropriation.
These funds will provide payments to States to plan and conduct
activities that increase the capacities and resources of agencies
to develop, coordinate, or stimulate permanent improvement in
systems of services for persons with developmental disabilities,
with priority to those persons whose needs are not otherwise met
under other health, education and human service programs.
The FY 1996 funds will also continue to support State activities
focusing on policy analyses, systemic change and capacity
building activities.
1-103
1189
Neune of Progreun: Developmental Disabilities Basic State Grants
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $69,343,000 $70,438,000 $70,438,000
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other z=z.
TOTAL PROGRAM $69,343,000
Number of Applicants 56
Number of Grants 56
New Starts:
Continuations :
# 56 56 56
$ 69,343,000 70,438,000 70,438,000
Contracts :
$70,438,000
$70,438,000
56
56
56
56
1-104
1190
Developmental Disabilities Protection and Advocacy
Legislative Authority - Section 143 of the Developmental
Disabilities Assistance and Bill of Rights of 1990, as emended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$23,753,000 $26,718,000 $26,718,000 +$-0-
1996 Authorization Such sums.
Purpose and Method of Operation;
The Developmental Disabilities Protection and Advocacy (P&A)
program provides grants to establish and maintain a protection
and advocacy system in each State to protect the legal and human
rights of persons with developmental disabilities who are
receiving, or may be eligible to receive, treatment, services, or
habilitation within the State. P&A funding is allotted among the
States based on a formula that takes into account the population,
the extent of need for services for persons with developmental
disabilities, and the financial need of each State. The
protection and advocacy system must have the authority under this
program to pursue legal, administrative, and other appropriate
remedies or approaches, including the authority to investigate
incidents of abuse and neglect and access client records. The
P&A system must be independent of any agency which provides such
services.
By statute, if at least $20 million is appropriated for this
program, the minimum allotment is $200,000 for each State, and
$107,000 for the Virgin Islands, American Samoa, the Commonwealth
of the Northern Mariana Islands, Guam, and the Republic of Palau
(until the Compact of Free Association with Palau takes effect) .
Funding for the Developmental Disabilities Protection and
Advocacy program during the last five years has been as follows:
1991 $20,981,727
1992 $22,500,000
1993 $22,506,496
1994 $23,753,000
1995 $26,718,000
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Rationale for the Budget Request:
The FY 1996 request is $26,718,000 the same as the FY 1995
appropriation .
The mission of the Protection and Advocacy System to advocate for
the legal rights of persons with developmental disabilities and
to assist individuals with their need for legal services has been
growing with increasing demands made upon its resources.
Moreover, the activities of the Protection and Advocacy Systems
have been increasing as more and more individuals realize the
significance of the Americans with Disabilities Act and the role
the Protection and Advocacy System can play under it on their
behalf. The budget request addresses these realities by
providing increased resources for the Protection and Advocacy
program to carry out its expanding mission.
Funding for this program will help States ensure: protection and
advocacy for the legal and human rights of persons with
developmental disabilities through outreach programs to unserved
and undeserved individuals, including persons facing
communications
barriers, and those who are culturally or geographically
isolated; services to institutionalized persons; training of
concerned citizens and persons with developmental disabilities;
and other advocacy resources. Funds will also be used by
grantees to provide such services as outreach, hotlines,
information and referral, counseling and legal services, advocacy
activities and training to service providers on the rights of
persons with developmental disabilities.
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Name of Program: Developmental Disabilities Protection and
Advocacy
Program Data;
Service Grants:
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
FY 1994
Actual
$23,753,000
FY 1995
Appropriation
$26,718,000
FY 1996
Recmest
26,718,000
Evaluation
—
— —
Program Support
Other
_— _
TOTAL PROGRAM
$23.
-753,
,000
$26,718,
,000
$26,718,000
Number of Applicants
57
57
57
Number of Grants
57
57
57
New Starts:
$
Continuations :
#
$
23,
,753
57
,000
26,718
57
,000
57
26,718,000
Contracts :
$
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1193
Developmental Disabilities Projects of National Significance
Legislative Authority - Section 163 of the Developmental
Disabilities Assistance and Bill of Rights Act of 1990, as
amended .
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$3,723,000 $5,715,0000 $5,715,000 -0-
1996 Authorization Such sums.
Purpose and Method of Operation:
The Developmental Disabilities Projects of National Significance
program provides funds directly to national. State, and local
public and non-profit private organizations for demonstration,
training and technical assistance projects through a competitive
grants/contracts process. These projects enhance the lives of
persons with developmental disabilities through promoting
activities and models designed to increase independence,
productivity, and integration into the community.
Funding for the Developmental Disabilities Protection and
Advocacy program during the last five years has been as follows:
1991 $3,024,960
1992 $3,248,000
1993 $3,034,000
1994 $3,784,000
1995 $5,715,000
Rationale for the Budget Request:
The FY 1995 request is $3,784,000, the same level as the FY 1994
appropriation .
This level of funding will continue to support projects designed
to increase and support the independence, productivity and
integration into the community of people with developmental
disabilities and their families which includes leadership
development for individuals and their families from culturally
diverse backgrounds, early intervention, home ownership, personal
assistance services, strengthening families through self -advocacy
and empowerment, data collection and health care reform issues.
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Name of Program: Developmental Disabilities Projects of National
Significance
Program Data;
FY 1994
Actual
FY 1995
ADorooriation
1996
Request
Service Grants:
Formula
Discretionary
...
...
...
Research
Demonstration
$1,
,800,000
$1,800,000
$1,
,800,000
Development
Training/Technical
Assistance
$1,
,549,000
$3,549,000
$3,
,549,000
Evaluation
Program Support
100,000
100,000
100,000
Other'
274.000
267.000
267.000
TOTAL PROGRAM
$3,
,723,000
$5,715,000
$5,
,715,000
Number of Applicants
Number of Grants
New Starts
# 2
$ $200,000
Continuations :
# 9
$ $1,813,000
Contracts :
# 6
$ $1,710,000
1,
,085,
6
,000
1,
,085,
6
,000
$1,
,800,
11
,000
1,
,800,
11
,000
$1,
,330,
6
,000
1,
,330,
6
,000
' Interagency Agreement
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1195
Developmental Disabilities University Affiliated Program
Legislative Authority - Section 154 of the Developmental
Disabilities Assistance and Bill of Rights of 1990, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$18,272,000 $18,979,000 $18,979,000 $-0-
1996 Authorization Such sums.
Purpose and Method of Operation;
The Developmental Disabilities University Affiliated Program
provides grants for operational and administrative support to a
national network of more than 50 University Affiliated Programs
(UAPs) . Grantees are public or private non-profit agencies
affiliated with a university and are initially selected through e
competitive process. UAPs provide community services on behalf
of persons with developmental disabilities through a variety of
mechanisms including clinical services programs, community-based
services programs, technical assistance to community services
personnel and State agencies, and dissemination of information.
In addition to core support grants, the program provides grants
to UAPs for interdisciplinary training, community services,
technical assistance, and information dissemination activities.
Funding for the Developmental Disabilities University Affiliated
Program during the last five years has been as follows:
1991 $13,906,820
1992 $16,030,000
1993 $16, 124 , 960
1994 $18,281,000
1995 $18,979,000
Rationale for the Budget Recmest;
The FY 1996 request is $18,979,000 the same as the FY 1995
appropriation .
Grant funds will be distributed in accordance with the
Developmental Disabilities Assistance and Bill of Rights Act
Amendments of 1990 in the following order of funding priorities:
I-llO
1196
(1) fund existing State UAPs, (2) establish a University
Affiliated Prograun (UAP) in those States and territories
currently without a UAP, and (3) ensure that all eligible UAPs
have a training initiative project.
The UAP awards will fund discretionary grant programs for public
and non-profit private agencies affiliated with a university.
Program will provide operational and administrative support to
catalyze additional support for a national network of University
Affiliated Programs. Grants will enable interdisciplinary
training, community services, technical assistance, and
information dissemination activities. In addition to core
support grants to the UAP, awards are made to support training
projects in the areas of emerging national significance,
specifically projects to train personnel in the areas of:
assistive technology services, positive behavioral supports,
transition from school-to-work community services, aging, early
intervention, the Americans with Disabilities Act, and projects
of special concern to the UAP which shall be developed in
consultation with the State Developmental Disabilities Council.
I-lll
1197
Name of Program: Developmental Disabilities University Affiliated
Program
Program Data:
FY 1994 FY 1995 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary
Research
Demonstration - — —
Development — —
Training/Technical
Assistance $17,972,000 $18,679,000 18,679,000
Evaluation
Program Support 1/ $ 300,000 $ 300,000 $ 300,000
Other
TOTAL PROGRAM $18,272,000 $18,979,000 $18,979,000
Number of Applicants 120 111 111
Number of Grants 118 109 109
New Starts:
$
22
2,200,000
3
600,000
3
Continuations :
*
$
96
15,781,000
106
16,381,000
106
acts :
#
$
2
300,000
2
300,000
300,
2
,000
1/ Peer Reviews
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1198
Native American Program
Legislative Authority - Sections 816(a) and 803A(f) (1) of the
Native American Progreuns Act of 1974, as eunended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$38,491,000 $38,461,000 $38,461,000 -0-
1995 Authorization Authorizing legislation
for Section 816(a) expires September 30, 1995. Section 803 was
authorized in 1995 by the Appropriations Act but has no
authorization for FY 1996. Reauthorizing legislation will be
proposed .
Purpose and Method of Operation;
The Native American Programs Act is the only Federal program
which serves all Native Americans regardless of where they live
or what their tribal or group affiliation may be. The Native
American Programs Act promotes self-sufficiency of American
Indians, Alaska Natives, Native Hawaiians, and Native American
Pacific Islanders by encouraging local strategies in economic and
social development. The Administration for Native Americans
(ANA) defines self-sufficiency as the level of development at
which a Native American community can control and internally
generate resources to provide for the needs of its members and
meet its own short and long range social and economic goals.
Social and economic underdevelopment are the paramount obstacles
to the self-sufficiency of Native American communities and
families.
Native American Programs include financial assistance grants,
training and technical assistance, research, demonstration and
evaluation and a demonstration revolving loan fund for Native
Hawaiians. Assistance is provided through direct grants,
contracts and interagency agreements. These funds support
projects that are expected to result in sustained improvements in
the social and economic conditions of Native Americans within
their communities, and at the same time, to increase the
effectiveness of Indian tribes and Native American organizations
to achieve their own economic and social goals.
Native American Programs and their policies will foster a
balanced developmental approach at the community level through
three major goals: (1) Governance; To strengthen Tribal
governments. Native American institutions and local leadership to
assure local control over all resources; (2) Economic
Development; To foster the development of stable, diversified
local economies to provide jobs and reduce dependency on welfare
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1199
services; and (3) Social Development; To support local access
to, and coordination of, services and programs which safeguard
the health and well-being of Native Americans. These goals are
based on the premise that the local Native American community has
the primary responsibility for determining its own needs, for
planning and implementing its own programs, and for building an
economic base from its own natviral, physical, and human
resources .
The Administration for Native Americans' funding policy is to
assist Indian Tribes and Native American organizations to plan
and implement their own long-term strategies for social and
economic development. This funding approach moves the focus from
increasing dependency on social services to increasing the
productivity of both individuals and communities.
Funding is based on the competitive selection of applications
submitted by Indian tribes and Native American organizations.
Panels of outside individuals review and rate all applications
according to published criteria and seek to identify those
proposals most likely to produce permanent, beneficial change for
Native American communities. Applicants must state specific,
measurable goals based on the developmental needs of the
community. After funding, grantees must report what they have
accomplished based on the goals they set. Anticipated results
include improved organizational effectiveness, new linkages with
the private sector economy, and improved coordination of Federal
and non-Federal resources to meet hxunan needs in a developing
economy .
Funding for the Native Americans Programs during the last five
years has been as follows:
1991 $33,375,567
1992 $34,126,000
1993 $34,507,000
1994 $38,627,000
1995 $38,461,000
Rationale for the Budget Request;
The fiscal year 1996 request for Native American Progreuns is
$38,461,000, the same as the FY 1995 appropriation.
It will support activities which cover a wide range of
interrelated social and economic development efforts, including
the expansion and creation of businesses and jobs in many areas,
e.g., tourism, specialty agriculture, arts and crafts, cultural
centers, light manufacturing, construction, health care systems,
housing, day care, fishing, and fish resources.
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1200
The program also addresses governance projects which include the
development of new and existing Tribal constitutions and by-laws,
as well as the establishment of Tribal zoning, tax, environmental
and other codes. These governance projects assist in creating a
stable climate and the necessary legal infrastructure for
villages and reservations, encouraging development and outside
investments .
Status clarification is another important area within the
program. This assists Tribes, Indian groups and villages to
petition for Federal recognition. Subsequently, successful
groups obtain assistance and resources from the Bureau of Indian
Affairs and health and environmental services from the Indian
Health Service.
Grants made under the Native American Languages Program will
ensure the preservation and enhancement of Native American
language progreons. It will provide community based programs that
(1) bring older and younger Native Americans together to
facilitate and transfer a Native American language; (2) train
Native Americans to teach, interpret, or translate a Native
American language; (3) develop, print and disseminate materials
to be used for teaching and enhancement purposes; (4) train
Native Americsans to produce or participate in television or radio
program to be broadcast in a Native American language; and, (5)
compile, transcribe and analyze oral testimony to record and
preserve a Native American language. In addition grants made
under the Indian Environmental Regulatory Enhancement Act will
enable tribes to plan, develop and implement programs designed to
improve their capacity to regulate environmental quality on
Indian lands, in accordance with Federal laws and regulations.
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1201
Name of Program: Administration for Native Americans
Program Data:
FY 1994 FY 1995 FY 1996
Actual Appropriation Recmest
Service Grants:
Formula
Discretionary $33,175,000 $34,320,000 $34,220,000
Research
Demonstration 722,000
Development
Training/Technical
Assistance 1,442,000 1,575,000 1,575,000
Evaluation 500,000
Program Support 1/ 1,152,000 1,167,000 1,167,000
Other 2/ 2,000,000 1,400,000 1,000,000
TOTAL PROGRAM $38,491,000 $38,461,000 $38,461,000
Number of Applicants 764 794 798
Number of Grants 259 257 257
New Starts:
# 177 193 189
$ $20,594,000 $21,544,000 $20,944,000
Cont inuat ions :
# 82 64 68
$ $14,404,000 $12,017,000 $12,617,000
Contracts :
/ 15 20 20
$ $3,493,831 $4,900,000 $4,900,000
1/ Preparation & logistical support for panel review process.
2.1 FY 94/95/96 includes: A grant to George Washington University
for the National Center for Native American Studies
($1,000,000/400,000) & a grant to the Office of Hawaiian Affairs
for the Native Hawaiian Revolving Loan Fund ($1,000,000 all 3
yrs.).
1-116
1202
NATIVE AMERICAN PROGRAMS
(dollars in thousands)
FY 1994
Appropriation
No.
Amount
I.
Federally
Recoanized
Native Americans
A. Tribes
121
15,114
B. Alaska
51
4,779
C. Consortia
5
877
II.
Non-Federal lY
Recognized
Native Americans
A. Tribes
32
2,481
B . Urban
5
679
C. Rural
3
542
D . Consortia
5
898
II.
Native Hawaiians
9
1,616
IV.
Native American
Pacific Islanders
5
593
V.
Special Proiects
17
4,416
VI.
Discretionarv
Activities
19
4,496
^11.
Native Hawaiian
Revolvina Loan Fund
1
1,000
'Ill
National Center
at Georae Washinotoi
1
1
University
1,000
FY 1995
Request
No. Amount
123 15,190
51 4,801
5 881
32
2,492
5
696
3
544
5
901
1,624
5
594
17
4,438
20
4,900
1
1,000
FY 1996
Request
No. Amount
123 15,440
51 4,801
5 881
32
2,492
6
846
3
544
5
901
1,624
5
594
17
4
438
20
4
900
1
1
000
400
TOTAL
274 $38,491
277 $38,461
277 $38,461
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1203
Social Services Research and Demonstration
Legislative Authority - Section 1110 of the Social Security Act,
as amended.
Increase
FY 1994 FY 1995 1996 or
Actual Appropriation Estimate Decrease
$13,664,000 $14,961,000 $14,961,000 $-0-
1996 Authorization Such sums.
Purpose and Method of Operation:
Social Services Research and Demonstration funds support
research, demonstration, evaluation and dissemination activities
in social services and income maintenance progreun areas. Social
services projects support the Department's and Administration's
efforts to promote the physical, emotional and cognitive well-
being of children and their families through more effective
progrcuns and services. In the income maintenance area, funded
projects demonstrate and evaluate proposals that encourage
economic self-sufficiency through new program policies, improved
education and training approaches, child support enforcement, and
administration. Activities designed to address the issues around
teen pregnancy and the improvement of parenting skills are also
supported .
These funds also support the demonstrations, evaluations and
other research required by the Feunily Support Act and other
legislation. This includes the ongoing, extensive evaluation of
the effectiveness of JOBS services, the research and evaluation
needed to develop effective JOBS performance standards.
These projects are of importance not only to federal policy
makers and administrators, but also to states, localities,
tribes, and public and private agencies, providing them with
information that enables them to manage and deliver services more
effectively.
Projects are conducted through federal contracts, grants and
cooperative agreements. Evaluation results, policy implications,
data and techniques from projects are disseminated to other
federal agencies, states and others through publications,
conferences and workshops, information memoranda and other
issuances. Final reports are reproduced and distributed to states
and other agencies and organizations.
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1204
Rationale for Budget Request
The FY 1996 budget request for Social Services Research and
Demonstration is $14,961,000 the same as the FY 1995
appr opr i a t i on .
The Administration for Children and Families (ACF) believes that
responsibility for the programs that directly concern the
economic security and the general well-being of the country's
children and families carries with it a comparable responsibility
to develop a capability - through research, demonstration and
evaluation - to make those programs as effective as possible.
With the problems that children and families are increasingly
experiencing, more research is needed to help ameliorate these
problems .
For FY 1996 ACF has planned research, demonstrations, and
evaluations around a nvimber of program priorities -
AFDC/JOBS/Self-Sufficiency, Child Support, Youth, Early
Childhood, Child Welfare and Special Populations. The following
rationale is presented according to these priorities.
AFDC/ JOBS /Self -Sufficiency;
Improving the welfare system so that it more effectively promotes
economic self-sufficiency of families is a priority area.
The Job Opportunities for Low-Income Individuals program
previously funded in this account is once again expected to be
earmarked by Congress for continued funding in FY 1996.
Much of the current funding available for welfare research must
be allocated to the ongoing evaluation of JOBS activities.
Included in the Family Support Act, this multi-year study
involves large scale random assignment evaluations at seven sites
in six states. It will provide a wealth of information on the
effectiveness of JOBS services overall, as well as on particular
subgroups of recipients, including long-term recipients. It will
also provide carefully derived information on the effect of
program participation on mothers and their children.
Another important FY 1996 expenditure is the continued funding of
the Parents Fair Share demonstration. This demonstration, co-
funded with the Department of Labor, is a test of employment and
training services, peer support, enhanced child support
enforcement and mediation services for unemployed noncustodial
parents whose children receive public assistance.
In FY 1996 ACF will continue work on a family-focused JOBS
development model to develop a family-focused approach combining
employment services with a variety of other services to help move
AFDC families towards self-sufficiency. There is evidence that
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1205
significant proportions of the AFDC caseload are not successful
in obtaining or sustaining employment because of personal and
family problems. This project will identify problems in the AFDC
population that inhibit successful employment and identify
programs which have attempted to deal systematically with
conditions which are inhibiting the family's ability to move
towards self-sufficiency, and to determine the relevant health,
social service, educational, employment and other service needs
of the family.
One of the more significant research areas in FY 1996 will be the
continuation of demonstrations aimed at changing the culture of
welfare. Moving recipients from welfare to work is a central
tenet of welfare reform proposals. But achieving this goal
requires a change in culture in the people delivering the
services and in the administration of the program at the State
and local levels. Where States and localities have successfully
implemented a work-oriented culture in the welfare office and
their clients, the concept of self-sufficiency and employment is
reinforced and promoted at every opportunity. This demonstration
will create and test various cultural change models for adoption
by welfare offices throughout the nation.
Another project that ACF will jointly fund with the Department of
Agriculture is a continuation of a demonstration of electronic
benefits transfer (EBT) . EST is popular with States as a highly
manageable, safe and cost-effective method of providing benefit
access to Federal payment recipients. Until this year, the
Federal Reserve Board (FRB) has exempted AFDC and Food Stamp
payments from the requirements of Regulation E. These limit a
recipient's liability for loss due to such events as theft or
misuse of the EBT card. States are extremely concerned that
Regulation E will have a negative effect on EBT. The FRB has
allowed 3 years (1997) before implementation Regulation E, and
has encouraged Agriculture and DHHS to "test" the effect at
multiple demonstration sites. The results of the demonstration
will help FRB determine whether or not to reconsider its decision
to apply Regulation E to EBT.
CHILD SUPPORT
In FY 1996 ACF will fund the parent location demonstrations for
state employment security agency (SESA) crossmatches. This is a
continuing activity to assist in the location of non-custodial
parents and enforcement of child support. Quarterly data on
employment location as collected by the state employment security
agencies is matched on a monthly basis with the State tapes or
'on-line' data of Social Security numbers of non-paying non-
custodial parents.
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1206
YOUTH
The FY 1996 funds will continue an evaluation related to the
youth development initiative. This activity will focus either on
the Youth Gang Drug Prevention Program, the Community Schools
Program, or a combination of the two. Such evaluation activities
will be planned and/or funded by ACF or in conjunction with other
participating Federal agencies or private foundations.
EARLY CHILDHOOD
The FY 1996 funds will also continue work on the Child Care
Research Partnerships initiative to provide insight into the
child care opportunities and needs of low-income families,
particularly those moving from welfare to work, or working
families at risk for welfare; increase understanding of how local
need, supply and demand interact to affect the lives and well-
being of children; develop a sound base of information about
difficult systemic issues facing States and local communities;
and help focus child care research on issues of importance for
ACF programs and priorities.
SPECIAL POPULATIONS
By law, a percentage of all research funds have to be allocated
to Small Business Innovative Research (SBIR) . This funding will
cover part of ACF's participation in the SBIR program.
The annual refugee survey will again be funded in FY 1996 to
collect survey information that is used in a Congressional report
on the status of refugees.
GENERAL
Additional funding will also support priorities intended to
improve the effectiveness of social services and the efficiency
with which they are delivered. Areas of activity expected to be
funded include identification and testing of community-based
solutions, improving integration and coordination of services,
more effective targeting on national concerns such as reducing
drug abuse and improving child welfare and strengthening
families.
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1207
Name of Program: Section 1110 Social Services Research and
Demonstration
Program Data;
Service Grants
Formula
Discretionary
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Research
1,100,
,000
1,
,500,
,000
1,
,500,
,000
Demonstration
7,406,
,000
8,
,511,
,000
8,
,511,
,000
Development
Training/Technical
Assistance
249,
,000
250,
,000
250,
,000
Evaluation
4,908,
,000
4,
,700,
,000
3,
,700,
,000
Program Support
Other
Total Program
$13,664,
,000
$14,
,961,
,000
14,
,961,
,000
Number of Applicants
Number of Grants
New Starts:
#
$
1,131,
9
,000
$1,
r683,
9
,000
$1,
,683,
9
,000
Continuations :
*
$ 1/
$7,363,
11
,000
$7,
,343,
20
,000
$7,
,343,
20
,000
Contracts :
t
$ 2/
$2,963,
61
,000
$2.
,410,
60
,000
$2,
,410,
60
,000
Transfers to Other
*
% 11
Agencies*:
$2,963,
8
,000
$2,
,410,
6
,000
$2,
,410,
6
,000
1/ Includes $5,500,000 for JOLI
2/ Includes $350,000 for SESAs
3/ Includes items such as transfers to ASPE for JOBS evaluation,
to National Science Foundation for Panel Study of Income Dynamics
(PSID) , and to IRS for tabulations of tax data.
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Community Services Block Grant
Authorizing Legislation - Section 672 of the Community Services
Block Grant Act, as amended.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$397,000,000 $391,500,000 $391,500,000 -0-
1996 Authorization Such sums.
Purpose and Method of Operations;
The Community Services Block Grant program issues block grants to
States, territories and Indian Tribes to provide services and
activities to reduce poverty, including services to address
employment, education, better use of available income, housing
assistance, nutrition, energy, emergency services, health, and
anti-drug needs. Each State submits an annual application and
certifies that the State agrees to provide: (1) a range of
services and activities having a measurable and potentially major
impact on causes of poverty in communities where poverty is an
acute problem; and (2) activities designed to assist low-income
participants, including the elderly, to become self-sufficient.
Funds are allocated to 50 States and the District of Columbia,
Puerto Rico, Guam, American Samoa, the Virgin Islands, the
Northern Marianas, the Republic of Palau and State and federally
recognized Indian Tribes. Allocations are based on relative
percentages of 1981 funding levels under Section 221 of the
Economic Opportunity Act of 1964 as amended.
Funding for the Community Services Block Grant over the past five
years has been:
FY 1991 $349,367,458
FY 1992 $360,000,000
FY 1993 $372,000,000
FY 1994 $397,000,000
FY 1995 $391,500,000
1-123
1209
Rationale for the Budget Request;
The FY 1996 request for the Community Services Block Grant is
$391,500,000, the sane as the FY 1995 comparable level. These
funds will be used to provide a flexible source of funding for an
array of social services and prograuns that are planned, designed,
and implemented at the local level.
Grant funds will be used by a network of local agencies.
Community Action Agencies, Federal/State recognized Indian
Tribes/Tribal organizations, Migrant and Seasonal Farmworker
organizations, or private/public community-based organizations to
provide a range of services and activities to assist low-income
individuals, including the elderly, to alleviate the causes and
conditions of poverty.
Of the funds appropriated, $3,915,000 will be used to make
grants, contracts, or cooperative agreements for training and
technical assistance, and planning and evaluation activities
related to provisions of the Community Services Block Grant Act,
including training and technical to assist local service
providers in the development of improvement management practices,
Community Services Block Grant data collection, and impact
evaluations. Projects will be developed with close coordination
with State and local Community Services Block Grant providers and
involve innovative approaches which promote the purposes of the
Community Services Block Grant Act.
1-124
1210
Name of Program: Community Services Block Grant
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $396,700,000 $387,585,000 $387,585,000
Discretionary
Research
Demonstration
Development —
Training/Technical
Assistance $300,000 $3,915,000 $3,915,000
Evaluation
Program Support — -
Other
TOTAL PROGRAM $397,000,000 $391,500,000 $391,500,000
130 130
130 130
126 150
$391,000,000 $391,000,000
Number of Applicants
135
Number of Grants
135
New Starts:
$ $397,
,000
138
,000
Continuations :
*
$
Contracts :
$
— -
6 6
$500,000 $500,000
1-125
1211
Emergency Community Services for the Homeless
Authorizing Legislation - Section 754 of Title VII, Subtitle D,
of the Stewart B. McKinney Homeless Assistance Act, as amended.
Increase
1994
1995
1996
or
A<?1;uz»l
Appropriation
Bs1;i»?ite
Decrease
$19,840,000 $19,752,000 $19,752,000 -0-
1996 Authorization $50,000,000
Purpose and Method of Operations;
The Emergency Community Services for the Homeless Program
provides grants to States, territories and Indian Tribes to
assist families and individuals who are homeless or are about to
become homeless. Emergency Community Services for the Homeless
funds may be used to: (1) expand comprehensive services to
homeless individuals to provide follow-up and long-term services
to help them make the transition out of poverty; (2) provide
assistance in obtaining social and maintenance services and
income support services for homeless individuals; (3) promote
private sector and other assistance to homeless individuals; (4)
provide assistance under certain conditions to an individual who
has received a notice of foreclosure, eviction, or termination of
utility services, in order to prevent them from becoming homeless
(such use is limited to 25 percent of the funds available in a
year) ; (5) provide for renovation of buildings used to provide
comprehensive services (not more than 50 percent of the funds may
be used for such purpose) ; and, (6) provide for, or refer to,
violence counseling for homeless children and individuals, and
violence counseling training to individuals who work with
homeless children and individuals.
The funds appropriated for the Emergency Community Services for
the Homeless program are distributed to 57 States and territories
that receive funds under the Community Services Block Grant
program. Funds are allocated using the formula that applies to
the Community Services Block Grant program, which takes into
account the relative number of persons living in poverty. In
addition, the McKinney Act directs that not less than 1.5 percent
of appropriated funds are to be set aside for federally-
recognized Indian tribes.
Each State and territory is required to submit an annual
application describing its proposed use of the funds and
certifying that it will comply with certain statutory and
1-126
1212
regulatory requirements. Federally-recognized Indian tribes that
apply for and receive Community Services Block Grant funding for
a fiscal year may also receive Emergency Community Services for
the Homeless funding.
Funding for the Emergency Community Services for the Homeless
program during the last five years has been as follows:
FY 1991 $41,222,000
FY 1992 $25,000,000
FY 1993 $19,840,000
FY 1994 $19,840,000
FY 1995 $19,752,000
Rationale for the Budget Request;
The FY 1996 request is $19,752,000, the same as the FY 1995
level. These funds will continue to provide services for
homeless families and individuals through a national network of
local anti-poverty agencies. Special emphasis is anticipated in
service to families and children during FY 1996 as this is the
fastest growing homeless population. This flexible funding is
particularly relevant to address the focused needs of this
emerging population.
1-127
1213
Name of Program: Emergency Community Services for the Homeless
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula $19,840,000 $19,752,000 $19,752,000
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance —
Evaluation
Program Support
Other
TOTAL PROGRAM $19,840,000 $19,752,000 $19,752,000
Number of Applicants 117 117 117
Number of Grants 117 117 117
New Starts: 117 117 117
t
$ $19,840,000 $19,752,000 $19,752,000
Continuations :
Contracts :
1-128
1214
Community Services Discretionary Activities
Authorizing Legislation - Section 681(a) of the Conununity
Services Block Grant Act, as amended.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$42,940,000 $45,015,000 -0- -$45,015,000
1996 Authorization Part of the authorization for
the Block Grant.
Purpose and Method of Operations;
Community Services Discretionary Grants provide assistance for
projects of national and regional significance. Assistance is
provided to private, locally-initiated community development
corporations which sponsor enterprises providing employment,
training, and business development opportunities for low-income
residents; to public and private non-profit agencies for
activities benefitting migrants and seasonal farm workers; to
public and private organizations to carry out programs in rural
housing and community facilities development; and to a private,
non-profit organization to provide recreational activities for
low-income youth.
Rationale for the Budget Request;
COMMXnJITY ECONOMIC DEVELOPMENT
The FY 1996 request for Community Economic Development is zero.
This reflects the concerns of Congress to reduce the number of
small discretionary grant programs and maintain flexibility for
the Secretary to continue key initiatives of national
significance.
RURAL HOUSING & COMMUNITY FACILITIES DEVELOPMENT
The FY 1996 request for Rural Housing & Community Facilities
Development is zero. This reflects the concerns of Congress to
reduce the number of discretionary grant programs and the
Administration's domestic agenda to develop more comprehensive
programs which can be replicated throughout the country. This
reflects the concerns of Congress to reduce the number of small
discretionary grant programs and maintain flexibility for the
Secretary to continue key initiatives of national significance.
1-129
1215
MIGRANTS & SEASONAL FARMWORKERS ASSISTANCE
The FY 1996 request for Migrant & Seasonal Farmworkers Assistance
is zero. This reflects the concerns of Congress to reduce the
number of small discretionary grant programs and maintain
flexibility for the Secretary to continue key initiatives of
national significance.
TECHNICAL ASSISTANCE
The FY 1996 request for Technical Assistance is zero. Authority
to provide technical assistance was provided as a set-aside in
the Block Grant in reauthorizing legislation passed last year.
1-130
1216
Name of Program: Community Economic Development
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary $22,233,000 $23,733,000
Research
Demonstration
Development •—
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM $22,233,000 $23,733,000
Number of Applicants 225 250
Niunber of Grants 60 70
New Starts:
# 60 70
$ $22,233,000 $23,733,000
Continuations :
Contracts :
1-131
1217
Name of Program: National Youth Sports
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appr9Pri?^tion Request
Service Grants:
Formula
Discretionary $12,000,000 $12,000,000
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM $12,000,000 $12,000,000
Number of Applicants 1 1
Number of Grants 1 1
New Starts:
/ 11
$ $12,000,000 $12,000,000
Continuations :
Contracts :
#
$
1-132
1218
Neune of Program: Rural Housing & Community Facilities Development
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary $5,460,000 $6,198,000
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM
$5,
,460,
,000
$6,198,000
Number of Applicants
39
41
Number of Grants
20
23
New Starts:
i
$
$5,
r460,
20
,000
23
$6,198,000
Continuations :
$
Contracts :
#
$
1-133
1219
Name of Program: Migrant & Seasonal Farmworkers Assistance
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary $2,947,000 $3,084,000
Research
Demonstration
Development — - ""*" ~~~
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM
$2.
947
000
$3,084,000
Number of Applicants
37
45
Number of Grants
13
15
New Starts:
$
$2
947
13
,000
15
$3,084,000
Continuations:
#
...
$
Contracts :
#
...
$
1-134
1220
Demonstration Partnership Program
Authorizing Legislation - Section 408 of the Hunan Services
Reauthorization Act of 1986, as amended.
1994
Actual
1995
Anprooriation
1996
Estimate
Increase
or
P9<?):ease
$7,995,000
$7,977,000
-0-
-$7,977,000
. Authorization
.Such Slims.
Purpose and Method of Operations;
The Demonstration Partnership Prograun provides grants to entities
eligible for funding under the Community Services Block Grant —
primarily community action agencies — to develop, in partnership
with other public and private organizations, unique and
innovative approaches to reduce dependency of the poor on public
assistance programs. Funds must be matched by recipients on a
50-50 basis, with no individual grant to exceed $350,000. The
Department is required to disseminate the results of successful
projects for replication throughout the country.
Funding for the Demonstration Partnership Prograun during the last
five years has been as follows:
FY 1991 $4,050,000
FY 1992 $4,050,000
FY 1993 $3 , 804 , 000
FY 1994 $7,995,000
FY 1995 $7,977,000
Rationale for the Budget Request;
The FY 1996 request for Demonstration Partnership Program is
zero. This reflects the concerns of Congress to reduce the
number of small discretionary grant programs and maintain
flexibility for the Secretary to continue key initiatives of
national significance.
1-135
1221
Name of Program: Demonstration Partnership Program
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary
Research
Demonstration $7,346,000 $7,327,000
Development
Training/Technical
Assistance $634,000 $500,000
Evaluation
Program Support $150,000
Other $15,000
TOTAL PROGRAM
$7,995,000
$7,977,
,000
Number of Applicants
175
225
Number of Grants
132
42
New Starts:
#
$
128
$6,361,000
$6,467,
39
,000
Continuations:
$
4
$1,000,000
$860,
3
,000
Contracts :
#
$
1
$634,000
$650
10
,000
1-136
1222
Community Food and Nutrition
Authorizing Legislation - Section 68 lA. (d) of the Community
Services Block Grant Act, as amended. Expired 9/30/94.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$7,944,000 $8,676,000 $6,000,000 -$2,676,000
1996 Authorization Such sums.
Purpose and Method of Operations;
The Community Food and Nutrition program provides grants to
public and private agencies at the local and State level to: (1)
coordinate existing food assistance resources; (2) assist in
identifying sponsors of child nutrition programs and initiating
new programs in under-served and unserved areas; and (3) develop
innovative approaches at the State and local level to meet the
nutrition needs of low-income people.
The authorizing legislation mandates that 60 percent of the
amount appropriated, up to $6,000,000, is to be allotted to
States for statewide programs and 40 percent is to be awarded on
a competitive basis. Amounts appropriated in excess of
$6,000,000 are allotted as follows: (1) 40 percent of such
excess is to be allotted to eligible agencies for statewide
grants; (2) 40 percent of such excess is to be awarded on a
competitive basis for local and statewide progreuns; and (3) 20
percent of such excess is to be awarded on a competitive basis
for nationwide programs, including programs benefitting Native
Americans and migrant farm workers.
The projects must focus on one or more of the legislatively-
mandated program activities: (1) coordination of existing
private and public food assistance resources, whenever such
coordination is determined to be inadequate in serving the needs
of low-income people; (2) assistance to low- income communities in
identifying potential sponsors of child nutrition procframs and
initiating new programs in underserved or unserved areas; and (3)
development of innovative approaches at the national, state or
local levels to meet the nutrition needs of low-income people.
1-137
1223
Funding for the Community Food and Nutrition program during the
last five years has been as follows:
FY 1991 $2,440,000
FY 1992 $7,000,000
FY 1993 $6,944,000
FY 1994 $7,995,000
FY 1995 $7,977,000
Rationale for the Budget Request;
FY 1996 request is $6,000,000 which is $2,676,000 less than the
FY 1995 appropriation. Funding at the reduced level in FY 1996
will provide support for 57 States and Territories according to a
legislatively mandated formula and approximately 55 - 60
competitively funded programs based on applications submitted by
States, public agencies, and private non-profit organizations.
1-138
1224
Name of Program: Community Food and Nutrition
Procfram Data;
Service Grants:
Formula
Discretionary
Research
FY 1994
Actual
$4,377,600
$3,566,400
FY 1995
Appropriation
$4,670,400
$4,005,600
FY 1996
Request
$3,000,000
$3,000,000
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
TOTAL PROGRAM
$7,
,944,000
$8,676,000
$6,000,000
Number of Applicants
153
200
125
Number of Grants
121
133
110
New Starts:
#
121
133
110
$
$7,
p944,000
$8,676,000
$6,000,000
Continuations :
#
-.—
—
$
— -
Contracts :
#
—
—
$
—
1-139
1225
Federal Administration
FY 1994
Actual
Amount $159,935,000
FTE 1,965
FY 1995
Appropriation
$164,671,000
1,983
FY 1996
Estimate
$173,983,000
2,009
Increase
or
Decrease
+$10,812,000
a/
a/ Includes the effect of transfers from Departmental
Management. See the Departmental Management section for details.
Purpose and Method of Operation
Salaries and related expenses of the Administration for Children
and Families (ACF) are included in the Federal Administration
activity. ACF operations are conducted at the following
locations:
o ACF Headquarters, Washington, D.C. (located in four buildings
in Southwest Washington) ;
o Each of the regional offices of the Department of HHS;
o Social Security Administration facilities at Baltimore,
Maryland where ACF staff run the Federal Parent Locator
Service for the Child Support Enforcement Program and other
ADP systems used to administer ACF programs;
o Thirteen audit offices of the Office of Child Support
Enforcement in various locations throughout the Nation; and,
Approximately one-half of the ACF employees work at ACF
Headquarters in the various program offices and staff offices.
The other half of ACF's work force is in regional and field
offices.
Rationale for the Budget Request:
The FY 1996 budget request of $173,983,000 is a net increase of
$10,812,000 over the FY 1995 appropriation.
The increase in Federal Administration requested for FY 1996 will
allow ACF to implement the President's important children and
family initiatives. The President's major program initiatives
for ACF include:
• Expansion of Head Start. The proposed increase will continue
to move Head Start toward full funding. At the same time, we
must strengthen our efforts to monitor the program and provide
technical assistance to grantees so that Head Start can better
prepare all low-income children for school and future life and
1-140
1226
help make their families better able to be self supporting
members of society.
• Welfare Reform. ACF has immediate enlarged responsibilities
in supporting reform of the existing welfare system. In the
longer term, ACF will need to play an even more active role in
monitoring and evaluating the results of State experimentation
and demonstration efforts as well as to augment its ability to
disseminate or "market" those ideas that work.
• Child Support. The Administration is poised to make
substantial and fundamental changes in the Child Support
Enforcement Program. These changes will require reinvigorated
Federal leadership in this important piece of the
Administration's welfare reform efforts.
• Family Preservation and Support. The Administration will
administer a capped entitlement of $225 million in 1996.
This request will:
o Support the agency's full-time equivalent positions and
related expenses, including built-in increases for
annualization of the 1995 locality pay raise, within-grade
increases, and increases in rent charges and other overhead
costs.
o Increase programmatic and financial oversight of Federally
funded activities. We are requesting increased travel funds
and contract funds to monitor ACF grantees.
o Accelerate improvements in ADP systems that increase the
productivity of Federal staff to allow more staff resources to
be directed toward monitoring and technical assistance. To
meet the President's goals of streamlining government and the
delivery of services, we must make significant additional
investments in automated systems. Many needed improvements
have been postponed in FY 1995 due to lack of funding.
o Improve electronic communications with State and local govern-
ments and other grantees by upgrading ACF's National Computer
Center telecommunications capabilities and by establishing
electronic bulletin boards to communicate program policies,
directives and announcements to States and grantees .
o Provide technical assistance, training and evaluation services
necessary to support initiatives to enhance paternity
establishment and enforce child support orders.
1-141
1227
Federal Administration
SUMMARY OF CHANGES
1995 Appropriation $163, 171, 000
1996 Request 173.983.000
Net Change +10,812,000
Change
1995 Base From Base
INCREASES ;
A. BUILT-IN;
1. Annualization of January
1994 pay raise, within
grade increases, and
January 1995 pay raise.. $105,416,000 +$2,172,000
2. Related Personnel
benefits 18,501,000 +1,386,000
3. Transportation of things 100,000 +25,000
4. Rental Payments to GSA. . 13,329,000 +871,000
5. Communications/Utilities/
Miscellaneous 3,700,000 +302,000
Subtotal Increases.... +$4,756,000
B. PROGRAM:
1. Travel for Technical
Assistance and
Monitoring 1,500,000 + 2,000,000
2. Consulting Services 200,000 + 650,000
3. Other Services (includes
ADP) 4,000,000 +1,881,000
4. Supplies and materials.. 500,000 +500,000
5. Equipment/Consolidation. 1,500,000 +1,500,000
6. Purchases of goods and services
for government accounts... 12,000 +1,000,000
Subtotal Program Increases +$9,531,000
Total INCREASES +$12,287,000
1-142
1228
DECREASES ;
1. Benefit for former personnel. 1,475,000 -1,475,000
Subtotal Built-in decrease. -1,475,000
TOTAL +$10.812.000
NET INCREASE Program Direction.. +$10,812,000
1-143
1229
Federal Administration
Budget Authority by Object
Increase
1995 1996 or
Appropriation Estimate Decrease
Full-time equivalent
employment 1,983 2,009 a/
Full-time equivalent of
overtime and holiday hours 3 3
Personnel compensation:
Full-time permanent 102,116,000 104,148,000 +2,032,000
Other than full-time
permanent 1,800,000 1,940,000 +140,000
Other personnel
compensation 1-500.000 1.500,000 _jiz
Subtotal personnel ^ ,^^ .„„
compensation 105,416,000 107,588,000 +2,172,000
Personnel benefits 18,501,000 19,887,000 +1,386,000
Benefits for former
personnel 1,475,000 -1,475,000
Travel and transportation
of persons 1,500,000 3,500,000 +2,000,000
Transportation of things 100,000 125,000 +2 5,000
Rental payments to GSA 13,329,000 14,200,000 +871,000
Communications, ^nm nnn
utilities and misc. 3,700,000 4,002,000 +302,000
Printing and reproduction 1 850,000 850,000
1-144
1230
Federal Administration
Budget Authority by Object
(Continued)
1995
Appropriation
1996
Estimate
Increase
or
Decrease
200,000
4,000,000
489,000
1,500,000
100.000
Consulting Services
Other Services
Supplies and materials
Equipment
Grants, Subsidies
and Contributions
Indemnities
TOTAL BUDGET AUTHORITY
BY OBJECT
a/ includes the effect of transfers from Departmental
Management . See the Departmental Management section for more
details.
850,000
7,881,000
750,000
3 ,000, 000
100.000
+650,000
+3,881,000
+261,000
+1, 500,000
$163,171,000 $173,983,000 +$10,812,000
1-145
1231
ADMINISTRATION FOR CHILDREN AND FAMILIES
Administrative Costs
(Federal Administration)
Increase
1995 1996 or
Rstimate Estimate Decrease
Travel (21.0) $1,500,000 $3,500,000 ^$2,000,000
^^^r?hlngsl22.0) 100,000 125,000 .25,000
Communications, Utilities
& Miscellaneous +to? 000
charges (23.3) 3,700,000 4,002,000 +302,000
""^Reproduction (24.0)... 850,000 850,000
'^°S:;iicel (25.1) 200,000 850,000 +650,000
Other services (25.2)... 4,000,000 7,881,000 +3,881,000
Purchases of goods &
^:c:inr(25!3?°:^!?"^"! 12,000,000 13,000,000 +1,000,000
'"S^tirLls (26.0) 500.000 1.000,000 +500.^
TOTAL $ 22,850,000 $ 31,208,000 +$8,358,000
1-146
1232
Electronic Benefit Transfer (EBT^ Task Force
FY 1994
Actual
FY 1995
Appr opr i a t i on
Amount
FY 1996
Estimate
$2,000,000
Increase
or
Decrease
+$2,000,000
Purpose and Method of Operation
The Administration for Children and Families, the Social Security
Administration, the Department of Agriculture, and The Department
of the Treasury each contribute to EST Task Force activities.
As a result of the May, 1994 National Performance Review report
"Creating a Benefit Delivery System that Works Better and Costs
Less: An Implementation Plan for Nationwide EBT," and a
Memorandum of Understanding among agencies, the Federal EBT Task
Force Executive staff received responsibility to:
o Develop and oversee national EBT policy;
o Coordinate the design and development of EBT building
blocks, including core financial services, cost policy and
funding agreements operating rules settlement services and
processor audit requirements;
o Coordinate the design and development of the EBT prototype
project (s) ;
o Assume broad stakeholder communications coordination
responsibility;
o Receive new applications from State; refer grant
applications to the lead program agency, and review the
schedule for application approvals; and
o Coordinate budget requests related to implementation and
operations of nationwide EBT.
Rationale for the Budget Recmest:
The FY 1996 budget request for the Electronic Benefits Transfer
Task Force is $2,000,000. Prototype EBT operations are expected
to begin in 1996. Funds will be used for independent
verification and validation of the prototype system, system
acceptance testing in the prototype as well as system design,
testing and acceptance activities for additional regional EBT
operations.
1-147
1233
state Tables
1-148
1234
HEAD
START
1994
1995
1996
state
Actual
Estimate
Estimate
Alabama
$54,282
221
$57
743,000
$63
650
000
Alaska
6,295
157
6
589,000
7
331
000
Arizona
44,415
667
47
663,000
53
860
000
Arkansas
30,718
819
32
979,000
36
573
000
California
371,303
923
394
361,000
444
084
000
Colorado
31,787
337
34
444,000
38
282
000
Connecticut
26,061
055
27
272,000
30
313
000
Delaware
5,814
651
6
078,000
6
716
000
Dist. of Columbia
12,853
813
14
417,000
15
594
000
Florida
118,975
793
126
081,000
142
810
000
Georgia
81,974
080
85
846,000
96
165
000
Hawaii
9,938
608
10
395,000
11
516
000
Idaho
9,574
494
10
016,000
11
189
000
Illinois
139,136
677
148
495,000
164
529
000
Indiana
46,558
136
48
769,000
54
726
000
Iowa
23,429
505
25
239,000
28
179
000
Kansas
22,095
034
24
236,000
26
978
000
Kentucky
54,364
364
58
360,000
64
574
000
Louisiana
75,876
200
79
435,000
88
922
000
Maine
12,610
359
13
175,000
14
563
000
Maryland
38,809
513
41
700,000
46
252
000
Massachusetts
57,263
902
61
566,000
67
961
000
Michigan
126,686
122
133
602,000
148
908
000
Minnesota
36,930
038
38
674,000
43
419
000
Mississippi
92,012
142
95
734,000
101
726
000
Missouri
55,978
726
58
602,000
65
458
000
Montana
9,562
699
10
009,000
11
190
000
Nebraska
14,342
152
14
997,000
16
699
000
Nevada
8,016
779
8
407,000
9
568
000
New Hampshire
5,699
002
5
967,000
6
656
000
1-149
1235
HEAD START (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Outer Pacific
Virgin Islands
Indian Programs
71,188,817
24,240,691
215,678,102
66,642,536
6,722,846
133,913,456
39,073,258
27,079,988
119,354,307
127,065,908
10,059,891
40,772,129
7,984,880
58,609,810
213,394,321
15,831,713
5,957,237
46,411,123
45,968,456
26,014,233
49,460,619
4,925,300
9,019,127
6,008,559
90,793,074
Migrant Programs 130,408,651
Discretionary 109,781,903
74,330,000
27,698,000
227,001,000
71,536,000
7,872,000
140,157,000
40,899,000
28,354,000
127,467,000
132,893,000
10,553,000
43,874,000
8, 359,000
62, 176,000
225,755,000
17,618,000
7,058,000
48,583,000
51,681,000
27,213,000
52, 386,000
5, 148,000
9, 333,000
6,228,000
94, 103,000
134,852,000
130,450,793
81,261,000
30,885,000
253,016,000
79,825,000
8,617,000
156,492,000
45,642,000
31,752,000
141,338,000
147,589,000
11,721,000
48,851,000
9,354,000
69,887,000
254,953,000
19,734,000
7,632,000
54,272,000
57,894,000
30,281,000
58, 127,000
5,707,000
10,402,000
6,941,000
105,033,000
150,680,000
138,451,000
Total, Budget
Authority
$3,325,727,903 $3,534,428,793 $3,934,728,000
1-150
1236
RUNAWAY AND HOMELESS YOUTH CONSOLIDATED PROGRAM
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
American Samoa
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Dist. of Columbia
Florida
Georgia
Guam
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Marianas & Palau
Marshall Islands
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
$993,588
166,990
45,000
936,997
580,753
7,572,052
819,177
715,272
155,857
112,254
2,780,378
1,646,704
45,000
268,111
295,943
2,780,378
1,359,110
673,525
623,428
889,684
1,143,879
283,882
90,000
1, 114,192
1,274,688
2, 304,457
1,103,059
696,718
1,243,145
206,882
403,558
298,726
259,762
1-151
1237
RUNAWAY AND HOMELESS YOUTH CONSOLIDATED PROGRAM (continued)
State
1994
Actual
1995
Estimate
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Discretionary
Total, Budget
Authority
1,708,861
424,896
4,050,427
1,524,244
160,496
2,615,244
783,924
693,935
2,624,521
1,070,589
213,376
870,202
186,472
1, 141,096
4,609,842
596,524
134,519
45,000
1,426,834
1,219,024
405,414
1,216,241
126, 170
6,841, 180
$68,572,180
1-152
1238
RUNAWAY AND HOMELESS YOUTH PROGRAM
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$493,315
$569,027
Alaska
97,828
100,000
American Samoa
30,000
45,000
Arizona
492,366
565,329
Arkansas
318,395
335,499
California
3,985,551
4,550,593
Colorado
505,932
495,587
Connecticut
375,855
409,467
Delaware
85,285
100,000
Dist, of Columbia
75,000
100,000
Florida
1,481,088
1,674,324
Georgia
865,296
972,682
Guam
30,000
45,000
Hawaii
152,297
157,975
Idaho
151,161
175,939
Illinois
1,461,434
1,620,961
Indiana
699,945
766,138
Iowa
403,094
387,805
Kansas
327,594
361,388
Kentucky
467,503
513,022
Louisiana
554,146
656,732
Maine
151,306
162,202
Marianas & Palau
60,000
90,000
Marshall Islands
—
—
Maryland
625,176
655,675
Massachusetts
669,812
735,984
Michigan
1,285,927
1,324,031
Minnesota
621,043
648,807
Mississippi
366,105
400,485
Missouri
697,650
720,133
Montana
105,671
122,576
Nebraska
227,058
231,943
Nevada
156,972
185,977
New Hampshire
136,497
149,521
1-153
1239
RUNAWA
Y AND HOMELESS
YOUTH PROGRAM (cont
inued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
904,853
1,001,741
New Mexico
223,271
254,134
New York
2
,175,011
2,360,643
North Carolina
800,947
900,299
North Dakota
85,932
100,000
Ohio
1
,391,603
1,510,537
Oklahoma
453,379
459,131
Oregon
386,717
413,165
Pennsylvania
1
,379,111
1,517,405
Puerto Rico
506,744
609,709
Rhode Island
112,123
124,161
South Carolina
437,187
502,984
South Dakota
101,911
109,896
Tennessee
599,613
670,469
Texas
2
,422,341
2,738,409
Utah
304,690
351,349
Vermont
75,000
100,000
Virgin Islands
30,000
45,000
Virginia
802,110
839,011
Washington
704,471
735,984
West Virginia
207,075
229,301
Wisconsin
646,648
709,038
Wyoming
75,000
100,000
Discretionary
3
927,961
4,045,796
Total, Budget
$36
910,000
$40,457,964
Authority
1-154
1240
FAMILY VIOLENCE AND PREVENTION SERVICESi'
State
1994
Actual
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Dist. of Columbia
Florida
Georgia
Guam
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
$281,493
200,000
260,803
200,000
2,100,802
236,165
223,302
200,000
200,000
917,984
459,468
25,179
200,000
200,000
791,598
385,351
200,000
200,000
255,562
291,770
200,000
334,035
408,219
642,276
304,905
200,000
353,432
200,000
200,000
200,000
$351
758
200
000
330
671
203
645
2,622
120
299
587
275
307
200
000
200
000
1,149
202
581
112
30
148
200
000
200
000
982
690
479
961
236
410
212
634
318
322
360
832
200
000
417
120
505
081
796
267
379
483
222
044
439
719
200
000
200
000
200
000
$351,758
200,000
330,671
203,645
2,622,120
299,587
275,307
200,000
200,000
1, 149,202
581,112
30,148
200,000
200,000
982,690
479,961
236,410
212,634
318,322
360,832
200,000
417,120
505,081
796,267
379,483
222,044
439,719
200,000
200,000
200,000
1-155
1241
FAMILY VIOLENCE AND PREVENTION SERVICES
(continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Hampshire
200,000
200,000
200,000
New Jersey
530,114
661,931
661,931
New Mexico
200,000
200,000
200,000
New York
1,233,167
1,528,769
1,528,769
North Carolina
465,730
583,464
583,464
North Dakota
200,000
200,000
200,000
Ohio
749,741
931,779
931,779
Oklahoma
218,606
271,443
271,443
Oregon
202,612
254,724
254,724
Pennsylvania
817,324
1,011,506
1,011,506
Puerto Rico
239,705
300,763
300,763
Rhode Island
200,000
200,000
200,000
South Carolina
245,217
306,056
306,056
South Dakota
200,000
200,000
200,000
Tennessee
341,930
428,378
428,378
Texas
1,201,655
1,514,823
1,514,823
Utah
200,000
200,000
200,000
Vermont
200,000
200,000
200,000
Virgin Islands
25,179
30,148
30,148
Virginia
434,014
349,552
545,323
545,323
Washington
441,483
441,483
West Virginia
200,000
200,000
200,000
Wisconsin
340,773
423,253
423,253
Wyoming
200,000
200,000
200,000
American Samoa
25,179
30,148
30,148
North Mariana Is
lands 25,179
30, 148
30,148
Palau
25,179
30, 148
30, 148
Total, Budget
Authority
$20,143,200
$24,118,400
$24,118,400
-' Excludes discretionary activities and State Domestic Violence
grants.
1-156
1242
CHILD ABUSE STATE GRANTS
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$393,629
$393,629
$393,629
Alaska
121,503
121,503
121,503
Arizona
382,821
382,821
382,821
Arkansas
257,106
257,106
257,106
California
2,637,512
2,637,512
2,637,512
Colorado
342,622
342,622
342,622
Connecticut
300,477
300,477
300,477
Delaware
117,532
117,532
117,532
Dist. of Columbia
100,744
100,744
100,744
Florida
1,013,623
1,013,623
1,013,623
Georgia
614,750
614,750
614,750
Hawaii
154,487
154,487
154,487
Idaho
163,956
163,956
163,956
Illinois
990,106
990,106
990,106
Indiana
62,751
62,751
62,751
Iowa
289,481
289,481
289,481
Kansas
249,287
249,287
249,287
Kentucky
356,394
356,394
356,394
Louisiana
443,106
443,106
443,106
Maine
158,457
158,457
158,457
Maryland
439,441
439,441
439,441
Massachusetts
487,696
487,696
487,696
Michigan
831,289
831,289
831,289
Minnesota
433,333
433,333
433,333
Mississippi
293,452
293,452
293,452
Missouri
477,312
477,312
477,312
Montana
134,024
134,024
134,024
Nebraska
199,078
199,078
199,078
Nevada
164,050
164,050
164,050
New Hampshire
150,516
150,516
150,516
1-157
1243
CHILD
ABUSE STATE
GRANTS (continued)
1994
1995
1996
State
Actual
Estimate^'
Estimate-'
New Jersey
633,991
633,991
633,991
New Mexico
208,240
208,240
208,240
New York 1
,415,550
1
,415,550
1
,415,550
North Carolina
572,602
572,602
572,602
North Dakota
117,532
117,532
117,532
Ohio
926,274
926,274
926,274
Oklahoma
327,046
327,046
327,046
Oregon
298,950
298,950
298,950
Pennsylvania
107,951
107,951
107,951
Rhode Island
136,161
136,161
136, 161
South Carolina
353,619
353,619
353,619
South Dakota
127,305
127,305
127,305
Tennessee
445,548
445,548
445,548
Texas 1
,614,070
1
,614,070
1
,614,070
Utah
264,742
264,742
264,742
Vermont
108,980
108,980
108,980
Virginia
542,061
542,061
542,061
Washington
478,839
478,839
478,839
West Virginia
198,773
198,773
198,773
Wisconsin
471,205
471,205
471,205
Wyoming
107,453
107,453
107,453
Puerto Rico
275,834
275,834
275,834
Virgin Islands
75,495
75,495
75,495
American Samoa
71,240
71,240
71,240
Guam
78,898
78,898
78,898
Trust Territory
66,703
66,703
66,703
(Palau)
Northern Marianas
68,403
68,403
68,403
Total, Budget
Authority $22
,854,000
$22
,854,000
$22
854,000
-'Estimates based on the assumption that all states will be
eligible.
1-158
1244
CHILD ABUSE COMMUNITY-BASED FAMILY RESOURCE PROGRAM
State
1994 1995 1996
Actual Estimate!' Estimate^
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Dist. of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
1-159
1245
CHILD ABUSE COMMUNITY-BASED FAMILY RESOURCE PROGRAM (continued)
State
1994
Actual
1995
Estimate-!'
1996
Estimate-'
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total, Budget
Authority
$0
$31,363,000
$38,734,261
New program. Impossible to estimate individual awards.
1-160
1246
CHILD ABUSE COMMUNITY-BASED PREVENTION GRANTS
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$99,266
Alaska
33,090
Arizona
65,141
Arkansas
49,597
California
449,976
Colorado
63,830
Connecticut
43,613
Delaware
58,920
Dist. of Columbia
31,976
Florida
383,852
Georgia
118,626
Hawaii
372,079
Idaho
38,613
Illinois
91,471
Indiana
54,474
Iowa
67,946
Kansas
60,345
Kentucky
64,506
Louisiana
68,984
Maine
59,445
Maryland
60,707
Massachusetts
60,007
Michigan
148,229
Minnesota
99,233
Mississippi
51,540
Missouri
132,946
Montana
34,135
Nebraska
50,658
Nevada
53,645
New Hampshire
39,625
1-161
1247
CHILD ABUSE
COMMUNITY-BASED
PREVENTION GRANTS
(continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
556,851
New Mexico
54,534
New York
123,543
North Carolina
81,883
North Dakota
36,525
Ohio
208,977
Oklahoma
115,698
Oregon
58,839
Pennsylvania
143,408
Rhode Island
36,753
South Carolina
54,056
South Dakota
38,781
Tennessee
73,695
Texas
261,286
Utah
57,099
Vermont
32,405
Virginia
56,086
Washington
81,741
West Virginia
40,549
Wisconsin
109,201
Wyoming
41,615
Total, Budget
Authority
$5,270,000
$0
$0
1-162
1248
CHILD WELFARE SERVICES
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$5,622,618
$5,511,953
$5,511,953
Alaska
753,592
756,386
756,386
Arizona
5,034,431
5,036,395
5, 036,395
Arkansas
3,424,206
3,386,737
3,386,737
California
31,731,483
31,577,979
31,577,979
Colorado
3,866,258
3,903,679
3,903,679
Connecticut
2,120,335
2,076,549
2,076,549
Delaware
726,194
720,092
720,092
Dist. of Columbia
447,456
426,908
426,908
Florida
13,146,152
13,095,674
13,095,674
Georgia
8,426,091
8,417,800
8,417,800
Hawaii
1,203,723
1,204,766
1,204,766
Idaho
1,703,044
1,718,872
1,718,872
Illinois
11,773,489
11,634,207
11,634,207
Indiana
6,952,338
6,832,308
6,832,308
Iowa
3,474,865
3,401,783
3,401,783
Kansas
3,068,450
3,033,606
3,033,606
Kentucky
5,030,263
4,960,940
4,960,940
Louisiana
6,526,524
6,411,669
6,411,669
Maine
1,482,353
1,455,298
1,455,298
Maryland
4,343,438
4,291,240
4,291,240
Massachusetts
4,708,248
4,596,904
4,596,904
Michigan
10,885,138
10,634,338
10,634,338
Minnesota
5,091,670
5,070,373
5,070,373
Mississippi
4,292,848
4,244,902
4,244,902
Missouri
6,146,062
6,071,611
6,071,611
Montana
1,206,980
1,219,514
1,219,514
Nebraska
2,070,546
2,032,223
2,032,223
Nevada
1,400,712
1,429,605
1,429,605
New Hampshire
1,087,039
1,073,714
1, 073,714
1-163
1249
CHILD WELFARE SERVICES
(continued)
state
1994
Actual
]
1995
Estimate
1
1996
Estimate
New Jersey
New Mexico
New York
North Carolina
North Dakota
5,224,197
2,510,276
15,452,415
8,111,554
945,476
5
2
15
8,
,193,337
,525,815
,231,175
,085,827
928,706
5
2
15
8
,193,337
,525,815
,231,175
, 085,827
928,706
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
12,878,298
4,405,802
3,556,035
12,148,428
1,054,127
12,
4,
3,
11,
1,
,747,566
,373,829
,555,161
,949,139
,031,739
12
4
3
11
1
,747,566
,373,829
,555,161
,949,139
,031,739
South Carolina
South Dakota
Tennessee
Texas
Utah
4,947,523
1,075,342
6,209,800
23,794,584
3,474,445
4,
1,
6,
23,
3,
,866,961
,077,153
,166,027
,796,313
,480,561
4
1,
6,
23,
3,
,866,961
,077,153
, 166,027
,796,313
,480,561
Vermont
Virginia
Washington
West Virginia
Wisconsin
715,238
6,372,891
5,699,400
2,486,155
6,022,126
6,
5,
2,
5,
699,111
,322,824
,740,698
,417,214
,949,970
6,
5,
2,
5,
699,111
,322,824
,740,698
,417,214
,949,970
Wyoming 723,628
American Samoa 192,669
Guam 351,116
Northern Mariana 141,557
Puerto Rico 8,104,813
7,
719,171
190,319
345,731
140,186
,950,897
7,
719,171
190,319
345,731
140,186
,950,897
Virgin Islands
279,559
275,545
275,545
Total, Budget
Authority
$294,624,000 $291,989,000
$291,989,000
1-164
1250
DEVELOPMENTAL DISABILITIES STATE GRANTS PROGRAM
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$1,329,327
$1,345,843
$1,345,843
Alaska
420,475
420,475
420,475
Arizona
955,449
998,958
998,958
Arkansas
768,612
768,612
768,612
California
6,143,785
6,423,100
6,423,100
Colorado
758,990
783,442
783,442
Connecticut
684,222
696,655
696,655
Delaware
420,475
420,475
420,475
Dist. of Columbia
420,475
420,475
420,475
Florida
2,998,667
3,116,963
3,116,963
Georgia
1,667,032
1,718,762
1,718,762
Hawaii
420,475
420,475
420,475
Idaho
420,475
420,475
420,475
Illinois
2,657,405
2,703,092
2,703,092
Indiana
1,465,625
1,475,995
1,475,995
Iowa
803,895
806,646
806,646
Kansas
610,952
617,182
617,182
Kentucky
1,239,259
1,250,972
1,250,972
Louisiana
1,414,382
1,423,598
1,423,598
Maine
420,475
420,475
420,475
Maryland
944,802
976,916
976,916
Massachusetts
1,316,088
1,341,702
1,341,702
Michigan
2,418,197
2,475,657
2,475,657
Minnesota
1,014,981
1,039,371
1,039,371
Mississippi
938,115
942,999
942,999
Missouri
1,326,269
1,342,585
1,342,585
Montana
420,475
420,475
420,475
Nebraska
425,955
425,955
425,955
Nevada
420,475
420,475
420,475
New Hampshire
420,475
420,475
420,475
1-165
1251
DEVELOPMENTAL
DISABILITIES
STATE GRANTS PROGRAM (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
1,511,572
1,540,860
1,540,860
New Mexico
467,160
479,382
479,382
New York
4,257,354
4,325,273
4,325,273
North Carolina
1,817,454
1,830,536
1,830,536
North Dakota
420,475
420,475
420,475
Ohio
2,894,940
2,935,874
2,935,874
Oklahoma
912,780
923,719
923,719
Oregon
724,640
746,575
746,575
Pennsylvania
3,170,238
3,219,197
3,219, 197
Rhode Island
420,475
420,475
420,475
South Carolina
1,059,457
1,059,457
1,059,457
South Dakota
420,475
420,475
420,475
Tennessee
1,446,537
1,467,752
1,467,752
Texas
4,402,055
4,520,882
4, 520,882
Utah
534,949
548,942
548,942
Vermont
420,475
420,475
420,475
Virginia
1,374,779
1,429,585
1,429,585
Washington
1,118,785
1,147,367
1, 147,367
West Virginia
799,228
809,383
809,383
Wisconsin
1,304,351
1,319,250
1,319,250
Wyoming
420,475
420,475
420,475
American Samoa
220,750
220,750
220,750
Guam
220,750
220,750
220,750
Northern Mariana
220,750
220,750
220,750
Puerto Rico
2,421,092
2,468,561
2,468,561
Virgin Islands
220,750
220,750
220,750
Micronesia
126,610
Palau
220,750
220,750
220,750
Marshall Islands
126,610
Total, Budget
Authority
$69,343,000
$70,438,000
$70,438,000
1-166
1252
DEVELOPMENTAL DISABILITIES PROTECTION AND ADVOCACY PROGRAM
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$422,605
$443,251
$443,251
Alaska
226,266
254,508
254,508
Arizona
305,884
335,949
335,949
Arkansas
240,905
258,562
258,562
California
1,957,574
2,149,978
2, 149,978
Colorado
245,782
271,993
271,993
Connecticut
229,643
258,610
258,610
Delaware
226,266
254,508
254,508
Dist. of Columbia
226,266
254,508
254,508
Florida
964,240
1,051,765
1,051,765
Georgia
534,753
594,291
594,291
Hawaii
226,266
254,508
254,508
Idaho
226,266
254,508
254,508
Illinois
844,473
911,643
911,643
Indiana
463,643
511,800
511,800
Iowa
255,593
266,337
266,337
Kansas
226,266
254,508
254,508
Kentucky
391,598
405,930
405,930
Louisiana
443,551
467,884
467,884
Maine
226,266
254,508
254,508
Maryland
303,965
337,036
337,036
Massachusetts
410,624
444,313
444,313
Michigan
772,334
845,248
845,248
Minnesota
326,431
358,455
358,455
Mississippi
295,756
317,379
317,379
Missouri
419,595
463,445
463,445
Montana
226,266
254,508
254,508
Nebraska
226,266
254,508
254,508
Nevada
226,266
254,508
254,508
New Hampshire
226,266
254,508
254,508
1-167
1253
DEVELOPMENTAL DISABILITIES PROTECTION AND ADVOCACY PROGRAM
(continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
473,055
509,869
509,869
New Mexico
226,266
254,508
254,508
New York
1,323,225
1,387,387
1,387,387
North Carolina
574,407
635,915
635,915
North Dakota
226,266
254,508
254,508
Ohio
920,282
1,003,767
1,003,767
Oklahoma
285,339
306,350
306,350
Oregon
234,587
262,627
262,627
Pennsylvania
1,008,047
1,054,394
1,054,394
Rhode Island
226,266
254,508
254,508
South Carolina
332,645
364,760
364,760
South Dakota
226,266
254,508
254,508
Tennessee
459,724
496,219
496,219
Texas
1,389,250
1,497,963
1,497,963
Utah
226,266
254,508
254,508
Vermont
226,266
254,508
254,508
Virginia
441,978
497,694
497,694
Washington
357,254
384,506
384,506
West Virginia
256,964
275,658
275,658
Wisconsin
417,371
453,037
453,037
Wyoming
226,266
254,508
254,508
American Samoa
121,052
136,161
136,161
Guam
121,052
136,161
136,161
Northern Mariana
121,052
136,161
136,161
Puerto Rico
771,875
825,354
825,354
Virgin Islands
121,052
136,161
136,161
Micronesia
Palau
121,052
136,161
136,161
Marshall Islands
Indian Set Aside
272,322
272,322
Discretionary
534,360
534,360
Total, Budget
Authority
$23,753,000
$26,718,000
$26,718,000
1-168
1254
COMMUNITY SERVICES BLOCK GRANT
State
1994
Actual^'
1995
Estimate
1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
$7,114,276
1,606,210
3,196,403
5,275,283
45,796,388
Colorado 3,373,814
Connecticut 4,679,687
Delaware 2,182,200
Dist. of Columbia 6,373,992
Florida 11,275,641
Georgia
Guam
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
10,435,887
441,413
2,182,200
2,158,573
18,326,615
5,648,918
4,198,770
3,166,650
6,540,463
9,107,817
2,180,240
5,323,375
9,670,120
14,368,640
4,668,589
6,157,891
10,735,534
2,042,664
2,704,230
2,182,200
$7,144,145
1,638,575
3,211,342
5,297,432
34,741,641
3,387,979
4,699,335
2,222,460
6,400,754
11,322,982
10,479,702
449,557
2,222,460
2,183,758
18,403,560
5,672,636
4,216,399
3,179,945
6,567,924
9,146,057
2,222,460
5,345,725
9,710,720
14,428,967
4,688,190
6,183,745
10,780,608
2,080,349
2,715,584
2,222,460
$7, 144,145
1,638,575
3,211,342
5,297,432
34,741,641
3,387,979
4,699,335
2,222,460
6,400,754
11,322,982
10,479,702
449,557
2,222,460
2, 183,758
18,403,560
5,672,636
4,216,399
3, 179,945
6,567,924
9, 146,057
2,222,460
5,345,725
9,710,720
14,428,967
4,688,190
6,183,745
10,780,608
2,080,349
2,715,584
2,222,460
1-169
1255
COMMUNITY SERVICES
BLOCK GRANT (cont
mued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Hampshire
2
182,200
2
,222,460
2
222
460
New Jersey
10
628,253
10
,672,876
10
672
876
New Mexico
2
177,688
2
,186,830
2
186
830
New York
33
671,549
33
,805,277
33
805
277
North Carolina
10
172,602
10
,220,882
10
220
882
North Dakota
2
016,630
2
056,589
2
056
589
Ohio
15
122,972
15
186,466
15
186
466
Oklahoma
4
839,819
4
862,211
4
862
211
Oregon
3
100,975
3
120,507
3
120
507
Pennsylvania
16
425,146
16
494,107
16
494
107
Puerto Rico
16
343,760
16
412,380
16
412
380
Rhode Island
2
182,200
2
222,460
2
222
460
South Carolina
5
962,373
5
992,116
5
992
116
South Dakota
1
915,585
1
950,927
1
950
927
Tennessee
7
642,872
7
674,961
7
674
961
Texas
18
681,754
18
760,188
18
760
188
Utah
2
132,531
2
171,875
2
171
875
Vermont
2
182,200
2
222,460
2
222
460
Virgin Islands
609,739
620,989
620
989
Virginia
6
211,221
6
237,299
6
237
299
Washington
4
559,613
4
580,077
4
580
077
West Virginia
4
343,045
4
361,280
4
361
280
Wisconsin
4
720,380
4
733,130
4
733
130
Wyoming
2
182,200
2
222,460
2
222
460
American Samoa
466,402
475,006
475
006
Mariana Islands
276,524
281,626
281
626
Palau W. Carolina
388,122
395,282
395
282
Indian Tribe
Set Aside
2
446,962
2
474,828
2
474
828
Discretionary
3
915,000
3
915
000
Total, Budget
Authority
$396,700,000
$391,500,000
$391,500,000
-' California includes $11,200,000 in earthquake relief funds.
1-170
1256
COMMUNITY SERVICES FOR THE HOMELESS GRANTS (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Hampshire
55,050
54,834
54,834
New Jersey
556,974
554,800
554,800
New Mexico
130,449
129,939
129,939
New York 1
,764,749
1,757,859
1,757,859
North Carolina
541,317
539,204
539,204
North Dakota
49,600
49,380
49,380
Ohio
792,539
789,446
789,446
Oklahoma
259,935
258,921
258,921
Oregon
162,916
162,280
162,280
Pennsylvania
860,841
857,481
857,481
Puerto Rico
856,552
853,208
853 , 208
Rhode Island
113,253
112,811
112,811
South Carolina
312,657
311,437
311,437
South Dakota
63,089
62,843
62,843
Tennessee
400,617
399,053
399, 053
Texas
979,114
975,292
975,292
Utah
79,150
78,841
78,841
Vermont
56,897
56,674
66,674
Virgin Islands
27,718
27,595
27, 595
Virginia
325,467
324,197
324, 197
Washington
244,529
243,574
243,574
West Virginia
227,583
226,694
226,694
Wisconsin
247,433
246,467
246,467
Wyoming
49,600
49,380
49, 380
American Samoa
21,202
21,108
21, 108
Mariana Islands
12,570
12,515
12,515
Palau W. Carolina
17,644
17,565
17,565
Indian Tribe
Set Aside
307,874
296,280
296,280
Total, Budget
Authority $19
,840,000
$19,762,000
$19,752,000
1-171
1257
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Child Care and Development Block Grant
FY 1996 Budget Page
Appropriation language and explanation of language changes. J-2
Amount available for obligation J-3
Summary of changes J-4
Budget authority by activity J-5
Budget authority by object J-6
Authorizing legislation J-7
Appropriation history table J-9
Justification :
A. General Statement J-11
B. Child Care and Development Block Grant J-12
C. Child Development Associate Scholarships J-16
E. Dependent Care Planning & Development Grants . . . J-19
F. State Tables J-22
J-1
1258
CHILD CARE AND DEVELOPMENT BLOCK GRANT
For carrying out sections 658A through 658R of the Omnibus
Budget Reconciliation Act of 1981 (The Child Care and Development
Block Grant Act of 1990), [$934,656,000] $1,048,825,000, which
shall be available for obligation under the seune statutory terms
and conditions applicable in the prior fiscal year.' (Department
of Health and Human Services Appropriations Act, 1995.)
' Consistent with history of appropriation language,
language is added to delay obligations until the end of the
fiscal year.
J-2
1259
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Child Care and Development Block Grant
Amounts Available for Obligation
1994 1995 1996
Actual Appropriation Estimate
Appropriation :
Annual $892,641,000 $934,656,000 $1,048,825,000
Enacted rescissions. -0- $14,000 -0-
Subtotal, adjusted
appropriation $892,641,000 $934,642,000 $1,048,825,000
Comparative transfer
from :
Children & Families
Services Programs.. $14,311,000 $14,183,000 $-0-
Subtota 1 , ad j usted
budget authority .... $906,952,000 $948,825,000 $1,048,825,000
Unobligated balance
expiring -S25.000 -0- -0-
Total Obligations .... $906,927,000 $948,825,000 $1,048,825,000
J-3
1260
SUMMARY OF CHANGES
1995 Appropriation $948,825,000
1996 Estimate Si. 048. 825. OOP
Net Change +$100,000,000
1995 Current
Estimate Base Change from Base
Increase
A. Program
1. Increase above the
Child Care & Develop-
ment Block Grant
Base $934,642,000
2. Increases due to conso-
lidation of the Child
Development Associate
Scholarship and Dependent
Care Planning and
Development Grants
progreuns formerly in
the Children & Faunilies
Services Programs
account
Total Increase
Net Change
+$85,817,000
+$14.183.000
+$100,000,000
+$100,000,000
J-4
1261
Child Care and Development Block Grant
Budget Authority by Activity
1994 1995 1996
AgtVtfll APPrQPriatJgn Estimate
Child Care and
Development
Block Grant $906, 952, 000a/ $948, 825,000a/ $1,048,825,000
Total , budget
authority $906,952,000 $948,825,000 $1,048,825,000
a/ Includes funding for the Child Development Associate
Scholarships and Dependent Care Planning and Development
Grant Progreuns.
J-5
1262
Child Care Development Block Grant
Budget Authority by Object
Increase
FY 1995 FY 1996 or
Appropriation Estimate Decrease
Consulting
Services $2,337,000 $2,622,000 +$285,000
Grants, subsidies
and contri-
butions 946.488.000 1.046.203.000 +99.715.000
Total , budget
authority by
object $948,825,000 $1,048,825,000 +$100,000,000
J-6
1263
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1265
APPROPRIATION HISTORY TABLE
Child Care and Development Block Grant
Budget
Estimate House Senate
Ygjtr To Congress Allowance Allowance Appropriation
19911/ $ — — $1,200,000,000 $731,925,000
Sequester^/ -9,515
19921/ 744,925,000 850,000,000 838,000,000 $825,000,000
19931/ 850,000,000 841,500,000 975,000,000 892,711,000
19941/ 958,964,000 892,711,000 892,711,000 892,711,000
1995^/1,090,662,000 934,642,000 934,642,000 934,642,000
1996 1,048,825,000
1/ Senate allowance included $1,159,000,000 to have been made
available in FY 1991 and $41,000,000 available for FY 1992
as part of the Human Development Services Appropriation. The
initial appropriation was $750,000,000; this was subsequently
reduced by the 2.41 percent across-the-board reduction
mandated by section 514(b) of the same appropriation act.
2/ Reduction pursuant to 0MB Bulletin 91-11 of April 25, 1991.
3/ Budget estimate to Congress included $731,925,000 for the
Child Care and Development Block Grant and $13,000,000 for
Child Care Licensing Improvement Grants. House Allowance
included $825,000,000 for the Child Care and Development
Block Grant and $25,000,000 for Child Care Licensing
Improvement Grants. Senate allowance included $825,000,000
for the Child Care and Development Block Grant and
$13,000,000 for Child Care Licensing Improvement Grants.
Appropriation did not include funds for Child Care Licensing
Improvement Grants.
i./ The initial appropriation of $900,000,000 was
subsequently reduced as a result of mandated cuts.
S/ Budget estimate to Congress included $932,711,000 for the
Child Care and Development Block Grant, $1,372,000 for Child
Development Associate Scholarships, $11,942,000 for Temporary
Child Care and Crisis Nurseries and $12,939,000 for Dependent
Care Planning and Development Grants.
J-9
1266
£/ Budget estimate to Congress included $1,090,662,000 for the
Child Care and Development Block Grant, $0 for Child
Development Associate Scholarships and $0 for Dependent
Care Planning and Development Grants. House and Senate
Allowance included $934,656,000 for the Child Care and
Development Block Grant which was reduced to $934,642,000
pursuant P.L. 103-333. In addition. Congress separately
provided $1,360,000 for Child Development Associate
Scholarships and $12,823,000 for Dependent Care Planning and
Development Grants. The comparable appropriation for the
consolidation proposed in the President's budget is
$948,825,000.
J-10
1267
Justification
Child Care and Development Block Grant
Increase
1995 1996 or
Appropriation Estimate Decrease
Child Care and
Development
Block Grant... $948.825.000 a/ $1.048.825.000 +$100.000.000
Total, budget
authority .... $948,825,000 $1,048,825,000 •i-$100,000,000
a/ Includes funds from Child Development Associate Scholarships
and Dependent Care Planning and Development Grant Programs.
General Statement
The Child Care and Development Block Grant was created by the
Omnibus Budget Reconciliation Act of 1990 (OBRA 1990) .
Seventy-five percent of the Child Care and Development Block
grant funds are available for child care services and activities
to improve the availability, accessibility and affordability of
child care. By law, a preponderance of the 75 percent must be
made available for direct services.
The remaining 25 percent of funds are reserved for quality
improvement activities for child care and for early childhood
development and before- and after-school services. Of the
twenty-five percent of funds reseirved: (1) 20% must be used for
quality activities including child care resource and referral
activities; grants or loans to help providers meet State or local
standards; improving the monitoring of compliance with, and
enforcement of. State and local standards and licensing and
regulatory requirements; providing training and technical
assistance; and, improving salaries and other compensation paid
to child care providers; (2) 75% must be used to establish or
expand and conduct early childhood development and/ or before- and
after-school child care progreuns; and, (3) the remaining 5
percent may be used for either category of activity. Child Care
and Development Block Grant funds are available to States,
territories, and Indian tribes.
J-11
1268
Child Care and Development Block Grant
Authorizing Legislation - Sections 658A through 658R of the
Omnibus Budget Reconciliation Act of 1981, as amended. Expires
September 30, 1995.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$906,952,000^/ $948,825, 000^/ $1,048,825,000 -*-$100, 000, 000
a/ Includes funds from Child Development Associate Scholarships
and Dependent Care Planning and Development Grant Programs.
FY 1996 Authorization Authorizing legislation expires
September 30, 1995.
Reauthorizing legislation will be
proposed .
Purpose and Method of Operations;
The Child Care and Development Block Grant provides grants to
States, federally recognized Tribes and Territories for the
purposes of providing low-income feunilies with financial
assistance for child care, improving the quality and availability
of child care, and for establishing or expanding and conducting
early childhood development programs and before- and after-school
progrsuns .
Federal funds provide grants, contracts, and certificates for
child care services to low-income faunllies with a parent who is
working or attending a training or educational program.
Certificates allow parents to choose from a broad range of
providers, from for-profit centers to a neighbor's or relative's
home. This progreun is designed to enable low- income faunilies to
remain self-sufficient.
Funds for this program are allotted to each State based upon a
formula that includes the relative per capita income of each
State, each State's share of the total national number of
children under the age of 5, and the percentage of children
receiving free or reduced price school lunches in each State. Up
to 3 percent of the total funding is reserved for Indian Tribes
and up to one-half of one percent is available to the
territories.
J-12
1269
Comparable funding for the consolidated Child Care and
Development Block Grant program, including funding for the three
predecessor programs, for the past five years, has been:
1991 $746,497,000
1992 $839,572,000
1993 $907,022,000
1994 $906,952,000
1995 $948,825,000
Rationale for the Budget Request
The FY 1996 budget request includes a $100 million increase in
funding for the Child Care and Development Block Grant, at the
same time consolidating two small, related programs which have
previously provided funds to States for Child Care purposes.
These two programs are the Child Development Associate
Scholarship program, and the Dependent Care Planning and
Development Grants pr gram.
The additional $100 million request will allow for a much-needed
increase in the number of low income families who can begin or
continue to work or participate in training and education. All
across the country, there are long waiting lists of low income
working parents in need of child care assistance. Critical
components of child care services, such as training and technical
assistance, quality improvements, and health and safety
protection can also benefit from this increase in funding.
Moreover, enhanced Child Care and Development Block Grant funding
will enable States, federally recognized Tribes and Territories
to continue improving the quality of child care programs.
Grantees have used funds to strengthen the quality of the whole
system by such efforts as supporting child care monitoring,
establishing child care provider mentoring and training programs.
Funds will be available for States to continue support for
assessment and credentialing of Child Development Associates, for
developing before and after-school child care programs and for
supporting child care resource and referral.
Since all of the consolidated activities are currently
supportable under the block grant authority. States will retain
the flexibility to spend block grant funds to continue to
accomplish the purposes of the consolidated programs. At the
same time. States will only have to deal with a single source of
funding for all of these child care activities, thereby
increasing their efficiency. As part of the broad effort across
government to bring together small categorical programs and to
enable States and communities to use resources more effectively
and responsively to meet local needs, this consolidation will
allow States to use funds for these same purposes with less
paperwork, administrative overhead and Federal regulations.
J-13
1270
Name of Progreun: Child Care & Development Block Grant
Program Data;
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants:
Formula
Discretionary
890,
,409,
,578
932,
-305,
,173
1,046,
-202,
,715
Research
~
~
~
Demonstration
~
~
—
Development
—
~
~
Training/Technical
Assistance
2,
,231,
,602
2,
-336,
,604
2,
-622,
,062
Evaluation
~
~
~
Progreun Support
~
~
—
Other
892,
~
~
~
TOTAL PROGRAM
,641,
,180
934,
-641,
,777
1,048,
-824,
,777
Nimber of Applicants
277
292
307
Number of Grants
277
292
307
New Starts:
t
S
24,
,036,
9
,569
41,
,895,
15
,595
41,
-895,
15
,595
Continuations :
# 268 277 292
$ 866,373,009 890,409,578 1,004,307,120
Contracts :
# 2 11
$ 2,231,602 2,336,604 2,622,062
J-14
1271
Child Development Associate Scholarship Program
Authorizing Legislation - Section 606 of the Child Development
Associate Scholarship Assistance Act, as amended. Expires
September 30, 1995.
Increase
FY 1994 FY 1995 FY 1996 or
ASitual Appropriation Request Decrease
$1,372,000 $1,360,000 — -$1,360,000
FY 1996 Authorization Not authorized.
Purpose and Method of Operations;
The current Child Development Associate Scholarship program,
proposed in FY 1996 for consolidation with the Child Care and
Development Block Grant, awards grants to States to enable them
to provide for scholarships to financially eligible individuals
who are candidates for the Child Development Associate (CDA)
Credential. It was initiated in 1972 to improve the quality of
child care by improving, evaluating, and recognizing the
competence of center-based staff working with preschoolers or
infants and toddlers, family day care providers, and home
visitors. A bilingual specialization is available. Forty-nine
States and the District of Columbia list the CDA credential in
their child care licensing regulations as a qualification for
teaching staff and/or directors.
According to the authorizing legislation, scholarship assistance
shall be awarded to income-eligible candidates to cover the cost
of application, assessment, and credential ing. The term "income
eligible" is defined in the statute as a candidate for the CDA
credential whose income does not exceed 130 percent of the Lower
Living Standards Income Level by more than 50 percent. A State
may use up to 35 percent of its award to provide scholarship
assistance to cover the cost of CDA training necessary for
credentialing. Not more than ten percent of the funds received
by the State may be used for the costs of administering the
prograun.
The amount of each State's allotment is determined based on the
State's total population compared to total ciurrent population
estimates .
J-15
1272
Funding for the Child Development Associate Scholarship Program
during the last five years has been as follows:
1991 $1, 397 , 000
1992 $1 , 397 , 000
1993 $1 , 372 , 000
1994 $1, 372 , 000
1995 $1,360,000
Rationale for the Budget Request;
Activities previously supported under Section 606 will be
subsumed vmder the proposed Consolidation with the Child Care and
Development Block Grant. States will continue to have the
flexibility under the Block Grant to provide credentialing
assistance for child care workers.
J-16
1273
Neune of Progreun: Child Development Associate Scholarships
Program Data;
FY 1994
FY 1995
Appr«?pri«ti<?n
FY 1996
R^qvest;
Service Grants:
Formula
Discretionary
1,372,000
1,360,000
~
Research
—
—
~
Demonstration
~
~
~
Development
~
~
~
Training/Technical
Assistance
—
—
—
Evaluation
—
~
~
Program Support
~
~
—
Other
~
~
~
TOTAL PROGRAM 1,372,000 1,360,000
Number of Applicants
~
—
Number of Grants
54
54
New Starts:
/
$
1,372,
54
,000
54
1,360,000
Continuations :
#
—
~
Contracts :
$
--
—
J-17
1274
Dependent Care Planning and Development
Authorizing Legislation - Section 670A of the State Dependent
Care Grants Act, as amended. Expires September 30, 1995.
Increase
FY 1994 FY 1995 FY 1995 or
Actual Appropriation Request Decrease
$12,939,000 $12,823,000 — -$12,823,000
FY 1996 Authorization Not authorized.
Purpose and Method of Operations;
The Dependent Care Planning and Development program provides
grants to States for activities in two specific areas: 1) 40
percent of allotted funds must be used for activities related to
dependent care resource and referral systems, and 2) 60 percent
of allotted funds must be used for activities related to school-
age child care services. HHS may waive the percentage
requirements for these two areas at the request of a State.
Funds are allotted to States by formula. Each State receives an
amount which bears the same ratio to the total amount
appropriated as the population of the State bears to the
population of all States. Funds for Dependent Care Programs in
the Territories and Insular Areas may be consolidated with the
Social Services Block Grant, at the option of the Territory or
Insular Area.
States have used Dependent Care Grant funds to: improve the
accessibility of resource and referral services for children, the
elderly, and the disabled; develop and disseminate resource and
referral materials for the dependent care populations; enhance
the capability of resource and referral systems to provide
comprehensive and effective services; provide training before and
after school services and to operate such facilities; provide
direct technical assistance to communities and groups; and,
develop comprehensive training materials to assist new programs.
Funding for Dependent Care Planning and Development program
dxiring the last five years has been as follows:
1991 $13,175,000
1992 Jl3,175,000
1993 $12,939,000
1994 $12,939,000
1995 $12,823,000
J-18
1275
Rationale for the Budget Request;
Activities previously supported under Section 206 will be
subsumed under the proposed consolidation with the Child Care and
Development Block Grant. States already have the flexibility
under the Block Grant to support information and referral
systems, as well as school-age child care services. Maintaining
child care quality is a particular focus for the Block Grant
funds.
J-19
1276
Name of Program: Dependent Care Planning & Development Grant
Program Data;
FY 1994
Actual
FY 1995
ADorooriation
FY 1996
Reouest
Service Grants:
Formula 12 ,
Discretionary
,939,000
12,823,000
—
Research
~
~
—
Demons tr at ion
—
~
—
Development
~
—
~
Training/Technical
Assistance
—
~
—
Evaluation
~
~
—
Program Support
~
~
~
Other
~
—
—
TOTAL PROGRAM 12,
,939,000
12,823,000
~
Number of Applicants
54
54
~
Number of Grants
54
54
—
New Starts:
#
$
0
0
0
0
—
Continuations :
$ 12,
54
,939,000
54
12,823,000
::
Contracts :
0
0
0
0
~
J-20
1277
CHILD CARE AND DEVELOPMENT BLOCK GRANT
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$18
868,199
$19
754,442
$22,167,796
Alaska
1
785,671
1
869,544
2,097,943
Arizona
16
114,036
16
870,915
18,931,995
Arkansas
10
541,127
11
036,246
12,384,519
California
101
825,814
106
608,587
119,632,710
Colorado
9
807,813
10
268,488
11,522,965
Connecticut
6
400,258
6
700,879
7,519,509
Delaware
1
750,863
1
833,102
2,057,047
Dist. of Columbia 1
699,749
1
779,586
1,996,993
Florida
43
796,143
45
853,254
51,455,039
Georgia
27
995,895
29
310,867
32,891,707
Guam
2
000,374
2
094,331
2,350,190
Hawaii
3
092,384
3
237,634
3,633,167
Idaho
4
475,144
4
685,342
5,257,739
Illinois
33
067,159
34
620,328
38,849,813
Indiana
16
578,248
17
356,931
19,477,387
Iowa
8
306,132
8
696,272
9,758,676
Kansas
7
900,127
8
271,198
9,281,670
Kentucky
16
166,825
16
926,183
18,994,016
Louisiana
24
431,282
25
578,823
28,703,728
Maine
3
569,446
3
737,104
4,193,657
Maryland
11
432,636
11
969,630
13,431,931
Massachusetts
12
335,024
12
914,402
14,492,125
Michigan
26
502,429
27
747,252
31,137,069
Minnesota
12
329,599
12
908,723
14,485,751
Mississippi
16
080,060
16
835,343
18,892,077
Missouri
16
212,211
16
973,700
19,047,337
Montana
2
935,959
3
073,862
3,449,388
Nebraska
5
019,963
5
255,751
5,897,834
Nevada
3
489,817
3
653,735
4,100,103
J-21
1278
CHILD CARE AND DEVELOPMENT BLOCK GRANT (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Hampshire
2,
,205,
,327
2,
,308,
,912
2,
,590,
,987
New Jersey
16,
r314.
,273
17,
,080,
,557
19,
,167,
,249
New Mexico
8,
,279,
,030
8,
,667,
,898
9,
,726,
,835
New York
50,
,715,
,836
53,
,097,
,965
59,
,584,
,820
North Carolina
25,
,037,
,977
26,
,214,
,014
29,
,416,
,519
North Dakota
2,
,240,
,642
2,
,345,
,886
2,
,632,
,477
Ohio
32,
,436,
,098
33,
,959,
,626
38,
,108,
,395
Oklahoma
13,
,521,
,231
14,
,156,
,324
15,
,885,
,770
Oregon
8,
,951,
,477
9,
,371,
,929
10,
,516,
,876
Pennsylvania
29,
,652,
,814
31,
,045,
,612
34,
,838,
,382
Puerto Rico
23,
,803,
,033
24,
,921,
,065
27,
,965,
,613
Rhode Island
2,
-523,
,260
2,
,641,
,778
2,
,964,
,518
South Carolina
16,
,460,
,065
17,
,233,
,196
19,
,338,
,535
South Dakota
3,
,073,
,105
3,
,217,
,450
3,
,610,
,518
Tennessee
18,
,799,
,006
19,
,681,
,998
22,
,086,
,501
Texas
77,
,733,
,501
81,
,384,
,655
91,
,327,
,229
Utah
8.
,378,
,423
8,
,771,
,960
9,
,843,
,609
Vermont
1,
,520,
,851
1,
,592,
,285
1,
,786,
,810
Virgin Islands
1,
,403,
,437
1,
,469,
,357
1,
,648,
,865
Virginia
16,
,565,
,033
17,
,343,
,096
19,
,461,
,862
Washington
14,
,342,
,361
15,
,016,
,025
16,
,850,
,497
West Virginia
6.
,865,
,302
7,
,187,
,766
8,
,065,
,879
Wisconsin
13,
,789,
,491
14,
,437,
,186
16,
,200,
,943
Wyoming
1,
,594,
,302
1.
,669,
,186
1.
,873,
,106
North Mariana
Islands
756,
,361
791,
,887
888,
,631
Palau
292,
,224
305,
,950
343,
,327
Indian Tribe
Set Aside
26,
,714,
,376
27.
,969,
,155
31,
,386,
,081
Discretionary
2,
,161,
,957
2,
,336,
,605
2,
,622,
,062
Total, Budget
Authority
$892,
,641,
,180
$934,
,641,
,777
$1/048,
,824,
,777
J-22
1279
CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP ASSISTANCE
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$21,827
$21,636
Alaska
3,098
3,071
Arizona
20,223
20,046
Arkansas
12,660
12,549
California
162,896
161,471
Colorado
18,312
18,152
Connecticut
17,315
17,164
Delaware
3,636
3,604
Dist. of Columbia
3,108
3,081
Florida
71,181
70,558
Georgia
35,627
35,315
Hawaii
6,122
6,068
Idaho
5,631
5,582
Illinois
61,381
60,844
Indiana
29,880
29,619
Iowa
14,840
14,710
Kansas
13,315
13,199
Kentucky
19,816
19,643
Louisiana
22,624
22,426
Maine
6,518
6,461
Maryland
25,901
25,674
Massachusetts
31,654
31,377
Michigan
49,802
49,366
Minnesota
23,643
23,436
Mississippi
13,795
13,674
Missouri
27,405
27,165
Montana
4,349
4,311
Nebraska
8,475
8,401
Nevada
7,003
6,942
New Hampshire
5,863
5,812
J-23
1280
CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP ASSISTANCE (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
41,105
40,745
New Mexico
8,344
8,271
New York
95,620
94,784
North Carolina
36,113
35,797
North Dakota
3,356
3,327
Ohio
58,135
57,627
Okleihoma
16,951
16,803
Oregon
15,711
15,574
Pennsylvania
63,376
62,822
Rhode Island
5,304
5,258
South Carolina
19,014
18,848
South Dakota
3,752
3,719
Tennessee
26,513
26,281
Texas
93,177
92,362
Utah
9,568
9,484
Vermont
3,008
2,982
Virginia
33,654
33,360
Washington
27,105
26,868
West Virginia
9,563
9,479
Wisconsin
26,424
26,193
Wyoming
2,466
2,444
Guam
2,418
2,397
Northern Mariana
2,418
2,397
Puerto Rico
18,587
18,424
Virgin Islands
2,418
2,397
Total, Budget
Authority $1,372,000
$1,360,000
J-24
1281
DEPENDENT CARE PLANNING AND DEVELOPMENT PROGRAM
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$205,190
$202,516
Alaska
50,142
50,000
Arizona
190,109
190,375
Arkansas
119,016
117,243
California
1,531,339
1,509,602
Colorado
172,150
172,479
Connecticut
162,773
158,501
Delaware
50,167
50,000
Dist. of Columbia
50,142
50,000
Florida
669,150
661,622
Georgia
334,923
334,559
Hawaii
—
56,735
Idaho
52,934
53,204
Illinois
577,023
565,757
Indiana
280,896
276,325
Iowa
139,505
136,107
Kansas
125,168
122,419
Kentucky
186,289
183,265
Louisiana
212,682
207,739
Maine
61,269
59,928
Maryland
243,490
240,146
Massachusetts
297,565
290,787
Michigan
468,177
458,429
Minnesota
222,256
218,477
Mississippi
129,683
127,836
Missouri
257,629
253,157
Montana
50,199
50,000
Nebraska
79,675
77,727
Nevada
65,833
67,183
New Hampshire
55,118
54,462
J-25
1282
DEPENDENT CARE
PLANNING AND
DEVELOPMENT PROGRAM (continued)
1994
1995 1996
State
Actual
Estimate Estimate
New Jersey
386,418
381,089
New Mexico
78,435
78,162
New York
898,897
880,147
North Carolina
339,487
335,914
North Dakota
50,153
50,000
Ohio
546,513
536,446
Oklahoma
159,350
156,276
Oregon
147,691
146,651
Pennsylvania
595,775
582,347
Puerto Rico
174,729
173,164
Rhode Island
50,242
50,000
South Carolina
178,747
176,204
South Dakota
50,172
50,000
Tennessee
249,244
246,627
Texas
875,928
872,118
Utah
89,944
89,964
Vermont
50,137
50,000
Virginia
316,366
313,955
Washington
254,800
254,172
West Virginia
89,894
88,029
Wisconsin
248,400
243,676
Wyoming
50,112
50,000
American Samoa
2,348
2,290
Gucun
6,683
6,519
Marshall Islands
—
1,511
Micronesia
3,313
Northern Marianas
2,175
2,122
Palau
759
740
Virgin Islands
5,109
4,984
Total, Budget
Authority
$12,939,000
$12,823,000 $0
J-26
1283
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Fcunilies
Refugee emd Entrant Assistance
FY 1996 Budget Page
Appropriation language and explanation of language changes . K-2
Amounts available for obligation K-3
Summary of changes K-4
Budget authority by activity K-5
Budget authority by object K-6
Significant Items in House and Senate Appropriations
Committee Reports K-7
Authorization legislation K-8
Appropriation history table K-10
Justification:
A. General Statement K-12
B. Transitional and Medical Services K-14
C. Social Services K-17
D. Preventive Health K-19
E. Targeted Assistance K-21
F. State Tables K-24
K-1
1284
REFUGEE AND ENTRANT ASSISTANCE
For making payments for refugee and entrant assistance
activities authorized by title IV of the Immigration and
Nationality Act and section 501 of the Refugee Education
Assistance Act of 1980 (Public Law 96-422), [$399,779,000:
Provided, That funds appropriated pursuant to section of 414(a)
of the Immigration and Nationality Act under Public Law 102-394
for fiscal year 1993 shall be available for the costs of
assistance provided and other activities conducted in such fiscal
year and in fiscal years 1994 and 1995] $414,199,000. (Department
of Health and Human Services Appropriaitons Act, 1995.)
[Refugee Resettlement Assistance]
[For necessary expenses for the targeted assistance program
authorized by title IV of the Immigration and Nationality Act and
section 501 of the Refugee Education Assistance Act of 1980 and
administered by the Office of Refugee Resettlement of the
Department of Health and Human Services, in addition to amounts
otherwise available for such purposes, $6,000,000.] (Foreign
Operations, Export Financing, and Related Programs Appropriations
Act, 1995.)
K-2
1285
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Refugee and Entrant Assistance
Amounts Available for Obligation
1994
1995
1996
Actual 1
Appropiriation'
Estimate
Appropri-
ation:
Annual. . . .
$399,778,814
$405,779,001
$414,199,000
Procurement
reduction
pursuant to
P.L. 103-
333
-7,000
Subtotal,
adjusted
appropri-
ation.... $399,778,814
$405,772,001 $414,199,000
Unobligated
balance,
start of
year
2,332,000
Unobligated
balance,
end of year -2,332,000
Unobligated
balance,
lapsing... -10,775,743
Total,
Obligations $389,003,071
2,332,000
-2,332,000
2,332,000
-2,332,000
$405,772,001 $414,199,000
' Includes $6,000,000 for Targeted Assistance, appropriated
in P.L. 103-306.
K-3
1286
SUMMARY OF CHANGES
1995 Appropriation $405,772,001
1996 Request 414.199.000
Net change +$8,426,999
1995 Current
Estimate Base Change from Base
Increases:
Program ;
A. Transitional and
medical services -
to provide FY 1995
level of services
in FY 1996 $264,273,001 +$14,255,999
B. Preventive Health -
To return to traditional
levels of support 5,300,000 +$171,000
Total increases.
+$14,426,999
Decreases:
Program;
A. Targeted Assistance -
to return to traditional
levels of support
Total decreases.
$54,397,000
-$6,000,000
-$6,000,000
Net Change.
+$8,426,999
' Includes $6,000,000 for Targeted Assistance appropriated
in P.L. 103-306.
K-4
1287
Budget Authority by Activity
1994 1995 1996
Actual' Appropriation' Estimate
1 . Transitional
and Medical
Services. $258,279,951 $264,273,001 $278,529,000
2. Social
Services. 80,802,000 80,802,000 80,802,000
3 . Preventive
Health... 5,299,863 5,300,000 5,471,000
4 . Targeted
Assistance 55,397,000 55,397,000 49,397,000
Total, Budget
Authority $399,778,814 $405,772,001 $414,199,000
' Reflects approved reprogranuning of $6 million from
Transitional and Medical Services to Targeted Assistance to
assist with the increased numbers of Haitians and Cubans settling
in Florida.
' Includes $6,000,000 for Targeted Assistance appropriated
in P.L. 103-306.
K-5
1288
Budget Authority by Object
1995
Appropriation
1996
Estimate
Increase
or
Decrease
Other
Services
(Interagency
agreements ,
supportive
services, etc.) 2,900,000
Purchase of
goods and
services
150,000
2,900,000
150,000
Grants ,
subsidies, and
contribu-
tions 402,722,001
Total,
budget
authority by
object $405,772,001
411,149,000
$414,199,000
+$8,426,999
+$8,426,999
K-6
1289
SIGNIFICANT ITEMS IN HOUSE AND SENATE APPROPRIATIONS
COMMITTEE REPORTS
Item
Acrtion to be Taken
FY 1995 House T9FlJittee Report
Targeted Assistance
1. The Conmittee expects
these grants to be awarded to
communities not presently
receiving targeted assistance
because of previous
concentration requirements and
other factors in the grant
formula, as well as those who
do currently receive targeted
assistance grants.
FY 1995 Senate Report
Transitional and Medical
Assistance
1. The Administration for
Children and Families will
comply with the intent of the
Committee .
1. The Committee expects the
Office of Refugee Resettlement
to inform the Committee if
changes in circumstances are
anticipated to provide less
than 8 months of cash and
medical assistance.
1. At this time it is
anticipated that the FY 1995
appropriation, together with
carry-over funds, will support
8 months of transitional and
medical assistance in FY 1995.
K-7
1290
Authorizing Legislation
1995
Amount
Authorized
Refugee and
Entrant
Assistance
Activities;
Section 414 (a) of
the Immigration
and Nationality
Act, as amended
and Section 501
of the Refugee
Education Asst.
Act of 1980
L. Transitional
and Medical
Services . . such sums
Social
Services.
such sums
Preventive
Health. . . . such sums
Targeted
Assistance such sums
1995 1996
Appro- Amount 1996
priation' Authorized Estimate
264,273,001
80,802,000
5,300,000
55,397,000
such sums 278,529,000
such sums 80,802,000
such sums 5,471,000
such sums 49,397,000
Total,
appropriation .
$405,772,001
$414,199,000
Total appropriation
against definite
authorizations. . .
' Includes $6,000,000 for Targeted Assistance appropriated
in P.L. 103-306.
K-8
1291
APPROPRIATION HISTORY TABLE
Budget
Estimate
to Conoress
House
Allowance
Senate
Allowance
ADDr ODr i a t i on
1984
$485,328,000
$541,761,000 $541,761,000
$541,761,000
1985
359,512,000
444,372,000
444,372,000
444,372,000
1986*'
Sequester
Rescission
310,737,000
Deferred
Deferred
421,486,000
-18,123,000
87,551,000
1987
367,915,000
Deferred
Deferred
339,597,000^'
1988
346,933,000^
320,855,000
389,597,000
346,933,000
1989
278,883,000
Deferred
400,000,000
382,356,000^
1990
368,822,000
Deferred
417,356,000
389,758,000
1991
Sequester
368,822,000
Deferred
398,000,000
420,770,000^
-10,146,338
1992
410,630,000
294,014,000
410,630,000
410,630,000
1993
Suppl.
227,000,000
27,000,000
321,750,000
405,114,000
381,481,000
1994
420,052,000
400,000,000
400,000,000
399,778,814^
1995
413,786,000
405,779,000
405,779,000
405,772,000
1996
414,199,000
*' All amounts shown for FY 1986 and later years exclude Federal
Administration which was consolidated into the Family Support
Administration's Program Administration budget activity (the
Administration for Children and Families' Program Direction
account beginning in FY 1992) .
- Under a provision of the Refugee Assistance Extension Act of
1986, P.L. 99-605, the Education Assistance function was
transferred from the Department of Health and Human Services to
the Department of Education. The budget figure shown contains no
amount for Education Assistance.
- The appropriation of $387,000,000 was reduced by $4,644,000
pursuant to P.L. 100-436.
K-9
1292
* The appropriation of $420,770,000 was reduced by $10,140 ooo
pursuant to P.L. 101-517.
J, The appropriation of $400,000,000 was reduced by a rescission
of $221,186 for administrative cost reductions.
K-10
1293
Justification
Office of Refugee Resettlement
1995
Appropriation'
1996
Estimate
Increase
or
Decrease
Transi-
tional and
Medical
Services... $ 264,273,001
Social
Services... 80,802,000
Preventive
Health 5,300,000
Targeted
Assistance. 55,397,000
Total ,
Budget
Authority
$278,529,000
80,802,000
5,471,000
49,397,000
+$14,255,999
+171,000
-6,000,000
$405,772,001
$414,199,000
+$8,426,999
General Statement
The Refugee and Entrant Assistance program is designed to help
refugees and Cuban and Haitian entrants who are admitted into the
United States to become employed and self-sufficient as quickly
as possible. The President's appropriation request of
$414,199,000 for this account represents current law
requirements. No proposed law amounts are included.
Current law appropriation request $414,199,000
Transitional and Medical Services funds support:
o Cash and medical assistance to refugee households that
not categorically eligible for AFDC, Medicaid and SSI
during their first months in the United States. This
progrzun is operated by State refugee program offices.
' Includes $6,000,000 for Targeted Assistance appropriated
by P.L. 103-306.
K-11
1294
o state reimbursements for costs incurred to administer
refugee progreun activities and the provision of assistance
and services to unaccompanied minors.
o Voluntary refugee resettlement agencies, which provide an
equal match for Federal dollars.
The Social Services activity assists refugees in becoming
employed and self-sufficient as rapidly as possible. Services
include English language training, employment-related services,
and a variety of special projects and activities.
The Refugee and Entrant Assistance program also supports programs
which: provide targeted assistance grants to States for counties
which are impacted by high concentrations of refugees; and
provide medical screening of refugees to preserve the public
health and assure that health problems are not a barrier to
achieving self-sufficiency.
In FY 1995 the Committee added bill language to allow funds
appropriated but not spent in FY 1993 to be carried forward into
FY 1994 and 1995. Spending for this provision scored at $14
million, but the Committee reduced the FY 1995 appropriation by
an equal amount. In FY 1996, the Administration has requested
the full amount estimated as necessary to fund the program and
has not factored in the effect of carry-forward language.
The FY 1996 request is based on the assumption that 110,000
persons eligible for the refugee program will be admitted to the
United States during FY 1996, including 90,000 refugees and
20,000 parolees from Cuba.
Ceiling Arrivals
1985
70,000
67,
,167
1986
67,000
60,
,554
1987
70,000
58,
,885
1988
87,500
76,
,733
1989
116,500
106,
,538
1990
125,000
122,
,263
1991
131,000
113,
,734
1992
132,000
131,
,611
1993
120,000
119,
,063
1994
120,000
112,
573'
1995
110,000
1996
110,000
(Estimate)
' Preliminary
K-12
1295
Transitional and Medical Services
Authorizing Legislation - Section 414 of Title IV of the
Immigration and Nationality Act and Section 501 of Title V of the
Refugee Education Assistance Act of 1980. Authorizing
legislation expires September 30, 1997.
Increase
1994
1995
1996
or
A<?tUftl
Appropriation
Estimate
Decrease
$258,279,951' $264,273,001 $278,529,000 +$14,255,999
1996 Authorization: Such sums
Purpose and Method of Operation;
This program provides funds for cash and medical assistance,
unaccompanied minors and voluntary agencies. The cash and
medical assistance programs would continue to be operated under
the State-administered delivery structure. This State-
administered cash and medical assistance program provides
assistance to refugees who are not categorically eligible for
AFDC, Medicaid, or SSI during their first months in the United
States. Assistance may be provided through existing State-
administered welfare programs, as well as through special refugee
resettlement provisions during an initial period of transition
towards self-support. State administrative costs are supported
as well.
Also provided is assistance for unaccompanied minors.
Historically, assistance to unaccompanied minors has been the top
priority for the cash and medical assistance program. This
activity reimburses States for providing foster care to an
unaccompanied minor until the child reaches the age of eighteen.
If a State has established a later age for emancipation from
foster care, reimbursements will be provided until that date.
The Voluntary Agency Program was first funded by Congress in
FY 1979. Under the program, participating national voluntary
refugee resettlement agencies provide an equal match (in cash and
in-kind services) for the Federal contribution. The
participating agencies provide services such as case management,
* The appropriation of $264,330,000 was adjusted as
follows: a reduction of $50,549 for administrative costs
reductions (rescission); $6,000,000 reprograunmed to Targeted
Assistance.
K-13
1296
job development, job placement and follow-up, and financial
assistance to eligible refugees. Participating refugees may not
access public cash assistance.
On a conpeurable basis, funding for this activity over the past
five years has been:
FY 1991 273,248,000
FY 1992 273,252,000
FY 1993 245,811,000
FY 1994 258,279,951'
FY 1995 264,273,001
Rationale for the Budget Request
m FY 1996, $278,529,000, an increase of $14,255,999 over the
compareUOle FY 1995 level, is requested to provide cash and
medical assistance to eligible refugees, including unaccompanied
minors, under both State-administered programs and voluntary
agency progreuns. The request would continue to assist needy
refugees who meet States' financial eligibility requirements for
AFDC but who do not meet the categorical eligibility requirements
for AFDC, Medicaid, or SSI. Approximately $39,000,000 will be
used to support grants under the Voluntary Agency Grant program.
The increase is requested to continue eight months of support,
the Scune level as in FY 1995.
Funding in this account will continue to be focused on programs
which provide specific interventions designed to foster refugees'
self-sufficiency.
' Reflects reprogramming of $6,000,000 from Transitional and
Medical Services to Targeted Assistance.
K-14
1297
Refugee Resettlement: Transitional and Medical Services
Program Data:
FY 1994 FY 1995 FY 1996
Actual Appropriation Recmest
1
Service Grants
Formula 222,640,232 222,273,001 236,529,000
Discretionary 35,639,719 42,000,000 42,000,000
Research —
Demonstration
Development
Training/Technical
Assistance
Evaluation —
Program Support —
Other
Total Program $258,279,951 $264,273,001 $278,529,000
Number of Applicants 60 63 63
Number of Grants
210
207
207
New Starts:
#
2
11
2
$
$2,086,807
$38,350,000
2,000,000
Continuations :
*
208
196
205
$
$256,193,144
$225,923,001
$276,529,000
Contracts :
#
$
$0
$0
$0
' Initial appropriation adjusted as follows: $264,330,000
reduced by: administrative cost reduction (rescission) of
$50,049; reprogramming of $6,000,000 to Targeted Assistance.
K-15
1298
Social Services
Authorizing Legislation - Section 414 of Title IV of the
Immigration emd Nationality Act and Section 501 of Title V of the
Refugee Education Assistance Act of 1980. Authorizing
legislation expires September 30, 1997.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$80,802,000 $80,802,000 $80,802,000
1996 Authorization: Such sums.
Purpose and Method of Operation;
This activity provides Federal funds for State-administered
programs emphasizing employment-related activities. Social
Services assist refugees in obtaining employment and social
adjustment, and achieving economic self-sufficiency as quickly as
possible. Highest priorities are given to English language
training, case management, and job placement. State and local
governments, voluntary agencies, and refugee-based mutual
assistance associations are consulted annually concerning the
effective use of these funds.
Of the funds appropriated, approximately 85 percent is allocated
by formula among the States and the District of Columbia. The
remainder supports special discretionary projects such as
services for Amerasians from Vietnam and former re-education camp
detainees from Vietnam.
Funding for this activity over the past five years has been:
FY 1991 82,951,000
FY 1992 82,952,000
FY 1993 80,802,000
FY 1994 80,802,000
FY 1995 80,802,000
Rationale for the Budget Request;
In FY 1996 the request for social services is $80,802,000, the
scime as the FY 1995 comparable level. With emphasis on job
placement for refugees as soon as possible after their arrival in
the United States, this request, together with a similar emphasis
under the voluntary agency matching grant program, will provide
employment-related and social adjustment services to new and
recently arrived refugees.
K-16
1299
Refugee Resettlement: Social Services
Progreun Data:
FY 1994 FY 1995 FY 1996
Actual Appropriation Request
Service Grants
Formula 68,071,403 68,681,700 68,681,700
Discretionary 12,330,597 11,720,300 11,270,000
Research
Demonstration
Development
Training/Technical
Assistance 350,000 250,000 250,000
Evaluation
Program Support a/ 50,000 150,000 150,000
Other
Total Program $80,802,
,000
$80,802,
,000
$80
,802,
,000
Number of Applicants
374
164
164
Number of Grants
New Starts:
#
$ $8,070,
294
79
,326
$1,650,
283
12
,000
$825,
283
6
,000
Continuations :
/
$ $72,331,
215
,674
$78,752,
271
,000
$79
,577,
277
,000
Contracts :
#
$ $400,
4
,000
$400.
3
,000
$400,
3
,000
a/ Conference contract.
K-17
1300
Preventive Health
Authorizing Legislation - Section 414 of Title IV of the Immigration
and Nationality Act emd Section 501 of Title V of the Refugee
Education Assistance Act of 1980. Authorizing legislation expires
September 30, 1997.
Increase
1994 1995 1996 or
Actual Appropriation Estimate Decrease
$5,299,863 $5,300,000 $5,471,000 +$171,000
1996 Authorization: Such sums
Purpose and Method of Operation;
The Office of Refugee Resettlement recognizes that a refugee's
medical condition may affect the public health as well as prevent a
refugee from achieving economic self-sufficiency.
This activity provides Federal funding to ensure that health
screening, exeuninations , necessary medical follow-up, and subsequent
notifications to States are performed for arriving refugees.
Particular emphasis is placed on follow-up treatment for refugees
screened overseas who have been determined to require additional
medical attention.
These funds have been transferred to the Public Health Service (PHS)
which awards grants to States to provide health screening/assessment
services to refugees. The Centers for Disease Control, PHS,
monitors overseas health screening, examination, and immunization of
refugees, reviews port of entry records, and notifies health
agencies.
Funding for this program over the past five years has been:
FY 1991 5,631,000
FY 1992 5,631,000
FY 1993 5,471,000
FY 1994 5,229,863
FY 1995 5,300,000
Rationale for the Budget Request: I
For FY 1996, $5,471,000 is requested, an increase of $171,000 over
the compareJale FY 1995 level. This increase will restore funds
rescinded in FY 1994 and sustained in FY 1995. The request will
enable the Public Health Service to continue to carry out essential
activities related to the health screening of newly arriving
refugees and to provide Federal support to States for this purpose.
K-18
1301
Refugee Resettlement: Preventive Health
Program Data: FY 1994 FY 1995 FY 1996
Actual Appr opr i a t i on Recmest
Service Grants
Formula
Discretionary
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other 11 5,299,863 5,300,000 5,471,000
Total Program $5,299,863 $5,300,000 $5,471,000
Number of Applicants NA NA NA
NA NA
$ $
Number of Grants
New Starts:
#
$
NA
$
Continuations :
#
$
NA
$
Contracts :
#
$
1
$5,299,863
NA NA
$ S
$5,300,000 $5,471,000
1/ Interagency agreement with Public Health Service.
K-19
1302
Targeted Assistance
Authorizing Legislation - Section 414 of Title
and Nationality Act and Section 501 of Title V
Education Assistance Act of 1980. Authorizing
September 30, 1997.
IV of the Immigration 1
of the Refugee
legislation expires
1994
1995
1996
or
Actual
Appropriation
Estimate
Decrease
$55,397,000 $55,397,000 $49,397,000 -$6,000,000
1996 Authorization: Such sums
Purpose and Method of Operation;
The Targeted Assistance Program (TAP) provides grants to States for
counties which are impacted by high concentrations of refugees and
high dependency rates. States are required by statute to pass on to
the designated counties at least 95% of the funds awarded.
In addition. Congress has historically directed that a portion of
the TAP funds be awarded to address specific impacts, such as those
on the Dade County (Florida) public schools and Jackson Memorial
Hospital (Miami) .
In FY 1994, the Office of Refugee Resettlement directed targeted
assistance funds to areas with large concentrations of refugee and
entrant populations to supplement available services. Services
funded under this program are generally designated to secure
employment for refugees within one year or less. Of the $55.4
million available in FY 1994, $25.5 million was allocated by formula
based on refugee concentrations and dependency rates. Approximately
$4.9 million was awarded to 23 States on a competitive basis to
address special impact problems. The remaining funds were earmarked
by Appropriations Committee report language for Florida for health
care and education in Dade County.
Of the funds appropriated in FY 1995, $6,000,000 was appropriated in
the Foreign Operations Appropriations Act, P.L. 103-306. In
accordance with Congressional intent, these funds were used to
augment the ten-percent set-aside for grants to localities most
heavily impacted by the influx of refugees including Laotian Hmong,
Cambodians, and Pentecostals .
K-20
1303
Fvinding for this program over the past five years has been:
FY 1991 48,794,000
FY 1992 48,795,000
FY 1993 49,397,000
FY 1994 55,397,000 '
FY 1995 55,397,000
Rationale for the Budget Request
The FY 1996 request for this program is $49,397,000, a reduction of
$6,000,000 from comparable 1995 levels. The reduction is consistent
with traditional levels of support for this activity. The amount
requested will be awarded to States to enable counties and other
jurisdictions which have high concentrations of refugees to provide
needed employment services and to address other impacts resulting
from high numbers of refugees.
' Includes $6,000,000 reprogrammed from Transitional and
Medical Seirvices.
K-21
Refugee Resettlement:
Program Data:
1304
Targeted Assistance
FY 1994
FY 1995
Appr<?pri?*ti9n
FY 1996
Reouest
Service Grants
Formula
Discretionary
25
29
,457,300
,939,700
31,457,300
24,939,700
25,
29,
,457,300
,939,700
Research
Demonstration
Development
Training/Technical
Assistance
Evaluation
Program Support
Other
Total Program $55,
397,000*'
$55,397,000*'
$49,
,397,000
Number of Applicants
147
187
62
Number of Grants
New Starts:
#
$
$10
63
41
,939,700
112
50
$6,000,000
$4,
57
35
,939,700
Continuations :
#
$
$44,
22
,457,300
62
$49,397,000
$44,
22
,457,300
Contracts :
0
$0
0
$0
0
$0
*' Of this amount Congress recommends that $19,000,000 support
communities affected as a result of the influx of Cubans and
Haitians diiring the Mariel boat lift.
^ Of this eunount, $6,000,000 was appropriated in the Foreign
Operation Appropriations Act.
K-22
1305
REFUGEE AND ENTRANT ASSISTANCE
CASH AND MEDICAL ASSISTANCE AND UNACCOMPANIED MINORS
1994
1995
1996
State
Actual
Estimate
Estimate
Alabama
$207,
,000
$215,000
$228,000
Alaska 1/
0
0
0
Arizona
3,500,
,000
3,636,000
3,855,000
Arkansas
125,
,000
130,000
138,000
California
62,784,
,000
65,219,000
69,143,000
Colorado
2,500,
,000
2,597,000
2,753,000
Connecticut
2,300,
,000
2,389,000
2,533,000
Delaware
100,
,000
104,000
110,000
Dist. of Col
2,150,
,000
2,233,000
2,367,000
Florida
17,000,
,000
17,659,000
18,721,000
Georgia
3,501,
,000
3,637,000
3,856,000
Hawaii
1,925,
,000
2,000,000
2,120,000
Idaho
500,
,000
519,000
550,000
Illinois
7,700,
,000
7,999,000
8,480,000
Indiana
250,
,000
260,000
276,000
Iowa
2,203,
,457
2,289,000
2,427,000
Kansas
1,200,
,000
1,247,000
1,322,000
Kentucky 2/
0
0
0
Louisiana
940,
,000
976,000
1,035,000
Maine
375,
,000
390,000
413,000
Maryland
2,100,
,000
2,181,000
2,312,000
Massachusetts
9,450,
,000
9,816,000
10,407,000
Michigan
4,750,
,000
4,934,000
5,231,000
Minnesota
6,500,
,000
6,752,000
7,158,000
Mississippi
1,100,
,000
1,143,000
1,212,000
Missouri
2,250,
,000
2,337,000
2,478,000
Montana
127,
,000
132,000
140,000
Nebraska
700,
,000
727,000
771,000
Nevada 3/
275,
,000
286,000
303,000
New Hampshire
300,
,000
312,000
331,000
K-23
1306
REFUGEE AND ENTRANT ASSISTANCE
CASH AND MEDICAL ASSISTANCE AND UNACCOMPANIED MINORS (continued)
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
3,250
000
3,376,000
3,579
000
New Mexico
850
000
883,000
936
000
New York
22,000
000
22,853,000
24,228
000
North Carolina
1,250
000
1,298,000
1,376
000
North Dakota
1,015
000
1,054,000
1,117
000
Ohio
1,600
000
1,662,000
1,762
000
Oklahoma
779
927
810,000
859
000
Oregon
6,539
165
6,793,000
7,202
000
Pennsylvania
5,550
000
5,765,000
6,112
000
Rhode Island
490
000
509,000
540
000
South Carolina
150
000
156,000
165
000
South Dakota
350
000
364,000
386
000
Tennessee
600
000
623,000
660
000
Texas
8,300
000
8,622,000
9,141
000
Utah
1,750
000
1,818,000
1,927
000
Vermont
350
000
364,000
386
000
Virginia
5,700
000
5,921,000
6,277
000
Washington
13,142
000
13,652,000
14,473
000
West Virginia
50
000
52,000
55
000
Wisconsin
1,500
000
1,558,000
1,652
000
Wyoming
35
000
36,000
38
000
Other 4/
46,216
402
43,991,001
44,988
000
Total, Budget
Authority 5/
$258,279
951
$264,279,001
$278,529
000
1/ Alaska operates under an alternative program.
2/ Kentucky operates under an alternative program. .
3/ Nevada operates under an alternrative program.
4/ Voluntary agency matching grant progrcun, Wilson/Fish
projects, and, for FY 1994, funds not awarded to be used to
address any unestimated State costs.
5/ For FY 1994, $6,000,000 was reprogrammed from Transitional
and Medical Services to Targeted Assistance.
K-24
1307
REFUGEE AND ENTRANT ASSISTANCE
SOCIAL SERVICES
1994
1995
1996
State
Actual
Estimate
Estimate
Alabeuna
$163,826
$164,000
$164,000
Alaska 1/
0
0
0
Arizona
729,053
729,000
729,000
Arkansas
94,142
94,000
94,000
California
17,117,932
17,
,118,000
17,
,118,000
Colorado
702,855
703,000
703,000
Connecticut
623,723
624,000
624,000
Delaware
75,000
75,000
75,000
Dist. of Col
498,476
498,000
498,000
Florida
5,183,398
5,
,184,000
5,
,184,000
Georgia
1,590,171
1,
,590,000
1,
,590,000
Hawaii
176,207
176,000
176,000
Idaho
166,697
167,000
167,000
Illinois
2,442,676
2,
,443,000
2,
,443,000
Indiana
209,224
209,000
209,000
Iowa
563,612
564,000
564,000
Kansas
395,479
395,000
395,000
Kentucky
100,000
100,000
100,000
Louisiana
459,538
460,000
460,000
Maine
112,507
113,000
113,000
Maryland
1,377,179
1
,377,000
1
,377,000
Massachusetts
2,021,717
2
,022,000
2
,022,000
Michigan
1,300,919
1
,301,000
1
,301,000
Minnesota
1,338,241
1
,338,000
1
,338,000
Mississippi
75,000
75,000
75,000
Missouri
911,181
911,000
911,000
Montana
100,000
100,000
100,000
Nebraska
402,298
402,000
402,000
Nevada
90,169
90,000
90,000
New Hampshire
102,459
102,000
102,000
K-25
1308
REFUGEE AND ENTRANT ASSISTANCE
V<^wiii.j.iiucu^
1994
1995
1996
State
Actual
Estimate
Estimate
New Jersey
1,445,186
1,445,000
1,445,000
New Mexico
224,296
224,000
224,000
New York
11,844,639
11,845,000
11,845,000
North Carolina
639,693
640,000
640,000
North DcJcota
183,744
184,000
184,000
Ohio
1,091,157
1,091,000
1,091,000
Oklahoma
292,482
292,000
292,000
Oregon
1,071,419
1,071,000
1,071,000
Pennsylvania
1,997,852
1,998,000
1,998,000
Rhode Island
193,254
193,000
193,000
South Carolina
100,000
100,000
100,000
South Dakota
219,451
219,000
219,000
Tennessee
596,808
597,000
597,000
Texas
3,023,514
3,024,000
3,024,000
Utah
315,450
315,000
315,000
Veraont
128,118
128,000
128,000
Virginia
1,115,560
1,116,000
1,116,000
Washington
3,439,987
3,440,000
3,440,000
West Virginia
75,000
75,000
75,000
Wisconsin
875,114
875,000
875,000
Wyoming
75,000
75,000
75,000
Discretionary 4/
12,730,597
12,731,000
12,731,000
Total, Budget
Authority
$80,802,000
$80,802,000
$80,802,000
1/ Alaska operates under an alternative program.
2/ Kentucky operates under an alternative program.
3/ Nevada operates under an alternative program.
K-26
1309
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Violent Crime Reduction Programs
FY 1996 Budget Page
Appropriation language and explanation of language changes. L-1
Amount available for obligation L-3
Summary of changes L-4
Budget authority by activity L-6
Budget authority by object L-7
Authorizing legislation L-8
Appropriation history table L-10
Justification :
A. General Statement L-11
B. Education and Prevention Grants to Reduce Sexual
Abuse of Runaway, Homeless and Street Youth, . . . L-12
C. Community Schools Youth Services and Supervision. . L-13
D. Grants for Battered Women's Shelters L-15
E. Youth Educaiton and Domestic Violence L-16
F. Domestic Violence Hotline L-17
G. Community Economic Partnership Investment Fund . . L-18
L-1
1310
VIOLENT CRIME REDUCTION PROGRAMS
For activities authorized by sections 30401, 40155, 40211,
40241, 40251, and subtitle K, title III of Public Lav 103-322,
$105,300,000, to remain available until expended, which shall be
derived from the Violent Crime Reduction Trust Fund, of which
$72,500,000 shall be for the Community Schools Youth Services and
Supervision Grant Program; $15,000,000 for greu:its for Battered
Women's Shelters; $7,000,000 for Education and Prevention Grants
to Reduce Sexual Abuse of Runaway, Homeless, and Street Youth;
$10,000,000 for Community Economic Partnership Investment Funds;
$400,000 for the National Domestic Violence Hotline; and $400,000
for four model Youth Domestic Violence Education Programs .
L-2
1311
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
Violent Crime Reduction Programs
Amounts Available for Obligation
1994
Actual
1995
Appropriation
1996
Estimate
Appropriation
Real transfer from:
Department of Justice
violent Crime Trust
Fund
Subtota 1 , ad j usted
budget authority ....
Total Obligations . . .
$26.900.000 $105.300.000
$26,900,000 $105,300,000
$26,900,000 $105,300,000
L-3
1312
SUMMARY OF CHANGES
1995 Appropriation $26,900,000
1996 Estimate $105.300.000
Net Change +$ 78,400,000
1995 Current
Estimate Base Change from Base
Increases:
A. Program;
1. Increase in the
Community Schools
Youth Services and
Supervision Program $25,900,000 -(-$46,600,000
2. Implementation of the
Education and Prevention
Grants to Reduce Sexual
Abuse of Runaway, Home-
less, and Street Youth .. +$7,000,000
3. Implementation of the
Grants for Battered
Women's Shelters +$15,000,000
4. Implementation of the Youth
Education and Domestic
Violence Program +$400, 000
5. Implementation of the
Community Economic Partner-
ship Investment Fund .... +$10.000.000
Total increases +$79 , 000 , 000
L-4
1313
SUMMARY OF CHANGES (Continued)
Decreases :
A. Program;
1. Decrease in the authoriza-
tion for the Domestic
Hotline $1,000,000 -$600.000
Total decreases -$600 , 000
Net Change +$78,400,000
L-5
1314
violent Crime Reduction Programs
Budget Authority by Activity
1994
1995
Actual
Appropriation
Education and Pre-
vention Grants to
Reduce Sexual
Abuse of Rvinaway,
Homeless, and
Street Youth
—
Community Schools
Youth Services and
Supervision
$25,900,000
Grants for Battered
Women's Shelters .
Youth Education and
Domestic Violence.
Domestic Violence
Hotline
1,000,000
Community Economic
Partnership Invest-
ment Fund
— — _
__—
Total, budget
authority
$26,900,000
1996
Estimate
$7,000,000
72,500,000
15,000,000
400,000
400,000
10,000,000
$105,300,000
L-6
1315
violent Crime Reduction Programs
Budget Authority by Object
Increase
FY 1995 FY 1996 or
Appropriation Estimate Decrease
Personnel Compen-
sation:
Full-time Perman-
ent $196,000 $252,250 +$56,250
Personnel
Benefits 34,000 44,000 +10,000
Travel 50,000 64,000 +14,000
Printing 10,000 13,000 +3,000
Other Services. 1,512,000 3,015,000 +1,503,000
Supplies 5,000 6,000 +1,000
Equipment 70,000 90,000 +20,000
Grants, subsidies
and contri-
butions $25.023.000 $101.815.750 +$76.792.750
Total, budget
authority by
object $26,900,000 $105,300,000 +$78,400,000
L-7
1316
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1318
APPROPRIATION HISTORY TABLE
Violent Crime Prevention Programs
Budget
Estimate House Senate
Year To Cppcpress Allowance Allowance Appropriation
1994
1995 $26,900,000
1996 $105,300,000
L-10
1319
Justification
Violent Crime Prevention Programs
1995
Appropriation
1996
Estimate
Increase
or
Decrease
Education and Pre-
vention Grants to
Reduce Sexual
Abuse of Runaway,
Homeless, and
Street Youth
Community Schools
Youth Services and
Supervision $25,900,000
Grants for Battered
Women's Shelters ..
Youth Education and
Domestic Violence .
Domestic Violence
Hotline
1,000,000
Community Economic
Partnership Invest-
ment Fund
Total, budget
authority ....
$7,000,000 +$7,000,000
72,500,000
15,000,000
400,000
400,000
+$46,600,000
+15,000,000
+400,000
-600,000
10,000,000 +10,000,000
$26,900,000 $105,300,000
+$78,400,000
General Statement
The Violent Crime Control and Law Enforcement Act of 1994 is a
sweeping measure, strengthening virtually every approach to
fighting crime across the nation. The Violent Crime Prevention
Programs in this account are a response to help balance crime
prevention and law enforcement efforts in communities. They
include programs in the community that will focus on before-and
after-school activities, economic partnerships, education related
to and prevention of sexual abuse of runaway and homeless youth,
and shelter and services to victims of domestic violence,
including battered women.
L-11
1320
Education and Prevention Grants to Reduce Sexual Abuse of
Runaway. Komaless and Street Youth
Authorizing Legislation - Section 316 (c) of the Runaway and
Homeless youth Act, as eunanded.
1994
1995
Appropriation
1996
Estimate
$7,000,000
Increase
or
Decrease
+$7,000,000
1996 Authorization $7,000,000
Purpose and Method of Operations;
The Education and Prevention Grants to Reduce Sexual Abuse of
Runaway, Homeless and Street Youth is a discretionary grant
program open to private non-profit agencies. The Secretary will
give priority to applications from agencies that have experience
in providing services to runaway, homeless and street youth.
Funds may be used for street-based outreach and education,
including treatment, counseling, provision of information, and
referrals for runaway, homeless, and street youth who have been
subjected to or are at risk of being subjected to sexual abuse.
This program is being funded for the first time in FY 1996.
Rationale for the Budget Request
The FY 1996 request for the Education and Prevention Grants to
Reduce Sexual Abuse of Runaway, Homeless, and Street Youth is
$7,000,000, the full authorization for the first year of this
program.
Implementation of this program will result in discretionary
grants being made in the summer of FY 1996. These grants will
provide outreach, education, and referral to runaways and street
youth who have been or are at risk of being sexually abused.
L-12
1321
Community Schools Youth Services and Supervision
Authorizing Legislation - Section 30403 (a) of the Violent Crime
Control and Law Enforcement Act.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Recruest Decrease
$25,900,000 $72,500,000 +$46,600,000
FY 1996 Authorization $103,500,000
Purpose and Method of Operations:
The Community Schools Youth Services and Supeirvision Grants
provides discretionary grants to non-profit community-based
organizations. The program must be operated by a consortium of
service providers.
Funds may be used for supervised sports programs and
extracurricular and academic programs that are offered after
school and on weekends and holidays during the school year and as
daily full- or part-day programs during the summer months.
Programs may include curriculum-based supervised educational
activities, work force preparation, entrepreneurship, cultural
activities, health programs, social activities, arts and crafts,
dance and tutorial or monitoring programs. Funding will go to
serve areas with significant poverty and juvenile delincpaency.
If the appropriation for the program exceeds $20 million in the
fiscal year, then the funds are allocated among the States on the
basis of comparative numbers of children in poverty. The
Secretary then awards grants to community-based organizations
within each State on a discretionary basis from the State's
allocation. If the annual appropriation is less than $20
million, the Secretary awards grants on a competitive basis to
community-based organizations throughout the nation. In awarding
grants, the Secretary of HHS shall give priority to community-
based organizations that demonstrate the greatest effort in
generating local support for programs.
The Federal share of program costs is 75 percent in FY 1995 and
FY 1996, 70 percent in FY 1997 and 60 percent in FY 1998 and
thereafter, the non-Federal share may be cash or in-kind, with
at least 15 percent coming from private non-profit sources.
FY 1996 will be the second year of this program. Funding has
been as follows:
1995 $25,900,000
L-13
1322
Rationale for the Budget Request:
The FY 1996 request for Community Schools Youth Services and
Supervision Grants is $72,500,000. This is an increase of
$46,600,000 over the FY 1995 appropriation.
The increase will provide youth constructive opportunities for
positive, healthy development and develop family and community
supports for those youth. Activities will include tutoring,
mentoring, work force preparation, cultural activities, and
supervised sports as well as access to health care includ'r'.j
counseling and substance abuse treatment.
L-14
1323
Grants for Battered Women ^s Shelters
Authorizing Legislation - Section 310(a) of the Family Violence
Prevention and Services Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Recmest Decrease
$15,000,000 +$15,000,000
FY 1996 Authorization S/
a/ The authorization for the Act is $50,000,000. Of that
amount, $15,000,000 is requested in this account and $32,645,000
is requested in the Children and Families Services account.
Purpose and Method of Operations;
The Grants for Battered Women's Shelters program is a formula
grant program. Grants are made to State agencies designated by
the Governor and Indian tribes.
States must give special emphasis to the support of community-
based projects of demonstrated effectiveness, the primary purpose
of which is to operate shelters for victims of family violence
and their dependents. In addition, emphasis is given to projects
which provide counseling, advocacy and self-help services to
victims and their children.
State domestic violence coalitions and others must be involved in
the decisions to ensure an equitable distribution of funds
throughout the State.
No income eligibility standard may be used as a condition for
receipt of services.
Rationale for the Budget Request;
The FY 1996 request for the Grants for Battered Women's Shelters
program is $ 15,000,000. These funds, along with funds in the
Children and Families Services account will provide immediate
shelter and related assistance to victims of family violence and
their dependents. These funds also will be used to increase
public awareness and prevent family violence.
L-15
1324
Youth Education and Domestic Violence
Authorizing Legislation - Section 317(d) of the Family Violence
and Prevention and Services Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Request; Decrease
$400,000 +$400,000
FY 1996 Authorization $400,000
Purpose and Method of Operations;
The Youth Education and Domestic Violence program is a
discretionary grant or cooperative agreement program. It is
authorized for FY 1996 only.
The statute does not designate eligible entities.
Rationale for the Budget Request;
The FY 1996 request for the Youth Education and Domestic Violence
program is $400,000, the full authorization for this one year
program.
Four model programs for the education of young people about
domestic violence and violence eunong intimate partners will be
selected, implemented, and evaluated in cooperation with the
Department of Education.
Each progreun will address a different audience; primary schools,
middle schools, secondary schools, and institutions of higher
education.
L-16
1325
Domestic Violence Hotline
Authorizing Legislation - Section 316(f) of the Family Violence
and Prevention and Services Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Request Decrease
$1,000,000 $400,000 -$600,000
FY 1996 Authorization $400,000
Purpose and Method of Operations;
The National Domestic Violence Hotline is a cooperative agreement
which will fund, for up to five years, the operation of a
national, toll-free telephone hotline to provide information and
assistance to victims of domestic violence. Counseling and
referral services will be provided 24 hours-a-day, 365 days a
year.
Rationale for the Budget Request;
The FY 1996 reguest for the Domestic Violence Hotline is
$400,000, the full amount authorized. This is a decrease of
$600,000 from the FY 1995 appropriation.
The hotline will provide information and assistance to victims of
domestic violence on a 24 hour-a-day, 365 days a year basis. A
database will be maintained that provides information on services
for victims of domestic assistance, including the availability of
shelters, to which callers may be referred throughout the United
States .
Trained hotline counselors will be available for non-English
speakers and will be accessible to persons who are hearing-
impaired.
The hotline must also publicize the hotline to potential users
throughout the United States.
L-17
1326
PnmTniinitv Economic Partnership Investment Fund
Authorizing Legislation - Section 31132(a) of the Violent Crime
Control and Law Enforcement Act.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Request Decrease
$10,000,000 +$10,000,000
FY 1996 Authorization $45,000,000
Purpose and Method of Operations:
The Community Economic Partnership Investment Fund is a
discretionary program for Community Development corporations and
related agencies.
Of the amount appropriated for National Community Economic
Partnership, 60 percent will be awarded to Community Development
Corporations for the Community Economic Partnership Investment
Fund. The remaining 40 percent will be awarded to upgrade the
management and operating capacities of Community Development
Corporations and to new or emerging Community Development
Corporations to establish, maintain, or expand revolving loan
funds or to make capital investments in new or expanding local
business.
Funds will used to establish non-refundable lines of credit for
the establishment, maintenance, or expansion of revolving loan
funds .
Rationale for the Budget Request;
The FY 1996 rec[uest for the Community Economic Partnership
Investment Fund is $10,000,000. This will be the first year this
program has existed.
Funds will be utilized to finance projects intended to provide
business and employment opportunities for low-income, unemployed
or under-employed individuals, and to improve the quality of life
in urban and rural areas.
Some of the funds also will be used to help the Community
Development Corporations set up revolving loan funds.
L-18
Wednesday, March 29, 1995.
ADMINISTRATION ON AGING
WITNESSES
DR. FERNANDO M. TORRES-GIL, ASSISTANT SECRETARY FOR AGING
ROBERT B. BLANCATO, EXECUTIVE DIRECTOR, WHITE HOUSE CON-
FERENCE ON AGING
ARMANDO D. SAVET, CHIEF FINANCIAL OFFICER
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
DHHS
Mr. Dickey (presiding). The subcommittee will come to order.
Please proceed. Dr. Torres-Gil.
Dr. Torres-Gil. Thank you, I appreciate that. And we know that
things are very busy, sir, and so if I may, I will submit my testi-
mony for the record and simply give you a brief overview and allow
you time for questions.
With me, as you can see on my left, is our Chief Financial Offi-
cer, Armando Savet; the Executive Director of the White House
Conference on Aging, Bob Blancato, and from the HHS Office of
Management and Budget, Dennis Williams. We thank you for your
time.
Mr. Dickey. Thank you for coming.
Opening Statement
Dr. Torres-Gil. I am the Assistant Secretary for Aging, and as
such I have responsibility for administering the programs of the
Administration on Aging. AOA's budget request for fiscal year 1996
is $897,000,000, which is a $20,000,000 increase over the fiscal
year 1995 enacted level. We believe this increase, as I will discuss
momentarily, is a significant step for AOA and its leadership in
promoting home and community based services.
I might just explain that the Administration on Aging and our
authorizing legislation, the Older Americans Act, is now in its 30th
year, and this year we are celebrating its 30th anniversary. This
Act and the programs that we provide are the programs that en-
able older persons or families, persons with disabilities to remain
in their homes and in their communities, and are delivered through
a series of aging network programs, which I will describe briefly.
We also feel that this Act and the programs are an integral part
of responding to the demographics of our aging society, not just be-
cause we have 33 million plus older persons, but by the time I re-
tire, there will be close to twice as many, or approximately 70 mil-
lion older persons. As such, our focus, sir, and concern, is to pro-
vide at the local level a host of home and community based services
that enable persons to stay in their homes and not go into expen-
sive institutional settings such as nursing homes.
(1327)
1328
As part of that, over the past 30 years, the Older Americans Act
has developed a network of services which include 57 State units
on aging in every State and territory, and approximately 657 local
area agencies on aging. We have over 6,000 senior centers, and
over 25,000 service providers. Our programs run the gamut from
information and referral to transportation to care management.
Best known programs are the meals on wheels home-delivered and
congregate meals nutrition programs that provide supportive serv-
ices in the home and at the congregate meal sites.
The increase that we are seeking is $18,600,000, which is tar-
geted to States to enable them to expand and develop their commu-
nity-based systems of long-term care services. In our work and
through our surveys, governors. State units on aging, and local
communities have told us that the greatest priority is to find a way
to better organize, integrate and manage a host of services, not just
our Older Americans Act, but Medicaid waivers for the disabled,
and long-term care in-home supportive services. State funds, and
private sector funds. This $18,600,000 would be targeted to every
State to enable them to build their capacity to better organize, link
together these programs, and therefore allow the consumers to find
it easier to get the services that enable them to stay in their
homes.
In addition, we're asking for a smaller amount, $1,500,000, which
would be targeted to our tribal organizations. We provide grants to
roughly 250, tribal organizations. So they, too, can begin to provide
long-term care for older Indian elders. We are also asking for
$1,500,000 to focus on the needs of the vulnerable elderly, particu-
larly vulnerable to fraud, abuse, and exploitation which is on the
increase among our elders.
We have an agency that is, as we characterize it, a "bottoms- up"
agency. Part of the funds, a small part, will be geared towards our
staff of 194 full-time equivalent positions who oversee this network
at the Federal and regional level. We are also asking for an addi-
tional $500,000 for fiscal year 1996 to close out the White House
Conference on Aging to do the follow-up, publish the reports, meet
with the groups and ensure that there is a follow-up to the great
activities that have occurred. And Mr. Blancato can talk about
that.
In short, Mr. Chairman, we are excited about the role that we
can play and perform, in particular, the principles of the Adminis-
tration on Aging and the Older Americans Act, which is a model
public-private partnership. Our services are all provided at the
local level, involve volunteers, the private sector, and provide a lot
of flexibility to State and local communities.
I might just add that we are also getting prepared for the reau-
thorization of the Older Americans Act later this year, and we're
going to be focusing on additional flexibility for States. As I men-
tioned earlier, we plan to especially focus on the critical need for
home and community based long-term care and to enhance the ca-
pacity of the States to give them a down payment so they can in-
vest in their system so they can be prepared for the demographics
that will be facing us.
So with that, Mr. Chairman, I will stop, and give you the oppor-
tunity to ask questions or raise issues.
I
1329
[The prepared statement and biography of Dr. Fernando Torres-
Gil follow:]
1330
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Statement by the Assistant Secretary on Aging
Mr. Chairman and members of the Subcommittee:
I appreciate this opportunity to discuss with you today the Fiscal
Year 1996 budget request for the Administration on Aging (AoA) .
Our FY 1996 budget request is $897 million, an increase of $20
million from the FY 1995 enacted level. This request provides
funds for programs aimed at improving the quality of life of older
Americans, in particular those individuals with physical and
cognitive impairments that put them at risk of
institutionalization, and at helping them remain independent and
productive. Our request represents the most significant step for
AoA in recent history, for it will provide funds to States for the
enhanced development of infrastructure for the delivery of home and
community-based long-term care for the elderly and the disabled.
I strongly believe that the budget request we are presenting today
is a solid one, built on careful planning as to how we might make
the greatest use of Federal funds if we are to meet the needs of
the nation's burgeoning elderly population. AoA serves older
persons and their families within the framework of the Older
Americans Act. As the focal point in the Federal Government for
serving older persons, AoA works to advance dignity and
independence of older Americans. The service delivery levels
funded by the Administration on Aging will be maintained in FY 1996
and targeted to the needs of socially and economically
disadvantaged older persons, especially the low-income and minority
elderly. The program increases requested will be directed toward
assisting States and Indian Tribes in developing and improving home
and community-based long term-care service systems.
By the year 2030, it is estimated that the number of people aged 60
and older will increase to 89 million, representing 25% of the
total population, while those 85 and older will increase to almost
9 million. AoA recognizes the need to address these demographic
changes. Thus, our focus is not just on serving today's older
persons, but also on working toward a secure and productive future
for the elderly of the 21st century.
Briefly summarized, our FY 1996 budget request will provide funding
for:
• The supf>ort of a natMork of 57 State units, 228 Tribes,
657 Area Agencies on Aging, approximately 6,000 senior
centers and more than 25,000 service providers throughout
the country.
• Over 230 million meals — cUsout half of meal recipients are
low-income elders and 17 percent of recipients are
members of minority groups.
• Supportive services, including over 40 million rides for
physician and pharmacy visits, nutrition and related
activities; over 12 million responses for information and
referrals and access to vital services for seniors and
their families; nearly 10 million personal care services
to elderly in need and about one million legal counseling
sessions.
• Services for the frail elderly, including an additional
1.3 million personal care services and 700,000 reassuring
visits and telephone calls.
Explanation of Increases;
The FY 1996 budget request includes an increase of $18.5 million to
provide grants to all States for developing better in-home and
1331
community-based care eystemB for older persons, particularly those
with disabilities. The focus is on (1) long-term care because it is
a critical issue facing the nation, (2) in-home and community-based
long-term care services because they are the much more preferred
alternative to institutional care and, (3) States and their
communities because they are the proving ground in this country for
building an efficient and cost-effective infrastructure of in-home
and community-based services.
Likewise, an additional amount of $1.5 million is requested for
grants to Indian Tribes to develop demonstration programs in Indian
communities for assessing and developing infrastructures for in-
home and community-based long-term care in order to enhance the
quality of life for older Indians who are struggling to remain
independent .
There is mounting evidence and concern that aibuse, neglect and
exploitation of the elderly are major problems in this country.
The increase of $1.5 million requested for elder tJsuse prevention
represents a meaningful increase in terms of State allocations to
"kick Btarf much more visible and tangible actions from the public
and private sectors. In particular, the funds will help States
respond to the fears and concerns of older persons about their
personal safety. They will help States build relationships with
local aging networks, adult protection service agencies, law
enforcement comnunities and domestic violence programs in reducing
the incidence of crime, violence and abuse of the elderly.
For Program Direction, the amount of $17.4 million is requested
which will support the 194 full-time equivalent positions and
related expenses. In addition to coverage of standard operating
expenses, effective monitoring strategies will be continued to
correct material weaknesses identified in the Federal Manager's
Financial Integrity Act report. We will also continue
implementation of the Information Resources Management plan to
establish AoA's Information Resources Management infrastructure and
maintain the data base for all program information activities.
Proper implementation of this plan will ultimately improve the
quality of information and service to the public.
AoA will play a key leadership role in the proceedings of the White
House Conference on Aging scheduled on Hay 2-5, 1995, in
Washington, D.C. This conference will be the fourth since 1960 and
the last in the 20th century. President Clinton called for this
conference to heighten public awareness of aging issues, identify
problems and develop recommendations that will guide aging policy
into the 2l8t century. The FY 1996 request of $500,000 will be
used to close-out the conference and to prepare, publish and
distribute the report.
The vision of the Administration on Aging is to ensure that the
older Americans (present and future) have an independent,
productive, healthy and secure life. This budget request will
continue to build on the foundation of enhancing AoA's ability to
meet its vision, and to continue to be responsive and effective in
serving our consumers.
Thank you, Mr. Chairman. My colleagues and I will be happy to
answer any question which you and the members of the Subcommittee
may have.
1332
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Biographical Sketch
NAME
POSITION
BIRTHPLACE
AND DATE
EDUCATION
EXPERIENCE
1993-Present
1991-1993
1980-1991
1985-1987
1979-1980
1978-1979
1972-1973
1968-1970
Fernando M. Torres-Gil
Assistant Secretary for Aging
Salinas, California, June 24, 1948
Ph.D., Brandeis University, 1976
M.S.W., Brandeis University, 1972
B.A., San Jose State University, 1970
(Honors - Political Science)
A. A., Hartnell Community College
Salinas, California, 1968
Assistant Secretary for Aging
Professor, School of Social Welfare, Los Angeles,
University of California
Professor of Gerontology and Public Administration,
University of Southern California
Staff Director, Select Committee on Aging,
US House of Rq)resentatives
Special Assistant to Secretary
Department of Health and Human Services
White House Fellow to Secretary
Dq>artment of Health, Education and Welfare
Housing Management Officer, Department of Housing
and Uiban Development, San Francisco, California
Primary and Secondary Teacher
California State Dqnitment of Education
Mini-Corp Migrant Education Program
1333
Mr. Dickey. I appreciate the brevity of your remarks. I really do.
I've sat on this committee now just a number of months, but I've
seen a lot of folks come up here and ask for increases. And I go
through kind of a little discussion. And I want to have that discus-
sion with you, if I may.
Dr. Torres-Gil. Please.
BUDGET INCREASE
Mr. Dickey. We're spending more than we're taking in. Do you
acknowledge that, as a Government?
Dr. ToRRES-GiL. Absolutely.
Mr. Dickey. All right. Your chances of getting an increase are
near zero. Do you understand that?
Dr. ToRRES-GiL. I understand the realities, yes.
Mr. Dickey. Why do you ask for an increase?
Dr. Torres-Gil. I ask for an increase because I think
Mr. Dickey. Even though you know you're probably not going to
get it?
Dr. Torres-Gil. I ask for an increase to at least make the case,
sir, that if there was any opportunity and I know that times are
tough, and there's little or no money, and which I might add, sir,
we deliberately did not ask for increases in services, because we
could make a case that there isn't money and there will never be
enough to serve all those who are in need.
But rather, I thought it would be at least a good effort or a rea-
sonable case to suggest that since we know there will never be
enough to serve all that are in need, we have to meet a balanced
budget, we have to reduce the deficit, that perhaps we could have
a modest amount we could give to the States so that they could do
more with what they have, so that they will not have to depend on
us. I realize that the odds are not good, sir, but this is why we
thought we'd at least make the case for this investment.
Mr. Dickey, Well, let me tell you what it appears to be. It just
is a bureaucratic tradition. And you dare not say that you want
less, because that means you'll even get cut more.
What we've got to do is change our pattern of spending, and
we've got to do it, and in some of these agencies, there's got to be
some leadership. And I think this committee is going to recognize
it, finally, when someone comes in here and says, we understand
what November 8th meant. We understand that cutting spending
first is our primary duty, or we're not going to have any services
to give.
Now, let me tell you what the practical side of it is, so you don't
think this is just some kind of harangue. I'll give you the story of
HUD. I know that's not in this committee, but I have had two vis-
its by people from Arkansas. Have you ever heard of Arkansas?
Dr. Torres-Gil. I think it's a very important State, yes, sir.
Mr. Dickey. I agree with you.
Dr. Torres-Gil. It's a very nice State, too.
Mr. Dickey. Thank you.
Two different groups came from HUD after we passed this $17
billion in cuts, and said, for heaven's sakes, you all cut $7 billion
out of our budget, I think that's what it was. We had no idea it
was coming. And you did it in the most irresponsible of ways.
1334
There are programs that we have that are market enhancement
programs and advertising programs for vacancies and so forth that
you all should have cut, and you could have cut.
And I said, well, how many times did you write to me and tell
me about those programs? Well, we didn't know it was coming. We
didn't know it was coming. HUD let us down, and so forth. And
this has happened all over the place.
What you're doing is you're leaving it to laymen to decide what
to cut in your Department. Because there's a vacuum. Now, I said
this to a psychologist, we met in that little room back there. And
he said, if you all had just told me, I would have come at that. And
said, I'll come back and we'll talk about cuts. But we haven't got
time for that.
Now, what it does, it sets us up for foolishly cutting some pro-
grams and foolishly leaving others in. But the denial is what the
American people are getting as a suggestion, the denial that we
don't have enough money.
Now, if we keep spending, and this is my opinion, Dr. Torres-Gil,
if we keep spending and keep spending and keep spending, and we
have no regard, and all we're trying to do is just say yes to every-
body and not have any friction whatsoever, we're going to end up
with a zero pretty soon. And we're going to have the great depres-
sion, and we're going to have to monetize the debt, and we're going
to have to say across the board, well, we can't do any of this stuff.
But in the meantime, you're going to leave it to us. We act like
we're authorities, and people want us to be authorities, they don't
want us to say, we don't know, because a Congressman, for heav-
en's sake, is supposed to know everything. But we don't.
Now what I would like to ask you, and I've got some more ques-
tions that I need to ask you, but I'd just like to ask you, if we're
going to cut, do you have permission to talk about this is what I
really want to know, but if you do, if we're going to cut some
things, what should we cut in your agency?
Dr. Torres-Gil. Well, sir, I don't think I'm in a position at this
point to talk about cuts, to be honest. I'd like to reinforce some of
the
Mr. Dickey. Do you think I am?
Dr. Torres-Gil. Well, you
Mr. Dickey. Do you think I am?
Dr. Torres-Gil. I think, certainly, sir, we're going to respond to
what the Congress wants, because you'll be making those final de-
cisions. We want to work with you, and I'd like to reinforce, if I
may, the very points that you're making. As a gerontologist, I
study
Mr. Dickey. As a what, a gerontologist?
Dr. Torres-Gil, A gerontologist. I'm also a faculty member at
UCLA, who is going to be in the final four with Arkansas, and I
may have to root for Arkansas at this game. [Laughter.]
What happens today is not going to affect that outcome, sir.
Mr. Dickey. Do you know anything about Big Country? That's
who you all are playing. [Laughter.]
Dr. Torres-Gil. Well, we'll keep that part away from appropria-
tions, but I'll certainly remember you when we're playing Arkan-
sas.
1335
But I just wanted to say, sir, that as a gerontologist, I have to
worry and study not just how we help those who are older today,
but those who we hope will be older tomorrow. It makes it very
clear that if I want to have a good retirement, that in fact we're
going to have to deal with the deficit and balance the budget and
make hard decisions now. You and I are fully in accord. Where we
cut, we may disagree as colleagues, as people who care about the
future. And so we may have to leave it at that.
But how I try to approach my job, sir, as the Assistant Secretary
for Aging, is to essentially say, where can we best make use of our
limited dollars, and how can we do so in a cost-effective way, not-
withstanding whether or not we can get an increase. At least with
the programs and the dollars that I have, I'm trying to get our
States and our providers to put more resources that they have now
into home and community based care. Otherwise, people go into
nursing homes which are far more expensive and will add to the
deficit that much faster.
So I think you and I are in agreement upon what we absolutely
must do over the long term. But perhaps how we address that now,
I feel that this increase, which as I mentioned, thought we'd at
least make a case, is a good, cost effective way to avoid the higher
costs of nursing homes and institutional care.
Mr. Dickey. At least you haven't mentioned the word invest-
ment.
You know, two things that have been said since I've been here
is that everybody's increase amounts to an investment. Secondly,
it amounts to a savings, if we don't do it, it's going to cost us. What
I said one day, and it hasn't reached the press yet, so I'm going
to repeat it, maybe repetition will get to it.
Dr. Torres-Gil. We may have some press here, too.
Mr. Dickey. I hope so. Wherever you are, I'm talking to you.
We can't afford it as a Nation to save any more money if we do
it like we've been doing it. You see, we can't afford to save any
more money. So when people come in here and say, this is an in-
vestment, and this is a savings, we are out of money. We're just
plain out of money. We're going to have to cut. And if we don't cut,
it's going to be done to us.
Now, let me go back. What reason is it that you can't comment
on cuts?
Dr. Torres-Gil. Well, it's not
Mr. Dickey. Be honest with me.
Dr. Torres-Gil. It's not an issue, sir, of not being able to talk
about cuts. My jurisdiction is the Administration on Aging, and in
fact we are reducing our overall costs. Today, for example, I'm
going to a retirement luncheon. We have a number of our employ-
ees who are going to take early outs, and who are going to be leav-
ing. We're reducing our overall work force. We're working with the
States to better track their costs. We have a fairly low overhead.
We've got it down to 2 percent, administrative costs, of our entire
budget.
So I am certainly trying to reduce costs, trying to find ways to
do it at less spending.
1336
Mr. Dickey. Let me say this. Are you free to do this, if we want
to talk about it? Are you free to talk about cuts, or were you told
not to talk about it?
Dr. Torres-Gil. No, I've not been told one way or another. De-
pends, sir, upon which areas you're talking about. Other parts of
the Department of Health and Human Services, I would have to
leave it to other colleagues, and certainly Mr. Williams is here rep-
resenting the Department. My focus today is to talk about the Ad-
ministration on Aging and the Older Americans Act. Within that,
certainly I can respond to any issues of cuts.
Mr. Dickey. Eight hundred and seventy-six million dollars, is
that right?
Dr. Torres-Gil. Yes.
Mr. Dickey. That's what 1995 is?
Dr. Torres-Gil. Nineteen ninety-five, yes.
Mr. Dickey. Okay, if we took a 10 percent cut, where would it
fall?
Dr. Torres-Gil. Where would it fall, sir? If I had to take a 10
percent cut, we would cope with it, we would roll with it, and we
would continue to do our work. But it would come from our serv-
ices, the bulk of our services go to our senior nutrition programs,
roughly $450 million.
Mr. Dickey. Would it cut the meals on wheels?
Dr. Torres-Gil. What it would do is it would cut the amount
that we can give all the different service providers. They then will
have to sort out how they're going to do it. A number of our sites,
for example, instead of serving three meals a day are doing two
meals a day, others are now going to frozen foods so that they can
stretch it out. It would put the onus on our service providers to find
ways to meet the cuts, and in fact, they have been doing so, be-
cause we have not had an increase for quite some time, so inflation
increases alone have been cuts.
We would have to cope with it, sir, and the providers have be-
come pretty creative in how they do so. But they are pretty well
stretched.
Mr. Dickey. Would you have to release some employees?
Dr. Torres-Gil. If we had to, yes, if it was that deep, we may
have to. We're tr3dng to avoid furloughs.
Mr. Dickey. Would that be here in Washington or out there in
the field?
Dr. Torres-Gil. I might add that I'm also doing a reassessment
of our regional offices so I can reduce staff there and better use
who we have, and if I had to pick between one or the other, I would
look very closely at the regional offices, yes.
Mr. Dickey. Were there increases in salaries, the budgetary item
of salaries from 1994 to 1995?
Dr. Torres-Gil. Yes, there were, as required. Armando?
Mr. Dickey. How much — are you a doctor?
Mr. Savet. No, sir.
Mr. Dickey. You're like I am.
Dr. Torres-Gil. He's more important.
Mr. Savet. The increases in our salaries are targeted towards
the mandated salary increases that were voted on for each fiscal
year.
1337
Mr. Dickey. How much?
Mr. Savet. Well, this year we had 3.22 — each locality has dif-
ferent levels of increases.
Mr. Dickey. How much was the official rate of inflation?
Mr. Savet. I believe it's around 3 percent.
Mr. Dickey. Is that right.
Mr. Savet. Yes.
Mr. Dickey. Is it Savet?
Mr. Savet. Savet.
Mr. Dickey. Ten percent would be what— $87,000,000.
Dr. Torres-Gil. It would be roughly $87,000,000. It would be
quite a blow, sir, and it would have a direct impact on the services
we provide.
Mr. Dickey. Okay, tell me this now, because I think this is what
drives it. We're sitting here in Congress, and let's just say we bring
that, and we're halfway into next year, and the $87,000,000 has
taken effect. Who are we going to hear from? What constituents are
going to call us and say, you're mean spirited and you're Repub-
lican, which is the same thing, I think, in some peoples' minds, and
you're harming us. Who will be the people who will be calling us?
Dr. Torres-Gil. Sir, I cannot speculate on who would say those
things or not. Or if those would be valid statements to make. But
I can say that there is a very active network out there, and cer-
tainly as you know, when the senior nutrition programs were being
discussed early on as part of proposed block grants, there were
comments and a lot of inquiries from senior citizens and providers
at the local community level. I know that they worked closely with
the different chairs of the authorizing committees to sort that one
out.
But certainly there are seniors themselves who receive their
services: their family members who depend on it to a certain ex-
tent, the local providers, and the volunteers have a real keen inter-
est in what happens. But certainly none of us would pretend to
have a value judgment on these things.
Mr. Dickey. Are there any unions that give these support serv-
ices?
Dr. Torres-Gil. I don't know the answer, Mr. Dickey. It all de-
pends, because these are administered through each State, and the
local AAAs. They have tremendous discretion on who they contract
with and how they do it. So I don't have a direct answer. I assume
there would be some in some places and not in others.
Armando, do you have any thoughts on that? If you'd like, we
can try to get you the information.
Mr. Dickey. No, these things, these questions are so general, and
I think we're going to have to do the cut. And I'm just saying
Dr. TORRES-GlL. These are good and important questions. So
Mr. Dickey. And I think they're practical questions. They may
not be good questions.
And I tell you what, I want you to understand this. This is no
fun. You know, this is my first year on Appropriations, and I heard
all these glorious accounts about getting on the Appropriations
Committee.
Dr. ToRRES-GlL. I might add, I worked on the Hill for a number
of years with the House Select Committee on Aging. I do not envy
1338
your job and certainly appreciate, at least, that you're trying to
deal with the tough decisions. We may not agree on everjrthing, but
you are dealing with something that we can't avoid.
Mr. Dickey. Well, I just think, see, I just think it's a matter of
trust. And our children and grandchildren, I think it's gotten down
to our grandchildren. Well, look at those kids right there. Those
Idds want us, they want us to have something for them. And if we
keep saying, we want something only for ourselves, and participate
in this me generation type mentality, we're going to have a prob-
lem with our consciences.
That's what I believe. And that's the reason I'm asking these
questions, and that's the reason I'm having to go through what I'm
going through in my votes and having to explain my justifications.
But I'm just saying, those are the things that we have.
BLOCK GRANTS
Now, you mentioned block grants. I have been to our area
aging
Dr. Torres-Gil. Area Agency on Aging, yes, sir.
Mr. Dickey. Agency on Aging in Hot Springs, Arkansas.
Dr. Torres-Gil. We call them AAAs.
Mr. Dickey. Okay, I've been there several times. The last time,
I got a pretty good viewpoint, a pretty good observation of the
meals on wheels. Then I come back up here and we're talking
about it, and then I get that person who I have a lot of respect for
who calls me back and then comes and visits me and says, do not
block grant this money.
Now, I tried to get from here what the problems are. But explain
to me what happens, just, if you can, to the meals on wheels, if we
block grant. Where are the conflicts?
Dr. Torres-Gil. If I may, I think it all depends on how we define
it. There's a lot of confusion out there. I think for some people,
when they say block grants, they envision that you take all these
services or dollars, stick them all in, give them to the State without
any directions about how they're spent.
I think many of our providers are concerned because in the Older
Americans Act today, we have separate parts for congregate meal
sites, senior citizens centers, home delivered meals, and meals on
wheels. We do allow up to 30 percent to be transferred.
So I think people are concerned about that. What I've tried to
clarify regarding the block grants, and in many ways, the Older
Americans Act is already a quasi-block grant, in that we just pro-
vide oversight, directions, and standards, which are the key cat-
egories, and then leave it to the States to decide how they're going
to work it out with their local Area Agencies on Aging (AAAs).
I think people are concerned some that if we even go further and
do that traditional type block grant that they do not know if there
will be dollars put in home delivered meals, congregate services,
transportation supportive services, all of which are good ones.
One of the things that I'm going to look at when we come up
with our reauthorization, is trying to provide even more streamlin-
ing flexibility to States to give them even more leverage, so to
speak, but to still ensure that some of these key services are ad-
dressed, which I think is what peoples' fears are, that they might
1339
lose that special identity. So that's my best guess of what they
might be saying.
Mr. Dickey. Maybe what I'm hearing is wrong, but it seems like
we're crossing lines when they say, we can't compete with the kids,
you see. Now, is that possible that our block granting to that pro-
gram might get intercepted by nutritional programs for kids?
Dr. Torres-Gil. You know, I think it all depends. Under the
original food block grant of the Contract, where it would have
joined senior nutrition and food stamps and school-based lunches
and WIC, I think some comments I had heard was the fear that
it could bring generational conflict with people, for kids and the el-
derly having to compete for fewer dollars. I know that some of the
governors felt they would be put in a tenuous position of trying to
choose between those groups.
I might just add, the last thing we want to do is to promote any-
thing that could be construed as generational conflict. I might just
add at the White House Conference on Aging, in fact, we are re-
quiring the delegates to address issues that affect children, middle
age and seniors to get away from that t3T)e of mind set.
But going back to this, I know that the governors and the Na-
tional Governor Association (NGA) staff have come Ui> with another
way to address it, which they refer to as an aging services consoli-
dation. This would be where you bring together not kids programs
and aging programs, but a variety of programs that are now scat-
tered throughout the Federal Government to give States more op-
portunities and flexibility to use transportation and housing and
food and commodities programs with the programs of the Older
Americans Act, and then provide more flexibility.
So I guess in response to the question of how you cut it, we're
going to look at all those options and work with the authorizing
committees.
USE OF VANS
Mr. Dickey. I've got a question that is of interest to me. Twice
during the campaign, I saw your vans taking people to the polls.
Is that legal?
Dr. ToRRES-GiL. I don't know what you're referring to, sir, could
you give us more details?
Mr. Dickey. Agency on Aging vans twice were delivering people
to the polls. Is that a service that you all traditionally give?
Dr. Torres-Gil. That is not a service we provide. That is not a
service that's authorized. We don't get into politics or lobbying. But
, I can't speak to what's happening there. If you give us some par-
I ticulars, we'll look into it, sir.
^ Mr. Dickey. Just watch out, and don't do anything yet until I
find out whether they were bringing them to vote for me or vote
for my opponent. [Laughter.!
Dr. Torres-Gil. Was this in Arkansas, Mr. Dickey?
Mr. Dickey. Yes, it was.
Dr. Torres-Gil. Should we wait until after the game?
Mr. Dickey. Yes. I like that. [Laughter.]
Dr. Torres-Gil. Hello, Mr. Bonilla, how are you?
Mr. Bonilla. Good morning.
1340
Mr. Dickey. Okay, let me go through the real Chairman's ques-
tions, if I may.
Dr. Torres-Gil. Yes, sir.
AUTHORIZING LEGISLATION
Mr. Dickey. As we understand it, the Administration has been
considering sending to Congress a request for a one-year extension
of the Older Americans Act. When will you send a reauthorization
proposal to Congress? Will you ask for a one-year extension or will
you be proposing substantive changes this year?
Dr. Torres-Gil. We have changed what our initial thoughts
were, and we will be submitting instead a three-year substantive
reauthorization. We're going to ask that it be reauthorized for three
years, and that there be substantive changes in the Act to reflect
a lot of the demographics, the social changes, and issues which you
and I have discussed.
We right now in the Department and the Administration are put-
ting together our proposals and our various options which we plan
to submit and to work closely with the authorizing committees on
the House side and the Senate side. So at this point, we are now
going for a three-year reauthorization with substantive modifica-
tions.
Mr. Dickey. Okay, in the event that there's no legislation that's
been passed by the time that we mark up the 1996 appropriations
bill, do you want the committee to proceed on the basis of the exist-
ing law?
Dr. Torres-Gil. I think the answer would be yes, sir.
Mr. Dickey. Well, I saw a nod over here.
Dr. Torres-Gil. Did my people say yes?
Mr. Dickey. Yes, they said yes.
Dr. Torres-Gil. Then I did the right thing. I'll hear about this
afterwards.
WHITE HOUSE CONFERENCE ON AGING
Mr. Dickey. What is the current status of the White House Con-
ference on Aging? How many delegates will attend the conference?
As you see it, what are the main purposes of the conference, and
why are we having it?
Dr. TORRES-GlL. I'm going to turn that over to Mr. Bob Blancato,
the Executive Director of the White House Conference on Aging.
Mr. Dickey. Is he a doctor?
Dr. Torres-Gil. He is not, sir, but he has more common sense
than I.
Mr. Blancato. And my school was eliminated early on, George-
town.
Mr. Dickey. I see. Go ahead.
Mr. Blancato. The White House Conference is five weeks away.
Five weeks from today, the White House Conference will be under-
way in Washington. At the moment, we have 2,092 delegates that
have been appointed by the governors, by Members of Congress, by
organizations, by the White House and the White House Con-
ference on Aging. The purposes of the conference are two-fold in
nature. One is to produce resolutions to impact national aging pol-
1341
icy for the next 10 years, and secondly, to work to get those imple-
mented over the next 10 years.
Mr. Dickey. How many delegates will attend?
Mr. Blancato. Two thousand ninety-two at the moment. We
may have a few more before we're done.
Mr. Dickey. All right, and the main purpose of the conference?
Mr, Blancato. To produce resolutions to impact national aging
policy for the next 10 years and to work to implement those resolu-
tions.
Mr. Dickey. How much has been appropriated for the con-
ference?
Mr. Blancato. The total amount of appropriation is $4,000,000,
$1,000,000 from fiscal year 1994 and $3,000,000 in fiscal year 1995.
Then we had a carryover fund from the previous White House Con-
ference on Aging of about $1,300,000. That is no-year funds, they
call those. So it's $4,000,000 in appropriated funds.
Mr. Dickey. Are you asking for additional funds for fiscal 1996?
Mr. Blancato. We are. We're asking for $500,000 to complete
the last phase of the process, which is producing and disseminating
the final report which will encompass the recommendations from
over 790 local White House Conference on Aging events in all 50
States that people have participated in around the country so far.
Mr. Dickey. When do you plan to submit the final report of the
conference?
Mr. Blancato. The law allows us 270 days from the completion
of the conference, which is May 5th, 1996. It's our objective to try
and get it before those 270 days. We would aim to try to get it done
by the end of December of 1995.
OLDER population
Mr. Dickey. How many people do Wv have in this country who
are 60 years of age or older?
Dr. Torres-Gil. Sixty years of age or older, approximately 35
million, but please don't hold me to the figures, I'm no good with
numbers. But approximately 13 percent of the U.S. population, 35
million, are 60 years of age and over.
Mr. Dickey. Are all of your funds allocated to States according
to the number of people in the State who are 60 or over?
Dr. Torres-Gil. They are allocated to the State primarily on the
percentage proportion of older persons. But we also have two other
criteria. We have what is called the hold harmless provision. In
other words, we provide a base amount based upon what they were
receiving in 1987, because as you know, many States have fluc-
tuated, there are more retirees, for example, that have moved to
Arkansas
Mr. Dickey. And California.
Dr. Torres-Gil. California, they're going to Nevada, Arizona,
Utah. But I think the east coast people go to Arkansas.
But in either event, we have a hold harmless provision to make
sure that they're not penalized, then the proportion, then a mini-
mum amount for States with small proportions will get something.
That is how it's distributed.
Mr. Dickey. Do you believe that 60 is the appropriate cut-off for
deciding who is an older American?
1342
Dr. Torres-Gil. You've raised one of the great debates, sir. As
you may know, there's no consensus on what constitutes an older
person. In our Title V senior emplojonent program, we use 55. In
Social Security, it's 62 and 65. In housing programs, it's 60. For the
Older Americans Act, it's 60. The American Association of Retired
Persons uses 50. There are great debates.
Certainly, I think we have to look closely at the fact that life ex-
pectancy has increased and we are living longer and more healthy.
But there are many seniors that at earlier ages are more likely to
be disabled. So 60 is the age now, and I think that's an issue that
Congress should discuss in the reauthorization.
Mr. Dickey. How long has that been the age limitation?
Dr. Torres-Gil. Since the beginning of the Act in 1965, sir.
Mr. Dickey. And people are living longer now?
Dr. Torres-Gil. Yes, they are. They've increased their life ex-
pectancy probably at least five years since 1965.
Mr. Dickey. Do you have an opinion of whether that threshold
should be raised?
Dr. Torres-Gil. My opinion — let me see if I can handle this in
a very careful way — I can say that we have to look at both sides.
Not to be disingenuous with you, but there are some good points
to make for looking at higher ages because of the overall increase
in longevity and good health.
On the other hand, what we are seeing, which is very troubling,
that for many groups, we are seeing not just greater problems at
younger ages, even a reduction in life expectancy, persons in rural
areas, minorities, persons who have low income, persons in tough,
physically demanding occupations. So we have to look at both
sides. Again, I can speak on both, but I think the Congress will
have to come to terms with that at some point.
Mr. Dickey. You're doing a good job.
Dr. Torres-Gil. I'm walking a fine line here, sir.
Mr. Dickey. I understand. I've got to ask these other questions,
but I think we ought to go to these other Members of Congress and
see what they have to say right now.
Mr. Bonilla?
Mr. Bonilla, Mr. Chairman, I have no questions at this time,
and would be happy to 3deld.
Mr. Dickey. How are you doing, Mrs. Lowey?
Mrs. Lowey. Hi, nice to see you, sir.
Mr. Dickey, You don't mind if we have a discussion over here,
do you?
Mrs. Lowey. No, that's quite all right.
Mr. Dickey. Well, why don't you lead it, then?
Mrs. Lowey. I just figured you will give us each 20 minutes
equal time, so that's okay.
Mr. Dickey. Go at it. I'm sorry.
Mrs. Lowey. No problem. No problem.
Mr, Chairman, depending on the level, we're all seniors or could
be, except Mr, Bonilla, I don't think you're even near there, right?
Mr, Bonilla, Right.
Dr. Torres-Gil. I'd like to just add, Mrs. Lowey, that for me my
personal definition of what constitutes being old is an3rthing that's
five years higher than my age. So that is my position.
1343
Mrs, LowEY. I'm with you. Welcome, Mr. Secretary, colleagues.
Good to have you today.
And I just want to say personally that I truly appreciate the im-
portant work you're doing. I look forward to the White House Con-
ference on Aging. And Mr. Blancato was kind enough to do the first
mini-conference on aging in my district. And it was well-attended,
we had a large audience, they addressed very serious issues, they
had real concerns.
And in fact, I'm having a series of other meetings in my district,
so that we can be prepared. I really appreciate it, and I look for-
ward to an outstanding conference, and I know that it will be. And
I look forward to continuing to work with you. You have been so
very effective, and I thank you all.
ELDER ABUSE
I'd like to begin with what I think is a very serious issue, and
some people close their eyes to it, but I think it's very real, and
that is the abuse and neglect of seniors. The issue of elder abuse
is particularly important. And in many parts of the country, I hear
that seniors are scared. They feel vulnerable to the escalating vio-
lence in the communities, and that just isn't right, and I know we
all agree.
I've been working with HCFA to look into the establishment of
a national registry of nursing aides crime records, so that we can
be sure that seniors in nursing homes, at least, are not abused by
the very people that they rely on. And I'm pleased that the Admin-
istration has requested funding to deal with elder abuse preven-
tion.
Can you provide the subcommittee with figures on elder abuse?
And I know that's a problem that's widespread. Could you describe
the magnitude of the problem, and could you tell us more about
how these funds will be used? From your testimony, I understand
that the funds will assist States and localities in reducing elder
abuse. But can you tell us more about the types of programs that
these funds might support?
Dr. Torres-Gil. Yes. Let me first say that we know anecdotally
and from newspaper stories and studies that the increase in elder
abuse and crimes against the elderly, domestic violence against
older women, is on the increase. The data, however, is not as accu-
rate, and we don't have the cross national, longitudinal type stud-
ies— ^that's my researcher side — that we would want. I do have one
figure from our IG's office in HHS, that they estimate that one and
a half to two million elderly people are abused annually.
What we are doing, and how we would use these monies, if we're
able to get them — but we'll be creative in terms of whatever we
might have — is several things. We are funding a national resource
center on elder abuse to help us get the data, understand the prob-
lem. One of my focuses as Assistant Secretary are the issues of
women, older women, who are most likely to be abused, to be taken
advantage of, who are the most vulnerable.
To that end, we are using our limited dollars, and we have an
inter-agency agreement with the Administration for Children and
Families in which we are in fact looking at the incidence of domes-
tic violence against older women and how we can best confront it.
1344
I just signed an agreement with the Department of Justice where
we're going to fund $350,000 to look at the issues of crime and vio-
lence against the elderly, and we're going to fund it through the
National Sheriff's Association, so that they can work with local
prosecutors, with protective services, with public guardianships,
with local police departments, to find ways to better protect older
persons. There are a lot of demonstration programs at work.
If we get these monies, we would use them to build upon these
initial efforts and to replicate the best ways to deal with elder
abuse and domestic violence, to use them as seed monies to encour-
age local communities and law enforcement groups to work to-
gether. So we have a number of things we would do. It's only a
modest amount, there's only so much we can do, but it's an issue
that cries out at least for us to begin the process.
Mr. Blancato. If I might add, Mrs. Lowey, and thank you for
your kind remarks, and I would add that I was joined that lovely
day in your district by Portia Porter Mittelman, the Principal Dep-
uty Assistant Secretary for Aging, who's sitting here in the front
row. You may remember that as well.
Mrs. LowEY. Of course.
Mr. Blancato. I would just point out that in our agenda for the
White House Conference on Aging, which is an agenda which in
many ways was driven by the grass roots from the over 790 events
that have gone on around the country, the issues of crime, personal
safety and elder abuse prevention have made it on our agenda,
which ensures that we will be able to provide for the Administra-
tion and for the Congress a better record of information about elder
abuse activities and prevention activities in the country.
We hope to make a substantive contribution in that area through
the White House Conference on Aging.
Mrs. Lowey. You mention, Mr. Secretary and Mr. Blancato, that
the amount of the dollars are small, and given our efforts to reduce
the deficit, you certainly understand that. You mentioned there are
some successful programs going on around the country.
Dr. Torres-Gil. Yes, there are a number of them.
Mrs. Lowey. And I never see any of us do a good enough job in
somehow spreading the good news. And I would hope that we
would showcase the really good experiments and the demonstration
programs, so we're not just continuing to flounder and wasting
these invaluable resources. I think it's so important.
And how are you doing that? How are you getting the word out?
How are you telling communities that may have not had much ex-
perience with this issue about the really good programs?
Dr. Torres-Gil. Thank you for raising that. I might just add,
one of the emphases I took when I came was to ensure that our
discretionary funding program, where a lot of our dollars come
from has an even stronger dissemination, utilization, and replica-
tion feature. All our grantees are required to tell us, "how will you
make sure that the bigger world, the broader community, knows of
what you've done and can replicate it and can use it."
For example, the Safe Corridors program in New York City,
funded by the Administration on Aging, has been very successful,
where the police and volunteers and the elderly know when they
1345
get their social security check, when they're going to the bank, that
they will be safe going down certain streets.
What we are requiring is that they find ways to replicate those
programs, to advertise them, and to use them. Because I know that
we'll never have enough money to do all this, and our intent of
these funds is not for Grovernment or the bureaucracy to have a
new program. That is not at all it; it's to show what works. Now,
take it, disseminate it, use it, replicate it, and let States and local
communities and volunteers in the private sector run with it.
I think we've had quite a good success with a lot of these dem-
onstration programs that are now being used across the country.
We're going to use these approaches with these efforts on the
abuse, violation and exploitation against the elderly.
REGIONAL OFFICES
Mrs. LowEY. Thank you. You mentioned New York City, and I
think we're all aware of the fact that New York City is the only
city in the country with 1 million residents over the age of 65. In
the Government's efforts to downsize and streamline, I hope that
consideration is being given to the population that the Administra-
tion on Aging serves. I would hope that the Aging Administration
considers these facts and that there is no effort and no movement
abroad to do anything about those important local services at the
district offices on aging.
Dr. Torres-Gil. Certainly we will take that into account. I might
just add that AoA in fact has awarded six grants for domestic
abuse prevention against older women, and we are requiring, in ad-
dition to the dissemination and utilization, public education cam-
paigns, again another vehicle to get out the word.
Mrs. LowEY. So there, we shouldn't be concerned about any ef-
forts to eliminate district offices in New York City?
Dr. Torres-Gil. I'm sorry, I may have missed that earlier point.
Are you referring to our regional offices?
Mrs. LowEY. That's right.
Dr. Torres-Gil. Okay, let me step back. That's another issue.
We are looking seriously at our regional office structure, not just
in the Administration on Aging, but also in all of the Department
of Health and Human Services as well as the Federal Government.
It's part of our reinventing Government activities. Because we
know we can't afford everything we have, that we're going to have
to make better use of the limited FTEs, the employees and the dol-
lars that we have.
I am looking very carefully at how I can reduce perhaps some of
the regional offices and make better use of what I have left, and
give them more resources and broader responsibility. I cannot at
this point assure you, Mrs. Lowey, whether or not the New York
office would remain or not remain. This is an issue that we're look-
ing at very closely.
Ultimately, these will be decisions by both the Secretary of
Health and Human Services and the Office of Management and
Budget. I just know that we have to restructure the regional field
presence, because we can't afford to have them all. Unfortunately,
that's probably as good an answer as I can give you.
1346
Mrs. LOWEY. Fm glad you said some, because clearly — clearly in
New York City, in a city where there are over a million seniors,
I'm sure that in your greater wisdom, you wouldn't consider closing
the office that serves so many people.
Dr. Torres-Gil. We will look closely at New York. They have one
of the largest, most active senior populations, and we'll take into
account all factors.
Mrs. LowEY. Was that a hint, Mr. Chairman? A little bit of a
hint. Then I'll just refer to two other things very quickly, because
I appreciate your indulgence.
MEALS PROGRAM
Number one, I understand before I got here that you referred to
the fact that in welfare reform, as a result of a good deal of input
from our seniors, the senior meals programs will no longer be in-
cluded in the block grant. So I'm delighted about that, because sen-
iors in my district were very, very concerned. And in fact, I visited
a couple of senior centers on Monday, and they're still worried
about the reimbursements and will they be able to continue to
serve all those seniors. So I think that was taken care of before.
Dr. TORRES-GiL. I might just add quickly, because we did discuss
it. But in working with Mr. Gingrich's office and Mr. Goodling's of-
fice, the Chair of the authorizing committee, what they have told
me at least is that they will not include the senior nutrition pro-
grams in the proposed food block grant, and they did not.
They will, however, reassess the nutrition programs as part of
the reauthorization of the Older Americans Act. We certainly wel-
come that assessment, and we can then work collaboratively to see
what occurs. What ultimately is decided, of course, will be up to the
Congress.
Mrs. LowEY. Well, I just want to say again for the record that
my knowledge of these programs and my visits to these programs,
which I do regularly, and I know many of us do, gives me a very
clear picture of an invaluable service. And many times, this is the
only hot meal that the seniors get each day. The meal delivery
services are equally important, because many of these seniors just
can't get out of their homes.
And in fact, it's a lifeline to other people. So it serves them phys-
ically, it serves them psychologically, and I would just hope we con-
tinue to give as much support as we can.
PREVENTIVE HEALTH
And the last point I wanted to mention was really to thank you
with regard to the request for, I believe it was $16,900,000 for pre-
ventive services. I authorized a provision in the past year to extend
access to seniors to preventive health services, such as blood pres-
sure and cancer screening, exercise, injury prevention programs.
In fact, it became law in 1992 as part of the amendments. And
again, I urge you to continue to focus on prevention. We're talking
about saving money. And there's no better way than to save money
in health costs.
Mr. Dickey. Are you talking about prevention of aging?
Mrs. LowEY. Well, I'll tell you something. If you can keep people
exercising, if they come to a senior center where they're interacting
1347
with other people, and they're doing all the various learning skills,
learning programs, and they're involved with each other and there
are lectures, there are exercise programs, it does prevent aging.
And I think it's so very important.
Dr. Torres-Gil. I might just add, one of the values that I am
pushing in our programs is that all of us must take more respon-
sibility for ourselves. One of those responsibilities is taking care of
our bodies and our health. So we can live longer, more healthy, and
not have to depend on public services if we take care of ourselves,
so we are pleased to continue that emphasis.
Mrs. LowEY. Right. Well, thank you, Mr. Chairman, and thank
you again. I look forward to the White House Conference on Aging,
and as a result of meetings, I'll be home for the next few weeks,
and I'll give you some more information about the New York sen-
iors, over a million strong.
Dr. Torres-Gil. Great.
Mrs. LowEY. Thank you very much.
Dr. Torres-Gil. Thank you, Congresswoman.
Mr. Dickey. Congresswoman Lowey, your statements about the
senior citizens and the meals on wheels and that sort of thing is
certainly well taken. And I agree with you.
Mrs. Lowey. Thank you, Mr. Chairman.
title IV
Mr. Dickey. Have you been able to meet all of the mandates for
the Title IV spending established by the 1992 amendments to the
Older Americans Act? If not, what adjustments have you had to
make?
Dr. Torres-Gil. We've been able to meet the mandates of most
of those programs, sir, of the requirements from the last time
around. There are a few that I was not able to meet. In particular,
two mandated studies which the Congress had asked be done this
year. We had been asked to do two studies, one on boarding care
facilities and one on home care quality studies.
Unfortunately, the studies were authorized but not appropriated.
Congress didn't provide the monies, and times have been tight. But
what I'm doing this year is working with the Institute of Medicine,
which would be commissioned to do these studies. We're talking
right now about providing them a planning grant so that they can
at least begin the planning for those studies. If I have sufficient
funds or can creatively find the funds in my discretionary program,
then I expect to move forward with those in the near future.
I think that by and large, every one of the things that were
asked of me in last year's appropriations in terms of the intent and
the mandate we've complied with them in one way or another, sir.
With that exception.
Mr. Dickey. Thank you. Why is it important for the agency to
have these discretionary funds at all? Why couldn't you get along
without these?
Dr. Torres-Gil. A good, legitimate question, sir. You're referring
to what is our Title IV discretionary funding program, which is
funded to the tune of approximately $25,000,000. The reason we
need those, I think they are well worth having. It is the only source
of funding in the Federsd Government that allows us to look at the
1348
applied practical aspects of how we can better serve older persons
through model programs, demonstration programs, program eval-
uation, studies, and surveys.
They are not academic or scholarly type studies. That is handled
through the National Institute on Aging and the National Insti-
tutes on Health who do all the real scientific biomedical type re-
search. We use our Title IV discretionary dollars to see what
works, how we can work better, and how we can replicate it.
For example, throughout the country now, every State is develop-
ing coordinated home £uid community-based services with care
management to make better use of what's available, better coordi-
nated. For example, created through an AoA Title IV grant back
in the 1970s is the On Lok in San Francisco, a successful home and
community-based care program for seniors in that community.
So I use those dollars strictly to make it possible for our service
delivery system to work better and to have the technical assistance
and the best practices, so to speak, to do it. It's the only way to,
in a sense, kind of keep atop of the field, and with that, the kind
of growing knowledge and understanding of how to serve an aging
population.
Mr. Dickey. How do you avoid duplication and overlap between
what you are funding and what is being funded by the National In-
stitute on Aging and by the Assistant Secretary for Planning and
Evaluation?
Dr. Torres-Gil. We work very closely with the Assistant Sec-
retary for Planning and Evaluation. We know what they are fund-
ing, they know what we are funding. We work very closely with the
Director of the National Institute on Aging. We have both memo-
randums of understanding. We meet regularly.
As a matter of fact, what we have done in the last two years is
to leverage each others' limited dollars, so Planning and Evalua-
tion, National Institute on Aging (NIA), and AoA, we'll get together
and say, this will cost us $500,000. You kick in a hundred, I'll kick
in two, you kick in three. That way, we do not duplicate, and try
to do it all together.
So I feel comfortable that we're minimizing overlap and duplica-
tion, and I can provide examples of that if you wish.
PROGRAM CONSOLIDATION
Mr. Dickey. What consideration, if any, has the Administration
given to consolidating any of the separately authorized Older
Americans Act programs?
Dr. Torres-Gil. I believe I was referring to that earlier when I
talked about our proposals for the reauthorization. We now have 13
titles, for example, in the Older Americans Act, different services,
and different categories where dollars go. We're going to look very
closely to see if we can reduce those titles, if we can provide more
flexibility in terms of how dollars are transferred within that.
States will have more real discretion, more authority, and more
ability to use limited dollars better. On the other hand, my caveat
to this is that the Older Americans Act must remain whole, that
we must have national accountability and standards and guidelines
so we know where the dollars are going.
1349
Mr. Dickey. Should State Agencies on Aging be given more flexi-
bility in deciding which programs should be funded, rather than
having distinct allotments of funds and grants for certain programs
determined at the Federal level?
Dr. Torres-Gil. Yes, yes, and we'll work together to find the best
way to do that, sir.
Mr. Dickey. Grood answer. If some consolidation of programs
were to take place, what potential savings would occur, and how
would this affect State administration of programs?
Dr. Torres-Gil. I don't know the answer to that. We'll have to
look at it closely. I might just add that at least at the Federal level,
I can't anticipate big, huge dollars, because we are already 'Tbot-
toms-up." The Federal level has a very small staff, very low over-
head. We leave it to the States.
What we're hoping is that if we give them more discretion, they
can better integrate and coordinate. They will save dollars, and can
use those dollars to provide more services. How much and in what
way will be part of our working out these proposals.
Mr. Dickey. But that's not really a savings of dollars as far as
our appropriation process is concerned, is it?
Dr. Torres-Gil. It would not be, you're right, if we let them use
it for other purposes. That's correct.
Mr. Dickey. All right. You all have done well.
Dr. Torres-Gil. I might just add, Mr. Dickey, we're looking for-
ward to having Betty Bradshaw, your delegate, at the White House
Conference on Aging. She's a really neat person.
Mr. Dickey. Thank you. She'll keep you on your toes.
Dr. Torres-Gil. We know her. She's very good.
Mr. Dickey. I want you to know I don't make any bad appoint-
ments.
Dr. Torres-Gil. No, sir.
Mr. Williams, Mr. Blancato, anything you want to add, or cor-
rect?
Mr. Dickey. Thank you all so much.
Dr. Torres-Gil. Thank you for your time. We appreciate the dia-
logue. Have a good day.
Mr. Dickey. Same to you.
[The following questions were submitted to be answered for the
record:]
1350
ADMINISTRATION ON AGING
Targeting o£ Title III Services
Mr. Porter: The justification indicates that an attempt is
made to target the programs on those older persons with the
greatest economic or social need. How is this done at the local
level?
Mr. Torres-Gil: Services are targeted to those older persons
with the greatest economic need and greatest social need by:
• Placing service delivery sites and focal points within
those communities where these older individuals reside;
• Implementing area plan objectives that contain specific
outreach methods for identifying eligible older
individuals;
• Implementing area plan objectives that contain specific
methods for delivering services;
• Assuring that grants and contracts made with service
providers contain agreements on how the provider intends
to satisfy service needs;
• Informing these older individuals of the availability of
services in their communities and neighborhoods.
Mr. Porter: What portion of the people in these programs
would be classified as low- income?
Mr. Torres-Gil: Forty-five percent (45%) of the program
participants are classified as low-income. This information was
compiled from the Title III Program data for fiscal year 1993 (the
last year that we have compiled data), and we do not expect any
significant changes in the fiscal year 1994 data.
Area Agencies on Aging
Mr. Porter: How many Area Agencies on Aging do we have in
this country now?
Mr. Torres-Gil: We have 657 Area Agencies on Aging (AAA).
In addition, there are 11 States and U.S. Territorial governments
with relatively small populations that serve as both the State
Agency on Aging and the Area Agency on Aging as is provided for in
the Older Americans Act.
Mr. Porter: How are they selected?
Mr. Torres-Gil: The Older Americans Act provides criteria by
which State governments designate Planning and Service Areas and
Area Agencies on Aging.
Mr. Porter: On average, how large of a population do they
serve?
Mr. Torres-Gil: The average elderly population per Area
Agency on Aging is about 65,000. However, the elderly population
of an Area Agency on Aging can range from that of New York City, to
a small parish in Louisiana.
Legal Services
Mr. Porter: Do most of these agencies provide legal
services?
Mr. Torres-Gil: Almost all Area Agencies on Aging provide
some form of legal assistance to older people in their Planning and
1351
Service Areas. In many areas the service is provided by local
private attorneys with small contracts. In others, legal assistance
providers for the elderly provide this service.
Mr. Porter; What kinds of legal services do they typically
provide?
Mr. Torres-Gil: The range of services provided is very
broad. It ranges from assistance with wills and probate, and
advance directives through consumer protection, assistance with
problems on Social Security, Medicare, private health insurance,
housing, guardianship and nursing homes. The nature of the service
is decided at the area level, depending on the needs of the
community.
Intrastate Funding Formula
Mr. Porter: What kind of procedure do the States use to
allocate Older Americans Act funds within the State?
Mr. Torres-Gil: States use an intrastate funding formula to
allocate Older Americans Act Title III funds within the State. The
intrastate funding formula must be developed in consultation with
area agencies, and must use the best available population data.
The proposed rule, based on the 1992 Amendments for the
intrastate funding formula must be published for public review and
comment. In developing the intrastate funding formula, the State
and area agencies must take into account such factors as:
• geographical distribution of all older individuals
residing in the State;
• distribution eunong planning and service areas of older
individuals in greatest economic and in greatest social
need;
• particular attention to low-income minority
individuals residing in planning and service
areas.
Mr. Porter: Does this procedure have to be approved by the
Administration on Aging?
Mr. Torres-Gil: Yes. The 1992 Amendments to the Older
Americans Act, for the first time, required the Assistant Secretary
for Aging to review and approve each State's intrastate funding
formula as a condition of approving the State Plan and allocating
Title III funds.
Mr. Porter: What criteria do you use when deciding whether
or not to approve a State's intrastate formula?
Mr. Torres-Gil: We use the criteria provided in section 305
of the Older Americans Act, as amended in 1992. The criteria
requires the Assistant Secretary for Aging to determine if the
State, in submitting its intrastate funding formula for review and
approval , has :
• consulted with the designated area agencies in the State;
• used the best available population data;
• published the proposed intrastate funding formula for
public review and comment, including a descriptive
statement of the formula, a numerical statement, a
listing of the demographic data to be used for each
planning and service area, and a demonstration of how the
intrastate formula allocates Older Americans Act Title
III funds to each planning and service area;
1352
• accounted for the geographical distribution of all older
individuals in the State, the distribution among planning
and service areas older individuals with greatest
economic need, older individuals with greatest social
need, and paid particular attention to low-income
minority older individuals;
Mr. Porter: Do you ever disapprove a State's formula?
Mr. Torres-Gil: No State's intrastate funding formula has
been disapproved to date. Although the statute is clear about the
Assistant Secretary for Aging's authority to disapprove a State's
intrastate formula, the Administration on Aging (AoA) works very
closely with States during the intrastate formula development
period. As a result of having prior knowledge about how the
intrastate formula was developed, and what problems and concerns
were addressed during the public review and comment period, AoA
staff has always been able to recommend that the Assistant
Secretary for Aging approve the intrastate formulas.
Title IV for Home and Community-Based Services
Mr. Porter: What are your plans for the training and
research funds that you are requesting for 1996, including the
additional $18.5 million for developing better in-home and
community-based care systems for older persons?
Mr. Torres-Gil: The Discretionary Funds Programs authorized
by Title IV of the Older Americans Act constitute the major
research, demonstration, training, and development effort of the
Administration on Aging. The request for FY 1996 for Training,
Research and Discretionary activities is $45,134,000, an increase
of $18,605,000 over the FY 1995 appropriation of $26,529,000.
The funding base of $26,529,000 will be utilized to serve
older Americans through applied research, innovative model
progrcuns, better trained personnel, and timely technical assistance
and information to the aging network and others who work with and
on behalf of older persons. Examples of these efforts include: the
National Resource and Policy Centers in long-term care, nutrition,
long-term care ombudsman, elder abuse, housing, and older women; a
National Aging Information Center; two National Resource Centers on
Native T^erican Elders; and career preparation prograims in the
field of aging. The following program priorities will guide the
allocation of these Title IV funds:
1) Expand the current system of consumer directed home and
community-based long-term care for older persons and
others with disabilities;
2) Educate the public and private sector to the growing
problem of malnutrition among the elderly;
3) Explore various approaches aimed at improving the (quality
of life for America's older women;
4) Develop a blueprint for the retirement of the baby-boom
generation;
5) Advance our understanding of how to better serve minority
elderly; and
6) Protect older persons from crime, violence, abuse, and
exploitation.
In the face of increasing demand from older persons and their
caregivers I am asking in FY 1996 only for an additional $18.6
million. These funds will provide the States with the wherewithal
to leverage additional funds; to develop or increase the number of
single entry points or one-stop service centers; to develop
information systems critical for purposes of planning, design and
1353
development, and for accounting to the executive and legislative
branches of government. We believe that information thus obtained
will demonstrate that in-home and community-based services are
essential, not only because they save public funds but also because
it is the choice of older persons at risk.
Mr. Porter: Why did you choose to rec[uest funds for home and
community-based services systems as part of the Title IV
discretionary grant progreun, rather than under the Title III
service program?
Mr. Torres-Gil: The Title IV funding approach was by far the
preferred choice because: (1) the grant awards can be used much
more strategically to leverage and manage funds that address
home and community-based long-term care needs; and (2) it allows
for equal partnerships with each State because, in contrast to
Title III, Title IV awards allow for grants of comparable in amount
to each State.
LEVERAGING
As you know, our overall progreun (including the Title IV
discretionary grant progreun) is designed to help vulnerable older
persons at risk of institutionalization through the provision of
support to individuals and their caregivers. This increase in
Title IV is focused on improving the system (infrastructure) of
in-home and community-based care which provides these services.
We know that there are not enough dollars to meet all the needs and
priorities, but we believe that now is the time to invest in the
capacities of States and local communities with assistance from the
Federal government to continue addressing the demographic trends we
know will occur. We consider this a down payment or investment in
the future of our country's system of in-home and community-based
care.
The dollars in this request would further enable States to continue
building their infrastructure and systems to leverage and manage
other funds (Social Services Block Grant, Medicaid, State General
Revenue) which address the in-home and community-based long-term
care needs of older people and disabled individuals of all ages.
FOCUS ON STATES
We focus on providing funds to the States because they have proven
their innovativeness in creating flexible and responsive systems
which take into account local needs, priorities and resources.
These designs empower local governments, entities, and communities
where individual older people live. States vary in their stages of
development.
These funds would be available to assist States to address their
specific needs. This may include any of the following items:
• Hiring staff to focus specifically on improving the design
and function of their system. This is intended to focus on
enhanced efficiency and effectiveness in responding to the
needs of individuals throughout each State and local
community.
• Investing in training for State staff, local staff and
providers. Cross-training across programs, services, and
administering agencies.
• Developing, designing, implementing or enhancing data
collection, analysis and reporting systems for progrcuns to
provide reliable information about the services delivered and
the people served. This will enhance States' capacity to
target and track the services provided and their capacity to
report program performance and effectiveness, proving that
1354
home and community-based care is a worthwhile investment.
This will also eneUsle compliance with the Government
Performance and Results Act of 1993, which requires
documentation of program performance.
• Providing and gaining information on best practices from
other agencies and States and replicating them in their own
States and local communities.
• Other items States would identify as necessary are:
- networking with the business and private sectors;
- providing public information about accessing services
through enhanced information and assistance; or
- providing enhancements to their case management/care
coordination systems.
Mr. Porter: Since many States have indicated that such
services are in high demand, and since many States have already
developed systems for providing such services, why should more
money be spent on research and demonstration in this area? If there
were to be an increase in funding, why shouldn't we increase the
service components of the program, rather than the
research/demonstration components?
Mr. Torres-Gil: The States and their localities are now in
varying stages of building their in-home and community-based long-
teirm care service systems. Because there are already considerable
knowledge and experience regarding in-home and community-based long
term-care services and its potential as an alternative to
institutional care, this Title IV funding to the States is not an
RSD effort aimed at commissioning more studies, convening more task
forces, and issuing more reports. States need to take stock of
where they are in the process; think hard about where and how, in a
practical world, they could improve their in-home and community-
based long-tertn care service systems; agree on action-forcing plans
to make those improvements happen. The purpose of the Title IV
funding increase is to work with the network of State and Area
Agencies on Aging, and other relevant agencies and organizations,
to accomplish the following:
• Provide training and technical assistance that draw upon
our already extensive base of experience and knowledge in
building in-home and community-based long-term care
systems; duplicate proven best practices and models, well
tested guides and manuals, as well as other useful
products, for the education and training of the State
staff, local staff and provider agencies responsible for
making the systems work.
• Ensure better coordination of programs and agencies within
their States and communities through interagency
agreements, task forces, policy councils and work groups,
with an emphasis on leveraging and managing other funds
(Social Services Block Grant, Medicaid, State General
Revenue) which address the home and community-based long-
term care needs of older people and disabled individuals
of all ages.
• Emphasize that we now recognize it is critical to target
and track the services provided; to report valid and
reliable information on program performance and
effectiveness, and; to demonstrate to critical audiences
of policymakers and taxpayers alike that home and
community-based care is worth the investment.
Mr. Porter: How much of the proposed increase would be
devoted to implementation of the national data base on aging — the
National Aging Program Information System (NAPIS)?
1355
Mr. Torres-Gil: NAPIS is being phased in over a three-year
period, beginning in FY 1995. States vary in their readiness to
collect and process basic information on the services, client
characteristics and costs of the services which they provide under
the Older Americans Act. Therefore, the costs of reporting systems
development, equipment and training must be determined by each
state based on their specific needs. Our approach of providing
Title IV grants to States with the flexibility to apply resources
to this task as well as others, accommodates State variability.
Mr. Porter: What is the status of NAPIS?
Mr. Torres-Gil: As mandated in the 1992 reauthorization of
the Older Americans Act, AoA is improving the accuracy and utility
of progreun reports required from states on the clients, services
and costs of social services provided to the elderly under the
Older Americans Act. AoA has successfully concluded over two years
of cooperative work with all levels of the aging network to design
a program information system with information requirements that
will meet the mandate for more accurate and useful information.
The new reporting requirement will replace a report with up to 30
categories of services with a report with no more than 15
categories of services.
Draft requirements were shared with state governors and the
aging network and were substantially modified based on comments
before the requirements were published in the Federal Register for
formal comment. The reports will be submitted to the
Administration on Aging (AoA) electronically.
AoA is providing software specifications and technical
assistance to build the capacity of states to transmit and utilize
the data. The program information system is being implemented over
a three-year period, from 1995 to FY 1997 to ease the burden on the
aging network. A formal set of tests developed in consultation
with the states will be used to assure that the reporting
requirements meet cost, utility, and other feasibility
expectations. The requirements will be modified as needed in
consultation with the States, HHS's partners in developing the
Older Americans Act program of services for the elderly.
Training and Research
Mr. Porter: For the record, provide a fairly detailed
breakdown, of how the training and research funds were spent in
1994 and of your spending plan for the 19^5 funds.
Mr. Torres-Gil: The tables which follow provide a breakdown
of the 1994 and 1995 Title IV expenditures.
Older Americans Act Research,
Demonstration, and Training:
FY 1994 Title IV Expenditures
National Aging Program Information 2,556,378
System (Mandated) : State Development,
Software Development, etc.
Other Older Americans Support 1,000,591
Contracts: Older Americans Month,
etc.
1356
other Mandated Contracts (Nutrition 1,807,410
Evaluation, SBIR, lOM Ombudsman Study)
Disaster Assistance (Mandated) 387,035
Education and Training Projects in 5,025,673
Aging (Mandated)
Mandated/ Earmarked Demonstration 5,569,591
Projects: Services in Federally
Assisted Housing, Housing Ombudsman,
Foreclosure and Eviction Prevention,
Volunteer Service Credits, Legal
Assistance Support Centers, and
Statewide Legal Hotlines, etc.
National Resource Centers for Long 3,821,861
Term Care, Elder Abuse, Native
American Elders, etc. (Mandated)
Home and Community-Based Care, Aging 3,793,685
and Disability Model Systems, Elder
Abuse, and Other Priority
Demonstrations
National Volunteer Senior Aides/Family 496,941
Friends Projects
Dissemination of Title IV Results and 423,675
Products
Interagency Agreements (Joint Projects 500,000
and Conferences)
White House Conference on Aging Mini- 352,160
Conferences and Other Program
Development Conferences
Rescission 95,000
TOTAL APPROPRIATION: $25,830,000
Older Americans Act Research Demonstration,
and Training: FY 1995 (Estimate)
New Start Projects from FY 95 DFP — Earmarks, 3,800,000
Mandates, etc. : Neighborhood Senior Care,
Pension Counseling Demonstrations, etc
1357
Mandated contract Projects: National Aging 3,257,702
Information Center, Nutrition Evaluation,
SBIR, National Aging Program Information
System
Other Older Americans Act support: Older 911,776
Americans Month, Disaster Assistance Training
Disaster Assistance (Mandated) 532,680
Mandated/ Earmarked Demonstration Projects: 1,697,863
Services In Federally Assisted Housing,
Housing Ombudsman, Foreclosure and Eviction
Prevention, Statewide Legal Hotlines
Home and Community-Based Care, Nutrition, and 6,868,795
Other Priority Demonstrations
National Resource Centers for Long Term Care, 3,382,697
Elder Abuse, Native American Elders, etc
(Mandated)
Education and Training Projects in Aging 3,684,457
(Mandated)
National Volunteer Senior Aides/Family Friends 625,000
Projects
ombudsman Reporting Demonstration 115,000
Interagency Agreements (Joint Projects and 655,500
Conferences)
Program Development Workshops (Title Vll 997,530
Implementation, Nutrition, Housing Managers,
etc. )
Procurement Reduction 105,000
TOTAL APPROPRIATION: 26,634,000
1358
ADMINISTRATION ON AGING
Gerontological Training and Careers Pipeline
Mr. Stokes: According to the opening statement, by the year
2030 it is estimated that the number of people aged 60 and older
will increase to 89 million, representing 25 percent o£ the total
population. Those 85 and older will increase to almost 9 million.
What is the state of the gerontological training and careers
pipeline?
Mr. Torres-Gil: In FY 1994, AoA made 24 awards totalling
approximately $3.4 million to institutions of higher education for
the support of gerontological career education and training.
Continuation funding for these grants in FY 1995 will be at the
same level of $3.4 million.
Mr. Stokes: What percentage of the Administration on Aging's
budget is invested in gerontological training?
Mr. Torres-Gil: The $3.4 million in gerontological career
education and training awards to institutions of higher education
represents about 13% of the overall Title IV FY 1995 budget of $26
million. When such other forms of training program activities as
continuing education, training by resource centers are included,
the total reaches at least $6 million or almost 25% of the Title IV
annual budget.
Mr. Stokes: How much is included in the FY 1996 budget for
this area, and how does it compare to FY 1994 and FY 1995.
Mr. Stokes: Assuming no reductions in the level of Title IV
funding that was proposed as part of the President's FY 1996
budget, gerontological career training support is estimated at $4
million and overall training program activities at $7 million.
This represents a modest increment over FY 1994 and FY 1995.
Should the proposed $18.6 million increase in support to the States
for the improvement of home and community-based long-term care
service systems be approved, a large portion of those funds,
perhaps $4-5 million, would likely be designated by the States for
training purposes.
Applied Research
Mr. Stokes: What progress has the Administration on Aging
made in strengthening and expanding its emphasis in applied
research?
Mr. Torres-Gil: A large share of AoA's funding for the
National Resource and Policy Centers in such important areas as
long term care, elder abuse, older women, nutrition, and the long
term care ombudsman program, as well as the funding of the National
Academy on Aging, is devoted to applied and policy research. AoA
estimates that at least one third of the Centers/Academy budget or
$1.3 million in FY 1994 and $1.5 million in FY 1995 is for applied
research. In addition, AoA will increase its funding base for
applied research projects from $1.2 million in FY 1994 to $1.7
million in FY 1995.
Mr. Stokes: What percentage of the Administration on Aging's
budget is invested in applied research?
Mr. Torres-Gil: The funding for applied research is about
10% of the FY 1994 Title IV budgat and about 12% of the FY 1995
budget .
Mr. Stokes: How much is included in the FY 1996 budget for
the area of research, and how does it compare to FY 1995 and FY
1996?
1359
Mr. Torres-Gil: Overall funding for applied research was
$2.5 million in FY 1994, increasing to an estimated $3.2 million in
FY 1995, and to an estimated $3.5 million for FY 1996.
Legal Hotline
Mr. Stokes: How extensively used is the Administration on
Aging's supported legal services hotline?
Mr. Torres-Gil: With AoA assistance. Statewide Legal
Hotlines have been established in Arizona, Northern California, the
District of Columbia, Florida, Maine, Michigan, New Mexico, Ohio,
Pennsylvania, Puerto Rico, and Texas. An estimated 65,000 older
persons called in to the Statewide Legal Hotlines with legal
questions and problems in FY 1994, the latest period for which data
are availeUsle. An evaluation of Legal Hotline operations showed
that Legal Hotlines and corresponding referral services resolved
81% of callers' legal questions and 50% of their legal problems.
Legal Hotlines are a valuable resource for implementation of the
vulnereUsle elder rights protection programs set forth in Title VII
of the Older Americans Act.
Mr. Stokes: How much is included in the FY 1996 budget for
this initiative, and how does it compare to FY 1994 and FY 1995?
Mr. Torres-Gil: In FY 1994, AoA supported grants to 3 Legal
Hotline projects at a total of $300,000. In FY 1995, AoA has made
continuation awards to the three current projects for a total of
$300,000. Also in FY 1995, we will conduct competitions for new
Legal Hotline projects and for program improvement grants to
existing Hotlines. Depending upon the quality of the applications
and upon the availability of funds, an additional $350,000 to
$600,000 in FY 1995 will be committed to these project awards. The
level of AoA funding for Legal Hotline projects in FY 1996 will,
again, hinge on the funds available under the Title IV budget to
continue the projects which were funded in FY 1995.
Collaboration
Mr. Stokes: What type of collaboration does the
Administration on Aging have with the National Institutes of
Health, the Agency for Health Care Policy and Research, the Health
Care Financing Administration, and the Health Resources and
Services Administration?
Mr. Torres-Gil: To carry out its national level program and
advocacy responsibilities, AoA places major emphasis on developing
collaborative relationships with other Federal agencies aimed at
coordinating diverse and wide-ranging Federal program resources and
linking those resources to the similarly diverse needs of older
persons. Dating back over two decades, AoA has worked hard to
develop and implement a network of Federal Interagency Agreements
to better serve older Americans, combining our resources with those
of the Departments of Housing and Urban Development, Labor, and
Education, the Farmers Home Administration, the Social Security
Administration, and the Corporation for National and Community
Service (formerly ACTION), as well as with other agencies within
the Department of Health and Human Services.
With respect to the DHHS agencies specified, AoA has an
Interagency Agreement with the National Institute on Aging
regarding aging research efforts; collaborative relationships with
the Health Care Financing Administration regarding in-home and
community-based long-term care services, health benefits and
insurance counseling; and joint exchanges of information with the
Health Resources and Services Administration regarding geriatric
training for health professionals.
1360
In-Home and Community-Based Long-Term Care
Mr. Stokes: According to the Congressional Justification,
the Administration on Aging is placing increased emphasis on
in-home and community-based long-term care. Would you elaborate on
this initiative and what it is designed to do? How much of an
investment is there in this program in the FY 1996 Budget Request?
Mr. Torres-Gil: Some of the States are at the cutting edge
in developing a range of long-term care options for older persons
who are at risk, utilizing a mix of Federal, State and private
funds. Other States with limited funds have a much more limited
repertoire. But whatever their progress, the foundation for these
efforts are the Federal, State and local partnerships and the
structures in each State that are based on the vision embedded in
the Older Americans Act.
The Act requires "bottom-up" planning and priority setting by
those who know best at the community level. The States and AoA are
responding to the needs of the ever increasing numbers of people 85
and older, of older individuals with a chronic condition, with one
or more physical or cognitive impairments, those who are at risk of
institutionalization.
The Congress has appropriated $9 million for in-home services
for frail older individuals, including those with alzheimer's
disease and their care givers. In addition the States and local
agencies use a substantial portion of $306 million appropriated for
supportive services to meet the needs of functionally impaired
older individuals. We also view the $94 million appropriated for
home-delivered meals as a critical element in meeting long-term
care needs.
A substantial part of our discretionary grants program is
supporting resource centers that provide technical assistance to
the States and demonstrations that move us somewhat further down
the road.
In the face of increasing demand from older persons and their
caregivers I am asking in FY 1996 only for an additional $18.6
million. These funds will provide the States with the wherewithal
to leverage additional funds; to develop or increase the number of
single entry points or one-stop service centers; to develop
information systems critical for purposes of planning, design and
development, and for accounting to the executive and legislative
branches of government. We believe that information thus obtained
will demonstrate that in-home and community-based services are
essential, not only because they save public funds but also because
it is the choice of older persons at risk.
Welfare Reform
Mr. Stokes: What impact will the overhaul of the welfare
system as passed by the House have on the Administration on Aging's
operations, the progreuns it administers, and the people served by
these progrcims. Elaborate and be as specific as possible?
Mr. Torres-Gil: We are gratified that the Congress did not
adopt the original provision in H.R. 4 including our nutrition
program with food stamps and other nutrition programs in a
consolidated food assistance program. We are also gratified that
Older Americans Act programs are not subject to the alien
restrictions.
As advocates for all elderly persons we are concerned about
the restrictions placed on legal immigrants, who have paid their
Federal, State and local taxes, in relation to such benefits as
SSI, food stamps, Medicaid and Social Services Block Grants. These
restrictions will impact on some areas more than on others; in Los
1361
Angeles County legal immigrants comprise 28 percent of the
population age 65 and older, and 63 percent of all SSI recipients
65 and older.
We have additional concerns about the operational
consequences of this bill. Frequently area agencies bundle funds
in contracts with providers of services. If the Older Americans
Act funds are bundled with Social Services Block Grant funds, for
instance, recipients would have to be queried with respect to their
citizenship status. We fear that this will not only deter legal
immigrant but citizens as well to use needed services.
PROLONGING INDEPENDENCE, NUTRITION FACTOR
Mr. Stokes: How dependent are the elderly on congregate
nutrition services and to what extent does this service factor into
the elderly 's ability to prolong their independence?
Mr. Torres-Gil: Many older people are economically, socially
and nutritionally dependent on congregate nutrition services to
prolong their functional independence at home in their communities.
The AoA-funded national evaluation of the senior nutrition program,
which will be released in August, 1995, will provide more specific
information about the extent to which this service assists in
prolonging older persons' independence.
Many older people are economically dependent on congregate
nutrition services in order to remain in their communities. The
1993 national study. Hunger Among the Elderly: Local and National
Comparisons by Martha R. Burt of the Urban Institute found that
food insecurity affected older people who were officially poor as
well as older people at up to 150% of the poverty line. This study
found that Federal food program users, including those who used
congregate nutrition services, suffered significantly more food
insecurity than non-program users. In addition, the study found
that "health conditions" including multiple medication use and
weight loss were strong causal factors for food insecurity. For
these people, congregate nutrition services are essential and
stretch a senior's limited income, helping to minimize painful
choices between housing, utilities, medications, health care and
food.
Many older people are socially dependent on congregate
nutrition services in order to remain in their communities.
Studies have found that social isolation as well as poverty are
causal negative factors for poor nutritional intake. Also, lack of
social support plays a role in the development of disease and
disability and researchers have shown a relationship between lack
of social support and unhealthy outcomes of illness. Congregate
nutrition services help maintain functional independence for the
depressed older person who is grieving over multiple losses, for
the functionally-impaired older person who with assistance attends
a congregate site and for the well, healthy, older volunteer who
gives back to the community by delivering home-delivered meals.
Many older people are nutritionally dependent on congregate
nutrition services in order to remain in their communities.
Adequate nutritional status is basic to independent functioning.
Anecdotal evidence indicates that for some older individuals, the
congregate meal is their only nutritionally adequate and balanced
meal of the day. A review of research from the late 1970s found
that program participants can receive a significant percentage of
their total nutrient intake and a substantial proportion of the
Recommended Dietary Allowances from program meals. This review
also indicated that when comparing participants to non-
participants, program participants had higher intakes of most
nutrients.
1362
Mr. Stokes; How many meals will be served under the FY 1996
Budget Request level, and how does this compare to FY 1995 and FY
1994?
Mr. Torres-Gil: The Administration on Aging expects to
maintain or slightly increase the total number of meals served in
the congregate and home-delivered nutrition services programs in FY
1996. Although the historical data does not indicate that a
significant increase in the total number of meals served will
occur, it does indicate a shift in meal service from congregate to
home-delivered nutrition services.
The Administration on Aging has not yet finalized data for FY
1994, and not completed data collection for FY 1995. In FY 1993,
there were a total of 228.9 million meals served, 126.4 million in
congregate and 102.5 million in home-delivered. Approximately 45%
of the meals served were home-delivered.
Outreach and Preventive Health
Mr. Stokes: Would you highlight for the committee the
Administration on Aging's major initiatives that are underway in
Outreach and Preventive Health services? To what extent are the
Administration on Aging's preventive health objectives linked to
those of Healthy People 2000; and what progress are we making?
Mr. Torres-Gil: The Administration on Aging has been
involved in a number of preventive health activities. Highlights
include:
• Through its National Eldercare Institute on Health
Promotion, AoA conducted a survey of the State Units on
Aging to learn about the State and Area Agency on Aging
experience with Title IIIF (Preventive Services) of the
Older Americans Act during the first two years of the
program. The information learned by the study will help
States to learn more about what other States are doing
with their IIIF funds and will enable AoA to provide
better guidance and technical assistance in the area of
preventive health services.
• AoA has continued to work with PHS agencies, notably
the Office of Disease Prevention and Health Promotion
and the Centers for Disease Control and Prevention. We
have also collaborated with the National Institute on
Aging and the National Institute on Mental Health. We
also participate in a Federal Working Group on Bone
Diseases with NIH. The highlight of our networking
activities was a visit by the Assistant Secretary on
Aging to the Director of the Centers for Disease
Control and Prevention in Atlanta which was an
opportunity for each to learn more about each other's
programs and areas of mutual interest on which we can
collaborate.
• In September, 1994 AoA co-sponsored a conference in
Atlanta with the Centers for Disease Control and
Prevention, The National Institute on Aging, The
American Association of Retired Persons, and the
Gerontological Society of America. The focus of the
conference was on research and program planning and
implementation in preventive health services.
Representatives of approximately 30 State Units on
Aging and 25 State Health Departments were in
attendance for a productive and information-packed
meeting which included a session for State Units on
Aging and State Health Departments to meet by States or
Regions to discuss prospects for joint activities.
1363
• The White House and the Department of Health and Human
Services is planning a public education campaign to
educate older women on the importance of mammography
and breast self-examinations to screen for breast
cancer. Mammography is a periodic benefit offered
under Medicare and has been shown to reduce the
subsequent incidence of morbidity and mortality for
women over 50.
• AoA and the Health Care Financing Administration
participated in the second annual flu shot education
campaign sponsored by the Department of HHS in the
fall. The campaign focuses on encouraging all older
people to take advantage of the Medicare benefit which
allows them to get free flu shots on an annual basis.
Very young persons and the elderly are most at risk for
complications of the flu. Increasing the number of
protected older people, especially the disabled and
frail, has benefits for the older person as well as
saving the cost of more acute and serious illnesses
that can arise from complications of the flu.
• AoA has long been involved in activities to promote the
safe use of medications through various education
vehicles. Most recently, we have collaborated with the
National Council on Patient Information and Education
(NCPIE) to sponsor a media and print ad featuring Ed
Asner speaking to professionals and consumers urging
the latter to take their medicines in for a check-up
with doctors and pharmacists to prevent complications
that may arise from patients getting prescriptions from
different doctors and pharmacists which may be
duplicative and counterindicated. Another recent
activity was co-sponsorship of a video in which the
Assistant Secretary for Aging appears discussing the
hazards of drug interactions for older persons and
urging older people to be educated consumers and ask
questions of their providers. This video will be
disseminated widely throughout the aging network
beginning this summer, and pharmacists will be
encouraged to set up brown bag medicine reviews to help
seniors to sort out their medicines and eliminate some
of the terrible consequences of medicine misuse and the
elderly.
AoA's preventive health activities support the Healthy People
2000 goals in many ways in the area of breast cancer prevention,
immunizations, and drug safety to name a few. We are making some
progress particularly in the area of immunizations where incidence
of flu was down significantly this year because so many people
received inoculations.
Elderly Abuse and Neglect
Mr. Stokes: How extensive a problem is elderly abuse and
neglect?
Mr. Torres-Gil: Elder abuse is a growing problem. Since
1986, the American Public Welfare Association (APWA) has surveyed
State Adult Protective Services and State Aging Agencies to collect
national information on the number of reports of elder abuse
received. APWA reports that, over the period of 1986 to 1991, all
types of elder maltreatment occurring in individuals' private
residences increased 94%.
Currently elder abuse is defined by State laws and the
definitions vary from State to State. Most States recognize five
types: physical, sexual, emotional, financial exploitation, and
neglect. The true incidence of elder abuse is unknown. Many cases
1364
go unreported. But recent estimates are that, on an annual basis,
between 1.5 and 2.0 million older persons are victims of elder
abuse.
Recognizing that the need for reliable data on the scope and
character of elder abuse is critical, the Administration on Aging
and the Administration for Children and Families jointly funded
last September a three-year National Elder Abuse Incidence Study to
be carried out by the National Center on Elder Abuse. It is
expected that the study will produce information about the types
and scope of elder abuse and about characteristics of victims and
perpetrators .
Mr. Stokes: Specifically what role is the Administration on
Aging playing in addressing this problem?
Mr. Torres-Gil: The 1992 Amendments to the Older Americans
Act established a new Title VII for carrying out vulnerable older
rights protection activities (the program is the successor to a
similar program previously authorized by Title III, Section 303),
including the prevention of abuse, neglect and exploitation of
older individuals, and training for persons involved in serving
victims.
The Prevention of Abuse and Neglect funds are allocated to
States according to the statutory formula outlined in the 1992
Amendments to the Older Americans Act for all Title VII programs.
To help assure that Prevention of Abuse and Neglect Program funds
are used in the most effective manner, the Administration on Aging
has provided Research, Training and Demonstration resources over
the years to support projects to advance our understanding of how
to identify, treat, and prevent elder abuse, and for the
establishment and operation of a National Center on Elder Abuse.
The Center provides training, technical assistance, up-to-date
program information, and reports on best practices to State and
community programs in addressing elder abuse problems.
Funding levels for the past five years have been as follows:
1991 $2,927,000
1992 $4,427,000/
1993 $4,348,000
1994 $4,648,000
1995 $4,732,000
For FY 1996, the President's budget requests $6,232,000 for
the Prevention of Abuse and Neglect Program, an increase of
$1,500,000 over the FY 1995 appropriation. It is intended to
indicate clearly to the aging network, the adult protective
services agencies, the law enforcement community, the domestic
violence constituency, and others that AoA shares their conviction
that crime, violence, and abuse against the elderly is a serious
national concern. Further, it represents, in terms of State
allocations, an order-of-magnitude increase sufficient to kick
start much more visible and tangible public/private sector action.
At the same time, the increase will serve to promote greater public
awareness of abuse, crime and violence against the elderly.
The balance of FY 1996 funds will be used to continue the
educational and training efforts of state and area agencies on
aging to reduce the incidence of elder abuse and neglect. Such
action is especially timely in view of the mounting evidence and
concern that abuse, neglect and exploitation of the elderly are
major problems in the United States.
Grandparents Raising Children
Mr. Stokes: The media has recently been giving increased
attention to "Grandparents Raising Their Grandchildren." To what
extent is this taking place across the country?
1365
Mr. Torres-Gil: Recent U.S. Census Bureau data revealed a
dramatic increase in the number of children in the United States
who were living with, and frequently being raised by, their
grandparents. Over the past 25 years, the number of children
living in households headed by grandparents has increased by more
than 50 percent. In fact, in 1992, there were only 867,000
grandchildren living with grandparents with neither parent present;
in 1993, there were 1,017,000, an increase of 17 percent in just
one year. Numerous factors contributed to this increase, including
alcohol and drug abuse, teenage pregnancy, divorce, joblessness,
incarceration, and AIDS.
A recent report by the American Association of Retired
Persons revealed that the vast majority (68 percent) of grandparent
caregivers are white, and 29 percent are African American.
Proportionately, however, midlife and older blacks are nearly twice
as likely as whites the same age to be grandparent caregivers; 9
percent of blacks were caregivers versus 5 percent of whites.
Mr. Stokes: What programs within the Administration on Aging
provide assistance to grandparents in this regard?
Mr. Torres-Gil: Grandparent caregivers face a wide array of
problems ranging from stress-related illnesses and social isolation
to severe financial difficulties. The Administration on Aging
(AoA) works closely with its nationwide network of State and Area
Agencies on Aging to plan, coordinate, and develop community-level
systems of services that meet the unique needs of individual older
persons. Community services may include congregate and home-
delivered meals, home health care, homemaker and chore services;
information and referral, legal services, outreach services; and a
variety of other services.
Many State and Area Agencies on Aging are recognizing the
need to provide more specialized services for grandparent
caregivers. Many Area Agencies on Aging have created community
interventions such as support groups, counseling, and information
resource centers to assist grandparent caregivers in their
community.
Over the years, AoA has supported many Title IV Discretionary
grants designed to promote intergenerational and multigenerational
projects. Several of these projects targeted grandparent
caregivers. One current grant, the New York Department for the
Aging's Kinship Foster Care Support Project, is developing a
service delivery model linking community volunteers ages 55 and
over with grandparent caregivers for support and services.
White House Conference on Aging
Mr. Stokes: What is the primary focus and objective of this
year's White House Conference on the Aging?
Mr. Torres-Gil: The primary focus of the 1995 White House
Conference on Aging is to develop resolutions to influence national
aging policy now and over the next 10 years and to propose
strategies to implement these resolutions now and over the next 10
years. The Conference is also working to include an
intergenerational focus in its resolutions.
Mr. Stokes: How widely used is the report that the
Conference develops?
Mr. Torres-Gil: We expect the final report of the 1995 White
House Conference on Aging to be the roost widely disseminated report
in the thirty-four year history of White House Conferences on
Aging. Our objective is to produce a report which chronicles the
extensive grass roots pre-conference events which have taken place
in all 50 States with an emphasis on their recommendations. We
also will further prioritize the final resolutions adopted by the
1366
White Houee Conference on Aging. Finally, the report will
also develop a blueprint on implementation of resolutions as
mentioned earlier as one of the objectives of the White House
Conference on Aging. The final report is due within 270 days after
the Conference adjourns (May 5, 1995) but we are confident we can
complete the writing of the report in advance of that.
1367
JUSTIFICATION OF THE BUDGET ESTIMATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration on Aging
FY 1996 Budget Page
Organization chart 1
Appropriation language and explanation of
language changes 2
Amounts available for obligation 3
Summary of changes 4
Budget authority by activity 6
Budget authority by object 7
Administrative costs 8
Significant items in House and Senate Appropriations
Committee reports 9
Authorizing legislation 12
Appropriation history table 15
Justification/Account Summary 16
A. General Statement 17
B. Supportive Services and Centers 19
C. Nutrition Services:
Congregate Meals 21
Home-Del ivered Meals 24
D. In-Home Services for Frail Older Individuals 29
E. Preventive Health Services 31
F. Training, Research and Discretionary Programs 33
G. Grants to Indian Tribes and Native Hawaiians 35
H . Ombudsman 37
I . Elder Abuse Prevention 39
J. Outreach, Public Benefit and Insurance Counseling.... 41
K. Federal Administration 42
L. White House Conference on Aging 44
M. Federal Council on Aging 45
Detail of Full-Time Equivalent ( FTE ) Employment 47
State tables 48
1368
•
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Z s
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Zti
o S
o
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1369
Department of Health and Human Services
Administration on Aging
For carrying out, to the extent not otherwise provided, the Older
Americans Act of 1965, as amended, and section 10404 of Public Law 101-239
(volunteer senior aides demonstration), $897,148,000. (Department of Health
and Human Services Appropriation Act, 1995).
1370
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration on Aging
Amounts Available for Obligation
Appropr i at ion :
Annual
Enacted rescission. . . .
Subtotal, adjusted
appropriation
Real transfer from the
Executive Office of
the President
Subtotal, adjusted
budget authority...
Offsetting
collections from:
Federal funds
Unobligated balance
available,
start of year
Unobligated balance
available,
end of year
Unobligated
balance, lapsing. . . . .
Total obligations.
FY 1994
Actual
$871,282,000
95,000
871,187,000
6,750,000
878,032,000
373,000
162,000
5878,148,000
FY 1995 FY 1996
Appropriation Estimate
S876,994,000 S897, 148,000
0 0
876,994,000 897,148,000
876,994,000 897,148,000
$876,994,000 $897,148,000
1371
SUMMARY OF CHANGES
1995 Comparable Appropriation $876,994,000
1995 Proposed Supplemental -0-
Total Estimated Budget Authority S876,994,000
1996 Request $897, 148,000
Net Change $+20,154,000
Budget Authority
1995 Current
Estimate Base Change from Base
Increases:
A. Built-in
1. Annualization of January, 1995
locality pay raise and related
costs $238,000 +$89,000
2. Provide for January, 1996 2%
pay raise and related costs.... 0 +203,000
3. Increased costs associated with
Federal Health Benefits and FERS 1,630,000 +224,000
4. Annualization of FTE positions
unfunded in FY 1995 +169,000
5. One extra day of pay 0 +42,000
6. Increased costs related to
rental of space, postage and
telecommunications 1,667,000 +176,000
7. Increased costs related to
to printing and reproduction,
supplies, equipment, travel
and transportation of things... 732,000 +35,000
8. Purchase of services to replace
the Working Capital Fund
regional functions 0 +158,000
9. Comparable transfer of two FTE
positions and benefits from the
Working Capital Fund 0 +136,000
10. Hardware upgrades consistent with
IRM rightsizing initiatives.... 0 +100,000
Subtotal, Built-in increases. +$1,332,000
1372
1995 Current
Estimate Base change from Base
B. Program
1. Research, Training and 26,529,000 +18,605,000
Demonstration ^0,3^3, v^^v
2. Grants to Native Americans 16,902,000 +1,500,000
3. Elder Abuse Prevention 4,732,000 ^LSOO.OOO
subtotal. Program increases... +521,605,000
Decreases
A. Built-in:
1. Decrease in Working Capital 823,000 -283.000
Fund '
Subtotal Built-in Decreases... -S283,000
B. Program:
'■ iT.rJ.z::iZZ"^^.'.T.'.'---- 3,000,000 .2.500^
Subtotal Built-in Decreases... -$2,500,000
, , +S20, 154,000
Total Increases
1373
Budget Authority by Activity
(dollars in thousands)
FY 1994
FY 1995
FY 1996
Actual
ADorooriation
Estimate
1.
Supportive Services
$306,709
375,809
$306,711
375,809
$306,711
2.
Aging Congregate Meals
375,809
3.
Aging Home-delivered
Meals
93,665
7,075
94,065
9,263
94,065
4.
Aging In-Home Services
9,263
5.
Preventive Health
17,032
16,982
16,982
6.
Training, Research,
and Discretionary
26,057
26,529
45,134
7.
Grants to Indian
16,877
4,370
16,902
4,449
18,402
8.
Aging Ombudsman
4,449
9.
Aging Elder Abuse
4,648
4,732
6,232
10.
Outreach, Public
Benefit and Insurance
2,000
1,976
1,976
11.
173
176
226
12.
Federal Administration
15,990
16,400
17,399
13.
White House Conference
993
3,000
500
Subtotal
$871,398
$876,994
$897, 148
Advocacy Services
6,750
0
0
Total, Budget Authority
$878,148
$876,994
$897,148
Total, FTE
189
192
194
1374
Budget Authority by Object
Total Number of Full-time
Permanent Positions
Total Compensable Workyears;
Full-time equivalent employment...
Full-time equivalent of
overtime and holidays hours
Average SES Salary
Average GS Gr&de
Average GS Salary
Personnel Compensation:
Full-time permanent
Other than full-time permanent
Other personnel compensation
Total
Personnel Benefits
Travel and Transportation of
Persons
Transportation of Things
Rent, Communications & Utilities:
Rental payments to GSA
Communications, utilities,
E, miscellaneous charges
Printing and Reproduction
Other Services:
Project contracts
Other Services
Supplies and Materials
Equipment
Grants, Subsidies and Contributions.
Total, Budget
Authority by Object
FY 1995
Appropriation
192.0
0.4
$101,708
13.4
S55,021
FY 1996
Estimate
194.0
0.4
$102,583
13.3
$56,398
$10,374,000 $11,294,000
212,000 276,000
142,000 152,000
$10,728,000 $11,722,000
1,630,000 1,874,000
359,000
60,000
395,000
10,000
Increase
or
Decrease
+2.0
0.0
+ S875
-0.1
+$1,377
^$920,000
♦64,000
+10,000
^S994,000
+244,000
+36,000
-50,000
1,373,000 1,577,000 +204,000
294,000 296,000 +2,000
186,000 152,000 -34,000
5,546,000
2,385,000
3,601,000
1,894,000
-1,945,000
-491,000
60,000 100,000 +40,000
67,000 172,000 +105,000
854.306.000 875.355.000 +21.049.000
$876,994,000 $897,148,000 +$20,154,000
1375
ADMINISTRATION ON AGING
Administrative costs
FY 1995
Estimate
(11.1) Full-Time Permanent $10,374,000
(11.3) Other than Full-Time
Permanent 212, 000
(11.5) Other Personnel
Compensation 142 . OOP
Subtotal ,
Personnel Compensation 10,728,000
(12.1) Civilian Personnel
Benefits 1,630,000
(21.0) Travel 359,000
(22.0) Transportation of Things.... 60,000
(23.2) Rental Payments to Others 0
(23.3) Communications, Utilities
and Miscellaneous Charges... 294,000
(24.0) Printing and Reproduction... 186,000
(25.1) Consulting Services 5,546,000
(25.2) Other Services 2,385,000
(26.0) Supplies and Materials 60.000
Total S21,248,000
FY 1996
Estimate
$11,294,000
276,000
152.000
11,722,000
Change
920,000
64,000
10.000
994,000
1,
,874,
,000
244,
,000
395,
,000
36,
,000
10,
,000
0
-50,
,000
0
296,
,000
2,
,000
152,
,000
-34,
,000
3,
,601,
,000
-1,
,945,
,000
1,
,894,
,000
-491,
,000
100,
,000
40,
,000
$20,
,044,
,000
-SI,
,204,
,000
1376
Significant Items in House and Senate
Appropriation Committee Reports
ITEMS
1995 HOUSE REPORT
Grants to Indian Tribes
1. The Committee expects the Department
to be prudent in awarding new grants
under this program so as to ensure
that existing grantees' grants are not
reduced in order to fund new grants.
Training, Research
and Special Reports
1. AoA is encouraged to use Title IV
funds to train more persons in the
field of aging to respond to a rapidly
growing elderly population. Moreover,
the training and education funds
should strengthen the capacity of
higher education, institutions to
provide gerontological training,
thereby assuring a long-term
commitment to personnel development in
the field of aging. AoA should also
emphasize the need for and employment
of qualified personnel trained and
educated in the field of aging.
AoA is urged to increase support for
applied research in order to focus on
problems and challenges confronting
older Americans and their families and
to strengthen service-delivery
programs for older Americans. Only
minimal funding for such research has
been provided during the past decade,
with a resulting lack of research
based data available to better
understand these issues and guide
agencies in program development.
No new Title VI grants will be
awarded this year. AoA will
not be issuing an announcement
for new awards since the current
grantees are in the fiscal year of
their three-year project cycle.
AoA has a sustained record of
supporting, through competitive
grant awards, the development and
improvement of gerontological
training programs to prepare
persons for careers in the field
of aging. Beginning in FY 1994
and continuing through FY 1995,
AoA made twenty-five awards to
HBCUs, Hispanic centers of
gerontology, community colleges,
and other institutions of higher
education totalling about S6
million for gerontology program
report .
Through the support of field-
initiated research projects and
of national policy/resources
centers, AoA will in FY 1995
increase its funding of applied
research focused on the problems
and challenges confronting older
Americans.
1377
The Committee urges that AoA continue
to fund the existing Statewide legal
hotlines for older Americans for which
current funding is scheduled to expire
at the end of fiscal year 1994.
Furthermore, the Committee urges AoA
to provide sufficient funds in fiscal
year 1995 to maintain the existing
level of operation for other ongoing
legal hotlines. In addition, the
Committee calls upon AoA to fund at
least six new Statewide legal hotline
programs in fiscal year 1995, with
preference to States with a high
percentage of older persons. It is
recommended that some of these legal
hotlines be operated by legal services
programs, bar associations, and law
schools.
The Administration on Aging
will include in its FY 1995
Discretionary Funds Program
Announcement a priority area
calling for applications from
qualified applicants to compete
for grant awards for projects
that establish new or improve
existing legal hotlines.
The Committee notes that the
amendments to the Older Americans Act
in 1992 directed the Secretary to
arrange for two studies focusing on
the quality of health care for older
citizens: (1) the quality of services
provided within board and care
facilities; (2) the quality of home
and community-based care. Because
health care reform increases the
importance of having this information,
the Committee encourages the AoA to
arrange for these studies.
The Administration on Aging is
considering a variety of
options, including collaborationE
with other interested Federal
agencies, for undertaking the
studies on (1) board and care
facilities and (2) the quality
of home and community-based care.
1995 SEWATE REPORT
Training. Research
and Special Projects
The Committee notes that AoA intends
to focus some of its research funds on
home and community-based care and
long-term care. In this regard, the
Committee directs that S2, 000, 000 be
used to carry out the Neighborhood
Senior Care Program as authorized in
the Older Americans Act
Reauthorization .
The Administration on Aging will
include in its FY 1995 Discretionary
Funds Program Announcement a priority
areas calling for applications from
qualified applicants to compete for
Neighborhood Senior Care Program grant
awards.
1378
The Committee encourages AoA to use
funds to train more personnel in the
field of aging to respond to a rapidly
growing elderly population. The
Committee urges AoA to expend part of
its funds for career preparation and
other instructional programs in
gerontology, and encourages that funds
institutes that serve the needs of
minority students in order to provide
education and training to other
students for careers in the field of
aging. Moreover, the Committee urges
AoA to work closely with organizations
representing these institutions, as
well as organizations representing
these institutions, as well as
organizations representing other
higher educational institutions with
interest in gerontological activities.
AoA has a sustained record of
supporting, through competitive grant
awards, the development and
improvement of gerontological training
programs to prepare persons for
careers in the field
of aging. Beginning in FY 1994
and continuing through FY 1995,
AoA made twenty-five awards to
HBUCs, Hispanic centers of
other institutions of higher
education totalling about $6
million for gerontology program
support .
1995 CONFERENCE COMMITTEE REPORT
Training. Research
and Special Projects
1. The House and Senate Conferees
earmarked $1,500,000 for national
legal services support and State Legal
Hotline demonstration projects. In
addition, the FY 1995 Appropriation
Committee Conference Report provided
SI, 500, 000 for the Neighborhood Senior
Care program and $625,000 for the
Family Friends Program.
The Administration on Aging
will include in its FY 1995
Discretionary Funds Program
Announcement a set of priority
areas calling for applications
from qualified applicants to
compete for grant awards in
each of the prescribed funding
areas.
1379
Authorizing Legislation
(dollars in thousands)
1995
Amount
Authorized
1995
Appropriation
1996 1996
Amount Budget
Authorized Estimate
Programs for
the Elderly:
(1)
(2)
(3)
(4)
(5)
Supportive
Services and
Centers,
[Sec. 303 (a) (1)
of the Older
Americans
Act of 1965,
as amended] . . . .
Preventive
Health Services
[Sec. 303 (f)
of the Older
Americans Act
of 1965, as
amended ]
Aging Ombudsman
Activities
[Sec. 702(a)
of the Older
Americans
Act of 1965
as amended]
Elder Abuse
(Sec. 702(b)
of the Older
Americans
Act of 1965,
as amended ] . .
Nutrition:
a) Congregate
Meals (Sec.
303(b)(1)
of the Older
Americans
Act of 1965,
as amended ] . .
b) Home-delivered
Meals (Sec.
303(b) (2) of the
Older Americans
Act of 1965,
as amended ]
a/
a/
a/
a/
S306,711
16,982
4,449
4,732
a/
a/
a/
a/
$306,711
16,982
4,449
6,232
a/
a/
375,809
S94,065
a/
a/
375,809
$94,065
1380
1995
Amount
Authorized
1995
Appropriation
1996
Amount
Authorized
1996
Budget
Estimate
(6)
(7)
(8)
(9)
In-Home Services
for the Frail
Elderly (Sec.
303(d) of the
Older Americans
Act of 1965,
as amended]
Outreach, Public
Benefit and
Insurance
Counseling (Sec.
703(d) of the
Older Americans
Act of 1965,
as amended]
Grants to Indian
Tribes (Sec 633
of the Older
Americans Act
of 1965,
as amended ] . . . .
(Indian Tribes-
Part A)
(Native Hawaiian:
Part B)
Aging Training,
Research and
Discretionary
Progreuns (Sec.
431(a) of the
Older Americans
Act of 1965,
as amended ]
a/
9,263
a/
9,263
a/
a/
a/
a/
(10) Federal Council
on Aging, (Sec.
204(g) of the
Older Americans
Act as amended).
(11) Program
Direction/
Federal
Administration. .
1,976
16,902
(15,212)
(1,690)
a/
a/
a/
a/
1,976
18,402
(18,402)
(0)
a/
a/
a/
26,529
16,400
a/ 45,134
a/
a/ 17,399
1381
1995
Amount
Authorized
1995
Appropriation
1996
Amount
Authorized
1996
Budget
Estimate
Unfunded
authorizations:
The Older Americans
Act of 1965,
as amended:
( 1 ) Board/Care Study
[Sec. 2 12]
(2) Home Care Study
(Sec. 213)
(3) School-based
meals [Sec. 303 (b) (3) ]
(4) Supportive activities
caretakers/frail older
individuals (Sec. 320)
(5) Vulnerable Elder
Rights Protection
[Sec. 703(c) )
Total appropriation.
Total,
appropriation
against definite
authorizations. . .
a/
a/
a/
a/
a/
a/
a/
a/
a/
$876,994
a/
876,994
$897, 148
897,148
a/ Such sums as may be necessary for Fiscal Year 1995.
14
1382
Appropriation History
Year
1986 1/
1987 1/
1988 1/
1989 1/
1990 1/
1991 1/
1992
1993
1994 3/
1995
1996
Budget
Estimate
Congress
689,100,000
689,100,000
701,296,000
701,296,000
724,098,000
748,677,000
809,049,000
850,693,000
839,075,000
875,723,000
897,148,000
House
Allowance
701,600,000
732,200,000
Defer
757,040,000
755,759,000
820,848,000
809,049,000
838,228,000
841,875,000
869,823,000
Senate
Allowance
701,600,000
716,570,000
768,700,000
757,700,000
764,759,000
827,240,000
867,874,000
850,693,000
881,863,000
873,662,000
Appropr iat ion
671,210,000
725,900,000
725,231,000
748,420,000
747,681,000
806,049,000
846,597,000 2/
838,676,000 3/
878,032,000 4/
876,994,000 5/
\l These totals exclude Federal Administration for the Administration on Aging.
Prior to FY 1992, AoA was a part of the former Office of Human Development
Services, and AoA's Federal Administration funding was within OHDS ' total
Administration Cost.
2/ Excludes $167,000 in across-the-board Program Direction cuts.
3/ Excludes S6, 767, 712 of Section 511 PPA cuts, $279,760 of Section 513 cuts, and
$241,000 of Section 216 cuts.
4/ Includes $6,750,000 transfer from the Executive Office of the President for
Emergency Disaster Relief.
^/ Excludes $229,000 in across-the-board reductions in Rent, Procurement, Awards,
and Working Capital Fund.
1383
ADMINISTRATION ON AGING
Justification
Account Summary
Supportive Services
and Centers
Aging Congregate
Meals
Aging Home-
Delivered Meals...,
Aging In-Home
Services
Preventive
Health Services...,
Research, Training
and Demonstration. .
Grants to Indian
Tribes
Aging Ombudsman
Aging Elder
Abuse Prevention...
Outreach, Public
Benefit and
Insurance Counseling.
Federal Council on
Aging
Federal
Administration
White House
Conference on Aging. .
Total
FTE
FY 1995
Appropriation
$306,711,000
375,809,000
94,065,000
9,263,000
16,982,000
26,529,000
16,902,000
4,449,000
4,732,000
1,976,000
176,000
16,400,000
3,000,000
S876,994,000
192
FY 1996
Estimate
Increase
or
Decrease
$306,711,000 -0-
375,809,000 -0-
94,065,000 -0-
9,263,000 -0-
16,982,000 -0-
45,134,000 +$18,605,000
18,402,000 +$1,500,000
4,449,000 -0-
6,232,000 +$1,500,000
1,976,000 -0-
226,000 +50,000
17,399,000 +999,000
500,000 -2,500,000
$897,148,000 +$20,154,000
194 +2
1384
ADMINISTRATION ON AGING
General Statement
The Administration on Aging (AoA) is a component of the Office of the
Secretary in the Department of Health and Human Services. Under the provisions
of the Older Americans Act, the Administration on Aging serves as the focal
point and advocate agency for older persons and their concerns at the Federal
level. AoA works closely with its nationwide network of regional offices and
State and Area Agencies on Aging to plan, coordinate, and develop community-
level systems of services that meet the unique needs of individual older
persons and their caregivers.
The fiscal year 1996 request for AoA is $897,148,000, a net increase of
S20, 154,000 from the FY 1995 appropriation. The request is based on a
recognition that resources are constrained, but reflects the fact that the
programs for older persons are at both a crossroads and pivotal moment in
their development. Generally service levels supported in FY 1995 will be
maintained in FY 1996. The service delivery systems funded by AoA will target
their efforts on the needs of socially and economically disadvantaged older
persons, especially the low-income minority elderly.
AoA is requesting increases in the discretionary funds program to work with
States in building systems that will bring in-home and community-based long
term care within the reach of older persons and others with disabilities that
put them at risk. The increase requested for the Native American program will
also be used to develop demonstration projects for assessing and developing
infrastructures for in-home and community-based long term care to enhance the
quality of life for older Indians who are struggling to remain independent. A
modest increase is also requested for the prevention of abuse and neglect
program to provide resources to States to start much more visible and tangible
actions from the private and public sectors. The additional amount requested
for the Federal Administration activity is needed to support the full funding
of 194 full-time equivalent positions including funds to cover built-in
increases such as annualization of the pay raises, hardware and software
upgrades to support the Information Resource Management efforts for AoA's
"Rightsizing" initiative and modest amounts for increasing costs of rent,
postage and other administrative costs.
The FY 1996 estimates will send a message that government and society are
concerned about the future of older persons and are putting in place the
infrastructure to meet their needs.
1385
0
D)
"D
<
CD
G)
CX)
CM CM
18 -
1386
Aoing Supportive Services and Senior Centers
Authorizing Legislation: Section 321 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$306,709,000 $306,711,000 $306,711,000 -0-
Purpose and Method of Operations:
The objectives of the Older Americans Act (OAA) and the vision for the
Administration on Aging and the Department of Health and Human Services are to
ensure that older Americans (present and future) have an independent,
productive, healthy and secure life. Supportive services represent the
cornerstone of the comprehensive and coordinated system of home and community-
based services which is needed to make the OAA objectives a reality in
communities across the nation. Federal funds for Supportive Services and
Senior- Centers are allocated to the individual states through a statutory
formula based primarily on each state's proportionate share of the total
American population aged 60 and older. Other provisions in the formula
provide minimum funding to smaller states and assure that no state receives
less funds than it did in FY 1987.
The national network of 57 State Agencies on Aging, 657 Area Agencies on Aging
and 25,000 service providers represent an experienced network in planning,
coordinating and providing home and community-based services to older persons
living in the community. This network continues to build upon the foundation
provided by OAA resources to foster the enhancement of a comprehensive and
coordinated system which is responsive to the needs of the elderly. As
catalysts and brokers. State and Area Agencies on Aging use OAA funds to
leverage state and local resources to expand and improve services.
Each State Agency on Aging is required to have a State Plan approved by AoA as
a prerequisite for receipt of funds. Based on the approved plan. State
Agencies on Aging award the funds to designated Area Agencies on Aging at the
community level. The Area Agencies on Aging make awards to local service
provider agencies or, in some instances with State Agency approval, directly
provide services to older persons.
All individuals age 60 and over are eligible for services, although the Older
Americans Act directs that priority be given to serving those who are in
greatest economic and social need, with particular attention to low-income
minority older individuals. In FY '93 nearly 6.5 million older individuals
received supportive services. Statistics on the characteristics of these
older persons indicate that service is provided to the targeted groups in
greater proportion than their percentage in the general population of older
persons served. Of that number, 35% were frail and disabled, 19% were
minority older persons and 39% were low-income older persons.
There are no mandatory fees in this program; however, older persons are
encouraged to make voluntary contributions to help defray the cost of
services. Under current law, these contributions are used to expand services.
Local programs were able to provide additional services to older individuals
as a result of approximately $25 million in program income collected in FY
1993. In addition, volunteer support is an integral component of the service
system.
1387
Funding for this activity during the last five years has been as follows:
1991 S290,814,000
1992 $299,238,0003/
1993 $296,844, 000b/
1994 $306,711,000
1995 Appropriation $306,711,000
a/ Reflects Sequester of 2.41% pursuant to P.L. 101-517.
b/ Reflects reprogramming of $762,000 to the White House
Conference on Aging.
FY 1996 Funding Request
Funding of $306,711,000 is requested for fiscal year 1995. This funding level
is the same as the FY 1995 appropriation. There continues to be a great need
for supportive services and senior centers in local communities as they
provide the fundamental core of a comprehensive and coordinated system of
in-home and community-based services, including long-term care services.
These services make a vital difference in the lives of older persons who are
attempting to remain independent and to live in their homes and communities
for as long as possible. About 6,000 senior centers across the nation
received funding under the Title III program.
States are using the majority of these funds to support access to services,
fill service gaps, and provide core in-home and community-based services.
During FY 1993 information and assistance services were provided for over 3
million older persons and their caregivers. Over 3 million outreach contacts
were made to identify older persons who were in need to gain access to needed
services. Over 800,000 older persons received needed transportation services
to their doctor, clinic or senior center. Hundreds of thousands of older
persons received in-home services, such as homemaker and home health aides,
personal care, and home repair/maintenance. Vulnerable older persons also
were assisted through legal services, guardianship, escort, and placement
services.
Because supportive services are designed to meet the priority needs of older
persons in each community and are offered in close coordination with other
resources at the local level, such as Medicaid waiver and State-funded
programs, these services can be provided in the most responsive and cost-
effective manner. For example, it is more cost effective to assist an older
person who is released from the hospital after hip surgery with short term in-
home services to augment caregiver support than to require this individual to
go to a nursing home to recuperate. These services are designed to maximize
informal support provided by caregivers and to enhance the capacity of the
older individual to remain self-sufficient.
1388
Congregate Nutrition Services
Authorizing Legislation; Section 331 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$375,809,000 $375,809,000 $375,809,000 -0-
Purpose and Method of Operations:
Federal funds for Congregate Nutrition Services are provided under Title III,
Part C-1. The funds are awarded to State Agencies on Aging through the same
formula used for all Title III funds, as described more fully in the
discussion of supportive services. Congregate nutrition services funds are
awarded by the State Agency on Aging to Area Agencies on Aging which, in turn,
make awards to or contract with congregate nutrition service providers.
For Congregate Nutrition Services, all older persons age 60 and over, and
their spouses regardless of age are eligible for service. The OAA directs
that priority be given to those who are in greatest economic and social need,
with particular attention to low-income, minority older persons. Mo.it recent
data for FY 1993 indicates that 127 million meals were served to 2,452,000
older persons. Statistics on the characteristics of these older persons
follow and indicate that service is provided to targeted groups in greater
proportion than their percentage in the general population. Of older persons
served, 27% of these were frail and disabled; 45% were low-income; 41% were
rural residents; 17% were minority; and 12% were low-income, minority.
Services are provided to groups of older people at senior centers and
nutrition sites. Congregate Nutrition Services is different than other food
assistance programs such as food stamps because it provides a cooked, ready
to eat meal to seniors in a group setting. Participation in a group setting
reduces isolation and encourages continued physical and mental functioning.
In addition, the setting is conducive to accessing and linking with other
supportive community services. In comparison to home-delivered nutrition
program participants, congregate participants are more able and healthy. For
these individuals, the Congregate Nutrition Program functions more as a health
promotion/disease prevention program. The Congregate Nutrition Program also
provides valuable opportunities to volunteer and give back to the community.
However, not all congregate participants are well and healthy; approximately
27% are frail. Anecdotal evidence suggests that the average age of a
participant is now above age 73 which was the average age in 1983. For these
more frail participants. Congregate Nutrition Services may be the service that
maintains their continued limited independent functioning.
Congregate Nutrition Service providers target special populations with
increased needs through specific congregate programs such as a breakfast and
dinner program in high-risk communities during the week and on weekends, use
of soup kitchens to reach homeless elders, or use of a home luncheon program
in a high-rise.
Although meals are the primary service provided, other nutrition services
including nutrition screening, education, counseling, and outreach are
provided. Congregate meals provided under the OAA must comply with the
Dietary Guidelines for Americans and provide a minimum of 33% of the
Recommended Dietary Allowances (RDA) if one meal is served; a minimum of 66%
of the RDA if two meals are served; and 100% of the RDA if three meals are
served. Service providers are encouraged to expand meal service to more than
one meal per day, more than five days a week, to persons with increased needs.
Where feasible and appropriate, meals are provided to meet the special health,
religious, and ethnic requirements of participants.
- 21 -
1389
There is substantial private sector/state/local community financial and
volunteer support in the Nutrition Services Program. Although there are no
. fees or charges in this program, older persons are encouraged to contribute
through volunteerism and financial support to help defray the cost of
services. In FY 1993, Congregate Nutrition Services program income, including
contributions from Congregate Nutrition Services participants, was over
$98,000,000. Under current law, these contributions are used by local
programs to expand services. Also, volunteers, many of them older Congregate
Nutrition Program participants, perform essential program tasks such as
managing nutrition sites, delivery of meals and record keeping, etc.
Funding for this activity during the past five years has been as follows:
1991 $361,078,0003/
1992. y $366, 067, 000b/
1993 $363,235,000
1994 $375,809,000
1995 Appropriation $375 , 809 , 000
a/ Reflects sequester of 2.41% pursuant to P.L. 101-517.
b/ Reflects reprogramming of $933,000 to the White Conference on
Aging.
FY 1996 Funding Request
Funding of $375,809,000 is requested for fiscal year 1996. This funding
level is the same as the FY 1995 appropriation. As stated in its strategic
plan, the primary mission of the AoA is to ensure that older Americans have an
independent, productive, healthy and secure life. Adequate nutritional status
is essential to the well-being, health, independence and quality of life of
all from well, healthy, more able older persons to frail, ill, functionally-
impaired older persons. The Nutrition Services Program strives to provide a
continuum of services to meet these individual needs. The amount of funding
requested will allow the Congregate Nutrition Services to continue to address
major difficulties faced by older persons which include:
0 nutritional deficiencies due to inadequate income and/or lack of
facilities to prepare food;
o isolation, which cuts older persons off from contact with others and is
a barrier to accessing needed services;
o illness, disease, and other conditions which affect independence.
Health and nutrition studies indicate that:
o eight (8) of 10 leading causes of death are related to diet and
nutrition;
0 eighty-five (85) percent of older persons have a nutrition-related
condition or chronic disease;
O nutritional status is a risk factor for and predictor of visits to the
physician, hospital emergency room, and hospital admission and
readmission;
o access to and acquisition of adequate food and food insecurity are
significantly related to income and poverty status with minority older
people experiencing higher rates of food insecurity.
The objectives of this program are to provide healthful meals and related
nutrition and supportive services to nutritionally at-risk older persons. As
an integral component of a comprehensive and coordinated in-home and community-
based service system. Congregate Nutrition Services promote health, reduce
social isolation and link older persons to other supportive services and
- 22 -
1390
progratng. By providing Congregate Nutrition Services, older persons are
assisted in remaining independent and at home, avoiding premature nursing home
placement, preventing and treating nutrition related conditions and diseases,
and limiting use of expensive health care services.
The Nutrition Services Program supports the Secretary's goal of fostering
independence through empowering the people we serve. It is designed to
maintain life, improve health, promote healthful lifestyles, enhance
independence and self-sufficiency and address special health needs of older
women and minority persons.
Based on the proportion of low-income and low-income minority persons served,
approximately 45% of Congregate Nutrition Services funding is used to meet
their needs. Service, to persons who are not low-income, generates
significant program income, volunteer, and community support and ownership of
the program.
In 1992, the AoA and the Office of the Inspector General (OIG) completed a
review of SUA's implementation of Title III of the OAA. For nutrition
services, although some weaknesses were noted in the SUAs ' guidance and
assessment of AAAs, SUAs were found to be generally successful in implementing
the nutrition requirements of the OAA. The AoA is continuing to follow-up on
this review through State visits.
To measure program performance, the AoA is in the process of improving its
data collection efforts through the National Aging Program and Information
System (NAPIS) which will allow the AoA to improve the accuracy of the data
collected on participants and services, enhance analysis of program
performance and provide information to improve service targeting. As part of
this on-going system, the AoA will be collecting data on the nutritional risk
of the participants served.
AoA has contracted with Mathematica Policy Research, Inc. to conduct a
congressionally mandated evaluation of the Nutrition Services Program. This
evaluation includes participant characteristics and service needs, program
targeting, program impacts on participants, effectiveness and efficiency of
program administration and service delivery, and funding sources. The
results will be available in July of 1995. The contractor will examine
participant health and physical status, economic status, functional capacity,
eating habits, food security, use of nutrition program services, linkages to
other services including home and community-based long-term care, and
participation in other food assistance programs. To determine impact and
address both nutritional and other measures of well-being related to program
participation, this study will compare program participants and non-
participants.
The requested funding allows Congregate Nutrition Services to continue to meet
essential food, nutrition, and health service needs of older persons, fulfills
the mission of the AoA and supports the Secretary's goals. It is consistent
with supporting an alternative to institutional care, promotes health and
fosters independence.
23 -
1391
Home-Delivered Nutrition Services
Authorizing Legislation: Section 336 of the Older Americans Act
of 1965, as amended.
Increase
py 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
593,665,000 S94,065,000 $94,065,000 -0-
Purpose and Method of Operations:
Federal funds for Home-Delivered Nutrition Services are awarded under Title
III, Part C-2, to each State with an approved State Plan on Aging. Funds are
distributed to the States according to the formula used for all Title III
services, as described more fully in the discussion of supportive services.
State Agencies on Aging make awards to Area Agencies on Aging, based on State-
approved Area Plans. Area Agencies on Aging make awards to or contract with
local service providers.
For Home-Delivered Nutrition Services are provided to older persons, age 60
and older who are home-bound due to illness, disability or geographic
isolation; a spouse of any age is eligible. The OAA directs that priority be
given to those who are in greatest economic and social need, with particular
attention to low-income, minority older persons. Most recent data for Fiscal
Year 1993 indicates that 103 million meals were served to 827,000 older
persons. Statistics on the characteristics of these older persons follow and
indicate that service is provided to targeted groups in greater proportion
than their percentage in the general population. Of older persons served, 73%
of these were frail and disabled; 55% were low-income; 39% were rural
residents; 18% were minority; and 14% were low-income, minority.
Services are provided to older people in their homes. Home-Delivered
Nutrition Services is different than other food assistance programs such as
food stamps which require that a person be able to obtain and prepare food.
Recipients of Home-Delivered Nutrition Services usually have significant
impairments in health and functional status that make acquiring and preparing
food difficult. Frecfuent contact between the home-bound older person and the
meal deliverer helps reduce isolation and allows for more frequent checking on
the status of isolated home-bound older persons. Home-bound older persons are
often linked to other community supportive services through an individualized
assessment and intake process. The provision of Home-Delivered Nutrition
Services provides respite to caregivers and assists caregivers in continuing
to maintain older persons at home. Often the provision of a home-delivered
meal is the essential service that prevents premature nursing home admission.
For Home-Delivered Nutrition Services participants, these services serve
health maintenance and rehabilitation functions.
Because Home-Delivered Nutrition Services participants are more frail and
impaired than Congregate participants, frequency and intensity of service may
be different than for Congregate Nutrition Services participants. Home-
delivered Nutrition Services participants may receive meals more than five
days a week and more than one meal a day. Compared to Congregate Nutrition
Service participants, Home-Delivered Nutrition Service providers serve more
rural, minority, low-income, frail/disabled and rural participants.
Although meals are the primary service provided, other nutrition services
including nutrition screening, education, counseling, and outreach are
provided. Home-delivered meals provided under the OAA must comply with the
Dietary Guidelines for Americans and provide a minimum of 33% of the
Recommended Dietary Allowances (RDA) if one meal is served; a minimum of 66%
1392
of the RDA if two meals are served; and 100% of the RDA if three meals are
served. Service providers are encouraged to expand meal service to more than
one meal per day, more than five days a week, to persons with increased needs.
Where feasible and appropriate, meals are provided to meet the special health,
religious, and ethnic requirements of participants.
There is substantial private sector/state/local community financial and
volunteer support in the Nutrition Services Program. Although there are no
fees or charges in this program, older persons are encouraged to contribute
through volunteerism and financial support to help defray the cost of
services. In FY 1993, Home-Delivered Nutrition Services program income,
including contributions from Home-Delivered Nutrition Services participants,
was $72,000,000. Under current law, these contributions are used by local
programs to expand services. Also, volunteers, many of them older Congregate
Nutrition Program participants, perform essential program tasks such as
managing nutrition sites, delivery of meals and record keeping, etc.
Funding for this activity during the last five years has been as follows:
1991 S87, 830, 000a/
1992 S89 , 603 , 000b/
1993 $89,659,000
1994 $93,665,000
1995 Appropriation $94,065,000
a/ Reflects sequester of 2.41% pursuant to P.L. 101-517.
b/ Reflects reprogramming of $228,000 to the White House
Conference osi Aging.
FY 1996 Funding Request
Funding of $94,065,000 is requested for Home-delivered Nutrition Services in
fiscal year 1996. This funding level is the same as the FY 1995
appropriation. As stated in its strategic plan, the primary mission of the AoA
is to ensure that older Americans have an independent, productive, healthy and
secure life. Adequate nutritional status is essential to the well-being,
health, independence and quality of life of all from well, healthy, more able
older persons to frail, ill, functionally-impaired older persons. The
Nutrition Services Program strives to provide a continuum of services to meet
these individual needs. The amount of funding requested will allow the Home-
Delivered Nutrition Services to continue to address major difficulties faced
by older persons which include:
0 nutritional deficiencies due to inadequate income and/or lack of
facilities to prepare food;
o isolation, which cuts older persons off from contact with others and is
a barrier to accessing needed services;
0 illness, disease, and other conditions which affect independence.
Health and nutrition studies indicate that:
o eight (8) of 10 leading causes of death are related to diet and
nutrition;
o eighty-five (85) percent of older persons have a nutrition-related
condition or chronic disease;
1393
0 nutritional status is a risk factor for and predictor of visits to the
physician, hospital emergency room, and hospital admission and
readmission;
o access to and acquisition of adequate food and food insecurity are
significantly related to income and poverty status with minority older
people experiencing higher rates of food insecurity.
The objectives of this program are to provide healthful meals and related
nutrition and supportive services to nutritionally at-risk older persons. As
an integral component of a comprehensive and coordinated in-home and community-
based service system, Home-Delivered Nutrition Services promote health, reduce
social isolation, link older persons to other supportive services and programs
and assist caregivers of functionally-impaired older persons. By providing Home-
Delivered Nutrition Services, older persons are assisted in remaining
independent and at home, avoiding premature nursing home placement, preventing
and treating nutrition related conditions and diseases, and limiting use of
expensive health care services.
The Nutrition Services Program supports the Secretary's goal of fostering
independence through empowering the people we serve. It is designed to
maintain life, improve health, promote healthful lifestyles, enhance
independence and self-sufficiency and address special health needs of older
women and minority persons.
Based on the proportion of low-income and low-income minority persons served,
approximately 54% of Home-Delivered Nutrition Services funding is used to meet
their needs. Service, to persons who are not low-income, generates
significant program income, volunteer, and community support and ownership to
the program.
In 1992, the AoA and the Office of the Inspector General (OIG) completed a
review of SUA's implementation of Title III of the OAA. For nutrition
services, although some weaknesses were noted in the SUAs ' guidance and
assessment of AAAs, SUAs were found to be generally successful in implementing
the nutrition requirements of the OAA. The AoA is continuing to follow-up on
this review through State visits.
To measure program performance, the AoA is in the process of improving its
data collection efforts through the National Aging Program and Information
System (NAPIS) which will allow the AoA to improve the accuracy of the data
collected on participants and services, enhance analysis of program
performance and provide information to improve service targeting. As part of
this on-going system, the AoA will be collecting data on the nutritional risk
of the participants served.
AoA has contracted with Mathematica Policy Research, Inc. to conduct a
congressionally mandated evaluation of the Nutrition Services Program. This
evaluation includes participant characteristics and service needs, program
targeting, program impacts on participants, effectiveness and efficiency of
program administration and service delivery, and funding sources. The
results will be available in July of 1995. The contractor will examine
participant health and physical status, economic status, functional capacity,
eating habits, food security, use of nutrition program services, linkages to
other services including home and community-based long-term care, and
participation in other food assistance programs. To determine impact and
address both nutritional and other measures of well-being related to program
participation, this study will compare program participants and non-
participants.
The requested funding allows Home-Delivered Nutrition Services to continue to
meet essential food, nutrition, and health service needs of older persons,
fulfills the mission of the AoA and supports the Secretary's goals. It is
1394
consistent with supporting an alternative to institutional care, promotes
health and fosters independence.
1395
Nutrition Program for the Elderly
Home Delivered and Congregate Meals
Fiscal Years 1980-1992
(Meals in Millions)
Fiscal
year
Total
Meals
Congregate
Meals
Home
Delivered
Meals
Home-Delivered as a
Percent of Total
Meals
1980
168.4
132.0
36.4
22%
1981
187.9
142.6
45.3
24%
1982
190.8
140.3
50.5
26%
1983
202.6
145.1
57.5
28%
1984
214.1
147.4
66.7
31%
1985
225.4
149.9
75.5
33%
1986
228.9
149.1
79.8
35%
1987
232.6
146.7
85.9
37%
1988
241.9
147.2
94.7
39%
1989
237.5
142.5
95.0
40%
1990
244.2
142.4
101.8
42%
1991
238.4
136.7
101.7
43%
1992
240.4
134.8
105.6
44%
1993
228.9
126.4
102.5
45%
28
1396
In-Home Services for Frail Older Individuals
Authorizing Legislation: Section 341 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
S7, 075, 000 S9, 263, 000 S9, 263, 000 -0-
Purpose and Method of Operation:
Federal funds for in-home services for frail older individuals are provided
under Title III, part D. The funds are awarded to State Agencies on Aging
through the same formula used for all Title III funds, as described in the
discussion of Supportive Services. In making funds available for in-home
services at the sub-State level, each State agency develops eligibility
criteria which take into account (1) age; (2) greatest economic need; (3) non-
economic factors contributing to frailty; and (4) non-economic and non-health
factors contributing to the need for in-home services.
At the discretion of state and area agencies on aging, in-home services can
include:
(1) homemaker and home health aides;
(2) visiting and telephone reassurance;
(3) chore maintenance;
(4) in-home respite care for families, and adult day care as a respite
service for families;
(5) minor modification of homes that is necessary to facilitate the
ability of older individuals to remain at home and that is not
available under other programs; and
(6) personal care services.
Funding for this activity during the last five years has been as follows:
1991 $6,831, 000a/
1992 $6, 898, 000b/
1993 S7, 07 5, 000
1994 S7, 075, 000
1995 Appropriation $9,263,000
a/ Reflects sequester of 2.41% pursuant to P.L. 101-517.
b/ Reflects reprogramming of $18,000 to the White House
Conference on Aging.
FY 1996 Funding Request
Funding of $9,263,000 is requested for fiscal year 1996, the same level as the
FY 1995 appropriation.
While most older Americans over the age of sixty live independently, many are
at risk of losing their self-sufficiency. Those at risk may have physical or
mental impairments such that they require help with day-to-day tasks like
bathxng, dressing, cooking, essential shopping, and household maintenance.
They also may have limited incomes and may not be able to afford in-home
services. Older minority persons face additional barriers related to
accessing services.
This program directly addresses the needs of vulnerable older people by
providing services to them and their caregivers in their homes. Home-based
1397
care enables older persons to maintain as much of their independence as
possible and to avoid or delay institutionalization. These services are a
critical component of home and community-based long-term care services
provided to frail older persons, including those who are victims of
Alzheimer's Disease. Assistance provided to these vulnerable persons helps
prevent the need for more costly health and institutional care.
This program also supports the families of older individuals. Approximately
eighty percent of personal care needs are met through families. Assistance
provided to family caregivers also helps prevent the need for more costly
health and institutional care.
The following reveal the extent of the problem:
About 5.8 million noninstitutionalized older people 65 years and
above have physical impairments.
About 4.3 million people over the age of 65 have some difficulty
performing at least one activity o* daily living.
A probable 3.4 million noninstitutionalized older people have
Alzheimer's Disease and related disorders with neurological and
organic brain dysfunction.
About 2.5 million older minority members have incomes less than 200
percent of the poverty level.
1398
Preventive Health Services
Authorizing Legislation: Section 381 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$17,032,000 $16,982,000 $16,982,000 -0-
Purpose and Method of Operations;
Federal funds for Preventive Health Services are provided under Title 111,
Part F. The funds are awarded to State Agencies on Aging through the same
formula that is used for all Title III funds, as described more fully in the
discussion of Supportive Services. Preventive Health Services funds are awarded
by the State Agency on Aging to Area Agencies on Aging which, in turn, make
awards to other community organizations and agencies. The State Agency on Aging
is required to give priority to areas of the state in which the older residents
are medically undeserved and have the greatest economic need.
The Preventive Health Services under this part may include: routine health
screening (hypertension, glaucoma, cholesterol, cancer, vision and hearing
screening); group exercise programs; home injury control services, including
screening of high-risk home environments and educational programs on injury
protection in the home environment; nutritional counseling and educational
services; screening for the prevention of depression; coordination of community
mental health services, educational activities, and referral to psychiatric and
psychological services; educational programs on the benefits and limitations of
Medicare and various supplemental insurance coverage, including individual policy
screening and health insurance-needs counseling; and counseling regarding follow
up health services based on any of the services provided for above.
Funding for this activity during the last five years has been as follows:
1991 $ -0-
1992 $16, 87 5, 000a/
1993 $16,864,000
1994 $17,032,000
1995 Appropriation $16,982,000
a/ Excludes a rescission of $125,000.
FY 1996 Funding Request
Funding of $16,982,000 is requested for fiscal year 1996, the
same level as the FY 1995 appropriation. This funding level will support
further development of preventive health services to promote and improve the well-
being of the nation's elderly. Funds appropriated for this activity are part
of comprehensive and coordinated service systems targeted to those elderly
most in need.
These services support the Secretary's theme of preventing future problems and
emphasizing early intervention. While many people think of health problems in
old age as inevitable, a substantial number of ailments are either preventable
or can be controlled. Preventive health services encourage older persons to
live healthy lifestyles which can reduce the incidence of costly and
debilitating illnesses such as heart disease and osteoporosis.
1399
Healthy People 2000. the National Health Promotion and Disease Prevention
Objectives for the decade list three principal goals: 1) increase the span of
healthy life; 2) reduce health disparities; and 3) provide access to
preventive services for all Americans. Eighty-two specific objectives for
older persons address physical activity, nutrition, tobacco, alcohol and other
drugs, mental health and disorders, violence and abuse, environmental health,
food and drug safety, oral health, heart disease and stroke, cancer, diabetes
and chronic disabling conditions, immunization and infectious diseases, and
clinical preventive services. The opportunities presented by these objectives
can be summarized, in part, by the goal of a target for reducing the
proportion of people aged 65 and older who are limited in two or more
activities of daily living. Through continued funding of Title III-F, the
Administration on Aging can continue to work toward this and other specific
Healthy People 2000 goals.
- 32
1400
Aging Trainino. Research, and Discretionary Proqrairia
Authorizing Legislation: Sections 309 and 431 of the Older
Americans Act, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$26,057,000 326,529,000 $45,134,000 +18,605,000
Purpose and Method of Operation
The Discretionary Funds Programs authorized by Title IV of the Older Americans
Act constitute the major research, demonstration, training, and development
effort of the Administration on Aging. These progreuns are aimed at developing
innovative model programs, training personnel for service in the field of
aging, and matching these resources to the changing needs of older persons.
Title IV funds are also focused on expanding the nation's knowledge and
understanding of aging and the aging process and providing technical
assistance and information to those who work with older persons.
Grants or contracts may be made to any public or non-profit agency,
organization, or institution. Among those agencies and institutions funded
are colleges, universities. State and Area Agencies on Aging, and other
organizations representing and/or serving older people.
Funding for this activity during the last five five has been as follows:
1991 $25,941,000
1992 $25,768,000
1993 $25,692,684
1994 $25,830,000
1995 Appropriation $26,529,000
Rationale for the Budget Reguest
The request for fiscal year 1996 for Training, Research and Discretionary
activities is $45,134,000, an increase of $18,605,000 over the FY 1995
appropriation. The entire increase in funding under Title IV of the Older
Americans Act is directed toward assisting all States in developing better
home and community-based long term care service systems with proven effective
means for older persons, in particular those individuals with physical and
cognitive impairments that put them at risk of institutionalization. The
focus is on long term care because it is a critical issue facing the nation.
The focus is on home and community-based long term care services because they
are, for the overwhelming majority of older and disabled persons and their
families, the much more preferred alternative to institutional care. The
focus is on States and their communities because they have been, are now, and
will be the testing and proving ground in this nation for building an
efficient and cost-effective infrastructure of home and community based
services that responds to the long term care needs of their citizens.
The States are now in varying stages of developing home and community-based
long term care service systems. A key to further progress in establishing
such systems is their capacity to target and track the services provided,
their capacity to report valid and reliable information on program performance
and effectiveness, and their capacity to demonstrate to critical audiences of
policymakers and taxpayers alike that home and community-based care is worth
the investment.
1401
The Older Americans Act does not specifically provide funds for the State and
Area Agencies to design, develop and implement program and fiscal information
systems. The 1992 amendments to the Act, however, authorize AoA to develop a
system for States to track and report home and community-based services. In
addition, the Government Performance and Results Act of 1993 provides guidance
to AoA to assist States in documenting program efficiency and effectiveness.
The foundation for satisfying these requirements, the National Aging Program
Information System (NAPIS), has been developed by AoA. The increased funding
will enable AoA to assist States to implement NAPIS, which will yield
performance measures, and improve the capacity of States to manage cost-
effective home and community-based service systems. Enhancing such systems
will enable the States to more effectively target services to those with the
greatest social and economic need. AoA plans a thorough evaluation to track
progress of the States in this critical area.
The balance of Fiscal Year 1996 funds will be devoted to improving our
capacity to serve older Americans through applied research, innovative model
programs, better trained personnel, and timely technical assistance and
information to the Aging Network and others who work with and on behalf of
older persons. Examples of these efforts include: the National Resource and
Policy Centers in long-term care, nutrition, long-term care ombudsman, elder
abuse prevention, housing, and older women; a National Aging Information
Center; two National Resource Centers on Native American Elders; and career
preparation programs in the field of aging. The following prograpi priorities
will guide the allocation of these Title IV funds:
1) Expanding the current system of consumer directed home and community-
based long-term care for older persons and others with disabilities
and assisting States in implementing program performance measures;
2) Educating the public and private sector to the growing problem of
malnutrition among the elderly;
3) Exploring various approaches aimed at improving the quality of life
for America's older women;
4) Developing a blueprint for the retirement of the baby-boom generation;
5) Advancing our understanding of how to better serve minority elderly;
and
6) Protecting older persons from crime, violence, abuse, and
exploitation.
1402
Aging Grants to Indian Tribes and Native Hawaiian Organizations
Authorizing Legislation: Section 633 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$16,902,000 $16,902,000 $18,402,000 +1,500,000
Purpose and Method of Operation:
The Administration has reaffirmed the Federal Government's commitment to self-
determination for tribal governments and a better and more equal partnership
to improve the economic and social conditions of those we serve. In order to
support this commitment, AoA is requesting an increase of $1,500,000 for the
Grants to Native Americans Program in order to promote the development of
in-home and community-based long term care services in Indian communities.
Under Title VI, Part A, awards are made to tribal and Alaskan Native
organizations, and under Title VI, Part B, awards are made to public or
nonprofit private organizations serving Native Hawaiians which represent at
least 50 Indians or Alaskan Natives 60 years of age or older, to provide a
broad range of services and assure that nutrition services and information and
assistance services are available. Title VI funds were allocated to 227
Tribal grantees and 1 Native Hawaiian grantee in fiscal year 1994.
Funding for this activity during the past five years have been as follows:
1991 $14,639,0003/
1992 $15, 086, 000b/
1993 $15,110,000
1994 $16,902,000
199S Appropriation $16,902,000
a/ Reflects sequester of 2.4% pursuant to P.L. 101-517.
b/ Reflects reprogramming of $38,000 to the White House Conference on Aging.
FY 1996 Funding Reguest
Funding of $18,402,000 is requested for Fiscal Year 1996, an increase of
$1,500,000 over the FY 1995 budget. These additional funds will be used to
develop demonstration projects in Indian communities for assessing and
developing infrastructures for in-home and community-based long term care in
order to enhance the quality of life for older Indians who are struggling to
remain independent.
Even though the need is great for home and community-based services, available
resources under Title VI greatly limit the portion of funds which can be
devoted to the delivery of in-home services. Entry into a care facility is a
remote option for most Indian elderly. Access to nursing homes is even more
prohibitive due to geographical boundaries of reservations; lack of cultural
sensitivity of the larger population in responding to Indian elderly needs;
and the lack of resources to fund Indian nursing homes. In 1993, AoA was able
to identify only 26 nursing homes throughout the nation which serve the Indian
elderly.
Public funds for Medicare/Medicaid programs, the major source of public funds
for health and long term care, are only made available through the States.
Historically, access by Indians to both health and long term care resources
has been severely limited, partially because of Tribal Sovereignty issues and
1403
partly because long-standing conflicts in cooperative programming. Generally,
it is assumed that the Indian Health Service provides the needed care to all
Tribal members; however, the reality is that the Indian Health Services does
not devote resources which are specifically geared to the needs of the elderly
who are the most likely to have chronic diseases which threaten their
independence .
Title VI, Grants to Native Americans, currently provides grants to Indian
tribal organizations, Alaskan Native organizations, and non-profit groups
representing Native Hawaiians to provide supportive and nutrition services,
including both congregate and home delivered meals, to older Native Americans.
These services respond to the cultural diversity of Native Americans and are
essential components of comprehensive community based services, including home
and community based long term care. Native Americans in general, and older
Native Americans in particular, are among the most disadvantaged groups in the
U.S. Although only 5.6 percent of the American Indian and Alaska Native
population is age 65 and older, 26.5 percent of those age 65-74 and 34.7
percent of those aged 75 years old over were below the poverty level in 1990.
Low incomes, as well as several other factors such as geographical isolation,
breakdown of traditional family structure, and physical and mental disability
can lead to decreased consumption of (juality foods. A recent study of elderly
Navajo identified a high prevalence of chronic protein malnutrition. The 1990
Census indicated that social isolation was high among the American Indian and
Alaskan Native population, with 37 percent of females and 19 percent of males
over age 65 living alone. Poverty, malnutrition, and social isolation are all
recognized as risk factors for disease and disability. Just as the absence of
social support tends to increase disease and disability, its presence may
hasten recovery and help to maintain health. In recent testimony before the
Senate Special Committee on Indian Affairs, the National Association Title VI
Directors stated that an increasing number of Indian elders relying on Title
VI meals as their main meal of the day, there is an increasing need for
special diets among Indian elders to prevent or delay the complications of
diabetes, hypertension and heart disease, and that the most cost effective
solution to long term care is prevention and prevention is closely related to
quality meals and in-home services such as homemaker, home health aid, chore
assistance, and friendly visitation.
1404
Ombudsman Services
Authorizing Legislation: Section 712 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$4,370,000 54,449,000 $4,449,000 -0-
Purpose and Method of Operation:
Each State is mandated by the Older Americans Act to establish and operate an
Office of Long-Term Care Ombudsman to investigate and resolve complaints on
behalf of older individuals residing in nursing homes and board and care
homes. Prior to the 1992 Amendments these activities were carried out under
Title III, Part A. Funds are allocated to the individual states through a
statutory formula based primarily on each state's proportionate share of the
total American population aged 60 and older. Other provisions in the formula
provide minimum funding to smaller states and assure that no state receives
less funds than it did in FY 1991.
Ombudsman Services help assure that older persons who reside in long-term care
facilities receive adequate and proper services and assistance that satisfy
established standards and specifications.
Funding for this activity during the last five years has been as follows:
1991 $2,440,000
1992 S3, 930, 000a/
1993 $3,870,000
1994 $4,370,000
1995 Appropriation $4,449,000
a/ Reflects reprogramming of $10,000 to the White House Conference on Aging.
Rationale for the Budget Request
Funding of $4,449,000 is requested for the Ombudsman Program for fiscal year
1996, the same funding level as the FY 1995 appropriation. The Ombudsman
Program provides a community presence in facilities through approximately 550
sub-state Ombudsman Programs. The request will permit the program to continue
to meet the requirements of the Act to receive and investigate complaints of
abuse of older Americans in both institutional and domestic settings.
Reports by the General Accounting Office (GAO), the Institute of Medicine
(lOM), and the Department of Health and Human Service's Office of Inspector
General (OIG) underscore the importance of, and the need to strengthen the
Ombudsman Program. The 1992 Amendments to the Older Americans Act
strengthened and expanded Ombudsman requirements in such areas as training,
reporting, and further development of sub-state programs.
The funds requested for the Ombudsman Program for FY 1996 will help the States
implement these responsibilities. Without funds, the capacity of the States
and communities to implement the new legislative amendments and
recommendations of the GAO, lOM, OIG and others will be impaired.
The continued growth of the Ombudsman Program demonstrates that it is meeting
an important need, nationwide. This is evidenced in the increase in the
number of complaints received and resolved in recent years. As noted below.
1405
there was a substantial increase in 1993, the last year for which data are
available, with no decline in the percentage of those complaints that were
resolved:
Fiscal All Sources Number of Percent
Year Funding Complaints Resolved
1989 $25,166,119 134,909 74.1
1990 $27,862,088 154,119 68.6
1991 $34,055,032 174,288 75.7
1992 $36,023,199 177,331 74.0
1993 $37,375,554 197,820 74.0
1406
Prevention of Abuse. Neglect, and Exploitation
Authorizing Legislation: Section 721 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$4,648,000 $4,732,000 $6,232,000 +$1,500,000
Purpose and Method of Operation;
The 1992 Amendments to the Older Americans Act established a new Title VII for
carrying out vulnerable older rights protection activities, including the
prevention of abuse, neglect and exploitation of older individuals, and
training for persons involved in servicing victims.
The Prevention of Abuse and Neglect funds are allocated to states according to
the statutory formula outlined in the 1992 amendments to the Older Americans
Act for all Title VII programs. To help assure that Prevention of Abuse and
Neglect Program funds are used in the most effective manner, the
Administration on Aging has provided Research, Training and Demonstration
resources to support the establishment and operation of a National Center on
Elder Abuse. The Center provides training, technical assistance, up-to-date
program information, and reports on best practices to state and community
programs in addressing elder abuse problems.
Funding for this activity during the past five years has been as follows:
1991 $2,927,000
1992 $4, 427, 000a/
1993 $4,348,000
1994 $4,648,000
1995 Appropriation $4,732,000
a/ Reflects reprogramming of $21,000 to the White House Conference on Aging.
Rationale for the Budget Request
Funding of $6,232,000 is requested for the Prevention of Abuse and Neglect
Program for fiscal year 1996. This request represents an increase of
$1,500,000 over the FY 1995 appropriation. It is intended to indicate clearly
to the aging network, the adult protective services agencies, the law
enforcement community, the domestic violence constituency, and others that AoA
shares their conviction that crime, violence, and abuse against the elderly is
a serious national concern. Further, it represents, in terms of State
allocations, an order-of-magnitude increase sufficient to kick start much more
visible and tangible public/private sector action. At the same time, the
increase will serve to promote greater public awareness of abuse, crime and
violence against the elderly.
The balance of FY 1996 funds will be used to continue the educational and
training efforts of state and area agencies on aging to reduce the incidence
of elder abuse and neglect. Such action is especially timely in view of the
mounting evidence and concern that abuse, neglect and exploitation of the
elderly are major problems in the United States. A report on elder abuse by
the Department of Human Services, Office of the Inspector General and a
hearing by the Select Committee on Aging, U.S. House of Representatives,
provide estimates that between one and one-half and two million elderly people
are abused annually. To gain a fuller understanding of this national problem,
the Administration on Aging and the Administration of Children and Families
1407
undertook, in late Fiscal Year 1994, to support a three-year study that will
measure the incidence of elder abuse, neglect, and exploitation, a study now
being carried out by the National Center of Elder Abuse.
- 40 -
1408
Outreach. Public Benefit and Insurance Counaelina
Authorizing Legislation - Section 741 of the Older Americans Act
of 1965, as amended.
Increase
FY 1994 FY 1995 FY 1996 or
Actual Appropriation Estimate Decrease
$2,000,000 $1,976,000 $1,976,000 -0-
Purpose and Method of Operation:
The 1992 Amendments to the Older Americans Act established a new Title VII for
carrying out vulnerable elder rights protection activities, including
outreach, public benefits, and insurance counseling services to persons who
may be eligible for assistance under other public and private programs. This
program builds upon and expands a separate outreach assistance progreun that
was originally authorized by the 1987 amendments but never funded. Under
prior law, funds were meant to enable states to provide outreach and
counseling to seniors regarding eligibility and enrollment in public
assistance programs such as Medicaid, SSI, and food stamps. The 1992
amendments expanded the counseling role of states to provide information to
older persons about Medigap insurance policies, long-term care insurance, life
insurance, and pensions.
Funding for this activity during the past five years has been as follows:
1991 $ 0
1992 S 0
1993 $ 0
1994 $2,000,000
1995 Appropriation $1,976,000
Rationale for the Budget Request
Funding of $1,976,000 is requested for outreach, public benefit and insurance
counseling for fiscal year 1996. This request is for the same funding level
as the FY 1995 appropriation. This program was funded for the first time in
FY 1994.
Funds appropriated, as authorized by the act, will be used to supplement any
funds that are currently expended for similar purposes under any Federal,
State, or local programs offering similar services. Thus, the FY 1996 funding
request will build upon, not supplant, the current level of services.
41
Federal Administration;
1409
Amount
FTE ceiling
FY 1994
Actual
$15,990,000
190
FY 1995
Appropriation
$16,400,000
192
FY 1996
Estimate
$17,399,000
194
Increase
or
Decrease
^$999,000
+2a/
Purpose and Method of Operation:
Salaries and related expenses necessary to provide administrative and management
support for all Administration on Aging (AoA) programs, are included in the
Federal Administration account. Allocations for personal services, travel,
supplies, equipment and other costs are made by the Office of Administration and
Management to all headquarters and regional staff offices within AoA.
Funding for this activing during the past five years has been as follows:
1991 S -0- b/
1992 $16,418,000
1993 $15,978,000
1994 $15,990,000
1995 Appropriation $16,400,000
a/ Reflects the effect of transfers from Departmental Management.
b/ The Administration on Aging was a part of the Office of Human
Development Services' Program Direction Appropriated Funds.
FY 1996 Funding Request
The FY 1996 request of $17,399,000 is a net increase of $999,000 over the FY 1995
appropriation. This request will:
o Support 194 full-time equivalent (FTE) positions and related expenses, 2 FTEs
over the FY 1995 ceiling. The FTE increase is AoA's share of the FTE
redistribution as a result of the Department's efforts to realign the
regional functional activities by making operating divisions directly
responsible for providing the support mechanisms to run their programs. This
move results in an overall reduction of FTE positions Department-wide. With
the additional 2 FTE postions, AoA will consider using its resources to
ensure that adequate support is provided to both regional and central office
activities.
Provide standard operating expenses including allowance for built-in
increases to cover the annualization of the current year and budget year pay
raises, within-grade increases, and other related miscellaneous expenses.
Continue to implement effective program monitoring strategies utilizing a
major portion of available travel and staff resources to correct material
weaknesses identified in the Federal Manager's Financial Integrity Act
report. For example, monitoring one-third of all Title VI grantees are
currently underway and are planned to be continued each year so that within
three years all grantees would have been monitored.
Continue to implement the Information Resources Management (IRM) plan for AoA
and proceed with the hardware and software upgrades to accommodate the new
system requirements. The plan identifies two major goals: to establish and
implement the IRM infrastructure and to develop and maintain the data base
for all program information activities. Proper implementation of the plan
1410
will result in the efficient access to pertinent information, lead to
increased staff productivity, enhance the program and administrative
management, provide better response to requests for assistance, enhance the
quality of the work place and ultimately improve the quality of service to
the public.
1411
White House Conference on Aoinq
Authorizing Legislation: Older Americans Act Amendments of 1987
Decrease
FY 1994 FY 1995 FY 1996 or
Actual Appropr iat ion Estimate Increase
S993,000 $3,000,000 S500,000 -52,500,000
Purpose and Method of Operations
The Older Americans Act Amendments of 1987, Section 202, says the President
shall, not later than May 31, 1995, convene the White House Conference on Aging
in order to develop recommendations for additional research and action in the
field of aging. Conduct of the Conference consists of three stages. First
stage, in FY 1994 was to hire a staff and to build grassroots support for the
Conference. The second stage, in FY 1995 is to plan and conduct the Conference.
The Conference will be held May 2-5, 1995. The third stage is to prepare the
report of the Conference (Section 205). The time frames required to write and
coordinate the final report in accordance with Section 205 will require FY 1996
funding.
Funding for this activity during the last five years has been as follows:
1991 $ 0
1992 S2, 000, 000
1993 $ 0
1994 51,000,000
1995 Appropriation 53,000,000
Rationale for the Budget Request
The law stipulates a specific time period which is longer than six months after
the Conference for the writing, reviewing, commenting and the filing of the final
report. Before the report can be finalized, it must be reviewed by the Governors
of each state. The FY 1996 funds will be used for three primary purposes -
office rent $160,000 (32%), report publishing, word processing services, and
mailing 5266,000 (53%) and salaries and benefits 574,000 (15%).
1412
Federal Council on the Aging
Authorizing Legislation: Section 204 of the Older Americans Act
of 1965, as amended.
Decrease
FY 1994 FY 1995 FY 1996 or
Actual Aporopr iat ion Estimate Increase
$177,000 $176,000 $226,000 +50,000
Purpose and Method of Operations
The Federal Council on the Aging (FCoA) is the citizen advisory agency within the
executive branch charged with advising and assisting the President on the special
needs and characteristics of older Americans. It is comprised of fifteen
members, five of whom are appointed by the President, five by the Senate, and
five by the House of Representatives. By statute, at least nine of the members
themselves must be older persons.
Mandates of the FCoA include: advising the President on matters related to the
special characteristics of older persons; convening quarterly public meetings and
conducting public hearings; reviewing and evaluating policies to assess their
effectiveness and to promote better coordination between and across government
agencies; serving as spokespersons on behalf of older Americans and their
families by making recommendations about Federal policies and programs; informing
the public by conducting or commissioning studies and issuing reports; serving as
appointees to the Advisory Committee of the White House Conference on Aging; and
issuing an annual and interim report to the President on key findings and
priority recommendations.
Funding for this activity during the last five years has been as follows:
1991 $181,000
1992 $180,000
1993 $178,000
1994 $177,000
1995 Appropriation $176,000
Rationale for the Budget Request
In order to advance the mandate of the Federal Council on the Aging and reach out
to and empower the most vulnerable and at-risk older persons in their
communities, we are requesting an increase of $50,000 from an FY 1995 level of
$176,000 to an FY 1996 level of $226,000. This additional level of funding is
necessary to:
• Support the statutorily mandated quarterly meetings of the Council
(existing funding allows for only two meetings);
• Conduct several studies and publications, including a special report
prepared in conjunction with the National Institute of Mental Health to
better inform service providers in community mental health centers about
issues pertaining to older consumers and their families. These activities
will seek to prevent future costs and problems by helping to train
practitioners in the field of aging to better assist older persons with
mental health needs (existing funding does not support the publication and
distribution of these informational and training materials).
1413
• Enable the Council to meet in Subcononittee sessions to provide program and
p>olicy leadership on consumer-oriented materials, including home and comniunity-
based long-term care, nutrition, productive aging, and volunteerism.
In addition, for FY 1996, the FCoA has developed a set of initiatives which are
designed to work in joint partnership with the President, the Department of
Health and Human Services, the Administration on Aging, and other federal
agencies reach out to and empower older persons on priority issues such as long-
term care, nutrition, elder abuse, productive aging, and greater personal and
lifelong planning for retirement. The major components of these cooperative
efforts include:
• Joining in partnership with the Department of Health and Human Services in
focusing increased attention on preventing elder abuse and domestic
violence against older persons. The Council intends to use its visibility
in local communities to reach out to older persons who may be at
particular risk of domestic violence and to better inform the senior
citizen community about sources of assistance.
• Working with the Administration on Aging, the Social Security
Administration, and the Department of Labor to better inform persons of
all ages about the need for early and comprehensive planning for
retirement and successful aging.
• Playing a leadership role in following up on the major recommendations
from the White House Conference on Aging and assisting in promoting and
publicizing new initiatives to older persons in their communities.
1414
ADMINISTRATION ON AGING
Detail of Full-Time Equivalent Employment
Federal Administration
Executive Level IV
ES-4
ES-2
ES-1
Subtotal, ES salary
GS/GM-15
GS/GM-14
GS-13
GS-12
GS-11
GS-9
GS-8
GS-7
GS-6
GS-5
GS-4
Subtotal, GS.GM salary
Total full-time equivalent (FTE)
employment, end-of-year
FTE usage
Average ES level
Average ES salary
Average GS/GM grade
Average GS/GM salary
FY 1994
Actual
FY 1995
Estimate
FY 1996
Recfuest
115,703
115,703
115,703
214,600
194,800
185,800
111,842
203,024
193,674
111,842
203,024
193,674
595,200
508,540
508,540
1
4
1,
,969,731
958,532
,045,891
,511,131
105,353
311,226
129,162
330,893
211,214
69,073
37,700
2
4
1
,052,051
979,595
,217,032
,575,052
109,809
324,391
134,626
344,890
220,148
71,995
39,295
2
1
4
1
,117,041
,025,392
,414,631
,606,553
112,006
330,879
137,318
351,788
224,551
73,435
40,081
9,
,679,906
10
,068,884
10
,433,675
189
192
194
187
189
194
3
99,200
13.4
53,480
2
101,708
13.4
55,021
2
101,708
13.3
56,398
1415
ADMINISTRATION ON AGING
Title III-B Supportive Services and Senior Centers
STATES
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
$303,140,202
4,954,402
1,544,752
3,921,000
3,398,458
28,475,651
3,030,769
4,290,710
1,544,752
1,544,752
19,256,431
6,072,527
1,569,713
1,556,162
14,096,910
6,630,206
4,148,934
3,342,111
4,545,494
4 ,604,406
1,636,215
4,824,013
7,977,104
10,558,044
5,221,407
3,173,960
6,911,998
1,544,752
2,238,544
1,581,582
1,566,132
9,956,984
1,572,996
23,603,654
7,225,871
1,544,752
13,408,273
4,139,644
3,518,177
17,408,844
1,595,706
$303,140,202
4,954,402
1,544,752
3,921,000
3,398,458
28,475,651
3,030,769
4,290,710
1,544,752
1,544,752
19,256,431
6,072,527
1,569,713
1,556,162
14,096,910
6,630,206
4,148,934
3,342,111
4,545,494
4,604,406
1,636,215
4,824,013
7,977,104
10,558,044
5,221,407
3,173,960
6,911,998
1,544,752
2,238,544
1,581,582
1,566,132
9,956,984
1,572,996
23,603,654
7,225,871
1,544,752
13,408,273
4, 139,644
3,518,177
17,408,844
1,595,706
$303,136,268
4,954,849
1,544.752
3,932,267
3,398,154
28,480,629
3,035,331
4,287,837
1,544,752
1,544,752
19,277,754
6,073,237
1,570,741
1,557,242
14,086,553
6,628,469
4,144,606
3,339,629
4,543,703
4,601,318
1,635,722
4,826,555
7,971,539
10,554,970
5,219,486
3,172,041
6,909,409
1,544,752
2,236,686
1,588,280
1,567,043
9,954,588
1,675,638
23,579,441
7,232,858
1,544,752
13,403,131
4,137,463
3,519,530
17,394,343
1,593,597
- 48 -
1416
FY 1994 FY 1995 FY 1996
STATES Actual Estimate Estimate
South Dakota 1,544,752 1,544,752 1,544,752
Tennessee 5,839,105 5,839,105 5,841,702
Texas 15,929,621 15,929,621 15,942,288
Utah 1,592,210 1,592,210 1,594,427
Vermont 1,544,752 1,544,752 1,544,752
Virginia 6,094,013 6,094,013 6,100,571
Washington 5,105,638 5,105,638 5,108,450
West Virginia 2,701,506 2,701,506 2.699,088
Wisconsin 6,196,686 6,196,686 6,193,114
Wyoming 1,544,752 1,544,752 1,544,752
Northern Mariana 202,892 202,892 202,892
American Samona 471,504 471,504 471,489
Guam 777,975 777,975 777,975
Puerto Rico 2,940,340 2,940,340 2,943,953
Virgin Islands 777,975 777,975 777,975
Palau 139,689 139,689 139,689
- 49 -
1417
ADMINISTRATION ON AGING
Title III C-1 Congregate Nutrition Services
FY 1994
FY 1995
FY 1996
STATES
Actual
Estimate
Estimate
$371,450
$371,450
$371,450
Alabama
6,071
6,071
6,071
Alaska
1,893
1,893
1,893
Arizona
4,767
4,767
4,767
Arkansas
4. 175
4 . 175
4,175
California
34,810
34", 810
34,810
Colorado
3,701
3,701
3,701
Connecticut
5,264
5,264
5,264
Delaware
1,893
1,893
1,893
District of Columbia
1,893
1,893
1,893
Florida
23,446
23,446
23,446
Georgia
7,420
7,420
7,420
Hawaii
1,943
1,943
1,943
Idaho
1,932
1,932
1,932
Illinois
17,308
17,308
17,308
Indiana
8,123
8, 123
8,123
Iowa
5,099
5,099
5,099
Kansas
4,106
4,106
4,106
Kentucky
5,577
5,577
5,577
Louisiana
5,647
5,647
5,647
Maine
2,010
2,010
2,010
Maryland
5,898
5,898
5,898
Massachusetts
9,801
9,801
9,801
Michigan
12,929
12,929
12,929
Minnesota
6,406
6,406
6,406
Mississippi
3,899
3,899
3,899
Missouri
8,485
8,485
8,485
Montana
1,912
1,912
1,912
Nebraska
2,764
2,754
2,754
Nevada
1,955
1,955
1,955
New Hampshire
1,942
1,942
1,942
New Jersey
12,212
12,212
12,212
New Mexico
1,928
1,928
1,928
New York
29,008
29,008
29,008
North Carolina
8,819
8,819
8,819
North Dakota
1,893
1,893
1,893
Ohio
16,425
16,425
16,425
Oklahoma
5,083
5,083
5,083
Oregon
4,304
4,304
4,304
Pennsylvania
21,346
21,346
21,346
Rhode Island
1,968
1,968
1,968
- 50 -
1418
STATES
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Wftst Virginia
Wisconsin
Wyoming
Northern Mariana
American Samona
Guam
Puerto Rico
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
1,904
1,904
1,904
7,152
7,152
7,152
19,479
19,479
19,479
1,960
1,960
1,960
1,893
1,893
1,893
7,445
7,445
7,445
6,237
6,237
6,237
3.320
3.320
3,320
7"; 599
7,599
7,599
1,893
1,893
1,893
253
253
253
605
605
605
953
953
953
3,588
3,588
3,588
- 51 -
1419
ADMINISTRATION ON AGING
Title III C-2 Home-Delivered Nutrition Services
STATES
Alabama
Alaska
J^rizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
$94,065
$94,065
$94,065
1,519
1,519
1,519
474
474
474
1,149
1,149
1 .J4q
1,036
1,036
r,03 6
8,774
8,774
8,774
939
939
939
1,310
1,310
1,310
474
474
474
474
474
474
5,992
5,992
5,992
1,872
1,872
1,872
474
474
474
474
474
474
4,297
4,297
4,297
2,031
2,031
2,031
1,261
1,261
1,261
1,017
1,017
1,017
1,388
1,388
1,388
1,406
1,406
1,406
498
498
498
1,487
1,487
1,487
2,429
2,429
2,429
3,238
3,238
3,238
1,595
1,595
1,595
967
967
967
2,109
2,109
2,109
474
474
474
679
679
679
483
483
483
474
474
474
3,046
3,046
3,046
549
549
549
7,177
7,177
7,177
2,238
2,238
2,238
474
474
474
4,109
4,109
4,109
1,262
1,262
1,262
1,082
1,082
1,082
5,318
5,318
5,318
482
482
482
- 52 -
1420
FY
1994
FY
1995
FY
1996
STATES
Actual
Estimate
Estimate
South Carolina
1,106
1,106
1, 106
South Dakota
474
474
474
Tennessee
1,794
1,794
1,794
Texas
4,913
4,913
4,913
Utah
500
500
500
Vermont
474
474
474
Virginia
1,884
1,884
1,884
Washington
1,57€
1 £7-£
1,576
West Virginia
821
'821
821
Wisconsin
1,894
1,894
1,894
Wyoming
474
474
474
Northern Mariana
62
62
62
American Samona
131
131
131
Guam
239
239
239
Puerto Rico
910
910
910
- 53 -
1421
ADMINISTRATION ON AGING
Title III D In-Home Services for Frail Elderly
STATES
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
$6,986,165
113,491
35,622
106,783
73,637
683,124
75,230
94,940
35,632
35,632
501,414
146,741
35,632
35,632
306,987
151,546
88,109
71,783
100,760
102,466
35,632
115,935
171,400
243,465
115,910
68,458
151,602
35,632
46,763
35,632
35,632
222,960
36,583
501,904
180,066
35,632
306,962
90,077
83,380
388,848
35,632
$6,986,165
113,491
J3, 632
106,783
73,637
683,124
75,230
94,940
35,632
35,632
501,414
146,741
35,632
35,632
306,987
151,546
88,109
71,783
100,760
102,466
35,632
115,935
171,400
243,465
115,910
68,458
151,602
35,632
46,763
35,632
35,632
222,960
36,583
501,904
180,066
35,632
306,962
90,077
83,380
388,848
35,632
$9,145,682
148,742
46,652
142,644
96,361
895,856
99,657
123,621
46,652
46,652
661,960
192,351
46,652
46,652
399,461
198,036
114,314
93,392
131,513
133,424
46,652
152,462
223,085
318,082
151, 320
89, 177
197,897
46,652
60,779
46,652
46,652
291,397
48,566
651,283
237,554
46,652
400,724
117,425
109,532
505,636
46,652
- 54 -
1422
STATES Actual Estimate
fL.'!:!?'* _FY 1995 FY 1996
Estimate
South Dakota 35,632 35.632 46 fi.;o
Jlxas""" \ll''.t' "5''^^ ^'^oll
ut^t 382,703 382,703 504 342
"^^^ 35,491 35,491 46,467
w^^""?"^ 35,632 35,632 46 652
^^""^^^^e 149,260 149 260 197 103
Washington 124 722 ipa 755 ^l^'i^i
west Virginia ^1^,111 ^I'^llH %^J'°^|
Wjsconsan 138,621 138,621 ISO.'isI
Wyoming 35,632 35 632 46 fiR9
Northern Mariana 4,679 4 679 e'ff?
American Samona 4,679 4 679 c 1^-7
o"^^ „. 17,945 17:945 zMis
Puerto Rico 73,847 73:847 97:609
- 55
1423
ADMINISTRATION ON AGING
Title III-F Preventive Health Services
FY 1994
FY 1995
FY 1996
STATES
Actual
Estimate
Estimate
$16,732,363
$16,732,363
$16,681,390
Alabama
273,214
273,214
272,691
Alasrca
€5,780
85,7-On
-33,32°
Arizona
257,066
257,066
261^512
Arkansas
177,272
177,272
176,661
California
1,644,490
1,644,490
1,642,376
Colorado
181,106
181, 106
182,703
Connecticut
228,553
228,553
226,636
Delaware
85,780
85,780
85,529
District of Columbia
85,780
85,780
85,529
Florida
1,207,078
1,207,078
1,213,581
Georgia
353,257
353,257
352,641
Hawaii
85,780
85,780
85,529
Idaho
85,780
85,780
85,529
Illinois
739,026
739,026
732,338
Indiana
364,825
364,825
363,063
Iowa
212, 110
212, 110
209,574
Kansas
172,807
172,807
171,217
Kentucky
242,566
242,566
241, 105
Louisiana
246,672
246,672
244 ,609
Maine
85,780
85,780
85,529
Maryland
279,095
279,095
279,511
Massachusetts
412,620
412,620
408,985
Michigan
586, 106
586, 106
583,145
Minnesota
279,036
279,036
277,418
Mississippi
164,803
164,803
163,490
Missouri
364,959
364,959
362,808
Montana
85,780
85,780
85, 529
Nebraska
112,574
112,574
111,428
Nevada
85,780
85,780
85,529
New Hampshire
85,780
85,780
85,529
New Jersey
536,743
536,743
534,222
New Mexico
88,067
88,067
89,037
New York
1,208,257
1,208,257
1, 194,007
North Carolina
433,481
433,481
435,512
North Dakota
85,780
85,780
85, 529
Ohio
738,965
738,965
734,654
Oklahoma
216,848
216,848
215,277
Oregon
200,724
200,724
200,807
Pennsylvania
936,091
936,091
926,991
Rhode Island
85,780
85,780
85,529
- 56 -
1424
STATES
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Northern Mariana
American Samona
Guam
Puerto Rico
Virgin Islands
Palau
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
326,110
326,110
326,425
921,299
921,299
924,618
85,440
85,440
85,190
85,780
85,780
85,529
359,321
359,321
361,353
300.249
300.249
300,731
138,177
138,177
136,708
333,708
333,708
331,192
85,780
85,780
85,529
11,265
11,265
11,233
11,265
11,265
11,233
43,200
43,200
43,074
177,775
177,775
178,949
43,200
43,200
43,074
7,803
7,803
7,734
- 57 -
1425
ADMINISTRATION ON AGIGN
Ombudsman Services
FY 1994
FY 1995
FY 1996
STATES
Actual
Estimate
Estimate
$4,315,130
$4,315,130
$4,392,653
Alabama
70,100
70,100
71,440
Alaska
22,009
22,009
22,407
Arizona
65,956
e3,956
,68^. 510
Arkansas
45,483
45,483
46,282
California
421,936
421,936
430,274
Colorado
46,467
46,467
47,864
Connecticut
58,641
58,641
59,374
Delaware
22,009
22,009
22,407
District of Columbia
22,009
22,009
22,407
Florida
309,706
309,706
317,937
Georgia
90,637
90,637
92,385
Hawaii
22,009
22,009
22,407
Idaho
22,009
22,009
22,407
Illinois
189,615
189,615
191,860
Indiana
93,605
93,605
95,116
Iowa
54,422
54,422
54,904
Kansas
44,338
44,338
44,856
Kentucky
62,236
62,236
63, 165
Louisiana
63,290
63,290
64,083
Maine
22,009
22,009
22,407
Maryland
71,609
71,609
73,227
Massachusetts
105,868
105,868
107, 147
Michigan
150,380
150,380
152,774
Minnesota
71,593
71,593
72,678
Mississippi
42,284
42,284
42,831
Missouri
93,639
93,639
95,049
Montana
22,009
22,009
22,407
Nebraska
28,883
28,883
29, 192
Nevada
22,009
22,009
22,407
New Hampshire
22,009
22,009
22,407
New Jersey
137,715
137,715
139,957
New Mexico
22,596
22,596
23,326
New York
310,009
310,009
312,809
North Carolina
111,220
111,220
114,096
North Dakota
22,009
22,009
22,407
Ohio
189,600
189,600
192,467
Oklahoma
55,638
55,638
56,399
Oregon
51,501
51,501
52,608
Pennsylvania
240,178
240,178
242,856
Rhode Island
22,009
22,009
22,407
- 58 -
1426
STATES
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wyoming
Northern Mariana
American Samona
Guam
Puerto Rico
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
22,009
22,009
22,407
83,671
83,671
85,518
236,383
236,383
242,234
21,922
21,922
22,319
22,009
22,009
22,407
92,192
92,192
94,668
77,036
77,036
78,786
35,453
35,453
35,815
85,621
85,621
86,766
22,009
22,009
22,407
2,890
2,890
2,942
2,890
2,890
2,942
11,084
11,084
11,284
45,612
45,612
46,881
- 59 -
1427
ADMINISTRATION ON AGING
Title VI I -Prevent ion of Elder Abuse
STATES
Alabama
ai aeVa
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georc|ia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
$4,648,000
$4,648,000
$6,231,930
74,559
74,559
100,000
23,409
23,409
31.387 .
70,150
70,150
95,967
48,376
48,376
64,830
448,777
448,777
602,716
49,423
49,423
67,047
62,371
62,371
83,170
23,409
23,409
31,387
23,409
23,409
31,387
329,408
329,408
445,355
96,403
96,403
129,410
23,409
23,409
31,387
23,409
23,409
31,387
201,678
201,678
268,751
99,559
99,559
133,235
57,884
57,884
76,908
47,158
47,158
62,832
66,195
66,195
88,479
67,316
67,316
89,765
23,409
23,409
31,387
76,164
76,164
102,573
112,602
112,602
150,087
159,946
159,946
214,000
76,148
76,148
101,805
44,974
44,974
59,996
99,596
99,596
133,141
23,409
23,409
31,387
30,721
30,721
40,891
2 3,4 09
23,409
31,387
23,409
23,409
31,387
146,476
146,476
196,046
24,034
24,034
32,675
329,730
329,730
438,172
118,296
118,296
159,822
23,409
23,409
31,387
201,661
201,661
269,600
59,177
59,177
79,001
54,777
54,777
73,691
255,457
255,457
340,183
23,409
23,409
31,387
- 60 -
1428
FY 1994
FY 1995
FY 1996
STATES
Actual
Estimate
Estimate
South Carolina
58,361
58,361
78,929
South Dakota
23,409
23,409
31,387
Tennessee
88,994
88,994
119,790
Texas
251,420
251,420
339,312
Utah
23,317
23,317
31,263
Vprmont
23,409
23,409
31,387
Virginia
98,057
98,057
132,607
Washington
81,937
81,937
110,361
West Virginia
37,708
37,708
50,168
Wisconsin
91,068
91,068
121,539
Wyoming
23,409
23,409
31,387
Northern Mariana
3,074
3,074
4,122
American Samona
3,074
3,074
4,122
Guam
11,789
11,789
15,807
Puerto Rico
48,514
48,514
65,669
Virgin Islands
11,789
11,789
15,807
Palau
2,156
2,156
2,868
- 61 -
I
1429
ADMINISTRATION ON AGING
Title VII Outreach and Insurance Counseling
FY 1994
FY 1995
FY 1996
STATES
Actual
Estimate
Estimate
$1,974,888
$1,974,888
$1,950,974
Alabama
32,082
32,082
31,730
Alaska
1-0,07 2
2S>,D73
9,932
Arizona
30,186 .
30, 186
30,428
Arkansas
20,816
20,816
20,556
California
193,106
193,106
191,105
Colorado
21,267
21,267
21,259
Connecticut
26,838
26,838
26,371
Delaware
10,073
10,073
9,952
District of Columbia
10,073
10,073
9,952
Florida
141,742
141,742
141,210
Georgia
41,482
41,482
41,033
Hawaii
10,073
10,073
9,952
Idaho
10,073
10,073
9,952
Illinois
86,781
86,781
85,214
Indiana
42,840
42,840
42,245
Iowa
24,907
24,907
24, 386
Kansas
20,292
20,292
19,922
Kentucky
28,484
28,484
28,054
Louisiana
28,966
28,966
28,462
Maine
10,073
10,073
9,952
Maryland
32,773
32,773
32,523
Massachusetts
48,452
48,452
47,589
Michigan
68,824
68,824
67,854
Minnesota
32,766
32, 766
32,280
Mississippi
19,352
19,352
19,023
Missouri
42,856
42,856
42,216
Montana
10,073
10,073
9,952
Nebraska
13,219
13,219
12,965
Nevada
10,073
10,073
9,952
New Hampshire
10,073
10,073
9,952
New Jersey
63,028
63,028
62, 161
New Mexico
10,342
10,342
10,361
New York
141,881
141,881
138,932
North Carolina
50,902
50,902
50,675
North Dakota
10,073
10,073
9,952
Ohio
86,774
86,774
85,483
Oklahoma
25,464
25,464
25,049
Oregon
23,570
23,570
23,365
Pennsylvania
109,921
109,921
107,863
Rhode Island
10,073
10,073
9,952
- 62
1430
STATES
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Northern Mariana
American Samona
Guam
Puerto Rico
Virgin Islands
Palau
FY 1994
FY 1995
FY 1996
Actual
Estimate
Estimate
10,073
10,073
9,952
38,294
38,294
37,982
108,184
108,184
107,587
10,033
10,033
9,913
10,073
10,073
9,952
42,194
42,194
42,046
35 -257
25,257
34,992
16^226
16,226
15,907
39,186
39,186
38,537
10,073
10,073
9,952
1,323
1,323
1,307
1,323
1,323
1,307
5,073
5,073
5,012
20,875
20,875
20,822
5,073
5,073
5,012
912
912
908
- 63 -
Wednesday, March 29, 1995.
OFFICE OF THE INSPECTOR GENERAL
WITNESSES
JUNE GIBBS BROWN, INSPECTOR GENERAL
MICHAEL MANGANO, PRINCIPAL DEPUTY INSPECTOR GENERAL
DENNIS DUQUETTE, DEPUTY INSPECTOR GENERAL
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET
Mr. Dickey (presiding). Are you ready to get started, Ms. Brown?
Ms. Brown. Yes, sir, I am.
Mr. Dickey. Okay, please begin.
Opening Statement
Ms. Brown. Mr. Chairman, I'm pleased to appear before you
today to present the fiscal year 1996 appropriation request for the
Office of Inspector General. Our statutory mission is to promote
economy, efficiency, effectiveness and integrity in the Department
of Health and Human Services' programs and operations. We were
created to protect the interests of taxpayers and the beneficiaries
of more than 300 health and welfare programs of this Department.
Rather than reacting to individual events that may result in sta-
tistical accomplishments, our operating philosophy is to employ our
scarce resources in a proactive approach, bringing about program
improvements. Our focus is on systemic problems; we plan our
work to address areas of high vulnerability and concentrate our ef-
forts on ensuring that program weaknesses are corrected.
These are particularly challenging times for OIGs, such as ours,
that are engaged in investigating, auditing and evaluating Federal
programs in the midst of dramatic change and reinvention. Never-
theless, it is during these times of program consolidation, agency
restructuring, work force streamlining and process re-engineering
that we have a unique opportunity to apply our skill and objectivity
to help the Administration and Congress find ways to achieve a
government that truly works better and costs less.
Although the Social Security Administration will shortly become
a separate agency, the remaining programs of the Department still
present a formidable challenge. Providing adequate oversight of the
Health Care Financing Administration, which has outlays com-
parable to the Department of Defense, and the public health pro-
grams and welfare programs that are administered by HHS contin-
ues to stretch our resources to the limit.
To meet these challenges, we have been taking innovative steps
and implementing new methodologies to perform our audit, inves-
tigative and inspection oversight activities. These innovations, cou-
pled with renewed priority setting and deployment of staff" to criti-
(1431)
1432
cal workload areas, will help us fulfill our mission and support the
programs of the Department.
ACCOMPLISHMENTS
Since we began 14 years ago, one important measure of our suc-
cess has been the savings accruing to the Federal government as
a result of our efforts. Since 1981, the return on OIG investment,
and the growth in administrative sanctions and judicial prosecu-
tions in response to OIG recommendations, has resulted in over
$59,000,000,000 in settlements, fines, restitutions, receivables and
savings to the Federal government.
This year's savings of $8 billion represent a substantial increase
in the return on OIG investment, from $160,000 per OIG employee
in 1981 to $6,400,000 per OIG employee in 1994. And from $4
saved for every OIG budget dollar spent in 1981 to $80 saved for
every OIG budget dollar spent in 1994. This increase in productiv-
ity occurred even as the Department's programs, and thus the
scope of our work, has expanded dramatically.
Administrative sanctions against individuals and entities who
defrauded or abused departmental programs or their beneficiaries
also rose from 39 in 1981 to 1,334 in 1994. During the same period,
successful judicial prosecutions rose, from 165 in 1981 to 1,169 in
1994. We refer for prosecution those individuals who fraudulently
obtain Social Security benefits or who otherwise criminally misuse
Social Security numbers, who improperly claim Medicare and Med-
icaid reimbursements, who engage in fraudulent telemarketing
schemes targeted to beneficiaries, and who defraud government
contracts and grants.
Mr. Dickey. Excuse me, that 1,100 is what time period?
Ms. Brown. That was in 1994. I was comparing it with 165 pros-
ecutions in 1981. So during the period, our office has been active.
Mr. Dickey. I see.
Ms. Brown. Another important area of OIG responsibility is the
deterrence, detection and prosecution of any corruption found
among departmental employees. While the number of prosecutions
and sanctions has risen over several years, it will be a challenge
to maintain similar numbers in 1996. We have experienced a con-
tinuing loss of staff in recent years, amounting to a 15 percent re-
duction since 1991.
We have for several years published the OIG Cost Savers and
Program and Management Improvement handbooks, respectively
referred to as the Red and Orange Books. The Red Book is a com-
pendium of significant OIG monetary recommendations that are
pending decisions or implementation actions by policy makers. We
prepare the Red Book to provide departmental decisionmakers. Ad-
ministration officials, and members of Congress with a tool for
evaluating actions that might be taken to achieve savings and/or
to improve program efficiency.
Our 1995 edition describes 79 dollar-saving opportunities, more
than 80 percent of which are directed at HCFA. Full implementa-
tion of the recommendations contained in the Red Book are pro-
jected to produce almost $25,000,000,000 in annual savings to the
Department.
1433
The Orange Book is a compendium of significant non-monetary
findings and recommendations. This compendium ensures that the
most significant weaknesses identified by the OIG relating to pro-
gram and financial management in the Department are flagged
and tracked until final corrective action is completed. The docu-
ment focuses on improving financial systems, internal controls, and
program efficiencies that in turn enhance the quality of programs
The 1995 Orange Book highlights 163 significant issues.
And this morning, I am pleased to submit copies of these docu-
ments to the subcommittee.
BUDGET REQUEST
For 1996, we are requesting $67,889,000 in general funds and
$33,837,000 in trust fund transfers, for a total obligational author-
ity of $101,726,000. This amount represents an increase of
$1,672,000 above our 1995 budget. It also reflects a slight reduction
in our FTE ceiling to 1,260, or five fewer than authorized for 1995.
The dollar increase is sought for annualization of the January
1995 pay raise of 2.4 percent and other mandated personnel costs,
that is, within-grade pay increases and a 25 percent availability
pay for criminal investigators, which is required by law. It also cov-
ers increased space rental payments to GSA.
We have been active in reinventing our processes and streamlin-
ing our operations. In our Office of Investigations, we have shifted
investigations to those areas of the country which traditionally
spend the most HHS dollars, for example, California and Florida,
and where data indicates that most fraud and abuse cases are
opened.
Our Office of Audit Services has conducted pilot tests with edu-
cational institutions and other entities to reduce the costs and
staffing needs associated with pre-award audits, without sacrificing
quality. We are also collecting data and information for many in-
spections via telephone in order to save travel dollars, and have
begun to consolidate administrative functions.
Examples of innovations that we will employ to aggressively com-
bat fraud, waste and abuse in the Department's programs are,
first, the establishment of a partnership plan between the OIG and
State auditors. Under this initiative, we will provide States with
the methodology for their use in conducting program audits. In ad-
dition to recovering taxpayer dollars, we believe this partnership
will result in program improvements and reduce the cost of provid-
ing needed services to Medicaid recipients.
Second, the cross-training of OIG auditors and evaluators to as-
sist in investigative work. We're also conducting joint audits, eval-
uations and investigations, particularly in combatting fraud in
health care.
Third, the development of a new work planning process to assure
integration of our audit, evaluation and investigative components.
And finally, the development of a pilot voluntary disclosure pro-
gram, in conjunction with the Department of Justice, that will pro-
vide responsible Federally-funded health care providers with incen-
tives to voluntarily report fraud and abuse that they discover with-
in their companies. This pilot program will allow, when appro-
1434
priate, for minimum exposure to dollar losses and sanctions by the
health care organization.
FISCAL YEAR 1996 PLANS
In fiscal year 1996, OIG efforts involving the Public Health Serv-
ice will focus on patient satisfaction with quality of medical care,
patient protection from research risk, post-marketing surveillance
of prescription drugs, the integrity of clinical trials in scientific re-
search, and the taxpayer's return on investment on certain long-
term research grant projects. Also, the barriers to implementation
of tribal management of Indian Health Service programs.
With regard to the Health Care Financing Administration, we
plan to continue examining the experience of Medicare bene-
ficiaries and Medicaid recipients in managed care plans and in
nursing homes. We will also continue to closely monitor Medicare
spending for home health care, which has increased five-fold since
1990, from $3 billion to expected levels this year of $16 billion.
We will also continue our surveillance of fraud and abuses in-
volving durable medical equipment expenditures. Finally, we plan
to review several large State Medicaid Management Information
Systems to determine compliance with national standards, and will
examine HCFA's plans for standardizing electronic media claims
processing.
Our efforts in the Administration for Children and Families will
focus on programs aimed at preventing the abuse of children, the
elderly, and the disabled, on certain aspects of the child support
enforcement and foster care programs, and on abuses within the
AFDC program.
We plan to examine the Administration on Aging's transpor-
tation and meals programs, and will identify opportunities for
States to increase services to the elderly under these Federally-
funded programs.
Additionally, we will continue to assess the Department's finan-
cial statements, review non-Federal audits, and monitor contractor
activities in order to assure compliance with all applicable Federal
statutes. Executive Orders and 0MB circulars.
In summary, our office continues to be committed to ambitious
objectives and meaningful, useful results. The subcommittee can be
assured that the resources invested in our office have been, and
will continue to be, productive to both the taxpayer and bene-
ficiaries' interests.
Although we are pleased with our accomplishments in assuring
that beneficiaries receive quality care, that the integrity of the
trust funds is maintained, and that those individuals who defraud
the Department's programs are held responsible for their actions,
we believe that much remains to be done. The resources requested
for 1996 will enable us to further our accomplishments, protect de-
partmental programs, and safeguard the heaJth and welfare of pro-
gram beneficiaries.
I should add, Mr. Chairman, that as of March 31, 1995, I will
also serve as Inspector General of the Social Security Administra-
tion, until a permanent SSA Inspector Greneral is confirmed. I'd be
happy to testify at some later period on SSA matters, should this
subcommittee so desire.
1435
That concludes my testimony, and I'll be happy to answer any
questions.
[The prepared statement and biography of June Gibbs Brown fol-
low:]
1436
STATEMENT OF JXniE GIBBS BROWN
Mr. Chairman and Members of the Subcommittee:
I am pleased to appear before you today to present the fiscal
year (FY) 1996 appropriations request for the Office of Inspector
General (OIG) .
Our statutory mission is to promote economy, efficiency,
effectiveness and integrity in Department of Health and Human Services
(HHS) programs and operations. We were created to protect the
interests of taxpayers cuid the beneficiaries of the more than 300
health and welfare programs of this Department. Rather than reacting
to individual events that may result in statistical accomplishments,
our operating philosophy is to employ our scarce resources in a
proactive approach to bringing about program improvements . Our focus
is on systemic problems; we plan our work to address areas of high
vulnerability and concentrate our efforts on ensuring that program
weaknesses are corrected.
These are particularly challenging times for OIGs such as ours
that are engaged in investigating, auditing, and evaluating Federal
programs in the midst of dramatic change and reinvention.
Nevertheless, it is during these times of program consolidations,
agency restructuring, workforce streamlining, and process
reengineering that we have a unique opportiinity to apply our skill and
objectivity to help the Administration and the Congress find ways to
achieve a government that truly works better and costs less.
Although the Social Security Administration (SSA) will shortly
become a separate agency, the remaining programs of the Department
still present a formidable challenge. Providing adequate oversight of
the Health Care Financing Administration (HCFA) , which has outlays
comparable to the Department of Defense, and of the public health
programs and welfare programs that are administered by HHS continues
to stretch our resources to the limit. To meet these challenges, we
have been taking innovative steps and implementing new methodologies
to perform our audit, investigative, and inspection oversight
activities. These innovations, coupled with renewed priority setting
and the deployment of staff in critical workload areas, will help us
fulfill our mission and support the programs of this Department.
Progress Report on Accomplishments
Since we began 14 years ago, one important measure of our
success has been the savings accruing to the Federal government as a
result of our efforts. Since 1981, the return on OIG investment, and
the growth in administrative sanctions and judicial prosecutions in
response to OIG recommendations, has resulted in over $59 billion in
settlements, fines, restitutions, receivables, and savings to the
Federal government. These savings represent a substantial increase in
the return on OIG investment: from $160,000 per FTE in FY 1981 to $6.4
million per FTE in FY 1994, and from $4 saved for every OIG budget
dollar spent in FY 1981 to $80 saved for every OIG budget dollar spent
in FY 1994. This increase in productivity occurred even as the
Department's programs, and thus the scope of our work, has expanded
dramatically.
Administrative sanctions against individuals and entities who
defrauded or abused departmental programs or their beneficiaries also
rose, from 39 in FY 1981 to 1,334 in FY 1994. During the same time
period, successful judicial prosecutions rose from 165 in FY 1981 to
1,169 in FY 1994. We refer for prosecution those individuals eind
entities who fraudulently obtain Social Security benefits, or who
otherwise criminally misuse Social Security Numbers (SSN) , who
improperly claim Medicare and Medicaid reimbursements, who engage in
1437
fraudulent telemarketing schemes targeted to beneficiaries, and who
defraud government contracts and grants. Another significant area of
OIG responsibility is the deterrence, detection, and prosecution of
corruption found among departmental employees.
While the number of prosecutions and sanctions has risen over
several years, it will be a challenge to maintain similar numbers in
FY 1996 . We have experienced a continuing loss of staff in recent
years, amounting to a 15 percent reduction since FY 1991.
Red Book euid Oreuiqe Book
We continue to pviblish the OIG Cost Savers and Program and
Management Improvement handbooks, respectively referred to as the
"Red" and "Orange" books.
The Red Book is a compendium of significant OIG monetary
recommendations that are pending decisions or implementation actions
by policy makers. We prepare the Red Book to provide departmental
decision-makers, Administration officials, and members of Congress
with a tool for evaluating actions that might be taken to achieve
savings and improve program efficiency. Our 1995 edition describes 79
cost-saving opportunities, more than 80 percent of which are directed
to HCFA. Full implementation of the recommendations contained in the
Red Book are projected to produce almost $25 billion in annual savings
to the Department .
The Orange Book is a compendium of significant non-monetary
findings and recommendations . This compendium ensures that the most
significant weaknesses identified by the OIG relating to program and
financial management in the Department are "flagged" and tracked until
final corrective action is completed. This document focuses on
improving financial systems, internal controls, and program
efficiencies that, in turn, enhance the quality of programs. The 1995
Orange Book highlights 163 significant issues.
This morning, I am pleased to submit copies of these documents
to the Subcommittee.
Budget Recaiest
For FY 1996, we are requesting $67,889,000 in general funds and
$33,837,000 in trust fund treinsfers, for a total obligational
authority of $101,726,000. This amount represents am increase of
$1,672,000 above our FY 1995 budget. It also reflects a slight
reduction in our FTE ceiling to 1,260, or 5 fewer than authorized for
FY 1995.' The dollar increase is sought for annualization of the
January 1995 pay raise of 2.4 percent, other mandated personnel costs
(such as within-grade pay increases and a 25 percent pay adjustment
for criminal investigators- -required by law) , and increased space
rental payments to GSA.
Reinvention Efforts
We have been active in reinventing our processes and
streamlining our operations. In our Office of Investigations, we have
shifted investigations to those areas of the country which
1 This includes 24 FTE as "placeholders" for positions to be
transferred from the Working Capital Fund to the OPDIVs for OS
regional support of personnel, financial management, and
administrative services. The figure also includes 259 FTE that will
be trauisf erred to SSA on March 31, 1995. Approximately $22 million
of the total obligational authority requested is earmarked for the
SSA Office of Inspector General .
1438
traditionally spend the most HHS dollars (e.g., California eind
Florida) and where data indicates the most fraud and abuse cases are
opened. Our Office of Audit Services has conducted pilot tests with
educational institutions and other entities to reduce the costs and
staffing needs associated with pre-award audits, without sacrificing
quality. We are collecting data and information for many inspections
via telephone in order to save travel dollars and have begun to
consolidate administrative functions.
Examples of other innovations that we will employ to
aggressively combat fraud, waste, 2ind eibuse in the Department's
programs are :
• The establishment of a Partnership Plan between OIG and State
auditors. Under this initiative, we will provide States with
the methodology for their use in conducting program audits . In
addition to recovering taxpayer dollars, we believe this
partnership will result in program improvements and reduce the
cost of providing needed services to Medicaid recipients .
• The cross -training of OIG auditors and evaluators to assist in
investigative work. Also, we are conducting joint audits,
evaluations, and investigations in combating fraud in health
care and other areas .
• The development of a new work planning process to assure
integration of our audit, evaluation, and investigative
components .
• The development of a pilot "voluntary disclosure" program that
will provide responsible Federally- funded health care providers
with incentives to voluntarily report fraud and abuse that they
discover within their companies. This pilot program will allow,
when appropriate, for minimum exposure to dollar losses and
Seinctions by the health care providers.
FY 1996 Plans
In FY 1996, OIG efforts involving the Pxiblic Health Service will
focus on patient satisfaction with quality of medical care and
protection from research risk, postmarketing surveillance of
prescription drugs, the integrity of clinical trials in scientific
research, the taxpayer's return on investment on certain long-term
research graint projects, and barriers to implementation of tribal
management of IHS programs .
With regard to HCFA, we plan to continue examining the
experience of Medicare beneficiaries and Medicaid recipients in
managed care plans and in nursing homes. We will also continue to
closely monitor Medicare spending for home health care, which has
increased five-fold since FY 1990 (from $3 billion to expected levels
this year of $16 billion) . We will continue our surveillcince of fraud
and abuses involving duratble medical equipment expenditures. Finally,
we plan to review several large States' Medicaid Management
Information Systems to determine complicince with national stcindards
and will examine HCFA' s plans for standardizing electronic media
claims processing.
Our efforts in the Administration for Children emd Families will
focus on programs aimed at preventing the abuse of children, the
elderly, eind the disabled, on certain aspects of the child support
enforcement and foster care programs, and on eibuses within the AFDC
program .
We plan to examine the Administration on Aging's trainsportation
and meals programs, and will identify opportunities for States to
increase services to the elderly under these Federally fvinded
1439
programs .
Additionally, we will continue to assess the Department's
financial statements, review non- Federal audits, and monitor
contractor activities in order to assure compliance with all
applicable Federal statutes. Executive Orders, and 0MB Circulars.
Conclusion
In summary, our office continues to be committed to ambitious
objectives and meaningful, useful results. The Subcommittee can be
assured that the resources invested in our office have been, and will
continue to be, productive to both the taxpayer and beneficiaries'
interests. Although we are pleased with our accomplishments in
ensuring that beneficiaries receive quality care, that the integrity
of the trust funds is maintained, and that those individuals who
defraud the Department's programs are held responsible for their
actions, we believe that much remains to be done. The resources
requested for FY 1996 will enable us to further our accomplishments,
protect departmental programs and safeguard the health and welfare of
program beneficiaries.
Mr. Chairman, this concludes my testimony. At this time, I will
be happy to answer questions from the Subcommittee.
1440
JUNE GIBBS BROWN
Inspector General
Department of Health and Human Services
June Qibbs Brawn was sworn In as Inspector Qeneral, Department o( Health and Human Services pHHS),
November S, 1993.
As Inspector General, Ms. Brown has responsibility (or audits, evaluations and both criminal and civil
irwestigations for DHHS as wen as the Imposition of sanctions, when necessary, agair^ health care providers
under the Program Fraud Civil Remedies Act The DHHS is the largest civliian agency of the Federal
Qovemment having the largest budget and more than 250 programs.
Before coming to HHS, Ms. Brown served as Inspector Gerwral of the Navy's Pacific Fleet at Pearl Hartx>r,
Hawaii. She has served In a variety of other management arxl Inspector General positions in the Federal
Qov6.' c ^nt since 1 972. She was Inspector General of the Interior Department from 1 979>1 981 , Inspeaor
Qeneral of NASA from 1981-198S and Inspector General of the Department of Defense from 1987-1989.
Ms. Brown has also held a variety of positions In private industry.
Ms. Brown currently serves as the Vice Chair of the President's Council on Integrity and Efficiency (PCIE).
Ms. Brown has also been affiliated with other organizations, including the President's Management Council
(PMC), and she is a fellow In the National Academy of Public Admlnistratioa She was the national president
of thie Association of Oovemmem Accountants, and has served on the Boards of Directors of the Federal Law
Enforcement Training Center, the Interagerwry Auditor Training Program at the Department of Agrlcuhure
Graduate School, the National Contract Management Association and the Hawaii Society of CPAs. She was
also the national chairperson of the Interagency Committee on Information Resources Management
Ms. Brovi^ received her Bachelor's and Master's of Business Administration from Cleveland State University,
ar>d her Juris Doctor from the University of Denver School of Law. She is a graduate of the Harvard
Advanced Martagement Program, and a Certified Public Accountant
Throughout Ms. Brown's government career she has received rnany honors and awards, including: the 1 994
Leadership Award from the Government Executive Magazine and the National Capitol Area Chapter of the
American Society of Put^tlc Admirtistration, the Department of Defense Distinguished Service Medal, Women
in Aerospace's Outstanding Achievement in Aerospace Award, NASA Exceptional Service Medal, the Joint
Firunciai Management Improvement Program's (JFMIP) Financial Management Improvement Award, arxJ the
Association of Qovemment Accountants' Robert W. King Award.
January 1995
1441
EFFECT OF BUDGET REDUCTIONS
Mr. Dickey. Yes, ma'am. Did you hear my initial questions to Dr.
Torres-Gil this morning?
Ms. Brown. Yes, I did.
Mr. Dickey. I don't want to go through that all again, but can
you help me, if we just took a 10 percent cut in your agency's re-
quest, how would that fall?
Ms. Brown. Well, since we returned approximately $8 billion to
the Federal government last year, 10 percent would be approxi-
mately $800,000,000 less that we would be bringing in and return-
ing to the program.
Mr. Dickey. Okay, how would that change the service given?
Ms. Brown. Well, there would just be fewer audits, inspections
and investigations that we would be able to conduct. We have a
very active criminal investigative unit. In one case alone, we re-
turned $379,000,000 to the government last year. That was larger,
in Janet Reno's words, than all of the Department of Justice's in-
vestigative recoveries in the previous year. We had another case
that resulted in $110,000,000 being returned. Before that
Mr. Dickey. Those are fines or damages or what?
Ms. Brown. It's a combination of fines and penalties. But the
major part involves recovering money that was fraudulently ob-
tained.
Mr. Dickey. I see.
Ms. Brown. So all of that money is returned to the government
to reduce the amount that would otherwise have to be paid.
Mr. Dickey. Well, I'm having my difficulties with OSHA in their
attempts to go out and just find ways to fine people. If you're say-
ing that if we cut the budget that you all would be finding more
ways to fine people, then I'm not so sure we're interested in that
position. But now, can you tell me how you all can just bring the
operations down, expense-wise?
Ms. Brown. In our operation?
Mr. Dickey. Yes, ma'am.
Ms. Brown. Eighty-five percent of our budget is consumed by
salaries. Most of the rest of it is in travel or equipment for the peo-
ple who are doing the work.
Mr. Dickey. And you say you're already using the telephone
more?
Ms. Brown. Yes. We have several initiatives that have cut down
on the amount of travel that we've had to do. For example, in some
of the pre-award audits, we have voluntarily allowed the contrac-
tors to participate in a new program initiative. We produced a
booklet that provides contractors with essential questions and al-
lows them to fill in the blanks with material they should have de-
veloped in making their award. We then review the document and
conduct our work from a central location.
Most of those who have participated have been very pleased. It
helped them organize their work, there was less imposition on their
business site, and they were able to put a better document together
in their award presentation.
1442
PREVENTION AND DETECTION OF FRAUD
Mr. Dickey. All right, as far as the prevention and detection of
fraud, is the only tangible evidence of the improvement the amount
of, the increase in the amount of prosecutions? Are there any other
ways that you all can point, or any other things you can point to
that would show improvement as far as the prevention and detec-
tion of fraud?
Ms. Brown. Well, it isn't just the prosecutions. Most of that is
dollar recovery back to the programs that were losing money. Ex-
cuse me, this is Mike Mangano, my deputy.
Mr. Mangano. Another way that I would answer your question,
which I think gets at what you're getting at, is that in a number
of the areas in which we conduct our investigations, audits and
evaluations, we uncover these tremendous spikes of inappropriate
expenses for say, the Medicare program. Once we launch those in-
vestigations and evaluations, we find ways to cut off the
vulnerabilities of those programs. That is, we make recommenda-
tions to eliminate the means that people can use to defraud the
programs or get inappropriate funds back from them.
One measure that we use is to track the vulnerabilities after we
make recommendations to the program on ways they can stop that
activity. And we usually see these nice downturns after our rec-
ommendations are implemented.
FRAUD in SSI program
Mr. Dickey. Who made the report on the SSI benefits? Are you
familiar with that report?
Ms. Brown. Yes.
Mr. Dickey. Okay, what are we doing to ensure that the Cjovem-
ment will stop the — have we identified the fraud? I mean, can you
all definitely tell us that there is fraud in the SSI program?
Ms. Brown. Well, we believe that there are a lot of weaknesses
in the SSI program, because some of the incentives are in the
wrong place. In a lot of our work, we have uncovered what the re-
ality is. For instance, with alcoholics and drug abusers, we were
able to show that in the entire time we were offering this benefit,
that virtually no one ever got off the program.
Mr. Dickey. Do you consider that fraud?
Ms. Brown. No, I don't consider that fraud.
Mr. Dickey. Do you call it abuse?
Ms. Brown. I think that it is a weakness in the program.
Mr. Dickey. So you're going to blame the program rather than
people who are receiving it?
Ms. Brown. For the most part, yes. There is no reason to go
after individuals, who are simply taking advantage of a program
that's available. But we believe there are ways of strengthening the
program.
Mr. Dickey. Did you find any circumstances where parents were
coaching the children to act disruptive in class?
Ms. Brown. Isolated incidents. We found no real trend where
there was any widespread coaching going on. And we did look at
that particularly.
1443
Mr. Dickey. It's just rampant in Arkansas, in eastern Arkansas,
and we're just hearing about it and hearing about it. You just can-
not, I mean, just the mere repetition of it is enough to give it ver-
ification.
Ms. Brown. Yes, sir, and
Mr. Dickey. I was disturbed that you all said there's no hard evi-
dence.
Ms. Brown. Well, we're talking about incidents where a teacher
will report potential abuses. However, we have not found any wide-
spread trends. But we have found
Mr. Dickey. What have you done to find out if there are wide-
spread trends? Tell me that?
Mr. Mangano. One of the reports that we did on the children in
SSI programs involved an examination of case files to determine
whether the children who were found to be eligible for Supple-
mental Security Income were actually eligible for it.
In that review, which used a national random sample that we
drew, we found that about 10 percent of the children, based on the
medical files that were provided to the State disability determina-
tion offices, should not have been eligible for those services. In an-
other 20 percent, we found there was not sufficient supporting doc-
umentation to make a determination that they were eligible. There
was a potential 30 percent of the children that had been deter-
mined eligible because of the Zebley decision who potentially
should not have been on the rolls.
When we completed that review, we provided it to the Social Se-
curity Administration to verify our findings and to see if they
would have assessed the individual cases in the same way. And
they verified every one of them. So when Inspector General Brown
said that we have found isolated cases of coaching, that's one par-
ticular way in which somebody could have been found to be ineli-
gible.
We found 30 percent that are potentially ineligible. Coaching
could be one of those instances, but we don't know whether it is
widespread or not. In fact, the work that we have done has shown
that it is isolated. Arkansas is one of the areas, though, that came
up fairly substantially high.
MAGNITUDE OF SSI FRAUD
Mr. Dickey. The numbers themselves are just increasing, aren't
they, the number of dollars?
Ms. Brown. Astronomically, sir, and that's why we did three re-
ports in that area. Of course, one of the problems is the court inter-
pretation that appears to have changed Congress' intent when this
benefit was created. What we've tried to do is point out the reali-
ties of what is happening and suggest that perhaps some kind of
legislative action could be taken to clearly indicate Congress' intent
as to who should receive these funds.
Mr. Dickey. Do you consider that a thorough report that you all
made, or semi-thorough or only surface?
Ms. Brown. We had three separate reports, each one covering a
different area. I believe those areas were thoroughly covered. There
are probably other things that we could look at as well.
1444
Mr. Dickey. Well, let's just talk about the bottom line. Were
there any prosecutions that have been referred?
Ms. Brown. No, sir.
Mr. Dickey. Why not?
Ms. Brown. We did not do criminal investigations. What we
were trying to find out in these cases was who the beneficiaries
were, whether or not they were entitled to the benefit, and had
been properly evaluated, even using the more liberal standard that
is now used by SSA. This information was provided to SSA so pro-
gram improvements could be made.
Mr. Dickey. Inspector General, all we'd have to have is one pros-
ecution in Arkansas, and I think the word would get out. Is there
not any way that we can, how can we approach that problem?
Ms. Brown. Well, ordinarily our office is so involved in larger
criminal areas where organized crime and more organized ap-
proaches are going on, that we aren't prosecuting individual bene-
ficiaries.
Mr. Dickey. Okay, well, that's well taken.
What penalties
Mr. Mangano. May I add something to that? I think this will get
to your question as well. The way the process works is the State
disability determination office makes the determination about
whether a person is eligible for the benefit or not. Once they do,
the person's on the rolls.
Our review showed that the records did not support as many as
30 percent of those beneficiaries receiving the services. Our respon-
sibility, then, is to turn those records back to the Social Security
Administration, and they're doing a thorough review of every one
of those cases.
If they suspect that fraud was the reason for a person getting on
the rolls, they'll turn that case back to us and we'll open up a
criminal investigation. And in fact, right now, we do have a very
large investigation underway on suspected cases of fraud in the SSI
program that do deal with coaching and some other matters, such
as manipulation.
Mr. Dickey. Okay, good, so we're not through with it?
Mr. Mangano. No, absolutely not.
Mr. Dickey. Grood, excellent. Now, what other penalties are
there? We get the money back, if the person is solvent. We fine peo-
ple. What other sanctions do we have?
Ms. Brown. Well, we would take them to court, and of course it
would be dependent upon the judge's decision as to whether there
would be any further penalty or confinement, based on the amount
that was fraudulently obtained, the person's intent and so on.
Mr. Dickey. All right. What are your plans in the future to in-
crease the efforts to prevent fraud and abuse in this area? Any-
thing different?
Ms. Brown. In SSI in particular?
Mr. Dickey. Right.
Ms. Brown. Well, as Mike mentioned, we have a case now that's
been opened. I'm not free to talk about open criminal investiga-
tions, but we would continue that work, and will continue opening
other cases as we become aware of allegations.
1445
Mr. Dickey. I'd like to yield to the most distinguished gentleman
from Maryland, one of the most distinguished Members on this
whole panel, Mr. Steny Hoyer, for however long he wants. In fact,
one of the most distinguished Members in Congress.
Mr. Hoyer. I want a copy of that transcript, with Mr. Dickey's
remarks. [Laughter.]
My opinions of Mr. Dickey's judgment have gone exponentially
up. [Laughter.]
Mr. Chairman, I really don't have any questions at this time. So
I'm going to yield back, but I may have questions in the future at
this hearing. I don't know whether issues are going to come that
I'm very interested in. I will make an observation that I made last
year, with reference to the continuing efforts made by the Inspector
General. Obviously $8 billion in savings of waste, fraud and abuse.
President Reagan made much of that. Others have made much of
waste, fraud and abuse.
On our side of the aisle, frankly, we have indicated that waste,
fraud and abuse was not the answer to solving the budget deficit
problem. I think that is correct, but I think it is absolutely essen-
tial that we raise the issue and pursue waste, fraud and abuse as
vigorously as we can.
And I'm pleased to see, both under the Reagan Administration
and the Bush Administration and the Clinton Administration, that
we see a real thrust towards getting at waste, fraud and abuse, be-
cause the taxpayers are rightfully outraged when they're working
hard, they're paying taxes, more than they'd like to pay, like every-
body, and they see people ripping off the system, because they had
to work hard to pay that money in.
So I think it's very appropriate that we raise those issues, and
pursue it as vigorously as you're pursuing it. I congratulate you for
that.
Ms. Brown. Thank you, sir. This is the fourth agency where I
have served in this capacity, including the Department of Defense.
I think this is an extremely well-run agency; however, it is also evi-
dent to me that the growth of fraud in the health care area is
something that is growing in astronomical proportions, and we
have to take as decisive and firm action as we possibly can to get
ahead of this. I believe Mr. Freeh, the Director of the FBI, has tes-
tified about this in the last couple of weeks. The FBI is becoming
much more active. We're working closely with them and with the
Department of Justice. We have a senior-level Health Care Fraud
Group where both the Criminal Division, the Civil Division, the
FBI, and my office participate. We are coordinating with all the
other IGs who have health care responsibilities, and also with the
State Medicaid Fraud Control Units, to try to get a handle on this.
I think our success is demonstrated by our chart, but it's not some-
thing that we can let up on. We really need to increase our activi-
ties.
Mr. Hoyer. Mr. Chairman, I may have some other questions
later on, but right now, let me withhold.
1446
FRAUD IN HEALTH CARE PROGRAMS
Mr. Dickey. What programs in the Department cause you the
most concern in terms of either weak management or financial vul-
nerabihty?
Ms. Brown. Well, as I mentioned, financial vulnerability is cer-
tainly evident in the health care programs. As also mentioned ear-
lier, we constantly monitor these programs for sudden growths in
a particular type of claim. Such growths always point to some prob-
lem. We've had as much as a 9,000 percent increase in a year in
something like female urinary collection devices.
We know that something is wrong, since the number of patients
has actually gone down in this area. And we've found that other
types of equipment, diapers, and so forth, are being charged to the
government in addition to these devices.
So we're able to go in and look at the vulnerable areas. A few
other areas that we're going to focus on this year are home health
care agencies, nursing homes, and the durable medical equipment
that is used in conjunction with these facilities. We've found they
are very vulnerable to fraud. For example, in one Florida nursing
home, St. Johns, we found that over 70 percent of the billings were
false. And then
Mr. Dickey. Seventy percent?
Ms. Brown. Over 70 percent in that particular case.
Mr. Dickey. Were there references to criminal prosecution in
those cases?
Ms. Brown. Absolutely, sir.
Mr. Dickey. Good. Is it your conclusion that we're still better off
with people at home, financially, now, I'm not talking about family-
wise, because I know the answer to that, but are we still better off
with people at home rather than in institutions?
Ms. Brown. All right, aside from the family issue, we're finding
the same kind of problems in the home health care industry. That's
why we're focusing on both of those. We expanded our study in
Florida to look at other nursing homes, since obviously this one
place was not representative, and found that over 20 percent of the
billings were false. So both of these industries, both nursing homes
and home health care, are extremely vulnerable to fraud. We're
going to do an expanded study this year, covering five States.
AUDIT priorities
Mr, Dickey. Any other audit priorities for the coming year?
Mr. Mangano. We just have lots of focuses this year across the
Department. I would say that about 50 percent of our work plan
in the audit area is going to be focusing on Medicare. We'll be look-
ing at hospital reimbursement, home health care agencies, nursing
homes, durable medical equipment, and at the pricing of drugs in
the Medicaid program for rebates. We'll also be looking at the Food
and Drug Administration in terms of how it conducts its post-mar-
ket surveillance process.
We're looking right now at how the FDA conducts its investiga-
tions for medical device equipment. In the Administration for Chil-
dren and Families, we're looking particularly at Child Welfare
Services and foster care. Another big area that we're placing a lot
1447
of attention on is child support enforcement. We've been involved
in this area now for about eight years, and we're taking a very sub-
stantial look this year at some interesting issues of absent parents
who are not paying child support, yet claiming income tax deduc-
tions for child care.
Mr. Dickey. That's really patriotic, isn't it?
Mr. Mangano. Absolutely.
FRAUD IN MEDICARE AND MEDICAID PROGRAMS
Mr. DiCKEY. Let me ask you this. How many billions of dollars
is the Government losing each year in the Medicare program?
Mr. Mangano. The estimate from the Greneral Accounting Office
a couple of years ago is that about 10 percent of the money is lost
to fraud or abuse. Of course, the larger share of that would be
abuse. No one really knows how much, because you don't know
fraud until you actually see it, investigate it, and prosecute it.
So if the GAO is right that there's 10 percent, and we'd have to
figure both 10 percent of Medicare and 10 percent of Medicaid,
Federal expenditures for Medicare this year will be about $177 bil-
lion. For Medicaid, it will be just under $90 billion. That does not
count the beneficiary share for Medicare, and does not count the
State share for Medicaid. So, substantial amounts of money could
be involved.
Ms. Brown. Sir, I might mention that the year I came to this
office, and I've been here two years now, 10,000 cases were closed
without investigation because we just didn't have the resources to
investigate all the possibilities that had been forwarded to us
through one source or another. So we're picking and choosing. Of
course, we're taking the low-hanging fruit, and that's why we're
getting such large results per person in OIG.
But I would like to see us get into more of these other areas, be-
cause of the tremendous deterrent effect that it would have against
other people pulling similar tj^es of fraud.
LOBBYING USING FEDERAL FUNDS
Mr. Dickey. Remember this is Chairman Porter's question. A
number of Members of Congress have commented to me concerning
the intense lobbying activities of some organizations that are large-
ly or exclusively Federally funded. In the process of doing audits
required under OMB circular A- 133, do you have different proto-
cols or guidance for those grantees that have a high percentage of
Federal funding, and how do you police the use of Federal funds
for lobbying activity?
Ms. Brown. Mr. Chairman, that particular program is called the
60 Plus grant program. And that's administered by the Department
of Labor. Because Congressman Porter had notified us of this issue
and his concern about it, I am forwarding the information over to
the DOL Inspector General, Chuck Masten, to look into this matter
and see if there's lobbying going on.
Mr. Dickey. Let me ask you this. The two times that I saw those
aging agency vans delivering people to the polls in Arkansas, is
that the sort of thing that we should report to you?
Ms. Brown. Well, I don't know the circumstances in that particu-
lar situation. Certainly, there should not be any lobbying with Fed-
1448
eral funds. There is no doubt about that. Whether this was some-
thing that would fall into that category in any way, I don't know.
Mr. Dickey. You know, it's kind of hard to deny carrying people
to the polls, you see. I haven't brought it up, which is kind of hard
to do, but is that the sort of thing that you could look at?
Mr. Mangano. You're absolutely correct, there should not be any
lobbying using Federal money. It's very important, though, to look
at the particulars of the case. In many communities, there's a shar-
ing of transportation. So that particular van could have been used
by the Aging organization, but it could also have been shared by
other organizations who were not getting Federal money. So you
really have to look at the individual case.
What we recommend is that you refer the matter to the program
first, and if they suspect fraud, they will always refer it to the OIG
to do a criminal investigation.
Mr. Dickey. You mean the program that went and got the peo-
ple?
Ms. Brown. The 60 Plus program. We are referring to the De-
partment of Labor.
Mr. Dickey. I see. I was about ready to say, that would be like
asking a rabbit to go to the store for the lettuce. I don't know if
we'd get anjrthing back.
Okay, what kinds of early warning systems do you use to identify
prospective problems in this area, this area meaning the lobbying.
Mr. Mangano. Oh, lobbying. We would love to push that back.
Each year we're required by the Congress to take a look at lobbying
activities that occur in our Department. The only way we can do
that is to go back to the agencies and look at their grants, to deter-
mine what people had submitted money to get that grant for.
We ask the program agencies if they've seen any evidence of lob-
bying activities. And I can tell you, each year very, very minor
amounts are reported. That doesn't mean there isn't any lobbying
going on, but it isn't being reported.
If suspected lobbying is reported, then the appropriate Assistant
Secretary would look at it. And if there were criminal activities
going on, or fraudulent activities, or a misuse of Federal funds,
they would refer the matter to us. So we have the one proactive
approach to the lobbying issue, where we're required each year to
report to ^he Congress, but it's not really sufficient to police the
area.
Ms. Brown. I might add, sir, that one of the things we often find
in the agencies we're auditing is that they have buried lobbying
costs in the costs that they're charging to the Federal government.
They can't do that, but it's one that we always note, and we make
sure that those costs are taken out. We are going after a few of
them criminally, where they have not only included lobbying costs,
but also other personal expenditures on a regular basis.
Mr. Duquette. Also if I may, Mr. Chairman, you mentioned A-
133 at one point in the question.
Mr. Dickey. Right.
Mr. Duquette. A-133 is, of course, the implementing circular for
the Single Audit Act. I think that about 7,000 of our HHS grants
are audited by public accountants under the Single Audit Act and
Circular A-133. In that regard, part of the audit does require them
1449
to look at lobbying activities. It's part of the compliance supple-
ment, if you will, that the auditors use.
So to the extent that they identify any violations, those will be
reported and come up, if you will, through the system. We receive
those reports, and that information is aggregated and put into a
system that's shared with each of the program managers for the
grants.
So to the extent that lobbying costs are identified by public ac-
countants under single audit activity, they would flow up through
the system and ultimately get to the program managers and, in
many cases, to us also.
Mr. Dickey. All right. The rest of the questions we'll just submit
in writing from Congressman Porter.
Did you have anything else, Mr. Hoyer?
Mr. Hoyer. I have no questions.
Mr. Dickey. Thank you all very much for being here.
Ms. Brown. Thank you.
Mr. Dickey. We are recessed until 2:00 o'clock.
[The following questions were submitted to be answered for the
record:]
1450
MEDICARE FRAUD
Mr. Porter; How extensive is the problem of fraud in the
Medicare program? How many billions of dollars is the Government
losing each year in this manner?
Ms. Brown: In February, the General Accounting Office (GAO)
issued a report discussing Medicare's exposure to losses through
waste, fraud, and cibuse. GAO noted in this report that Medicare is
the fastest growing program in the Federal budget; Medicare
expenditures have more than doubled in the last decade, from $70
billion in 1985 to $162 billion in 1994. In identifying Medicare as a
high risk program, GAO concluded that the program remains highly
vulnerable to exploitation. In earlier reports and testimony, GAO
estimated the loss to fraud in overall health care at about 10
percent; that would put about $16 billion in Medicare at risk in 1994.
Although it is not possible to know exactly how much fraud there may
actually be in the program, the Office of Inspector General (OIG)
generally agrees with GAO's assessment. Because there is no
indication that fraud and abuse in the health care industry is
abating, OIG is seeking to broaden its investigative, audit and
evaluation activities aimed at curbing excessive utilization and
unnecessary spending in the Medicare program.
Mr. Porter: What portion of your office's investigative
resources is devoted to this problem, and roughly how many FTE does
that entail?
Ms. Brown: In March 1995, OIG's Office of Investigations had
approximately 346 full-time equivalent (FTE) staff, including 202
criminal investigators. Almost all of these staff were available to
work in support of any and all HHS programs. However, when the Social
Security Administration (SSA) became an independent agency on March
31, 126 of those FTE were transferred to the new OIG at SSA. The
remaining 220 FTE are now assigned primarily to Medicare and, to a
lesser extent, Medicaid. Fortunately, OIG is eible to leverage its
investigative resources for Medicare through coordination with the
Health Care Financing Administration's (HCFA) contractor-based fraud
units and, for Medicaid, through the State Medicaid Fraud Control
Units (SMFCU).
Given current fiscal restraints, OIG supports legislation which
would establish a Health Care Fraud and Abuse Control Account to help
pay for enforcement activities. Under this approach, financial
recoveries derived from health care fraud cases (e.g., criminal fines,
civil penalties, and damages under the False Claims Act) and
administrative penalties and assessments would be deposited into an
account, to be made available for the future funding of fraud and
abuse enforcement activities. With this mechanism, the individuals
who actually perpetrate fraud against, or otherwise abuse, our Federal
health care programs and are adjudicated as guilty will pay the costs
of increased enforcement in those programs. Therefore, funding to
combat fraud and abuse is increased without either drawing down from
the U.S. Treasury or increasing taxes. Of course, full restitution of
monies lost due to fraud would be made before any funds are deposited
in the Control Account.
LOBBYING USING FEDERAL FUNDS
Mr. Porter: A number of Members of Congress have commented to
me concerning the intense lobbying activities of some organizations
that are largely or exclusively Federally funded. In the process of
doing the audits required under OMB circular A-133, do you have
different protocols or guidance for those grantees that have a high
percentage of Federal funding, and how do you police the use of
Federal funds for lobbying activities?
1451
Mb. Brown: The Office of Management and Budget's (OMB) Circular
A-133 is the implementing circular for the Single Audit Act. The
principles and standards applied under A-133 audits are the same,
regardless of an organization's percentage of Federal funding.
Approximately 7,000 HHS grants are audited by public accountants under
the Single Audit Act. One requirement for these audits is that
lobbying activities be exeunined. Any violations should be identified
and ultimately reported to program managers. In many cases, the
violations may be reported to OIG for appropriate action.
Each year OIG is required by Congress to examine and report on
lobbying activities by departmental grantees. To prepare this report,
we examine grants to agencies and ask program officials to provide us
with any evidence of lobbying activities which they may know of.
Usually, very minor amounts are reported. On occasion, we find that
lobbying costs are buried in other costs charged to the Federal
government; when this occurs, we ensure that these costs are purged.
In a few instances, where lobbying costs and other personal
expenditures are regularly charged to the government, we pursue the
cases criminally.
Mr. Porter; What kinds of early warning systems do you use to
identify prospective problems in this area?
Ms. Brown: Although OIG does not have an "early warning system"
to identify problems in this area, we have the pro-active approach
mentioned above, our annual report to Congress on lobbying activities
by departmental grantees. We note, however, that this is not a
sufficient mechanism to fully police the area.
NEEDED LEGISLATIVE CHANGES
Mr. Porter: In your opinion, what are the most important
legislative changes that need to be made in the Department's programs?
Ms. Brown: I am providing nine excerpts from our 1995 Cost
Savers Handbook, commonly referred to as the Red Book. We prepare the
Red Book to provide departmental decision-makers. Administration
officials, and Members of Congress with a tool for evaluating actions
that might be taken to achieve savings and improve progreun efficiency.
Implementation of all recommendations contained in the Red Book are
projected to produce almost $25 billion in annual savings to the
Department. The nine excerpted items, which would require legislative
action for implementation, are projected to produce almost $6 billion
in annual savings to the Department.
Mr. Porter: Has the Department taken any steps to propose
legislative changes in these areas?
Ms. Brown: Yes, in some cases. The status of our
recommendations, including any actions taken by the Department, are
indicated on the attached Red Book excerpt.
1452
Stop Inappropriate Payments
for Incontinence Supplies
Current Law:
According to the Medicare Carriers Manual section 2130, "Prosthetic devices (other than dental) which replace all
or part of an internal body organ (including contiguous tissue), or replace all or part of the function of a
permanently inoperative or malfunctioning internal body organ are covered when furnished on a physician's
order." Under the Medicare Part B program, the HCFA will reimburse suppliers that provide incontinence
supplies to aid individuals whose incontinence condition "...is of long and indefinite duration."
Proposal:
We support ongoing activity at HCFA and the durable medical equipment regional carriers' to develop more
specific coverage guidelines and educate providers and suppliers about proper billing for such supplies. We
continue to support HCFA's efforts to pursue a systematic solution to these kinds of problems through a
requirement for "bundling" of services in nursing home settings.
Legislative Regulatory Other Administrative
CZ] □ LZ
Reason for Action:
Medicare allowed $107 million in 1993 for supplies whose billing is questionable. Almost $88 million was paid
for incontinence accessories that were not billed in conjunction as required with a prosthetic device.
Savings (in millions):
FY 1 FY 2 FY 3 FY 4 FY S
$107 $107 $107 $107 $107
Status:
We are awaiting HCFA comments.
Report:
uy OEI-03-94-00770--Final report-December 1994
OEI-03-94-00772-Final report-December 1994
The Red Book
1453
Require Medicare Coverage of AU State and Local
Government Employees or Make Medicare
the Secondary Payer
Current Law:
The Consolidated Omnibus Budget Reconciliation Act of 1985 established Medicare Pan A coverage and
payment of hospital insurance contributions for new State and local government employees hired after March 31,
1986. However, employees hired prior to April I, 1986 are not covered by Medicare Part A unless the
government entity has voluntarily agreed to cover groups of its employees under the full Old-Age, Survivors and
Disability Insurance (OASDI) program.
Proposal:
Require Medicare coverage and hospital insurance contributions for all State and local employees, including those
hired prior to April I, 1986. If this proposal is not enacted, seek legislation making Medicare the secondary
payor for retirees for exempt State and local agencies.
Legislative Regulatory Other Administrative
man
Reason for Action:
Retirees from exempt agencies pay significantly less taxes when they qualified for Medicare coverage. We
estimate that over a 9-year period (1982-1990) Medicare will have spent about $16.9 billion in benefits for these
retirees. However, only an estimated $2.7 billion of taxes, with interest, will have been collected, leaving a
shortfall of $14.2 billion to be subsidized by other taxpayers. Most of these retirees qualify for Medicare through
other covered employment or as a spouse of a covered worker. Those insured through other employment
contributed far less for their coverage than other retirees yet their hospital benefit protection is the same.
Furthermore, exempt government agencies which had not paid the employer's share of hospital insurance
contributions will have the windfall advantage of Medicare as the primary payor of health costs for retirees over
age 65. Both conditions unfairly drain the health insurance trust fund and are inequitable to employees and
employers who must contribute.
Savings (in millions):
FY 2
$1,552
FY 3
$1,521
FY 4
$1,490
FY 1
$1,559
FY 5
$1,451
Status:
This proposal was included in the President's FY 1995 budget.
Report:
jy A-09-88-00072-Final report- February 1989
The Red Book
1454
Reduce the Prospective Payment
System Adjustment Factor for Indirect
Medical Education Costs
Current Law:
Since the inception of Medicjire's prospective payment system (PPS), indirect medical education (IME) payments
have been paid only to teaching hospitals. The IME payments are designed to alleviate an anticipated adverse
effect that PPS would have on teaching hospitals. The IME adjustment factor was determined by HCFA and
Congress. Using historical data, HCFA compared costs per case in teaching and nonteaching hospitals using
regression analysis and determined that operating costs in hospitals with teaching programs increased
approximately 5 79 percent for every 0.1 resident physician per hospital bed as compared to hospitals without
teaching programs. Under a congressional mandate, HCFA was required to double the adjustment factor under
PPS-increasing it to 11.59 percent.
The Consolidated Omnibus Budget Reconciliation Act of 1985 reduced the IME adjustment factor from 11.59
percent to 8.1 percent for discharges occurring on or after May 1, 1986 and before October 1, 1988. The
Omnibus Budget Reconciliation Act of 1987 further modified the IME adjustment by reducing it to approximately
7.7 percent for each 0.1 in the ratio of interns and residents to beds.
Proposal:
Reduce the IME adjustment factor to the level supported by HCFA's empirical data. Initiate further studies to
determine whether different adjustment factors are warranted for different types of teaching hospitals.
Legislative Regulatory Other Administrative
man
Reason for Action:
Our extensive analytical work showed that teaching hospitals were making excessive profits.
Savings (in millions):
FY 1 FY 2 FY 3 FY 4 FY 5
$2,130 $3,290 $3,810 $4,330 $4,890
Status:
The President's FY 1995 budget contained a proposal to reduce the IME factor to 3 percent.
Report:
llg> A-07-88-00111--Final report-September 1989
The Red Book 22
1455
Limit Prospective Payment System
Reimbursement for Hospital Admissions
Not Requiring an Overnight Stay
Current Law:
Under the prospective payment system (PPS), hospitals are reimbursed for each admission when the patient is
discharged based on established rates which are grouped into diagnosis related groups (DRG). Current Medicare
instructions provide that an admission occurs when it is expected that the patient will occupy a bed and remain
overnight. This applies even if the person is later discharged or transferred to another hospital without actually
using a hospital bed overnight.
Proposal:
Seek legislation to pay for covered services related to 1-day admissions without an overnight stay, as outpatient
services which are paid on the basis of the lower of the actual costs or the customary charges in a locality.
Legislative Regulatory Other Administrative
man
Reason for Action:
Based on Medicare records for 1989, our follow-up review revealed that the Medicare program paid for 179,500
admissions which did not require an overnight stay. Many of these cases related to observations after emergency
or outpatient services, to surgeries later canceled or to acute care stays of doubtful necessity. In many cases,
documentation revealed that few, if any, services were provided during the period the patient was an inpatient.
Savings (in millions):
FY I FY 2 FY 3 FY 4 FY 5
$210 $210 $210 $210 $210
Our follow-up report (A-05-92-00006) indicated that problems still exist with inappropriate admissions and that
the volume of I -day admissions on a national basis had increased approximately ISO percent over 198S levels.
The HCFA proposes to implement our recommendation through administrative remedies that would designate
whether specific services are to be covered and paid for as inpatient or outpatient services. As a fmal measure,
HCFA may propose a legislative proposal to remove these stays from the usual DRG payment methodology No
proposal was included in the President's FY 1995 budget.
Report:
BS- A-05-89-00055-Final report-July 1989
A-05-92-00006-Final report-January 1992
The Red Book
1456
Recover Overpayments and Expand the
Diagnosis Related Group Payment Window
Current Law:
Under the prospective payment system (PPS), Medicare fiscal intermediaries (Fl) reimburse hospitals a
predetermined amount for inpatient services fijmished to Medicare beneficiaries depending on the illness and its
classification under a diagnosis related group (DRG). Currently, separate payments for nonphysician outpatient
services (such as diagnostic tests and laboratory tests) rendered within 72 hours of the day of an inpatient
admission are not permitted (OBRA of 1990, section 4003).
Proposal:
The FI's should recover the estimated $8.6 million in potential improper payments and refund the beneficiaries'
coinsurance and deductible related to these payments. The HCFA should propose legislation to expand the DRG
payment window to at least 7 days immediately prior to the day of admission.
Legislative Regulatory Other Administrative
[Z] □ [Z]
Reaaon for Action:
Approximately $8.6 million in improper billings and subsequent payments for nonphysician outpatient services
was made to hospitals, and an additional $4.1 million was improperly charged* to beneficiaries for related
coinsurance and deductible. Our review also identified about $83.5 million in admission related nonphysician
outpatient services rendered 4 to 7 days immediately before an inpatient admission. The FIs cited clerical errors
and insufficient or nonexistent edits for improper payments, and the hospitals cited clerical errors and
misinterpretation of the regulations.
Savings fin millions):
FY 1 FY 2 FY 3 FY 4 FY 5
$92.1* $83.5 $83.5 $83.5 $83.5
* Note: Includes a one-time recovery of $8.6 million.
Stotus:
The HCFA agreed to recover the improper billings and to refund the beneficiary coinsurance and deductible. It
did not concur with our recommendation to further expand the payment window. No legislative proposal was
included in the President's FY 1995 budget.
Report:
tS"
A-0 1-92-00521 --Final report-July 1994
The Red Book 26
1457
Control Medicaid Payments to
Institutions for Mentally
Retarded People
Current Law:
Federal Medicaid rules for reimbursing States for the intermediate care facilities/mentally retarded (ICF/MR) are
not tailored to ICF/MR -operations. "Reasonable -costs" or "efficiently and economically operated facility" are not
defined in regulation. Each State has considerable discretion in defming these terms and setting ICF/MR payment
methodology.
Proposal:
The HCFA should take action to reduce excessive spending of Medicaid funds for ICF/MRs by one or more of
the following:
• lake administrative action to control ICF/MR reimbursement by encouraging States to adopt
controls:
• seek legislation to control ICF/MR reimbursement, such as mandatory cost controls. Federal per
capita limits, flat per capita payment, case-mix reimbursement, or national ceiling for ICF/MR
reimbursements; and
• seek comprehensive legislation to restructure Medicaid reimbursement for both ICF/MR and
home and community-based waiver service for developmentally disabled people via global
budgeting, block grants, or financial incentive programs.
Legislative Regulatory Other Administrative
m □ m
Reason for Action:
Medicaid reimbursement rates for large ICF/MRs are more than five times greater in some Slates than in others.
Average Medicaid reimbursement in 1991 for large ICF/MRs ranged among States from $27,000 to $158,000 per
resident. This variation was unrelated lo the patients' severity of illness, quality of service, facility characteristics,
or resident demographics. Lack of effective controls results in excessive spending.
Savinss (in millions):
FY 2
S683
FY 3
$683
FY 4
S683
FYl
S683
FYS
$683
Status:
The HCFA nonconcurred with our recommendation. The HCFA believes Medicaid statutory provisions allow
States to establish their own payment systems. This flexibility allows for the variations found among Sutes in
their payment rates and the methods and sundards used in determining these rates. The HCFA sent copies of our
report to State Medicaid Directors for their use.
Report:
^- OEI-09-91-OIOIO-Final repon-June 1993
The Red Book
1458
Institute and Collect User
Fees for FDA Functions
Current Law:
The Food and Drug Administration (FDA) currently imposes user fees for several activities, including color
certification, reconditioning of products, and imported tea inspections. The FDA began collecting fees in 1993 for
activities covered by the Prescription Drug User Fee Act.
In the absence of specific authorizing legislation, the FDA is precluded by statute from imposing user fees to
cover additional functions.
Proposal:
Extend user fees to various functions performed by FDA, possibly including premarket review and approvals for
devices, inspections of additional manufacturing facilities, and inspections of food processors and establishments.
Legislative Regulatory Other Administrative
Z]
Reason for Action:
User fees, if properly Instituted, represent a legitimate method to recover regulatory costs. Such fees would be
consistent with fee systems in other Federal regulatory environments, such as the Environmental Protection
Agency, the Federal Communications Commission, the Federal Energy Regulatory Commission, and the Nuclear
Regulatory Commission. In addition, user fees would properly reflect the value of discrete benefits enjoyed by
manufacturers from FDA's regulatory activities, such as increased consumer confidence in industry's products and
protection from unfair competition.
The imposition of user fees for major FDA regulatory functions will not only shift the economic burden of FDA's
functions to users but will have the potential added benefits of increasing revenue for needed expansion of
services, improving agency tracking of resources, and increasing agency accountability for the costs of regulation.
Savings (in millions):
FY 1
FY 2
FY 3
FY 4
FY 5
$252
$252
$252
$252
$252
Sutu»:
The total estimated collections for all user fees for FY 1995 is $90.9 million ($5 million from certification,
$79.4 million from Prescription Drug User Fee activities and $6.5 million from inspections under the
Mammography Quality Standards Act). The President's FY 1995 budget request for FDA included a provision to
assess user fees totaling $342.9 million, which was intended to cover a broader range of activities including
enhancement of the device review process. New legislation is required to authorize additional user fees to collect
the additional $252 million.
Report:
0> OEI-12-90-02020-Final report-July 1990
OEI-05-90-01070--Final report-August 1991
The Red Book
1459
Simplify Administrative/Indirect
Cost Allocation Systems
Current Law:
The Office of Management and Budget (OMB) Circular A-87, Cost Principles for Stale and Local Covernmenls.
establishes requiremeiMs that State and local governments must follow in preparing and submitting cost allocation
plans for Federal approval. State and local governments must adhere to the plans when claiming
administrative/indirect costs for Federal financial participation.
Proposal:
Simplify the process for charging administrative/indirect costs to Federal programs through reform of the cost
allocation plans. We have identified a range of options, some of which require legislative actions, to reform the
cost allocation system. Options for reform include: (1) use of block grant awards; (2) a flat percentage rate for
administrative/indirect costs; and (3) negotiation of a nonadjustable rate for a predetermined number of years.
Legislative Regulatory Other Administrative
m m □
Reason for Action:
State cost allocation plans annually allocate an estimated $20 billion of administrative/indirect costs to Federal
programs. We concluded from a review of 105 statewide cost allocation plans (35 States, plans for each of 3
years) that the system for allocating costs to Federal programs has degenerated into a highly technical accounting
and allocation maze. The Federal, State and local governmental communities have struggled to work within a
burdensome system instituted over 20 years ago that seeks to equitably share administrative/indirect costs. Prior
reform efforts concentrated on individual programs and/or cost principles instead of the system or process and
thus were not entirely successful.
Savings (in millions):
FY I FY 2 FY 3 FY 4 FYS
• Estimated savings resulting from reform of cost allocation plan process. The report of the National
Performance Review (NPR), "Creating a Government That Works Better and Costs Less" estimates a 5-year
savings of $3.3 billion by reducing intergovernmental administrative costs.
Status:
Our recommendations are cited in the NPR report that calls for reform of the cost allocation process The OMB,
in revising Circular A-g7 will address the NPR recommendations.
Report:
By A- 1 2-92-000 14--Final report-September 1993
The Red Book i 1995
1460
Improve Funding System for
Welfare Administrative Costs
Current Law:
The Federal Government pays for half of the administrative costs for most types of administrative activities in the
Aid to Families with Dependent Children (AFDC), food Stamp and Medicaid programs. States have considerable
latitude in defining their administrative costs. Costs need only be considered "reasonable and necessary" as
outlined in OMB Circular A-87, "Cost Principles for State and Local Governments."
Proposal:
Examine the following alternative options for funding administrative costs in the AFDC, Food Stamp, and
Medicaid programs:
• Reduce Medicaid special match rales lo 50 percent. This option has already been enacted for
the AFDC and Food Stamp programs.
• Block Grant. Combine the administrative costs of all three programs at a base year level, then
provide inflationary increases each year.
• Standard Cost Per Recipient. Fund States based on a standard per recipient allocation amount.
• Cost Per Recipient Cap. Impose a cap on Federal reimbursement of the cost per recipient.
Leyislative Regulatory Other Administrative
m □ □
Reason for Action:
The current method for reimbursing States for welfare administrative costs is unwieldy, inefficient, and
unpredictable. In addition, there is considerable unexplained disparity in administrative costs among States and
significant risk of increase in administrative costs overall.
Savings (in millions):
Options FY I
FY 2
FY 3
FY 4
FYS
$273
$ 315
$ 362
$ 415
$817
$1,458
$2,159
$2,940
$180
$ 293
$ 423
$ 562
$127
$ 144
$ 162
$ 182
Reduce Special Match $236
Block Grant $248
Standard Cost Per Recipient $ 69
Capped Cost Per Recipient $113
Status:
Enhanced matching rates have been reduced to 50 percent in the AFDC and Food Stamp programs; however, not
in the Medicaid program.
Report:
^ OEI-05-91-0I080--Final report-January 1994
The Red Book
1461
CFO ACT
Mr. Porters What steps has the Department taken over the past
year or so to improve the implementation of the Chief Financial
Officers Act?
Ms. Brown: During fiscal year (FY) 1994, HHS prepared financial
statements for all entities and accounts subject to the reporting
provisions of the Chief Financial Officers (CFO) Act; ten sets of
financial statements were prepared for the FY 1993 reporting cycle.
In FY 1995, HHS is planning to prepare financial statements for all
agency accounts. This will enable HHS to do a "dry run" for the
Department-wide reporting required for FY 1996. In addition, HHS has
been working closely with OIG to develop an internal control review
protocol to assess controls at Medicare contractors. Weak controls
are a long-standing problem often reported in our audit reports.
Mr. Porter: How much of your own budget is devoted to the Act?
Ms. Brown: This OIG has never received funding specifically for
CFO-related work. Nevertheless, we strongly support the goal of
audited financial statements. We began annual financial statement
audits of SSA seven years ago — well before passage of the CFO Act.
Our diversion of resources to conduct full-scope audits of SSA's
statements and limited-scope work on HCFA's FY 1993 statements (SSA
and HCFA account for nearly 92 percent of the Department's annual
outlays) clearly demonstrates our commitment. In order to overcome
the shortage of resources, we are currently working with the HHS
Office of the Assistant Secretary for Management and Budget (ASMB) to
develop a funding mechanism to reimburse us for full-scope work at
HCFA. We will also continue to oversee contracted financial statement
audit work at the Public Health Service (PHS) and the Department's
Working Capital Fund.
Mr. Porter: In your opinion, how important is the Chief
Financial Officers Act? What are the taxpayers getting from it?
Ms. Brown: OIG strongly supports the goal of audited financial
statements as a means of improving financial accountability. We
believe that one of the most significant trends in the Federal
government today is the attention being given to accountability
reporting. Examples are found not only in the CO Act but also in the
Government Performance and Results Act (GPRA) of 1993, the proposed
standards of the Federal Accounting Standards Advisory Board, and the
many "reinventing government" efforts. While accountability reporting
has been defined differently by different groups, there is a common
element to all models: that the people entrusted with Federal
resources are responsible for providing the public with answers on how
well those resources were used to achieve their intended purpose.
PATENTS OF NIH-FUNDED INVENTIONS
Mr. Porter: We note that on page 46 of your most recent semi-
annual report you have found that, as a result of inadequate
oversight, many extramural research inventions created with NIH money
were not being patented in a way that ensured protection of Federal
financial interests. Can you tell us more about this, and also what
is being done about it?
Ms. Brown: OIG reported that the National Institutes of Health
(NIH) did not have a system for ensuring that grantees submit
invention data, nor was NIH aware of those patents developed with NIH
funds and filed by grantees. Therefore, we recommended that NIH
establish a system to better monitor this area. NIH is now developing
a paperless reporting system that will make use of data currently
provided by grantees to the Association of University Technology
Managers. This system is still in the testing phase; four large
1462
universities are cooperating with NIH in a pilot to evaluate it.
These schools will be able to transfer data, via the Internet, to a
server at NIH. We plan to review the reliability of the paperless
system and other changes to NIH's monitoring efforts, when they are
fully operational.
INDIRECT COSTS IN BIOMEDICAL RESEARCH
Mr. Porter: Can you report any progress since last year in the
Department's effort to hold down indirect costs in biomedical
research?
Ms. Brown: In 1991 and 1993, after a series of Congressional
hearings and work done by both GAO and a HHS task group that included
OIG, OMB revised its cost principles in Circular A-21 governing the
manner in which indirect costs are to be charged by colleges and
universities. This included changes aimed at holding down indirect
costs. For example, a list of unallowable items of expenditure was
included, and the administrative portion of the indirect cost rate was
capped at 26 percent. Since these changes were put in place, the
average indirect cost rate at major research schools has decreased
slightly, from 51.1 percent in 1992 to 50.5 percent in 1995.
Mr. Porter: To what extent has your office being involved in
these efforts?
Ms. Brown: We have continued our efforts to review indirect
cost issues and to assist ASMB's negotiators in reviewing the indirect
cost proposals submitted by universities. For the latest two years
for which complete data is available (FY 1992 and FY 1993), joint
reviews by the Department's negotiators and OIG at 13 universities and
four non-profit research entities resulted in reduced indirect costs
and savings of about $276 million; OIG was credited with $179 million
of these savings. We are continuing these joint reviews of university
indirect cost proposals.
OIG is also continuing its efforts in the indirect cost area by
focusing its audits on the following: possible shifting of costs from
capped to uncapped areas; space surveys and special studies; and
special reiviews of other selected areas of the facilities portion of
indirect costs. We are also working with the Indirect Cost
Interagency Working Group and the National Science Foundation on
policy issues involving indirect costs.
AUDIT REPORTS
Mr. Porter: During the past year, what would be the three or
four most significant audit reports issued by your Office?
Ms. Brown: I consider OIG's most significant audit reports of
the last year to be the following:
(1) Medicare Secondary Payer: Empire Blue Cross Blue Shield
(June 1994) A-02-93-01006
(2) Therapeutically Equivalent Generic Drugs (July 1994) A-06-
93-00008 and OEI-03-94-00080
(3) Under-Reporting New Technologies by Scripps Research
Institute (June 1994) A-14-93-00029
Mr. Porter: Provide a summary of those reports for the record.
1463
Ms. Brown: The information follows:
(1) Medicare Secondary Payer: Empire Blue Cross Blue Shield
(June 1994) — OIG has estimated that the Medicare program may be paying
out as much as $1 billion a year unnecessarily because Medicare fiscal
intermediaries and carriers do not always identify primary payers, and
because insurers, underwriters and third-party administrators often do
not pay as primary payers when they are required to do so. This
problem, which was first identified as a high risk area in 1989, has
been addressed through several initiatives, including proposals for
legislative remedies and legal actions against noncomplying insurers.
At HCFA's request, OIG reviewed Empire Blue Cross Blue Shield's
compliance with the Medicare secondary payer (MSP) provisions. OIG
determined that a substantial number of Medicare primary payments for
medical services were improperly made by HCFA contractors, when Empire
private lines of business should have been the primary payer. OIG
estimated that approximately $85 million in improper payments were
made during the period January 1, 1983, through November 20, 1989, for
beneficiaries subject to the working-age criteria of the MSP statute.
In addition, OIG was unable to render an opinion on another $118
million in potentially improper payments in which either Empire
customers did not cooperate or OIG was un£U}le to contact the customers
based on information provided by Empire.
Most of the improper payments which were identified were the
result of the inappropriate sale by Empire of secondary coverage,
rather than primary coverage, to its customers. OIG recommended that
HCFA negotiate a reasonable settlement with Empire to recover sums
improperly paid by HCFA contractors, including the $85 million and the
$118 million cited above. The matter has also been reviewed by OIG's
Office of Investigations and is being referred to the Department of
Justice for its review. In its response to the draft report, HCFA
concurred with OIG's findings and recommendations.
(2) Therapeutically Equivalent Generic Drugs (July 1994) — OIG
found that 11 State Medicaid programs have policies in place that
promote the use of generic drugs beyond current Federal requirements.
OIG also found that use of generic drugs was being promoted by other
programs that provide health benefits. Some progreims require generic
substitution when available, while others use financial incentives as
part of their reimbursement policies.
OIG calculated that the annual cost savings to the Medicaid
program could be as much as $46 million for 37 high-volume dispensed
brand-ncune drugs, if reimbursement for those drugs is limited to the
amounts set by HCFA for equivalent generic drugs. Cost savings would
become even greater in the future, since the Federal patents on
exclusive drug manufacturing of 60 important, highly used drugs with
more that $10 billion in sales will expire by the end of 1995. OIG
recommended that HCFA identify and alert States to methods which would
encourage the use of lower-priced generic drug products in the
Medicaid progreun.
In response to OIG's draft report, HCFA stated that the report
effectively described best practices and agreed to share the report
with all State agencies. However, HCFA expressed concerns about the
recommendation that it seek legislative authority to require States to
adopt policies to encourage generic drug substitution or to limit
Federal financial participation to amounts based on generic drug
prices, rather than brand-name drug prices.
(3) Under-Reporting New Technologies by Scripps Research
Institute (June 1994) — OIG determined that NIH did not have effective
procedures to detect that the Scripps Research Institute (SRI) under-
reported, in its patent applications, NIH's involvement in inventions
resulting from NIH-sponsored research. Because NIH was not aware of
1464
inventions being developed at SRI with NIH grant funds, it could not
provide assurance that the objectives of the Patent and Trademark
Amendments Act of 1980 were being met. Information obtained from NIH
showed that only 51 (41 percent) of the 125 patents awarded to SRI
were developed with help from Federal grant funds. However, after
questions were raised about the accuracy of SRI's reporting, SRI
revealed to NIH on June 30, 1993, that 96 of its patents had been
developed with the help of Federal funds.
OIG recommended that NIH determine whether SRI properly reported
all patented inventions, and that NIH establish procedures to better
monitor SRI's compliance with the Act. PHS generally concurred with
OIG '8 recommendations. As requested, OIG presented its findings and
recommendations at hearings before the House Small Business Committee,
Subcommittee on Regulation, Business Opportunities and Technology. In
its testimony before the same Committee, NIH said that it was
improving its reporting systems and working with the Patent and
Trademark Office in proposing new monitoring procedures.
CONGRESSIONALLY-REQUESTED REPORTS
Mr. Porter: Can you tell us how many reports and investigations
were conducted by your office in 1994 at the request of Congressional
committees or Members of Congress?
Ms. Brown: During FY 1994, OIG's Office of Audit Services
completed work on eight Congressional requests initiated during
FY 1993. Additionally, we received 12 new Congressional requests in
FY 1994 on which work has been completed or is underway. In total,
approximately 20 audits and/or inspections were either completed or
initiated in FY 1994 as a result of requests from Congressional
committees or Members of Congress. More often. Members of Congress or
committee staffs learn of our activities after field work has begun
and monitor our progress, using our findings in crafting improvements
in programs and practices.
Mr. Porter: Has this work been increasing in recent years?
Ms. Brown: Although OIG does not maintain records of work
performed specifically at the behest of Members of Congress, our sense
is that this type of work has been increasing in recent years.
AUDIT RESOLUTION PROCESS
Mr. Porter: Can you tell us generally how the audit resolution
process works in the Department, and also tell us what your role is in
the process?
Ms. Brown: Audit resolution is the joint responsibility of the
Department and OIG. Both have established a policy for audit
resolution that is in accordance with OMB Circular A-50 and the
Inspector General Act Amendments of 1988. This policy requires that
management decisions be made on all recommendations resulting from OIG
work. My office issues and tracks over 4,000 reports each fiscal
year; approximately half of those reports contain recommendations
subject to the audit resolution process.
The Department and OIG have developed a standard document used
by all agencies within the Department to communicate to OIG management
decisions on OIG recommendations. A departmental clearance document
tracks final actions on all cost recommendations questioned by OIG,
i.e., not only the establishment of an accounts receivable as the
result of a questioned cost recommendation, but also the collection of
that receivable.
1465
The Department and OI6 have also developed a joint policy on
conflict resolution, which is used when OIG and Department management
cannot agree on the resolution of an audit recommendation. The
Conflict Resolution Council is chaired by the ASMB.
My personal responsibility for audit resolution, aside from
management oversight, is to achieve reconciliation with HHS senior
management before an issue is elevated to the Conflict Resolution
Council. Once an issue is subject to the departmental conflict
resolution process, I am actively involved in the outcome.
Mr. Porter: How successful has the Department been in recent
years with audit resolution?
Ms. Brown: The Department has been very successful in audit
resolution. At the end of the last semi-annual reporting period
(September 30, 1994), the Department had 114 reports in which
management decisions had not been made on all recommendations within
six months of issuance. However, prompt resolution of many of these
recommendations were beyond management's control.
Of course, the best measures of the success in the audit
resolution process are recoveries and savings to the Federal
government that result. In FY 1994 — an exceptional year — the
Department pursued recoveries of $869 million. Implemented savings in
FY 1994 totaled well over $6 billion. The realization of these
recoveries and savings is a joint effort by Department management, OIG
and Congress.
Mr. Porter: Can you give us some idea of how much is currently
owed to the Department?
Ms. Brown: The tracking and collection of receivables is the
responsibility of Department management. They have reported that $411
million relating to OIG recommendations was owed to the Department as
of September 30, 1994.
BUDGET REQUEST
Mr. Porter: Your 1996 request is for $101,726,000, an increase
of about 1.7 percent over the current year. What are your principal
items of increase?
Ms. Brown: For FY 1996, we are requesting $67,889,00 in general
funds and $33,837,000 in trust fund transfers, for a total
obligational authority of $101,726,000. This amount represents an
increase of $1,672,000 (1.7 percent) over our FY 1995 budget. It also
reflects a slight reduction in our FTE ceiling to 1,260, or 5 fewer
than authorized for FY 1995. The dollar increase is sought for
annualization of the January 1995 pay raise of 2.4 percent, other
mandated personnel costs (such as within-grade pay increases and a 25
percent pay adjustment for criminal investigators, as required by
law), and increased space rental payments to GSA.
Mr. Porter: In which areas will you have to ekbsorb cost
increases because your budget request does not provide for them?
Ms. Brown: Most of these costs have been defrayed by FTE
reductions and decreases in administrative costs.
Mr. Porter: Are you proposing any significant reductions for
19967
Ms. Brown: Any adjustments made to our FY 1996 request will be
due to the independence of SSA.
1466
AUDIT CONTRACTS
Mr. Porter: How much are you budgeting for audit contracts in
19967
Ms. Brown: Our request proposes $275,000 for audit contracts in
FY 1996. The bulk of OIG contract funds will be expended by the
Office of Audit Services.
Mr. Porter: How does that compare with 19957
Ms. Brown: It is a decrease of $25,000 from our estimated
FY 1995 level of $350,000.
Mr. Porter: What are the basic types of work that you are doing
by contract, instead of with your own staff?
Ms. Brown: Each year, OIG must conduct a wide range of routine
financial audits which are most suited for a CPA firm. Our contracts
are in accordance with OMB Circular A-120 and do not replace existing
OIG staff.
The three primary types of OIG audit contracts are as follows:
(1) Audits to review administrative cost reports of Medicare
intermediaries and carriers;
(2) Audits to assist regional staff with State and local
reviews and non-profit entity audits; and
(3) Services of highly skilled medical and technical experts to
support investigations, audits and inspections.
Mr. Porter: Is it more expensive to do the work by contract?
Ms. Brown: Yes, but these contracts are necessary since we do
not have sufficient manpower to conduct all the required audits.
Mr. Porter: Are these audit contracts awarded on a competitive
basis?
Ms. Brown: Yes, in accordance with established Federal
procurement procedures .
BUDGET AND STAFF BY ACTIVITY
Mr. Porter: For the record, provide a chart showing for 1994 to
1996 a breakdown of your budget and staff by major activity, such as
audit, investigation, etc.
Ms. Brown: The information follows:
Office of Audit
Services
Office of
I nvest igat ions
Office of Evaluations
and Inspections
Executive Management
Office of Civil Fraud
and Administrative
Adjudication
TOTAL 1,257 $100,082 1,265 $100,054 1,260 $101,726
FY
FTE
1994
($000)
FY
FTE
1995
($000)
FY
FTE
1996
rsooo>
714
$53,869
711
$53,492
708
$54,386
375
32,247
367
31,877
365
32,410
123
45
9,976
3,990
120
47
9,723
3,327
120
47
9,885
3,383
._
^^
20
1.635
20
;,662
1467
VACANCIES
Mr. Porter: Are all of the top poaitions in your organization
currently filled?
Mb. Brown: No, they are not. Currently we have a vacancy in
the position of Deputy Inspector General for Investigations, which is
a Senior Executive Service (SES) position. Another SES position, the
Assistant Inspector General for PHS Audits, is currently filled, but
the person who occupies that position has been detailed to SSA as
their Principle Deputy Inspector General. He will be retiring in
September 1995, at which time the HHS position will become vacant.
Mr. Porter; How many Senior Executive Service positions do you
have?
Ms. Brown: OIG currently has 11 positions for SES personnel.
One of those positions is currently vacant; another position will
become vacant in September 1995 (see answer cUaove) .
ASSET FORFEITURE SHARING
Mr. Porter: In last year's appropriations bill, we gave you
authority to share in the proceeds from the forfeiture of property in
investigations in which your office participated. The proceeds would
be transferred to you from either the Justice or Treasury Departments.
Have you utilized this authority to date?
Ms. Brown: OIG has submitted one application for asset
forfeiture sharing through the Department of the Treasury. The assets
involved in equitable sharing were seized bank accounts totaling over
$325,000. This application is currently pending.
Mr. Porter: How much money do you expect from this source in
the current fiscal year?
Ms. Brown: The determination of amounts to be shared with OIG
is made by the Department of Justice. It is estimated that less than
$200,000 will be shared with OIG during FY 1995.
Mr. Porter: Why aren't you proposing to continue this authority
in fiscal 1996?
Ms. Brown: OIG supports the Secretary's initiative to create a
Fraud and Abuse Control Fund. Under this initiative. Congress would
provide the Secretary with authority to reimburse OIG and HCFA for
program integrity efforts, after improperly spent monies have been
returned to the trust funds and the U.S. Treasury. Revenues for this
fund would be derived from asset forfeitures, investigative
recoveries, and fines and penalties from civil monetary penalty (CMP)
authorities.
OIG also supports the Health Care Fraud Prevention Act of 1995
(S.245) which, among other things, proposes to establish an All Payer
Fraud and Abuse Control Account. Under this bill, financial
recoveries derived from health care fraud cases (e.g., criminal fines,
civil penalties, and damages under the False Claims Act) and
administrative penalties and assessments would be deposited into an
account, to be made available for the future funding of fraud and
abuse enforcement activities. With this mechanism, the individuals
who actually perpetrate fraud against, or otherwise abuse, our Federal
health care programs and are adjudicated as guilty will pay the costs
of increased enforcement in those progrtuns. Similar to the
Secretary's initiative, full restitution of monies lost due to fraud
would be made to the trust funds before any funds are deposited in the
Fraud and Abuse Control Account.
1468
WELFARE REFORM
Mr. Stokes: States would be given significant flexibility
with little accountability under the House-passed welfare reform bill.
What impact will the overhauled welfare reform have on the Office of
Inspector General? Be as specific as possible, especially as it
would relate to the OIG audits and accountability.
Ms. Brown: The Office of Inspector General (OIG) has limited
experience with block grants. Generally, block grants are established
to minimize reporting requirements and increase flexibility for the
grantees. We do not include the current HHS block grants (e.g., Title
XX Social Services, Low Income Home Energy Assistance, and Child Care
Development block grants) in our audit and inspections work plan
because of the nature of the funding mechanism. As you are aware,
most of our work is based on programmatic adherence to the law and
regulations. The "no strings attached" block grant policy presents a
challenge in conducting a performance-based review because the
necessary data is not available.
The House-passed welfare reform provides for State audits under
the Single Audit Act. Currently, we have cognizance over about 80
percent of the contract audits performed in the States under the
Single Audit Act. We review these audits for findings that would
require action on our part.
RED AND ORANGE BOOKS
Mr. Stokes: According to your opening statement, the Office of
Inspector General produces a Red Book of monetary recommendations and
an Orange Book of non-monetary findings and recommendations. For what
audience are these documents intended? How often are they updated and
how widely are they distributed?
Ms. Brown: The Red Book is a compendium of significant OIG
monetary recommendations that have not been substantially implemented.
These recommendations may require one of three types of actions:
legislative, regulatory, or administrative (e.g., changes to manual
issuances) . Some complex issues can involve two or all three types of
actions. The Inspector General Act requires that OIG's semi-annual
reports to Congress include an identification of all significant
recommendations from previous semi-annual reports for which corrective
action has not been completed. OIG highlights such recommendations in
each semi-annual report. However, because of the abbreviated nature
of this list and the potentially significant impact of OIG's
recommendations, we prepare the Red Book to highlight our most
significant monetary issues even further.
The Orange Book is the non-monetary equivalent of the Red Book.
This document describes unimplemented recommendations for program and
management improvement . Both the Red Book and the Orange Book are
widely distributed to the HHS executive staff and Operating Divisions,
the Office of Management and Budget, Members of Congress, and
congressional committees. They are also available to the public upon
request. The books are updated at least annually, and several hundred
copies are distributed each year.
STREAMLINING
Mr. Stokes: Specifically, what role has the Office of Inspector
General played in the agency's streamlining and program consolidation
initiative?
Ms. Brown: To the extent that OIG's audits and inspections have
recommended programmatic changes to increase program efficiency,
eliminate vulnerabilities, and improve program effectiveness, we have
contributed to the Department's efforts to streamline and consolidate
1469
programs. We ourselves have re-engineered some of our processes
(e.g., pre-award audits) to streamline the process and improve
efficiency as we continue to meet our statutory mandates with reduced
resources .
MEDICAID AND MEDICARE AUDITS
Mr. Stokes: How extensive an audit has the agency conducted of
the Medicaid an^i Medicare programs? What were the most significant
findings for ea».h7
Ms. Brown: OIG has devoted significant resources to monitoring
and investigating the Medicare and Medicaid programs. These
activities have helped ensure the cost-effective delivery of health
care, improved the quality of health care, and reduced the potential
for fraud, waste and abuse.
Over the years, OIG findings and recommendations have
contributed to many significant reforms in the Medicare program. Such
reforms include: implementation of a prospective payment system (PPS)
for in-patient hospital services and a fee schedule for physician
services; the Clinical Laboratory Improvement Amendments (CLIA) of
1988; regional consolidation of claims processing for durable medical
equipment (DME) ; establishment of fraud units at Medicare contractors;
prohibition on Medicare payment for physician self -referrals ; and new
payment methodologies for graduate medical education (GME) .
OIG has also documented excessive payments for hospital
services, indirect medical education, DME and laboratory services,
leading to statutory changes to reduce payments in those areas . To
ensure the quality of patient care, OIG has: assessed clinical and
physiological laboratories; evaluated the medical necessity of certain
services and medical equipment; analyzed various State licensure and
discipline issues; reviewed several aspects of medical necessity and
quality of care under PPS, including the risk of early discharge; and
evaluated the care rendered by itinerant surgeons and the treatment
provided by physicians performing in-office surgery.
OIG also plays an active role in the Department's Federal
Managers' Financial Integrity Act (FMFIA) process designed to detect
and correct systemic weaknesses, and reviews HCFA financial statements
under the Chief Financial Officers Act.
RESEARCH PROJECT GRANTS
Mr. Stokes: How extensive a problem has there been with respect
to patient protection from research risk, the integrity of clinical
trials, and taxpayer's return on investment in long-term research
project grants?
Ms. Brown: OIG is not aware of any widespread problems related
to clinical trials or long-term research grants at the National
Institutes of Health (NIH) . However, we are aware of problems with
individual research projects at certain locations. For example, there
have been reports of alleged falsification and fabrication of
scientific data related to a National Cancer Institute breast cancer
study. In another example, a researcher funded by NIH was recently
indicted for selling an experimental drug without FDA approval and for
double -billing expenses on an NIH grant.
We are concerned that these cases, and several others we are
currently reviewing in coordination with the Department of Justice,
may be indications that HHS management control over the administration
of biomedical research funds need improvement. We will continue to
investigate problem areas such as these as they surface. We also plan
to review the quality of NIH's oversight of grants awarded to external
organizations for clinical and long-term research grants.
1470
JUSTIFICATIC»( OF THE BUDGET ESTIMATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES
OFFICE OF INSPECTOR GENERAL
FY 1996 Budget Page
Organization Chart 98
Appropriation Language 99
Amounts Available for Obligation 100
Summary of Changes 101
Obligational Authority by Activity 103
Obligational Authority by Object 104
Administrative Costs 106
Significant Items in House, Senate and Conference
impropriations Committee Reports 107
Authorizing Legislation 109
impropriations History Table 110
Justification :
General Statement Ill
Program Accomplishments 114
Program Initiatives for FY 1995 and FY 1996 115
Rationale for the Budget Request 120
Detail of Full-Time Equivalent (FTE) Employment 122
Detail of Positions 123
97
1471
o
O
u
9
a.
M
C
•
1472
DEPARTMENT OF HEALTH AND HDMAN SERVICES
OFFICE OF INSPECTOR GENERAL
For e^qpenses necessary for the Office of Inspector General in carrying
out the provisions of the Inspector General Act of 1978, as amended,
[$63,585,000] $67,889,000, together with not to exceed [$37,060,000]
$33, 837,000, to be transferred and expended as authorized by section 201(g) (1)
of the Social Security Act frcMn amy one or all of the trust funds referred to
therein [, together with any funds, to remain available until expended, that
represent the equitable share from the forfeiture of property in
investigations in which the Office of Inspector General participated and which
are treunsferred to the Office of the Inspector General by the Department of
Justice or the Department of the Treasury] . (Department of Health and Human
Services J^prppriations Act, 1995.)
99
1473
OFFICE OF INSPECTOR GENERAL
AMOUNTS AVAILABLE FOR OBLXOATION'
FY 1994
Actual
FY 1995
Estimate
FY 1996
Estimate
General funds :
Annual appropriation $63,590,000 $63,585,000 $67,889,000
Rescission pursuant to P.L. 103-211 -272,000
Reductions pursuant to P.L. 103-333 -697.000
Subtotal, adjusted appropriation 63,318,000 62,888,000 67,889,000
Comparable transfers from:
GDM/IOS for security protection
function ♦324. 000 ■f420. OOP
Subtotal, adjusted general funds 63,642,000 63,308,000 67,889,000
Trust funds :
Annual appropriation 36,617,000 37,060,000 33,837,000
Reductions pursuant to P.L. 103-333 z^:^ -314.000 z^^
Subtotal, adjusted trust funds . . 36,617,000 36,746,000 33,837,000
Unobligated balance lapsing -177.000 z^^ Z-i^
Total obligations $100,082,000 $100,054,000 $101,726,000
General funds 63,465,000 63,308,000 67,889,000
HI/SMI trust funds 20.597.000 20.670.000 17.623.000
Subtotal, budget authority .... 84,062,000 83,978,000 85,512,000
OASDI trust funds 16.020. OOP 16. 076. OOP 16.214.000
Total obligation* $100,082,000 $100,054,000 $101,726,000
' Excludes the following amounts for reimbursements:
$3,468,000; FY 1995--$5, 655, 000; FY 1996--$5, 000, 000 .
1474
OFFICE OF INSPECTOR GENERAL
SDHHARY OF CHANGES
1995 General funds adjusted appropriation ^on'!2n'S2n
HI/SMI trust funds transfers '.In'nnn
Comparative trainsfer
■I-420.000
Total estimated budget authority ,*?nn' nc!' nSni
(Obligations) ($100,054,000)
1996 Request-General funds ^f^'c^^'non
Request- -HI /SMI trust funds transfers 17,623,000
Total estimated budget authority ,*??!' !H' ^So,
(Obligations) ($101,726,000)
Net change
-t-$4,161,000
(Sbligations) ■ (+$1,672,000)
1995 Base Change from Base
Obligational Obligational
(PTE) Authority (FTE) Authority
Increases :
A. Built-in:
1. Annualization of January 1995
pay raise (1,265) $80,764,000 --- +$403,000
2. Effect of January 1996 pay
raise (1,265) 80,764,000 --- +1,280,000
3. Career ladder promotions and
within-grade increases . . . (1,265) 80,764,000 --- +704.000
4. Annualization of premium pay
at 25% of base pay (1,265) 80,764,000 --- +1,950,000
5 . Increase from one additional
day of pay (1,265) 80,764,000
+270,000
6. Increase in Rental Payments
to GSA --- 5,392,000 --- +80,000
7. Increase in Rental Payments
to Others --- 306,000 ^^ ti^Mfi
Total increases "- +4,695,000
1475
OFFICE OF INSPECTOR GENERAL
StnOIARY OF CHAMGBS
(Cont.)
1995 Base
Obligational
(FTE) Authority
Decreases:
A. Built-in:
1 . Decrease in share of Working
Capital Fund costs $3,450,000
Subtotal
B. Program:
1. FTE reduction (1,265) $80,764,000
2. Reductions in other non-salary
administrative costs .... 10,105,000
3. Reduction in Equipment . . . 343,000
Subtotal
Total decreases
Net change
Change from Base
Obligational
(FTE) Authority
(-5)
-S450.000
-450,000
-319,000
-2,206,000
-48.000
(-5) -2,573,000
(-5) -3,023,000
(-5) +$1,672,000
1476
OFFICE OF INSPECTOR GENERAL
OBLIGATIONAL ADTHGRITY BY ACTIVITY'
(Dollars in thousands)
General funds
HI/SMI trust fund trauisfers .
Subtotal, budget authority
OASDI trust fund trcuisfers
Total obligations 1,257 $100,082 1,265 $100,054 1,260 $101,726
1994
1995
1996
Actual
Appropriation
FTE Amount
Estimate
FTE Amount
FTE Amount
$63,645
$63,308
$67,889
20.597
20.670
17,623
84,062
83,978
85,512
16.020
16,076
16.214
' Reflects the following comparable adjustment (see Amounts Available for
Obligation for further explaination) :
1994 1995 1996
Non-Comparable Total 1,253 $99,758 1,261 $99,634 1,260 $101,726
Immediate Office of the Secy . ■f4 ■t-324 +4 -f420
Con^jarable Total 1,257 $100,082 1,265 $100,054 1,260 $101,726
1477
OFFICE OF INSPECTOR GENERAL
OBLZGATIONAI. AUTHORITY BY OBJECT
1995 1996 Increase or
Aopropriation EBtimate Decrease
Full-time equivalent employment . . . 1,265 1,260 -5
Full-time equivalent of overtime and
holiday hours 9 9
Average SES salary $110,691
Average GS grade 11.1
Average GS salary $51,614
Average grade . grades estcUslished by
act of July 1, 1944 (42 DSC 207)
Commissioned Corps 6 6
Average salary, grades established by
act of July 1, 1944 (42 USC 207)
Commissioned Corps $61,549 $62,596 +1,047
$113,237
+$2,546
11.5
+0.4
$52,942
+$1,328
Personnel compensation:
Full-time permanent $64,819,000 $68,848,000 +$4,029,000
Other than full-time permcment . . 208,000 208,000
Other personnel compensation . . . 1.506.000 987.000 -519.000
Total personnel compensation . . 66,533,000 70,043,000 +3,510,000
Civilian personnel benefits 14,216,000 14,994,000 +778,000
Benefits to former personnel .... 15. 000 15. 000
Total compensation and benefits . . 80,764,000 85,052,000 +4,288,000
Travel 3,507,000 3,051,000 -456,000
Transportation of things 36,000 35,000 -1,000
Rental payments to GSA 5,392,000 5,472,000 +80,000
Rental payments to others 306,000 314,000 +8,000
Communications, utilities, and
miscellaneous charges 1,021,000 929,000 -92,000
Printing and reproduction 261,000 225,000 -36,000
Advisory cind assistance services . . 350,000 275,000 -75,000
Other services 1,678,000 1,021,000 -657,000
Purchases of goods emd services from
other government accounts 5,963,000 4,668,000 -1,295,000
(Worlting Capital Fund payment) . . (3,450,000) (3,000,000) (-450,000)
104
1478
OFFICE OF INSPECTOR GENERAL
OBLIGATIONAL AUTHORITY BY OBJECT
(Cont . )
1995 1996 Increase or
Appropriation Estimate Decrease
Operation of GOCOs
Research and Development contracts
Supplies and materials $433,000 $389,000 -$44,000
Equipment 343,000 295,000 -'ta.OOO
Total obligations by object . . $100,054,000 $101,726,000 $1,672,000
1479
OFFICE OF INSPECTOR GENERAL
AOMINZSTRATrVS COSTS
(Obligational Authority)
Personnel Compensation:
Full-Time Permanent (11. 1) . . .
Other than Full-Time Permanent (11
Other Personnel Compensation (11.5
Total Personnel Compensation (11
Civilian Personnel Benefits (12.1)
Benefits to Former Personnel (13.0)
Travel (21.0)
Transportation of Things (22.0)
Rental Payments to Others (23.2)
Communications, Utilities, and
Miscellaneous Charges (23.3)
Printing and Reproduction (24.0)
Advisory and Assistance Services (25
Other Services (25.2)
Purchases of Goods and Services from
Other Government Accounts (25.3)
Operation of GOCOs (25.4)
Research & Development Contracts (25
Supplies and Materials (26.0) . . .
TOTAL
1995
B^timat^
1996
Estimate
qh^q?
$64,819,000
$68,846,000
+$4,029,000
208,000
208,000
...
1,50?.PP0
987.000
-519.000
66,533,000
70,043,000
+3,510,000
14,216,000
14,994,000
+778,000
15.000
15,000
...
3,507,000
3,051,000
-456,000
36,000
35,000
-1,000
306,000
314,000
+8,000
1,021,000
929,000
-92,000
261,000
225,000
-36,000
350,000
275,000
-75,000
1,678,000
1,021,000
-657,000
5,963,000
4,668,000
-1,295,000
433.000 389.000 -44.000
$94,319,000 $95,959,000 +$1,640,000
1480
OFFICE OF INSPECTOR GENERAL
SIGNIFICANT ITEMS IN HOUSE, SENATE AND CONFERENCE
APPROPRIATIONS COMMITTEE REPORTS
Action Taken or to be Taken
1995 Senate Report 103-318
Clinical Lab Billing to Medicare
1. A 1991 GAO report recognized
this cost shi£t in clinical
lab billing to Medicare. The
practice of cost shifting, if
widespread, could cost the
Medicare progrsun and elderly
beneficiaries billions of
dollars in inflated payments
by shifting the true cost of
clinical lab testing onto the
Medicare progreun. In the
current climate of cost
containment aind health care
reform, it would be
appropriate for the HHS
Inspector General to take a
careful look at the
laboratories to detezmine the
extent and nature of this
practice, and to determine
whether there are savings for
the Medicare program and
Medicare beneficiaries in
curbing this kind of practice,
(p. 143)
OIG responded to the Committee
on December 23, 1994. Cost
shifting is normally discussed
in Medicare Part A, where it
has been shown that inpatient
hospital costs for treating
Medicare patients are not
fully covered by the Medicare
prospective payment system in
some hospitals. Over the
years, OIG has done a number
of analyses of Medicare
payments for clinical laJD
services. Medicare reimburses
clinical labs based on a fee
schedule established using
historical charges that
independent clinical labs use
to bill the progreun. Such
labs rely upon physicians to
order services, euid OIG found
that the labs heavily discount
the doctors' pricing schedule
as a marketing scheme to keep
the physicians' business. In
January 1990, OIG issued
"Chsunges are Needed in the Way
Medicare Pays for Clinical
Laboratory Tests," an analysis
of independent clinical lab
billings to physicians. That
report determined that the
charges to Medicare were three
times the physiciems' actual
prices and that Medicare was
allowing twice what the
doctors were paying. OIG has
issued a draft follow-up
report to HCFA showing that
the leUs industry is still
using dual pricing.
Legislation has been enacted
to reduce the Medicare ceiling
to 76 percent of the national
median; however, OIG found
that the Xabe were more them
making up for the reductions
in the fee schedule by
increasing utilization: since
1481
1988, utilisation of lab
services has significantly
increased. Although the
national fee schedule amounts
have been reduced, the average
amount billed per beneficiary
has increased. The labs may
have cootpensated for lower
prices by getting physicians
to order more tests. In the
draft report, 01 G recomnended
that HCFA: (1) require
laboratories to identify and
bill profiles at reduced rates
whenever they are ordered; (2)
develop a method of paying for
profiles at less than the full
price for individual tests;
(3) consider reinstating the
coinsurance and deductible
provisions for laboratory
services; and (4) monitor the
tests ordered by physicians as
profile pac)tages for proper
medical justification. OIG
anticipates that a final
report will be issued in the
near future .
108
1482
OFFICE OF INSPECTOR GENERAL
AnTHORIZING LEOISLATIOH
1995 1995 1996 1996
Amount Appro- Amount Budget
Authorized priation Authorized Request
Office of Inspector General :
P.L. 95-452, as amended . . Indefinite $63,585,000 Indefinite $67,889,000
1483
OFFICE OF INSPECTOR GENERAL
APPROPRIATIONS BISTORT TABLE
FY 1987
;^propriation
Trust Funds
FY 1988
impropriation
Trust Funds
FY 1989
impropriation
Trust Funds
FY 1990
Appropriation
Trust Funds
Sequester
FY 1991
i^Pi^opi^iation
Sequester
Trust Funds
FY 1992
Trust Funds
FY 1993
Appropriation
Trust Funds
FY 1994
Appropriation
Rescission
Trust Funds
FY 1995
Trust Funds
FY 1996
i^Pi^op^i^tion
Trust Funds
Budget
Estimate
to Congress
29,716,000
40,000,000
38,439,000
40,000,000
46,430,000
40,000,000
49,498,000
43,300,000
51,500,000
43,723,000
63,842,000
47,347,000
57,496,000
50,988,000
62,379,000
36,617,000
64,501,000
36,617,000
67,809,000
33,837,000
House
Allowance
30,016,000
40,000,000
37,361,000
40,000,000
46,430,000
40,000,000
49,498,000
44,300,000
53,500,000
43,723,000
63,842,000
37,833,000
61,901,000
37,027,000
62,379,000
36,617,000
63,585,000
37,060,000
Senate
Allowamce
29,716,000
40,000,000
37,361,000
40,000,000
46,430,000
40,000,000
50,600,000
44,300,000
53,500,000
43,723,000
58,191,000
37,833,000
61,496,000
46,988,000
64,800,000
36,617,000
63,585,000
37,060,000
Net Enacted
Appropriation
30,516,000
40,000,000
35,026,000
38,296,000
45,873,000
39,520,000
50,488,000
44,300,000
-577,000
51,917,000
-675
42,669,000
58,191,000
37,401,000
62,379,000
36,617,000
63,590,000
-272,000
36,617,000
62,888,000
36,746,000
1484
OFFICE OP INSPECTOR GENERAL
FY 1994 FY 1995 FY 1996 Increase or
Actual Appropriation Estimate Decrease
FTE Amount FTE Amount FTE Amount FTE Amount
1,257 $100,082,000 1,265 $100,054,000 1,260' $101,726,000 -5 +$1,672,000
General Statement
The Department of Health euid Human Services anticipates budget outlays in
excess of $600 billion in FY 1995, encon^assing well over one-third of the
budget of the United States. The scope of the Office of Inspector General's
(GIG) oversight reaches all of the Department's 300-plus programs impacting
the well-being and the quality of life of virtually every person in the United
States. In FY 1996, GIG requests $67,889,000 in general funds and $33,837,000
in trust fund transfers, for $101,726,000 in total obligational authority eUid
1,260 FTE.
Purpose and Method of Operation
GIG is statutorily charged with protecting the integrity of HHS programs, as
well as promoting their economy, efficiency and effectiveness. This mission
is accomplished through a progreun of audits, investigations suid inspections
designed to reach all orgcuiizational levels of the Department. OIG's goal is
to detect and prevent fraud and aibuse, and to ensure that beneficiaries
receive high-quality, necessary services at appropriate payment levels.
Within the Department, GIG is aui independent orgauiization, reporting to the
Secretary auid communicating directly to Congress on significant matters. GIG
is comprised of the Office of Audit Services, the Office of Investigations,
the Office of Evaluation amd Inspections, and the Office of Civil Fraud and
Administrative Adjudication. Over 75 percent of OIG activities are carried
out in 60-plus regional and field-offices.
• The Office of Audit Services (GAS) conducts con^jrehensive audits of
Departmental programs and operations, and makes recommendations to
ensure that program objectives are being achieved in the most efficient
manner. The GAS also provides overall leadership in carrying out the
responsibilities mandated by the Chief Financial Officers Act of 1990
relating to finemcial statement audits. Audit recommendations have led
to legislative cheuiges in nearly all program areas, including changes to
payments for Medicare capital costs, avoidance of "Secondary Payer"
situations, Medicaid drug payments, and the Social Security progreun.
• The Office of Investigations (01) conducts investigations of fraud,
waste, cOsuse or mismanagement in order to safeguard the Department's
programs. Worlcing with the Department of Justice (DOJ) , other Federal
agencies, and State law enforcement agencies euid prosecutors, 01
investigators seelc criminal euid civil actions against those who commit
' Includes 24 FTE as "placeholders" for positions to be transferred from
the Worlcing Capital Fund (WCF) to the OPDIVs for OS regional support of
personnel, finsmcial msmagement, and administrative services in FY 1996.
Final distribution of the 24 FTE will be determined after discussions related
to OPDIVs' provision of regional support services are concluded. The 1,260
FTE differs from the 1,271 FTE shown in the FY 1996 President's Budget
i^pendix because 11 FTE associated with regional finance and accounting are
now properly counted as WCF FTE.
Ill
1485
fraud or who thwart the effective administration of HHS programs. OIG
investigations focus on providers of services and supplies under
Medicare and Medicaid, program grantees and applicants, beneficiaries
and other recipients of funds, as well those involving HHS enployees.
• The Office of Evaluation and Inspections (OEI) conducts short-term
progrcun evaluations (or inspections) that focus on issues of concern to
the Department, Congress and the public. Specific issues addressed by
OEI include foster care. Head Start, school health. Medicare and Social
Security client satisfaction, and services to the disabled. The results
of this work generate rapid, accurate euid up-to-date information on
Departmental programs, and offer recommendations to in^rove their
efficiency and effectiveness.
• The newly created Office of Civil Fraud and Administrative Adjudication
(OCFAA) , originally part of 01, is responsible for protecting Federally-
funded health care programs through the negotiation and imposition of
civil monetary penalties (CMP), assessments auid program exclusions.
Through the use of the CMP and False Claims Act statutory authorities,
OCFAA- -in coordination with other Federal agencies- -collected
approximately $450 million in FY 1994 through settlement negotiations,
and imposed 1,255 exclusions and 1,334 Scuictions against those engaging
in fraud or abuse of the Medicare and Medicaid programs and their
beneficiaries .
• OIG is supported by the Office of Management and Policy, which conducts
legislative and regulatory reviews, develops administrative policy,
provides financial, resource, and information management, provides
Freedom of Information Act and Privacy Act services, and produces the
semisumual and other OIG reports.
Non-compareible appropriated funding for OIG during the last five years
(including cunounts avail2U3le for obligation from both general funds and trust
fund transfers) have been as follows:
Fiscal Year
Fvmds
PTB
1991
$94,587,000
1,437
1992
$94,927,000
1,400
1993
$98,996,000
1,313
1994
$99,935,000
1,253
1995
$99,634,000
1,265
The President's appropriation request for this account represents current law
requirements. No proposed law amount is included.
Streamlining and Performcmce Measures
OIG decreased the size of its wor)c force by more than 200 FTE (14.5 percent)
between FY 1991 and FY 1994. OIG managed this reduction through attrition and
an overall OIG-wide hiring freeze effective September 1991, with controlled
minimal hiring to fill critical positions. OIG also conducted early-out and
buyout programs targeted at the SES to GS-12 levels to reduce management
positions .
OIG is streamlining its operations and management structure to minimize costs
cind ensure that the greatest proportion of resources is concentrated on
investigations, audits, cind inspections. To ensure that limited resources are
used most efficiently, OIG is reducing administrative costs by: increasing
the use of teleconferencing to conduct audit smd evaluation conferences and
report reviews; ma)cing more efficient use of electronic communications;
loo]cing at more cost-effective ways of providing training in-house; and
112
1486
redesigrning basic work processes.
In Januairy 1994, OIG begeui work on its strategic plan. It estaiblished its
major goals and is refining the objectives, strategies, and performance
indicators to be used to measure how well it attains those goals. The current
goals are to: have a positive impact on HHS prograuns; manage OIG operations
effectively and efficiently in em environment of diminishing resources; auid
attract and retain talented, diversified and enthusiastic staff. This plan
will guide OIG in redesigning its work cuid determining how it caui best deploy
its resources.
The following examples highlight several current initiatives by OIG in
reinventing its processes and exploring creative ways to effectively deploy
its resources to aggressively combat fraud, aUiuse, cuid waste in HHS programs:
• OIG has undertaken a new work plemning process to assure that meuidatory
work is covered and that OIG can meet increased demamds for
investigations .
• OIG is cross -training auditors eind evaluators to assist in investigative
work, cuid is conducting joint audits, evaluations and investigations in
combating health care fraud and other areas.
• OIG conducts many joint investigations with other Federal law
enforcement agencies, such as the Secret Service, the Federal Bureau of
Investigation (FBI) , the Internal Revenue Service, the Postal Inspection
Service and other OIGs. Currently, OIG is working with the DOJ, the FBI
amd the HHS Office of the General Counsel in developing a "voluntary
disclosure" program to offer certain Federally- funded health care
providers incentives to disclose etny fraud and abuse they discover
within their companies.
• OIG is working in partnership with the HHS OPDIVs amd with State and
local audit groups to share experiences and audit and investigative
techniques. For example, OIG initiated a Partnership Plan with State
auditors to design and provide broader audit coverage of significant
issues in the Medicaid program, to achieve more effective, efficient and
economical delivery of health care services and resources. In addition
to recovering taxpayer dollars, this partnership will identify issues
for program improvements auid reduce the cost of providing needed
services to Medicaid recipients . Partnerships between OIG and State
auditors/comptrollers in North Carolina, Louisiana, New York, euid
Massachusetts are already in place .
• OIG and the National State Auditors Association are involved in a review
of the Medicaid prescription drug prograun in eight States, aind are
working to expamd involvement to more States in other health care
issues .
• A number of on-going initiatives involve home health care agencies,
durable medical equipment, and nursing homes. One new effort underway
is a national investigation into the marketing and billing of
incontinent care kits amd supplies to nursing home residents.
Currently, OIG has identified amd opened 20 investigations involving 100
subjects, with additional cases expected.
• OIG is also developing contract audit initiatives aimed at conserving
audit resources while, at the same time, meeting the audit needs of
Medicare Peer Review Orgamizations (PROs) and colleges amd universities.
1487
PROGRAM ACCOMPLISHMENTS
The most striking accoo^lishment of OIG is in savings to the Federal
government as a result of OIG activities and recommendations, return on OIG
investment, and growth in judicial prosecutions. Despite diminishing
resources, OIG's
accomplishments have
continued to remain high
through OIG's efficient use
of those resources.
Monetary Benefits
Between FY 1981 and FY 1994,
over $65.0 billion in
savings, settlements, fines,
restitutions and receivables
resulted from OIG activities
euid the implementation of
OIG recommendations . In
FY 1994 alone, those savings
totalled over $8 billion
(see Figure 1) .
Return on investment has
also increased from $160,000
per OIG FTE in FY 1981 to
$6.4 million in FY 1994, and
from $4 in savings for every
OIG budget dollar spent in
FY 1981 to $80 in savings
for every OIG dollar spent
in FY 1994 (Figure 2) .
IMPLEMENTED SAVINGS
FY 1981 - FY 1994
1981
1882
1»83
1984
19BS
1986
1987 •
1988
1989
1990
1991
1992
1993
199«
«o.ie
0
- «0.61
1 *L9I
j^H tt.az
■^^H tio.e9
^^^^^H tie.a*
$
0 $10 $20 *30 840 t«0 $60 $70 $(
Tool a«vliig> In Blllloni
Figure 1
Successful Judicial
Prosecutions
Successful judicial
prosecutions rose from 165
in FY 1981, to 1,169 in
FY 1994 . OIG has prosecuted
individuals and entities who
improperly claimed Medicare
and Medicaid reimbursement ,-
misused Social Security
numbers; fraudulently
obtained Social Security
benefits auid generic drug
approvals .
OIG Return on Investment
$80
■
t4
8«vlng« Par Dollar lnv*»l*tf
Figure 2
1488
PROGRAM INITIATIVES FOR FY 1995 AND FY 1996
The Secretary has pronulgated eight strategic goals to guide the Department.
Prevention, independence, customer service and modem management are the four
themes underpinning these goals, cmd 016 uses these goals as a guide to plcui
work within each OPDIV of the Department.
Public Health Service (PHS)
The activities conducted and supported by PHS represent this country's primary
defense against acute and chronic diseases and disabilities. PHS programs
provide the foundation for the Nation's efforts in promoting and enhancing the
continued good health of the American people. In FY 1995, PHS is expected to
spend over $21 billion on ctbout 200 programs to promote the health of D.S.
citizens. Most PHS activities are administered through grants to colleges and
universities. State and local governments, emd non-profit orgsmizations.
• Patient Satisfaction amd Protection: OIG plans to develop work in the
following areas: patient satisfaction with quality of medical care;
impact of Agency for Health Care Policy and Research guidelines on HCFA
coverage policies,- and patient protection from research risk.
• Drug Surve i 1 1 ance : OIG plans to conduct a series of inspections
focusing on postmarketing surveillance of prescription drugs. Later
inspections may include cm examination of new postmarketing surveillance
strategies and Food eind Drug Administration oversight of cost-
effectiveness studies.
• Scientific Research: In the future OIG will follow-up on several
aspects of National Institutes of Health (NIH) oversight of scientific
research, both intreunural cmd extrctmural, with an emphasis on integrity
of clinical trials.
• Long-Term Grants: OIG will determine whether NIH grants that have been
continuing in excess of 10 years are achieving the desired results. 016
will determine what results the agency expected and cooqpare this with
the results achieved by the university, in order to determine if
continuing the grant is in the Federal government's best interest.
• Investigative Activities: OIG will continue to investigate fraud in the
PHS programs. These investigations are diverse, conplex, and critical
to protecting the health of the American people. For example, in the
Indian Health Service (IHS) , OIG will focus on early inplementation of
tribal msuiagement of IHS progreuns. This review will examine barriers to
tribal management of the prograuns. Also, OIG will review IHS collection
of money from private health insurance cm^ctnies for health services
provided in its facilities to those patients having private insurance
cuid whether additional collections are possible. The agency is relying
on reimbursement to help defray its high health care costs.
OIG will also continue to investigate employee fraud and misconduct
related to the administration of the Department's programs. Previous
areas have included conflict of interest, embezzlement, and accepting
bribes or gratuities.
Health Care Fincuicing Administration (HCFA)
HCFA administers both the Medicare and Medicaid programs. Medicare Part A
covers hospital and other institutional care for approximately 36 million
persons age 65 or older, and for certain disabled persons; expected FY 1995
costs are $112 billion. Medicare Part B covers most costs for medically-
necessary physician and non- institutional services; expected FY 1995 costs are
1489
$66 billion. Medicaid provides grants to States for medical care for
approximately 35 million low- income people; eitpected FY 1995 costs are $95
billion.
• Mamaqed Care : OIG will continue to assess the experiences of Medicare
beneficiaries in managed care arrangements, particularly risk-based
Health Maintenance Org2mizations (HMOs) . OIG will study beneficiaries'
knowledge of aind use of the appeals process, euid produce several reports
relating to mechanisms (beneficiary surveys, disenrollment rates) that
HCFA might use to assess HMO performance. OIG will exeunine the adec[uacy
of fincuicial safeguards at organizations providing managed care to
Medicare and Medicaid recipients. Prior studies have identified
problems in managed care plans .
• Home Health: OIG is concerned cOsout the rapid increase in Medicare
spending for home health care- -180 percent between 1990 and 1993.
Currently, three home health-related projects will be completed in the
coming year: One project describes the current role of the physician in
Medicare home health; a second project summarizes how other private sind
Federal payers meu:age their home health benefits; the third project will
amalyze cmd explain the variation in payments to home health agencies.
• Nursing Homes : OIG will continue to produce reports which examine
services and supplies provided to Medicare beneficiaries residing in
nursing homes. Prior OIG studies identified improper payments made for
duraible medical equipment on behalf of residents of s)cilled nursing
facilities as well as other potential program vulnerabilities.
Additional work will examine pricing of services and supplies, and
potential duplicate payments.
• DuraJjle Medical Equipment: OIG will continue to perform reviews
covering the Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) area, including assessments of the new DME Regional
Carriers' performance in curbing eibuse euid ensuring appropriate
payments. During the coming year, OIG plams to study issues associated
with wound care, enteral nutrition and nebulizers, as well as the
Certificate of Medical Necessity (CMN) process.
• Investigative Activities: OIG will continue to concentrate
investigative resources in areas where Department programs are growing.
In addition to investigating allegations of criminal and civil fraud,
OIG will participate fully in interagency health care task forces now
being established in several major cities. Also, OIG will continue to
investigate facilities/entities that billed the Medicare progrsun for
services not rendered, or that msmipulated diagnosis -related group codes
in aui effort to inflate their reimbursement eunount .
• Medicaid: OIG will review several large States' Medicaid Management
Information Systems (MMIS) to determine if recent or plemned chsuiges
comply with national standards as well as HCFA' s pleuis for standardizing
electronic media claims processing.
Also, OIG will determine if Medicare or Medicaid programs are
reimbursing individuals or entities who were (1) specifically excluded
from the Medicare and Medicaid programs (2) excluded or suspended by
Federal prograuns, (3) excluded or suspended by a State Medicaid agency
or (4) suspended by licensing boards.
1490
Social Security Administration (SSA)
• DisaUailitv: About $4.5 billion was spent for disability payments to
disctbled children in FY 1993. In response to Congressional requests,
cuid to address numerous allegations of payments to disabled and non-
diseibled children, OIG will conduct a series of studies on SSA' s
disability program. These reviews will include: (1) the 55 State
disability determination agencies, (2) the impact of the Supreme Court's
"Zebley" decision on the growth of the SSI program, and (3) SSA' s
efforts to monitor the continuing disabilities of the Title II
beneficiaries living outside the United States.
• Debt Management : OIG will conduct a series of systems and
telecommunications studies for SSA, including: (1) a review of internal
controls for the new Debt Management System that controls more than $1.5
billion of beneficiary debt owed to SSA, and (2) a review of SSA' s
security controls to preclude personnel from misusing access to
beneficiary' s records .
• Vocational Rehabilitation: OIG will determine whether newly awarded
disability beneficiaries are appropriate candidates for vocational
rehcibilitation, euid whether they are taking advantage of available
services. This program provides vocational training cUid related support
to disability appliccuits. Earlier studies have shown that less them 1
percent of dissUjled individuals leave the rolls because they have
returned to work.
• Investigative Activities: The Social Security number (SSN) , originally
created for wage and tax reporting purposes, is now widely used as an
identifier, euid is frequently misused in connection with the cooimission
cUid concealment of white collar and violent crimes. Fictitious numbers
have been used to defraud banks, insur2mce and credit conpanies, and
public assistance programs. SSNs have also been misused to launder
illegally obtained monies, to register illegal firearms, and to shield
illegal aliens and fugitives. SSN cards Ccui be obtained by fraudulent
applications or ceui be counterfeited. Investigations will target
persons who file fraudulent applications and individuals who misuse SSNs
to report wages or to defraud benefit programs either administered or
funded by the Department .
OIG will also target fraudulent Social Security Retirement and Survivors
Insurance beneficiaries and others who meike false statements on benefit
applications, conceal employment income, or assume false identities to
collect multiple benefits. Specifically, OIG will target investigations
involving large overpayment cunounts, or cases involving false claims or
conspiracies in the DiseUsility Insurance (DI) program. Violations of
the DI program may involve the exaggeration of medical conditions,
fetbrication of medical evidence, or offers of bribes to medical
professionals. Some perpetrators fail to report receipt of workers
compensation benefits or a return to work.
• Drug Addicts and Alcoholics: OIG will conduct an early implementation
review of the Referral and Monitoring Agency process to determine how
successful treatment is defined, aad how treatment outcome is measured.
SSI payments are made to 80,000 needy individuals disabled due to drug
addiction or alcoholism, on the condition that they participate in a
treatment progrcun where available and have a representative payee.
Earlier OIG reviews documented numerous weaknesses in SSA' s
inplementation of the treatment and monitoring requirements for drug
addicts and alcoholics (DA&As) . SSA has negotiated referral and
monitoring agreements in 34 States and ei^ects to have contracts in
place in all States by the end of 1995. Despite the absence of any
1491
clear success in rehetbilitating SSI DA&As, Congress is considering
expanding the treatment and monitoring provisions to 175,000 Title II
disabled who also suffer from drug or alcohol addiction.
• Representative Payees: OIG will analyze SSA's monitoring of
representative payees (individuals or entities selected by SSA to
receive and memage payments on behalf of others) . OIG will identify the
basic business practices of this fiduciary responsibility and will
e:<plore alternative means of monitoring payee performance. SSA is in
the process of implementing major enhancements to the representative
payee process, and has requested OIG's assistance in evaluating its
accounting process. This process currently costs more tham $40 million
a year and identifies few instauices of misuse. OIG will conduct a
series of reviews focusing first on assessing the risk of misuse among
different categories of representative payees, followed by a study of
the degree that State and community agencies coordinate with SSA in
monitoring payments, and an identification of successful monitoring
techniques used by other organizations that SSA could adapt to its own
use.
• Aliens Receiving SSI Benefits: Because of the ease with which
counterfeit documents can be obtained, OIG will verify the legal and
eligibility status of aliens receiving SSI disatbility and aged benefits.
Separate rsuidom samples of non-citizen disaUbled recipients and of
non-citizen aged recipients will be taken. Immigration and
Naturalization Service records will be reviewed to verify legal status
and, along with SSA records, used to assess whether recipients met the
eligibility requirements for SSI. In 1993, 7.3 percent (zUxjut 160,000)
of the 2.2 million applications for disability benefits were from
aliens .
• State emd Ijocal SSA coverage: OIG will examine State atnd local
governmental entities' compliance with the Omnibus Budget Reconciliation
Act (OBRA) of 1990 requirement for mandatory Social Security coverage
for all State auid local government employees not already covered under a
qualified retirement system. SSA suspects that significant non-
compliamce may be costing the trust funds billions of dollars euinually
auid could result in loss of Social Security coverage for individuals.
One State and its subdivisions will be reviewed initially to develop an
audit guide for national use .
Administration for Children amd Feunilies (ACF)
ACF provides Federal direction and funding for State, local and private
orgcuiizations, amd for State -administered programs to promote stability,
economic security, responsibility and self-support for families. It also
oversees a variety of programs that provide social services to children, youth
and families, persons with developmental disabilities and Native Americans.
• Child Abuse: OIG will evaluate how States employ challenge grants aimed
at preventing child abuse and the program' s interrelationship with
prograuns designed to prevent abuse of the elderly and disabled.
• Child Support Enforcement: OIG will assess the effectiveness euid
feasibility of child support agencies' procedures for coordinating with
Federal and State tax authorities to preclude non-custodial parents from
claiming tax benefits if IRS requirements are not met.
• Foster Care: OIG will review State operations to determine: (1) levels
of care needed for children entering foster care and adherence to
prescribed treatment plans; (2) appropriateness of the State's
methodology in setting payment rates (previous work identified
118
1492
J3H /3^
unallowable cost being charged) ; and (3) the efforts made by States to
have relatives adopt foster care children who remain in kinship care for
long periods of time.
Also planned is a review of the demonstration projects funded under the
Abandoned Infants Assistance Act of 1988.
• Job Opportunity and Basic Skills Program (JOBS) : States have had the
option of providing AFDC benefits to families with jobless fathers at
home, Icnown as AFDC-Unemployed Parents Program (AFDC-UP) . There is
anecdotal evidence that some States are changing the focus of their JOBS
programs in unsuiticipated and unintended ways to meet the AFOC-UP
participation requirements. OIG will survey a sample of State programs
to identify any progrcunmatic or operational issues.
OIG will conduct a series of studies on the JOBS progrcun to identify how
State agencies increase employer participation and determine en^loyer
perspectives on JOBS participants. This review is of significcuit
inportance because of welfare reform' s increased interest in the JOBS
program to assist individuals in becoming self-sufficient. Also, OIS
plans to review States' efforts in fairly and properly applying
sanctions against recipients and if the use of sanctions appears to be
effective in deterring abuse and promoting cooperation.
In other areas OIG will study information concerning the experiences,
opinions, euid attitudes of JOBS participemts . Specifically, OIG will
gather information on participants' (1) understanding of the program's
services fund requirements; (2) positive and negative experiences in the
program; and (3) suggestions for program inqprovement .
• AFDC: OIG will continue to target crime by individuals who perpetrate
fraud in the AFDC program. The AFDC program is defrauded when
applicants misrepresent their finemcial circumstances, conceal income or
assets that would render the applicant ineligible, receive AFDC for non-
existent children, or receive AFDC under the appliceuit's assigned Social
Security Number (SSN) while gainfully enqployed under a false SSN.
Administration on Aging (AoA)
AoA awards greuits to States for establishing comprehensive community-based
systems that assist the elderly in maintaining their independence and in
remaining in their homes as long as possible.
• Transportation : OIG will identify opportunities for States to increase
transportation services provided under the various Federally- funded
programs without increased expenditures . The primary focus of the
review will be at the county and local government levels where services
are actually provided.
• Meals: OIG will review and identify opportvinities for States to provide
more meals to needy older persons without increasing Federal
expenditures; specifically by their taking advantage of cost savings
available from the use of Department of Agriculture commodities valued
at Ixelow market prices. It will identify incentives and barriers to
States' use of commodities, and solicit input from States on ways the
program could be inqproved. OIG's objectives are consistent with
National Performance Review recommendations.
119
1493
Fin2mcial Statements. Non-Federal Audita, and Contractor Activitiea
• OIG will assess the OPDIVs' efforts to correct grantees' fiscal and
management problems before they interfere with service delivery and/or
become high risk.
• OIG will conduct the statutorily- required Chief Financial Officer audits
through reimbursaible agreements with the OPDIVs.
• OIG will conduct a series of audits of for-profit contractors, who are
not covered by the single audit concept emd are HHS's most vulnerable
risk area. This will be done primarily through reimburseUsle agreements.
• OIG will conduct a series of Medicare contractor audits related to
pension costs to assure that the contractors are cooplying with Cost
Accounting Standards, Federal Acquisition Regulations, the Tax Reform
Act of 1986, and OBRft 1987. OIG will also determine how effectively
Medicare carriers give direction and advice to providers and suppliers
on coding policies.
In addition, OIG will conduct a series of Medicare contractor reviews to
assist HCFA in developing the necessary protocols to review the internal
controls of Medicare contractors and determine if HCFA and the
contractors have adequate financial memagement systems to identify auid
collect all potential Medicare-as-Secondary-Payor (MSP) claims. These
reviews will be done through reimbursaible agreements.
• OIG will begin to evaluate the general systems controls at HCFA
resulting from its major automated systems initiatives, including the
Project to Redesign Information Systems Management and the Common
Working File system (a national system used for prepayment authorization
of Medicare claims) .
• OIG will examine a recent risk suialysis of the HCFA Data Center (HDC)
that is located in leased commercial space euid which supports key
management functions for both Medicare and Medicaid as well as crucial
systems support for HCFA' s actuaries and the Department's health care
reform initiatives.
• OIG will assess how to enlist different providers into the electronic
data interchange and paperless processing environment, what barriers
exist for provider entry, and how such barriers night be effectively
addressed.
Rationale for the Budget Request
The FY 1996 request for OIG is an increase of $1,672,000 and a decrease of 5
FTE from FY 1995 levels. The dollar increase is sought for the following
reasons: annualization of the January 1995 pay raise, the jmticipated January
1996 pay raise of 2.4 percent, mandatory personnel costs (such as within-grade
increases and availability pay for criminal investigators, which- -as required
by law- -will include a 25 percent pay adjustment for criminal investigators),
and space rental payments to GSA. Most of these costs have been defrayed by
FTB reductions and decreases in administrative costs. Figure 3 shows the
FY 1996 budget request by major object-class category.
1494
OIG Budget Request
FY 1996
Salary. & Bfts 83%
Equipment & Other 2%
Travel 3%
Rent 6%
Other Services 6%
Figure 3
121
1495
OFFICE OF INSPECTOR GENERAL
DETAIL OF FULL-TIME EQUIVALENT (FTE) EMPLOYMENT
1994 1995 1996
Actual Estimate Estimate
1 253 1.265 1,260
Office of Inspector General j...^^^
Average GS Grade
-- : : : 11:1
1!!? ; . 11.0
1993
1994
1995
1996
11.1
11.1
11.5
122
1496
OFFICE OF INSPBCTOR GENERAL
DBTAIL OF POSZTZONS
1994 1995 1996
Actual EBtimate Request
Executive Level I
Executive Level II
Executive Level III
Executive Level IV — — —
Executive Level V
Subtotal — — —
Total - Executive Level Salaries ... $ $ $
ES-6 1 1 1
ES-5 2 2 2
ES-4 3 4 4
ES-3 6 6 6
ES-2 3 2 2
ES-1 li^ zjis. ---
Subtotal 15 15 15
Total - ES Salaries $1,564,000 $1,660,000 $1,699,000
GS-15 47 40 40
GS-14 120 117 IIG
GS-13 358 355 352
GS-12 424 426 424
GS-11 49 53 50
GS-10 2 2 2
GS-9 76 88 91
GS-8 21 21 21
GS-7 103 116 118
GS-6 20 25 24
GS-5 15 16 14
GS-4 2 2 2
GS-3 1 1 1
GS-2
GS-1 -_z^ z^^ ---
Subtotal 1,238 1,262 1,255
Total positions 1,253 1,277 1,270
Total FTE usage, end of year 1,257 1,265 1,260
Average ES level 4 4 4
Average ES salary $104,280 $110,691 $113,237
Average GS grade 11.1 11.1 11.5
Average GS salary $49,223 $51,614 $52,942
Average Special Pay (Commissioned Corps) . . $65,681 $61,549 $62,596
1497
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PROPOSBD CHAMQBS TO 6ENBRAL PROVISIONS
FOR FISCAL YSAR 1996
The President's Budget recommends several changes to the General
Provisions included in the FY 1996 Departments of Laibor, Health eind Human
Services, and Education, and Related Agencies Appropriations Act. Proposed
cheuiges follow appendix schedules for the Department of Health and Human
Services (Title II General Provisions) and the Department of Labor (Title V
General Provisions) . Expleuiations for these changes follow:
SEC. 203. This provision, which prohibits the Department from implementing
certain authorizing statutes, is proposed for deletion.
SEC. 204. This provision, which prohibits the Department from enforcing
certain child welfare requirements, is proposed for deletion.
SEC. 205. This provision, a one-time provision reducing appropriations
pursuant to procurement savings, is proposed for deletion.
SEC. 207. This provision, a one-time provision reducing appropriations
pursuant to rental savings, is proposed for deletion.
SEC. 208. This provision, which limits the Secretary from exercising
authority to manage funds, is proposed for deletion.
SEC. 209. This provision, a one-time provision redirecting certain funds for
protective services, is proposed for deletion, as these funds have been
accommodated in the budget .
SEC. 210. This provision, related to targeting Low Income Home Energy
Assistance funds, is proposed for deletion, as it has been incorporated into
authorizing statute.
Title V
SEC. 509. This provision, which prohibits Federal funding for abortions
except in certain cases, is proposed for deletion. As mentioned in the
footnote below the deleted provision, the Administration intends to wor)c with
Congress to address this issue as part of Health Care Refoirm.
SEC. 510. This provision, which prevents the Department of Education from
implementing certain regulations, is proposed for deletion.
SEC. 512. This provision, a one-time provision relating to Black Lung benefit
rates, is proposed for deletion.
SEC. 513. This provision, a one-time provision which limits and cuts amounts
for perfortnotnce awards, is proposed for deletion.
SEC. 514. This provision, which imposes penalties for Icnowingly transmitting
HIV, is proposed for deletion. It has been enacted into permanent law by
P.L. 103-333.
SEC. 515. This provision, which limits certain authorities under the Crime
Bill, is proposed for deletion.
1498
FY 1996 MOVER MATERIAL
HRAf.TH TARfRS
Acquired Immune Deficiency Syndrome
Alzheimer's Disease
Bone Marrow
Cancer
Cystic Fibrosis
Diabetes
Homeless
Immunization
Infant Mortality
Long-Term Care
Mental Retardation
Minority Health and Assistance
Pediatric AIDS
Rural Health
Sexually Transmitted Diseases
Stroke
Substance Abuse
NON-HKAT.TH TARTARS
Aging
Child Care
Family Planning
SPFTTAI. TARIKS
Impact of Federal Abortion Funding Limitation
HKALTB-RKT^ATKn TABLES
National and Federal Expenditures
Congressional Action on Budget for NIH
Women's Health
1499
rRoss-cmriNG tables
T-l Expired Legislative Authority
T-2 Employment
T-3 Entertaimnent Fund
T-4 New Programs
T-5 Unobligated Carryover Balances
T-6 Legislative Programs
T-7 Budget Authority
T-8 Expenditures
T-9 Travel
T-10 Program Support and Program Management
T-11 Entitlement vs. Discretionary
T-12 Administrative Expenses
1500
ACQUIRED IMMUNOOEFICICNCY SYNOROMI
HmMH NMoureM • SantM*
Canlm tor OtoaaM Conlral
• l»f»MOufi 377.9M
Na
122^47
146.296
160.666
169,666
173.026
213.017
216.904
229,760
NHLBt
M.OM
42.096
46.406
46.206
46.086
94.677
99.469
97329
mm
ajno
4.662
6J14
6.194
6.379
12,169-
11.749
12306
MOM
3.M7
9.306
6.260
7.172
6.446
10,437
ia792
11,736
NMOS
13.0M
16.196
16.691
17.962
16.416
22.113
22.741
23,607
NU»
91U77
364.066
430.640
446.640
496.666
942J12
996.411
966,016
NHMS
10.SN
14.614
19.966
16.100
16.690
n**a
24.664
26.138
MCHD
23.4ST
26.746
32.606
34,726
36.607
96,426
96.667
60.713
NB
4.*M
9.933
9.660
9,60l
6,263
6,361
6,633
6,128
MENS
4.1J»
4J96
4.914
4.228
4J72
9.606
9.748
6.081
MA
443
686
668
1.072
1,193
1.666
1.719
1.718
MAMS
673
1.236
1.633
1.664
1.760
1.861
2.676
3.036
MOCO
-
-
469
463
616
646
1.992
1.«0
MMH
43.373
63.331
72.720
76,140
76.433
67.162
66.439
63366
MOA
ao.«24
62.639
122.666
129J66
127.047
143.376
147,402
193331
HtMA
6.130
7.660
7.666
7360
6.623
6.497
6.741
iai38
NOW
67.616
46.147
47.426
90.091
90.661
61.363
64,630
66370
MNR
706
667
2.949
2.710
2,666
4.226
4377
4.666
nc
4.616
4.666
9.391
9,9M
9.664
6,682
6.106
6.664
NCHQM
-
-
-
-
-
637
1.060
1.600
MM
20
463
916
1.067
1.101
1762
2346
3.162
OO
12.668
10.264
11.737
13.666
14.961
24.936
29364
27366
BAF
5.772
12.660
4.666
7,000
3.793
-
-
-
NsSofiM nralulM of HMnh
1.047,440 1.079364
13*8.726 1307364
1501
ACQUIRED IMMUNODEFICIENCY SYNDROME
FV1M* FYlttO FY1«
PriM} FYltM FVIM4 PT 1IM FY 1«W
SubMuiM Abuu a M«ntal HMltti
8«vtM« AdminMration Sa.Oaa
Agancy for HMlth Car* Policy
one* ol •<• AukUnt S«cr«laiy
torHMMi e.40S
4g.aas M.n* 2e,02S zs.sss ir.sM 24.177 24.225
•.470 10.237 10.139 •.•24 10.024 10.MS 1t.07»
7,07« S.S34 4,7»4 9^330 ».2g3 4.0«3 4.000
Subtotal, UHHS
PHS AgonciM
HaaMh Car* Finaneing
Admjniatraliofi
1.291. 1»e 1.929.745 1.ai3.M7 1,S84.e2« 2,004.237 2.4»0.727 2.S2S.7I8 2.«23.940
949.000
Social Sacwtty Administration 1 70,000
Oniea of CM RiflMa 2.700
750.000 1.050.000 1.350.000 1.579.000 1.000.000 2.240.000 2,450.000
24«.00O 350.000 901.000 570.000 540.000 1.009.000 1.200.000
2,700 2.700 2.700 2.500 2.500 2.500 2.500
Subtotal. UHHS Agancias 1 .•55.555
Food 4 Onjg AdminiaUation 73.779
Indian HaaWi Sanica
500
TOTAL. HHS t*.0«S/«71
VMarana Affaits Oapartmant 134,000
Dal««a Oapaflmanl •6,000
AgancylOf Mamational
40.000
2,997.449 3.225.057 3.745.325 4.392.037 9.323.327 9.573.315 5.915.140
97.425 53.359 72.302 72.525 72.39S 72.749 73.514
2,870 1.503 3.170 3.303 3.995 3.537 3.»35
•2^17,54$ t»;tnjU t3,523,7*5 •4^27,5«5 tS,3**,2^2 tS,*45,7a0 •5,9*345e
220.000 295.000 27».000 329.000 312,000 32».0O0 345.000
129.000 127,000 120,000 194.000 12»,000 127.000 55.000
71.000 75.000
4.000 117.000 115.000 121.000 121.000
1502
ACQUIRED IMMUNODEFICIENCY SYNDROME
2.000
s.ooo
9.000
1,000
1.000
1,000
Labor 0*paitin«fil
1.000
1.000
1,000
Houikigauiten
-
-
-
Ottie* of Paraonnd
12.000
21.000
34.000
TOTAL. HIV/MOS
»2,921^71
t»J»\Jt»»
t*,7W,aM
7.000
uoo
1.000
1,000
1.000
1,100
100,000 196,000
M.OOO 108.000
2W,000 1 M.OOO
1/ (Mlwls oMigitfion*. Oo« not agra* wWi apprapcMion NMory liMM.
1503
ALZHEIMER'S DISEASE
Obligations
(Dollars in Thousands)
Health Resources & Services
Administration
FY 1992
$3,974
$4,959
$4,959
$4,959
FY 1996
$4,913
Centers for Disease Control
& Prevention
178
40
National Institutes of Health
NCI
NHLBI
NIOR
NIDDK
NINDS
NIAID
NICHD
NEI
NIEHS
NIA
NIDCD
NIAMS
NIMH
NIAAA
NCRR
NINR
FIG
501
593
564
486
494
2.043
1,954
2,076
2.135
2,200
367
2.000
2,100
2200
2300
2,400
38.844
42.266
44.460
45.883
47,349
1.558
2,364
1,585
1.631
1 664
713
266
392
400
400
115
1,444
1.335
1,381
1,427
424
97
356
356
369
197.080
202.744
212,797
216,360
220,700
1,022
1.438
1 585
1.660
1.687
1,758
1,625
1,434
1,500
1,550
26,990
24,185
24.390
25,166
25,887
1,027
823
554
600
600
1,194
1,911
1.204
1.447
1,564
3,188
3,369
3.122
3,230
3,370
43
60
50
55
200
National Institutes of Health 1 /
287.239
I
1504
ALZHEIMER'S DISEASE
Obligations
(Dollars in Thousands)
FY 1992 FY 1993 FY 1994 FY 1995 FY 1996
Substance Abuse & Mental Health
Services Administration 277 60 30
Agency for Health Care Policy
& Research 563 628 645 60O 600
Subtotal. L/HHS
PHS Agencies 283.859 292,919 303.801 310,189 317 414
Health Care Financing
Administration 1.400 1.400 1.500 1.700 1,700
Administration on Aging 250 300 350 300 300
TOTAL, ALZHEIMER'S $285,509 $294,619 $305,651 $312,189 $319,414
1/ Excludes funds awarded by 00 through ICDs for AREA program.
1505
BONE MARROW
Obligations
(Dollars in Thousands)
FY 1992
FY1W3
FY 1094
FY IMS
FY 1996
$12,433
$16,234
$11,171
$15,360
$15,360
Health Resources & Services
Administration 1/
National Institutes of Health:
NCI
NHLBI
NIDR
NIDOK
NINDS
NIAID
NIEHS
NIA
NIAMS
NIMH
NCRR
National Institutes of Health
TOTAL. BONE MARROW $96,082 $113,931 $116,106 $126,034 $129,686
1/ The National Bone Marrow Donor Program was transfen'ed from NHLBI to HRSA in FY 1995.
38,950
49,617
49,647
51.145
52.911
25,450
28,243
34.554
35,540
36,800
284
788
1,492
1.514
1,536
5.900
7.269
7,600
7,800
8.000
644
706
1,039
1,069
1.111
6,185
6.686
6.243
6,424
6,553
1.865
2.649
2,859
2,859
2.917
-
-
481
490
510
1.021
953
1,285
1,300
1,350
1.563
-
774
776
788
1,787
786
960
1,757
1,850
83,649
97.697
106.934
110,674
114.326
1506
CANCER
Obligations
(Dollars in Thousand*)
FY19S6
C«nters for Disease Control
& Prevention
$61,400
$62,053
$113,108
$136,506
$139,506
National Institutes of Health:
NCI
1.947.571
1 .978,340
2.076.946
2,136,406
2,219.797
NHLBI
30,246
33.966
35.420
36,425
37.500
NIOR
4,668
6.890
7,574
7,777
8.131
NIOOK
14,000
21.600
25,600
32,900
37,900
NINOS
11,668
12,285
13,796
14,160
14.755
NIAID
29.149
30,900
28,747
29.581
30.339
NIGMS
6.210
6.785
11.715
17.317
21,316
NCHD
4.173
4.601
7.725
8.000
8.200
NEI
11.235
9,807
9,416
9,743
10.064
NIEHS
70.604
79.788
73.001
76.336
82,488
NIA
6.637
6.639
9,199
10,540
11,400
nkx;d
949
1,010
-
889
891
NIAMS
3.6S7
3,119
4,649
4,850
5,000
NIMH
3.488
4,134
4,022
4.160
4,340
NIOA
924
950
1,198
1,250
1.300
NIAAA
1.391
1.397
1,399
1.400
1.400
NCHGR
-
-
11,475
22.386
24.217
NCRR
15.375
18,902
19,361
23.177
25,002
NINR
2,520
3,740
4,023
4.185
4,320
FIC
350
2.165,015
361
2.225.214
396
437
468
National Institutes of Health 1 /
2.345,666
2.441,930
2.548.628
1507
CANCER
Obligations
(Dollars in Thousands)
Pyi992 PTIWa FY 1994 FY 1999
Agency for Health Care Policy
& Research
4,220
4.350
Subtotal, L/HHS
PHS Aganaes
2.230,197 2.311,4e7 2.463.133 2,582,786 2,692,684
Health Care Finarfdng
AdnrMnistraton 13,395,000 13,395.000 15.095.000 17.125,000 18.975.000
TOTAL, CANCER
$15,625,197 $15,706,487 $17,558,133 $19,707,786 $21,687,684
1/ Excludes funds awarded by 00 through ICO* for AREA program.
1508
CYSTIC FIBROSIS
Obligations
(Dollars in Thousands)
FY1W2
FY 1993 FY 1994
FY 1995
FY 1996
National Institutes of Healt^:
NCI
296
325
168
181
188
NHLBI
16,009
20,537
17.140
18,125
18.700
NIDR
2.724
1.995
1,778
1,797
1,849
NIDOK
19.062
21 500
21,889
22.500
23.100
NIAIO
11.325
15.395
16532
17.011
17.352
NICHD
563
484
359
400
400
NIEHS
.„
...
505
505
523
NEI
358
372
429
444
459
MAMS
219
224
230
240
250
NCRR
856
1.517
861
879
964
NCNR
365
309
25
30
40
NCHGR
1.314
621
364
1.011
1.018
National Institutes of Health 53.033 63.279
HeeUth Care Financing
Administration 40 40
TOTAL. CYSTIC FIBROSIS 53,133 63,319
40
60,320
63,123
50
63,173
64.843
50
64,893
1509
DIABETES AND RELATED RESEARCH
Obligations
(Dollars in Thousands)
Pn995
Centers for Disease Control
& Prevention
10.000
10.000
18.410
19.865
19.865
National Institutes of Health
NCI
962
1,204
1,279
1.236
1.270
NHLBI
19.638
20.716
19.779
20.350
20.950
NIDR
1,603
2.258
2,505
2,600
2,722
NIDDK
184.500
187.100
191.409
197.100
203.100
NINDS
5.012
5.859
5.717
5,882
6.118
NIAID
4.642
3.764
4.898
5.040
5.141
NIGMS
2.272
1.629
1.704
1.757
1.813
NICHD
1 1 .474
12.621
12.329
12.700
13.000
NEI
20,868
22,150
22,605
23,390
24.160
NIEHS
447
643
415
415
430
NIA
4.811
5,389
6666
6,870
7.080
NIMH
1,186
1.754
2.036
2.118
2,186
NIAAA
...
329
285
285
NCRR
19.116
19,025
18.577
19500
20.461
NINR
1.746
1.397
1,130
1.170
1.220
NCHGR
...
...
2,181
3,468
3,490
FIC
135
140
56
59
63
National Institutes of Health 1/
278,412
285,649
298.615
313.489
10
1510
DIABETES AND RELATED RESEARCH
Obligations
(Dollars in Thousands)
Agency for Health Care Policy
& Research 1.247 1.105 1,277
Subtotal. L/HHS PHS Agenci 289.659 296.754 313,302 323.805 333,354
Health Care Financing
Administration 5.200 5.200 5.900 6600 6600
Subtotal, L/HHS Agencies
294.859
301.954
319,202
330,405
339.954
IrKJian Heeilth Service
6.607
6.722
$303,476
6,722
$320,024
6722
$330,527
6957
TOTAL, DIABETES
$296,266
$340,311
1/ This excludes AREA awards
11
Health R«$ourc«s & S«rvic«t
Adminrttration 1/
Substance Abut* & Mantal Haalth
Sarvicas Administration 2/
National Institutas of Haalth:
NIMH Rasaarch Grants
NIDA Rasaarch Grants
NIAAA Rasaarch Grants
Nursing Rasaarch Grants
National Institutas of Haalth
Subtotal, UHHS
PHS Agsncios
Administration for Children
and Families 3/
TOTAL, HHS 4/
Housing and Urban
Development
Federal Emergency Management
Administration
Interagency Council on
the Homeless
Department of Labor
1511
HOMELESS PROGRAMS
Obligations
(Dollars in Thousands)
FY 1M2 FY 1»»3 FV U
FY IMS FY 1996
$55,763 $57,014 $63,011 $65 445 $65 431
5.856
9.927
10514
10914
1 1 .293
5.645
6.000
6 079
6.200
6400
553
256
605
700
700
0
0
171
17 449
ISO
17994
190
12.056
16183
18583
144320 151,151 134.230 137.079 134.438
93.537 88.213 90.927 95 696
236,057 239JM 225.157 232.775 222,782
450.000 590.700 822 700 1,120.000 1.120.000
134.000 129.000 130.000 130.000 130 000
1.100 900 0 0 0
9.300 12.500 12,500 5.000 5 000
1512
HOMELESS PROGRAMS
(OoMara in Thousand*)
Department of Educabon
Department of Veterans Affairs
Department of Agriculture
TOTAL. HOMELESS
FY 1992
FY 1993
FY 1994
FY 1995
FY 1996
34,800
34,400
35.100
38,300
39.500
33.000
46.900
65,900
75.900
77.500
32.000
32.000
40,000
40.000
40.000
$932,257 $1,085,764 $1,331,357 $1,641,975 $1,634,762
1/ Excludas cartain tmall PHS grant awards in HRSA's Bursau of Haalth Profsssions and tti* Agancy tor
Hsalth Car* Policy and R***arch nvtiich indiractly impact on Homalais Populatons.
2/ Form*rty AOAMHA. SAMHSA wa* astablishad by th« AOAMHA Raorganization Act (P. L 102-321). Also, attar
FY 1993. tha Communrly Support Program no lor>g*r supports homslass activttias.
3/ Th* Administration for Childrsn and Famili*s was crcaMd on April IS. 1991 . by combining th* programs
and rasourc** of th* form*r Family Support Adminislration and th* OtRo* of Human Oavalopmant S*rvic*s.
4/ In addition. HCFA astimalas a portion of Madicaid funds is ailocatsd to th* homslass:
FY 1992- $115 million: FY 1993- S125 million: FY 1994- S140 million: FY 1995- S150 million:
and FY 1996- 1170 million Howavar. sine* th*s* programs ara not spaeifically targatad to homalass
populatioTd ttMy ar* not includad abov*.
13
1513
IMMUNIZATION
Obligations 1/
Pollars in Thousands)
FY 1992
FY 1993 FY 1994 FY 1995
FY 1996
Health Resources & Services
Administration
$300
$1,600 $1,600 $1,600
$1,600
Centers for Disease Control
& Prevention
341,081
528,143
465.497
National Institutes of Health:
NCI
NHLBI
NIDR
NIODK
NINDS
NIAID
NICHD
NIEHS
NEI
NIA
NIAMS
NIOCD
NIMH
NIDA
NCRR
NICHGR
FIC
49.894
60.391
64,323
66,655
70.077
4,688
2.640
1.131
1.156
1.180
6.668
3,675
5.742
5.961
6.229
1.700
1,800
1,900
2.000
2,000
814
1,115
1,079
1,089
1,142
145,017
145,901
181.619
185,268
195.139
7.117
8.899
6.937
7.100
7,300
0
726
145
145
150
1,193
1.464
1.163
1.203
1.243
776
S30
1.166
1.200
1.240
115
0
0
0
0
1,196
79
633
791
936
1,467
3.157
0
0
0
1,570
5.909
6,400
6.900
6.800
10.053
12.992
15.672
15.640
15.926
0
0
0
1.540
1.639
2.908
4.046
6.816
7,013
7.464
National Institutes of Health
235.378
253,344
294,726
303,661
316.465
Agency for Health Care Policy
& Research
1.593
1,065
1.286
1,320
1,373
14
1514
IMMUNIZATION
Obligations 1 /
Pollars in Thousands)
Pn992 FY 1993 Pn994 FY1995 Pf 1995
Office of the Assistant Secretary
for Health 7.877 2,737
Subtotal, L/HHS
PHS Agenaes
Health Care FinarKing
Administration
2,446
996
541,307 599.827 828.203 773.074 800.251
167,400 175.400 265.000 627,298 560,400
Subtotal, L/HHS Agenaes 708,707 775,227 1,093,203 1,400,372 1,360,651
Food & Drug Administration 26.300 26.996 37.000 37.277 37.277
Indian Health Service 1.266 1.287 1,348 1.328 1,397
TOTAL, IMMUNIZATION
$736,273 $803,512 $1,131,551 $1,438,977 $1,399,325
1/ Reflects obligations. Does not agree with appropriation history tables.
IS
1515
INFANT MORTALITY
Obligations 1/
(DoUare in Thousands)
Haalth Raaouroas & Sarvicas
Administration
nriw2
$755,804
'1903 FY19B4 m995
$822,781 $879,623 $916,168
m996
$918,288
Cantara for Disaasa Control
226.200
241.220
377,116
328.231
338.653
Nabonal tnslitutas of Haalth:
NCI
1.340
1.854
2,092
1,968
2,192
NHLfil
22,712
24.166
34,805
35,565
36,783
NIOR
278
281
285
0
0
NIDDK
1.300
0
1.500
1,100
1,150
NINDS
8.503
11,458
11.468
11.793
12.207
NIAIO
88.923
82,079
96.160
98.948
103.968
NICHD
71.903
78.321
76.405
78,600
80,600
NEI
2.781
3.809
3.410
3.529
3.645
NIEHS
7,006
6,411
6.188
6.188
6.415
NIAMS
8,655
11,002
9.633
10.200
10.500
NIDCD
244
1,813
2.069
^277
2,300
NIMH
3.230
2.949
3.222
3,345
3.460
NIOA
44.257
45.200
47.300
49.600
50.200
NIAAA
5.542
6.852
7.201
7.200
7.200
NCRR
6.551
8.125
9.722
10.976
11,402
NCNR
7.009
6,021
4.598
4,750
4,960
NCHQR
0
0
7.836
18,572
19.277
FIC _
578
1,132
947
1.456
1.551
National Institutas of HaaNh 280,81 2
Substance Abuse & Mental Health
Sarvicas Administrabon 63,245
Agency for Health Care Policy
& Research 10,563
80.253
9.066
324.836
7Z817
9.766
346,069
57.346
10,400
357,810
40,289
10,400
16
1516
INFANT MORTALITY
FY 1992 FY 1993 FY 1994
Offio* of tfi* Assistant Sscratary
for HMMh 7.754
SubteUi. UHH8
PHSAoMwlM
Health Cars Financing
Adminwtrabon
6.250
FY 1996
6,686
1.344.438 1,462.411 1,670.408 1.664.912
FY 1996
6.144
1.671.584
4.205.000 6.140.000 7.175.000 8.010.000 6.655.000
Subtotal. LTHHS Agendas 5.549,438 7.602.411 8.845.406 9,674.912 10.526.584
307,375 331.323 349.567 350.492 368,746
Indian Health Service
TOTAL, INFANT
MORTALITY 85.886313 $7,933,734 $9,194,978 $10,028,404 $10,895,330
1/ Reflects obligations. Does not agree with appropriation history tables.
17
1517
LONG TERM CARE
Obligations
(Dollars in Thousands)
FY 1998
FY 1998
FY 1994
FY 1995
FY 1996
Hoaltti Resourcas & Sennces
Administration
$3,230
$0
SO
SO
SO
SubstarKX Abuss & Mental
Health Services Admin.
180
Agency for Health Care Policy
Research
4.534
7,953
4,141
4,192
6,661
6,661
7,025
Subtotal, L/HHS
PHS Agencies
6,661
6,661
7.025
Health Care Financing
Administration
21,400.000
24,800,000
21,266,000
22,064.000
23,266.000
Adminstration on Aging
1,889
S21 .409.842
5,061
$24,809,253
4,500
5.000
5,000
Total, LAHHS Agencies
$21,277,161
$22,075,661
$23,278,025
1518
MENTAL RETARDATION
Obligations
(DoUars in Thousands)
FY 1992
FY 1993
FY 1994
FY 1995
FY 1990
HMtfth RssouroM & S«n/(0M
Administration
$961
$744
$808
$800
$800
Canters for Oiseas* Control
&Prav«ntion
Laad-Sased Paint
Poisoning Prevention
21,180
29,683
34.683
36.409
36,391
Fetal Alcohol
5.024
5,024
5.844
5.844
5.844
tJOM Retardation
Povefty-Assoctated) _
899
414
3.144
3.672
3.672
Subtotal, CDC
27.103
35,121
43.671
45.925
45.907
rtational Institutes of Health:
NINOS
19.170
16,580
17.796
16,192
18,921
NIAIO
25.458
28,523
31.240
32.146
32.789
NICHO
53,633
53.021
55.097
56.700
58.400
NIIMIH
7,946
6.311
6.198
6.388
6.568
NtAAA
6,073
6.701
7.523
7.525
7.525
NCRR
671
10,842
911
1.062
1,093
NHLBI
0
0
3.101
3.190
3,285
MA
0
0
1.270
1.310
1.350
NCHQR
0
0
S,031
8.871
8,929
NINR _
0
0
140
150
160
Natior^al Institutes of Healt _
112.951
121.978
128.307
135.534
139.020
Subtotal. L/HHS
PHS Ager>cies
$141,015
$157,643
$172,786
$182,259
$185,727
Health Care Financing
Administration
5.550.000 5.911.000 5.815,000 5,580.000
5.738.000
Social Security Administration
Estimated Benefit
Payments from OASOI
Trust Funds
Estinrtated General
Fund Payment for
Supplemental Secuhty
Subtouy. SSA
3.446,000 3,825.000
4.135.000
4.466.000
4.826.000
3.359,000 4,339.000 4.049.000 4.203.000 4.280.000
6.805.000 8.164.000 8.184,000 8.669.000 9,106,000
ToM. UHHS Agenoies $1^496.015 $14,232,843 $14,171,786 $14,431,250 $15,029,727
1519
MINORITY HEALTH AND ASSISTANCE
Obligations
(Dollars in Thousands)
nnw2
FY 1993
Pri995
Total
875.958
976,172
1,141,283
1,170,898
FY 1998
Health Resources & Services
Administration:
Direct
$108,181
$108,752
$93,539
$92,972
$92,320
Indirect
507,461
542,548
578.281
599.032
685.176
Total
615,642
651,300
671 ,820
692.004
777.496
Centers for Disease Control
& Prevention;
Direct •
59,236
71,543
79.108
86.777
88.160
Indirect
727,019
840.545
1.044.395
1.118.440
1.151.989
Total
786.255
912,088
1,123,503
1.205.217
1.240.149
National Institutes of Health
Direct
213.130
271,728
375.651
395.628
402,187
Indirect
662,828
704,444
765.432
775.270
816.202
1.218.389
Substance Abuse & Mental Health
Services Administi'ation:
Direct
1.580
840
859
859
487
Indirect
284.567
296.953
335.127
318.271
221.534
Total
286.147
297.793
335.966
319.130
222.021
Agency for Health Care Policy
an6 Research:
Direct
7.200
6.373
7.700
10.300
7.700
Indirect
0
0
0
0
0
Total
7.200
6.373
7.700
10.300
7.700
20
1520
MINORITY HEALTH AND ASSISTANCE
FY1««2
Pn093
FY 1994
FY 1995
FY 1996
ffice of the Assistant Secretary
or Health:
direct
16,915
20,398
19,738
20.668
20,592
ndirect
0
0
0
0
0
rotal
16,915
20.398
19,738
20.668
20.592
ubtotal, L/HHS
p»HS Agencies;
Direct
406,242
479,634
576,795
607.204
61 1 .446
ndirect
2,181,875
2.384,490
2,723.235
2.811.013
2.874.901
Subtotal
2,588,117
2.864,124
3.300,030
3.418.217
3.486.347
ealth Care Financir>g
Administration:
Direct
0
0
0
0
0
ndirect
0
24,975,000
27,403.000
29.404.000
31.964.000
Subtotal
0
24.975,000
27.403.000
29.404.000
31.964.000
ubtotal. L/HHS Agenaes
Direct
406,242
479,634
576,795
607.204
611.446
rxjirect
2,181,875
27,359,490
30,126,235
32.215,013
34.838,901
Subtotal
2,588,117
27,839,124
30,703,030
32.822.217
35.450.347
idian Health Service:
Direct
1,705,954
1,858,419
2.123,572
2,176,118
2.273.842
r>direct
0
0
0
0
0
Total
1,705,954
1,858,419
2.123.572
2,176.118
2.273.842
OTAL MINOR ITT HEALTH
Olreel
2,112,196
2,338.053
2,700,367
2,783,322
2,885,288
Indirect
2.181.875
27,359,490
30,126,235
32,215,013
34,838,901
TOTAL
$4,294,071
$29,697,543
$32,826,602
$34,998,335
$37,724,189
1521
PEDIATRIC AIDS
Obligation* 1/
(Dollar* in Thoutandt)
FY1M2
Haallh Rasourca* & Sacvio**
Adminiatration
$20,897
Cantara for Disaasa Control
& Pravantion
40.231
National Inttitutas of Haalth:
Na
NHLBI
NIOR
NIDOK
NINDS
NIAIO
NICHO
NIMH
NIOA
NIAAA
NCRR
NINR
NCHQR
FIC
10.920
11.404
10.677
10.724
10.906
7.931
8.790
17.668
17.831
18.61S
2.212
1.533
2.041
2.041
2.139
433
552
1.109
1.150
1.200
3,377
1.528
1.870
1.878
1.895
65.011
65.101
65.979
67.892
72.441
29.433
33.649
44.087
45.900
47.500
5.874
9.373
12.416
12.734
13.344
4,478
3.580
2.794
3.500
4.000
659
805
2.621
2.825
2.825
6.510
6.519
7.224
7.687
8.077
233
278
0
0
0
0
0
0
601
650
404
413
643
729
776
National Inttitulat of Haalth
Subatanca Abuaa & Mantat Haalth
Sarvicat Administration
Agar>cy for Haalth Cara Policy
& Rasaarch
PEDIATRIC AIDS
$202,421 1213,003 (244,591 S2S3.S74
1/ Raflactt obligationa. Ooa* not agraa with appropriation hiatory tablo*.
■ 2.1 -
1522
RURAL HEALTH
Obligations 1/
pollevs in Thousands)
FY 1993
Pri994
FY 1995
FY 1996
lealtti Resources & Services
Administration
$380,935
$395,341
$425,043
$442,957
$437,119
enters for Disease Control
& Prevention
23,414
23,230
26,000
25,200
25,200
atonal Institutes of Health;
NCI
24.399
28,047
29,212
33,608
35,571
NHLBI
6,782
9,581
8,677
8.925
9,190
NIOR
479
610
464
525
579
NIEHS
626
1,422
1,911
1.911
1,911
MA
5,635
6,712
5,376
5.540
5.710
NIMH
21,984
17,373
18,634
19.343
19,996
NIDA
1,453
5,567
5,957
6.100
6,300
NIAAA
0
0
3,021
3.625
3,825
NCRR
175
347
323
333
362
NCNR
2,610
2,927
2,501
2.590
2,700
NLM
6,472
6,544
6,333
6,370
6,542
Jational Institutes of Health
70.615
79.130
82.429
88.870
92.686
Agency for Health Care Policy
& Research
2.425
3.289
4.278
5.000
5.400
Health Care Finanang
Adrninistration
125.000
197.000
229.000
277,000
rOTAL, RURAL HEALTH
477,389
625,990
734,750
791,027
837,405
1/ Reflects obligations. Does not agree with appropriation history tables.
23
1523
SEXUALLY TRANSMITTED DISEASES
(Excluding HIV/AIDS)
Obligations 1/
(Dollars in Thousands)
FY1»«2
FV1W3
FYt»»4
FY19S5
National Institutes of Health
62,466
85,797
96.142
107.324
FY 1996
Centers for Disease Control
& Prevention
$88,746
(89,552
$99,771
$105,242
$107,268
National Institute* of Health:
NCI
21,436
24,156
26,050
26.762
27.703
NHLBI
590
0
193
200
205
NIOR
449
448
622
662
742
NINDS
490
473
692
696
732
NIAIO
51.171
52.743
59.608
67,237
68,850
NICHD
3.522
3,247
3,338
3.400
3,500
NEI
1,357
1,126
1.260
1,324
1,368
NIOA
1,000
1,000
685
1.000
1.000
NCRR
2.375
2.604
5.474
6.021
6,222
NCNR
76
0
0
0
0
110,322
195
AgefKy for Health Care Policy
& Research 303
Subtotal. UHHS
PHS Agencies 171,515 175,544 197,913
1/ Reflects obligations. Does not agree with appropriation history t^lbles.
212,566 217,590
24
1524
STROKE
Obligations
(Dollars in Thousands)
Pn992
FY 1993
FY 1994
FY 1995
FY 1996
National Institutes of Health:
NHLBI
19.780
21 .271
21,851
22.500
23.160
NINOS
65.179
67.050
69.162
71.330
73.715
NIGMS
757
685
718
740
764
NICHD
691
910
1.427
1-.500
1.600
NEI
._
844
1.065
1,102
1.138
NIA
3.636
4.066
6,854
7.060
7,270
NIDCD
7.331
5.472
5,785
5.903
6,086
NIMH
3.408
3.371
2.775
2.887
2,980
NIDA
1.222
1.250
1.303
1.400
1,400
NIAAA
212
384
172
172
NCRR
604
651
450
470
726
NINR
1,198
1.201
603
620
650
National Institutes of Health
104,218
Agency for Health Care Policy
& Research
1,422
1,533
2,194
TOTAL, STROKE
105,640
108,304
115,684
25
1525
SUBSTANCE ABUSE
(Dollar* In Thoutand*)
FY 1992 FY 1993 FY 1994 FY 1995 FY 1996
Substance Abuse and Mental Health
Services Administration 1/ 1,533,125 1,626,055 1,705,576 1,729,819 1.780.060
Health Resources and Services
Administration 2/ 16.739 20,880 33,442 36,418 41,488
Centers lor Disease Control
and Prevention 3/ 28,611 31,242 36,642 44,493 47.170
National Institutes of Health:
NIDA
NIAAA
NIMH
Subtotal, NIH
Subtotal, L7HHS
PHS Agencies
Social Security Administration
Health Care Financing
Administration 1.400,000 1,570,000 1,730,000 1,940,000 2.160,000
Administration for Children
and Families 111,046 111.200 105,700 110,500 114,800
Subtotal. L/HHS Agencies 3.722,609 4,008,568 4,305,881 4.715.948 5 065.537
Food & Drug Administration 6.700 6,575 6,664 6,800 6,738
Indian Health Sen/ice 75.295 81 ,305 87,617 91 ,352 96,046
TOTAL, HHS 3,804,604 4,096,448 4,400,162 4,814,100 5.168.321
399.151
403,065
424,315
437.443
452,069
171,748
176,173
184,622
190,067
195,847
62,189
65.371
66,784
69,308
71 ,703
633,088
644.609
675,721
696.818
719,619
2.211.563
2.322.786
2,451,381
2.507,548
2588.337
n/a
4,582
18,800
157,900
202,400
26
1526
All Other Government: 4/
Office of National Drug
Control Policy
High Intensity Drug
Trafficking Areas
Special Forfeiture Fund
Labor
Education
Agriculture
Defense
Veterans Affairs
Justice
Treasury
Transportation
State
SUBSTANCE ABUSE
(Dollar* In Thoutand*)
FY 1992 FY 1993 FY 1994 FY 1995
18,700
1 5,400
86,000 86.000
20,000 1 5,000
61,500 65,100
12.000
9,900
714,700 700.800 598,800 605,200
15,900
28,900
30,700
30.200
1,226,000 1.140,700 814.900 852,000
841,700 901.500 854,100 887.400
FY 1995
9,900
86,000 107,000 110.000
12,500 26,100 37,000
91,100 93,500
80,400
627,700
29.500
812.000
929.500
4,240.700 4.803,300 4,963,500 5,768,300 6,709,900
1,097,300 1,040,500 1,094,700 1,070,700 1,042.000
467,900 355,300 371,000 353.500 371,600
220,100 200.200 114,900 118.100 213,300
27
1527
SUBSTANCE ABUSE
(Dollar* In Thousands)
FY1992
FY 1993
FY 1994
FY 1995
FY1996
Agency for International
Development
258.000
139.800
44.900
14,000
0
U.S. Information Agency
9.700
9,300
7.900
8,000
8,400
Interior
45.200
40,600
38,400
36,000
35.800
Corporation for National
and Comm. Service
10,000
9,700
28,200
39,400
53.900
Housing and Urban
Development
The Judiciary (U.S. Courts)
Small Business Administration
TOTAL, SUBSTANCE ABUSE
165.000
175.000
315,000
300,800
290,300
359,900
405.600
457,100
499,000
586.500
100
200
200
100
100
13,663,004 14,229.348 14,336,062 15,633,300 17,116.121
1/ SAMHSA r*fl«ct( *comparabto' daU lor all yaan. in complianc* with Iha AOAMHA Raocganiiation Ad P L 102.321 All
SAMHSA Subslanca Abus* Block Grant funding, tanring both drug and alcohol programs tt indudad Also. FY 1933 and
FY 1994 donotlncluds nst transfer by tha Stats* of (22.210.783 and S12 317 886 rsspactivsly from ths SubtUnc*
Abuss Block Grant to ths MsnUI Hsalth Block Grantat allowsd by Ssction 205 (b).P L 102-321
2/ Inchidss ths Ryan WhHs AIDS Cars-Trsatmsnt funding in 1901 through 1096
3/ Figurs rsprsssnts sn sttimats bassd on historical lur>ding pattsms. Ths Psrformancs Partrwrship slimlrutss many
sstasidss. incrsasing Stats flsxiblNty to targst furtd* to thair substancs atxjss priorltiss Actual lurtds to bs
spsnt by Statss on drug AIDS counsslling and prsvsntion in FY 1996 carmot bs sttimatsd «nth prscision.
4/ Numbsrs rsportsd by ONDCP. In gsnsral. all data rsportsd includs ak;ohol programs ralating to Hlsgal uts of
alcohol by undsrags psrsoru.
CKHOnuMS MB
28
1528
§ i iS i
S 8
II
3
s
I
e
I
1 ?
l5
CO Q)
I
§2,
1529
§ I § §
S S N «D S 8
8 * * ■
u) *- m
I
§ g
8
g § § §
■O *- <^ 10
lo S I 8
§ S
A
t
il
ts
•I
511
I I !
1530
Child Care
Obligations/Budget Authority
1992 1993 1994 1995 1996
Actual Actual Actual Estimate Estimate
Administration for Children
and Families (ACF) :
AFDC and Transitional
Child Care S415.3 S596.0 $731.0 S865.0 954.0
At-Risk Child Care 332.0 264.3 276.0 357.0 300.0
Child Licensing Improvement
Grants
Child Care and Development
Block Grant 825.0 892.7 892.6 934.6 1,048.8
Community Services
Block Grant 1/ n/a n/a n/a n/a n/a
Social Services Block
Grant (Title XX) 2/ 660.0 660.0 660.0 660.0 660.0
Dependent Care Planning
and Development 13.2 12.9 12.9 12.8
Child Development
Associate Scholarship 1.4 1.4 1.3 1.3
Temporary Child Care
Crisis Nurseries 11.1 11.9 11.9 11.8 11.8
Research and Demonstration 0.4 0.0 0.0 0.3 0.3
Head Start 3/ (2,202.0) [2,776.3) (3,325.7) (3,534.4) (3,934.7)
Total, ACF $2,258.4 $2,439.2 $2,585.7 $2,842.8 2,974.9
Public Health Service:
Research and Demonstration.. 11.0 11.5 11.1 10.6 10.8
Agency for Health Care
Policy and Research 11.4 10.1 13.2 13.9 14.4
Total, PHS $22.4 $21.6 $24.3 $24.5 25.2
Assistant Secretary for
Planning and Evaluation:
Research and Evaluation $0.3 $0.3 $0.3 $0.3 $0.3
HHS TOTAL $2,281.1 $2,461.1 $2,610.3 $2,867.6 3,000.4
1531
1/ The Consnunity Services Block Grant provides grants to States to go to local
consnunlty action agencies for local antlpoverty activities, which may Include
child care. No data on such expenditures Is provided to the Federal government.
2/ Estimates based upon HHS-sponsored research have been used for the cost of day
care services which States may choose to provide under the Social Security Act's
Title XX formula grants program.
3/ Data for the Head Start program are listed for Information, but have not been
Included In totals for the Administration for Children and Families (ACF)
because Head Start Is a comprehensive child development program rather than a
child care program.
1532
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Population Research and Family Planning Activities
Obligations: Fiscal Year 1992 to Fiscal Year 1996
(dollars in Millions)
FY 92
FY 93
FY 94
TOTAL DHHS
736.2
893.8
949.7
PUBLIC HEALTH SERVICE
Office of the Assistant
Secretary for Health
Office of Population
Affairs
7.8
7.6
6.:
Family Planning
Program
149.6
173.4
180.9
National Institutes
of Health
FY 95 FY 96
1,005.7 1.061.3
6.7 6.1
193.3 199.0
National Institute
of Child Health and
Human Development 159.5 154.9 165.4 171.2 176.7
Office of the
Director 1/
0.6
0.1
0.8
0.8
0.8
Health Resources and
Services Administration
Maternal and Child
Health Block Grant 2/
2/
2/
2L
SL
2/
Centers for Disease
Control
2.4
22
3.2
3.2
3.2
Indian Health Service
22.1
23.2
24.4
20.5
20.5
TOTAL PHS
334.2
353.8
374.7
395.7
406.3
1533
DEPARTMENT OF HEALTH AND HUMAN SERVICES
(continued)
Administration for
Children and Families 3/
Social Services
Block Grant 4/ 4/ 4/ 4/ 4/ 4/
Health Care Financing
Administration
Medicaid Bureau 402.0 540.0 575.0 610.0 655.0
Footnotes:
1/ Represent funds awarded through the NICHD for the Acdemic
Research Enhancement Award program.
2/ The Maternal and Child Health Block Grant expends
approximately $560 million annually for a broad range of
maternal and child health service, including family
planning services. The proportiaon of this total allocated
to family planning services cannot be determined through
available reporting systems.
3/ Formerly the Office of Human Development Services.
4/ The Social Services Block Grant expends over $2.8 billion
annually for a broad range of social services, including
family planning. The proportion of this total allocated to
family planning services cannot be determined through current
reporting systems.
1534
HEALTH CARE FINANCING ADMINISTRATION
ABORTIONS
Part I . Background
HHS's Appropriations Acts have contained restrictions on the Department's funding of
abortions since the ^ipropriations Act for FY 1977. HHS was enjoined by a Federal
District Court from enforcing the FY 1977 restrictions untfl August 4. 1977.
Consequently, the Departmect provided funding for all abortions which were covered
under a State's plan that were performed through that date. The appropriations
restiictions, commonly known as the Hyde Amendment restrictions, have governed
HHS's funding of all abortions performed after August 4, 1977, except for those
abortions performed during the period February 19 through September 19, 1980.
Federal funding was available for all medically necessary abortions performed during
that period under the criteria set forth by the District Court for the Eastern District of
New York and described in Harris v. McRae. 448 U.S. 297 (1980).
The following excerpts from instructions issued by HHS set forth the rules under which
the Department has funded abortions performed after August 4, 1977, with its
appropriations for FY 1977 through FY 1980.
1. For abortions performed after August 4. 1977. and for which funds
appropriated by the appropriations act for FY 1977 or the continuing
resolutions which appropriated funds through December 1. 1977. are used to
pay the claim:
". . . where the attending physician, based on his or her professional judgment,
has certified in writing that the abortion is necessary because the life of the
mother would be endangered if the fetus were carried to term."
2. For abortions performed after August 4. 1977. and prior to February 14. 1978.
and for which funds appropriated by P.L. 95-205 (appropriations act for FY
1978^ or P.L. 95-480 (appropriations act for FY 1979;> are used to pav the
claim:
(a) where the attending physician, based on his or her professional judgment,
has certified in writing that the abortion is necessary because the life of
the mother would be endangered if the fetus were carried to term;
(b) where two physicians, based on their professional judgment, have certified
in writing that severe and long lasting physical health damage to the
mother would result if the pregnancy were carried to term; or
1535
Page 2 - Abortions
(c) for the victims of rape or incest, when such rape or incest has been
reported promptly to a law enforcement agency or public health service.
The Department will accept any reasonable interpretation of those
provisions for abortions covered under paragraph 2.
For abortions performed on or after February 14. 1978. and prior to August 21.
1978. and for which funds appropriated bv P.L. 95-205 or P.L 95-480 are used
to pay the claim:
(a) where a physician has found, and so certified in writing to the State
agency, that on the basis of his or her professional judgment, the life of
the mother would be endangered if the fetus were carried to term;
(b) where two physicians have found, and both certified in writing to the
State agency, that on the basis of their professional judgment, severe and
long lasting physical health damage to the mother would result if the
pregnancy were carried to term; or
(c) for the victims of rape or incest, if the State agency has received signed
documentation from a law enforcement agency or public health service
stating that:
(i) the person upon whom the medical procedure was performed was
reported, within sixty (60) days of the incident, to have been the
victim of an incident of rape or incest; and
(ii) the report included the name, address, and signature of the person
who reported the rape or incest
For abortioDS performed on or after August 21. 1978. and for which funds
appropriated bv P.L. 95-205 or P.L. 95-408 are used to pay the claim:
(a) where a physician has found, and certified in writing to the State agency,
that on the basis of his or her professional judgment, the life of the
mother would be endangered if the fetus were carried to term. The
certification must contain the name and address of the patient;
1536
Page 3 • Abortions
(b) ^ere two physicians have found, and certified in writing to the State
agency, that on the basis of their professional judgment, severe and long-
lasting physical health damage to die modier would resoh if die
pregnancy were carried to term. The certification must contain the name
and address of the patient At least one of the two physicians must also
certify that he or she is not an "interested physician.* An "interested
physician* is one:
(i) whose income is directly or indirectly affected by die fee paid for
- the performance of the abortion; or
(ii) who is the spouse of, or another relative ^o lives with, a physician
whose income is directly or indirectly affected by the fee paid for
the performance of the abortion; or
(c) for the victims of rape or incest, if the State agency has received signed
documentation from a law enf orcanent agency or public health service
stating:
(i) that the person upon whom the medical procedure was performed
was repented to have been the victim of an incident of rape or
incest;
(ii) the date of the incident;
(iii) the date of the repent, which must be within sixty (60) days of the
incident;
(iv) the name and address of the victim and the name and address of
the person making the rqxnt (if different from the victim); and
(v) that the report included the signature of the individual who
reported the incident
1537
Page 4 - Abortions
The contmumg resolutioos which made funds available for FY 1980, PX. 96-86 signed
October 12, 1979, and P.L 96-123 signed November 20, 1979, removed the exception
which allowed payment for abortions in those instances where severe and long lasting
physical health damage to the mother would result if the pregnancy were carried to term
when so determined by two physicians. Thus, Federal funding for abortions was
prohibited except (1) where the life of the mother would be endangered if the fetus
were carried to term, and (2) for such medical procedures necessary for victims of rape
or incest, when such rape or incest has been reported promptly to a law enforcement
agency or public health service. Regulations implementing P.L 96-86 were published at
42 CFR, part 441, on October 26, 1979. These regulations also applied to e]q>enditures
for abortions under P.L. 96-123 because the provision in that act governing abortions
was similar to the one contained in P.L 96-86.
On January 15, 1980, the District Court for the Eastern District of New York declared
tlie Hyde Amendment unconstitutional insofar as it precluded payments for medically
necessary abortions. That decision became effective on February 19, 1980, when the
Supreme Court refused to extend a stay of the district court order. Federal funding then
became available for all medically necessary abortions performed on or after February
19. The Supreme Court decision of June 30, 1980, reversed the district court's decision
on the constitutionality of the Hyde Amendment The petition for rehearing filed by the
plaintiffs in the McRae case delayed the effective date of the Supreme Court's decision,
leaving the district court order on payments for abortions in effect The Supreme Court
denied the appellee's petition for a rehearing in the McRae case on September 17, 1980,
and the district court's order was vacated on September 19, 1980. Therefore, the
availability of Federal tunding for abortions performed after September 19, 1980, was
subject to the FY 1980 Hyde Amendment restrictions; i.e.. Federal funds under
Medicaid were available only for abortions performed in life endangering circumstances
and abortions performed in instances of promptly reported rape or incest
On October 1, 1980, the President signed a joint resolution making continuing
appropriations available for FY 1981 through December IS, 1980, or untfl the enactment
of a subsequent appropriation. This resolution contained language which changed the
conditions under which Federal funding was available for abortions under Medicaid.
During FY 1980, Federal funds were available for abortions necessary for the victims of
rape or incest when the rape or incest was reported to a law enforcement agenqr or
public health service within sixty days.
1538
Page 5 • Abortions
Under the FY 1981 resolution. Federal funds were available for abortions necessary for
the victims of rape when the rape had been reported within 72 boon to a law
enforcement agency or public health service. Federal funds were also available for
abortions necessary for the victims of incest There was no longer a rq)orting
requirement for victims of incest In cases of incest, Federal funding was available when
the State agency had received a physician's written statement that die physician had been
informed that the patient was a victim of incest As in FY 1980, Federal funds
continued to be a^^able for abortions where the life of the woman would be
endangered if the fetus were cairied to tenn.
On June S, 1981, the President signed the Supplemental ^ipropriations and Rescission
Act of 1981. Under this act. Federal Financial Particqiation (FFP) is no longer avaflable
for abortion claims paid after June 5, 1981, for victims of rape or incest Federal funds
continue to be available for abortions where the life of the mother would be endangered
if the fetus were carried to term.
Subsequent congressional measures have continued to make Federal funds available for
abortions where the life of the woman would be endangered if the fetus were carried to
term. See P.L Nos, 97-51, 97-92, 97-276, 97-377, 98-107, 98-139, 98-619, 99-107, 99-154,
99-434, 99-464. 99-465, 99-491, 99-500. 99-591, 100-202, 100-436, 101-166, 101-517, 102-
170 and 102-394.
Effective October 1. 1993. as part of Public Law No. 103-112, The Health and Human
Services Appropriation bill. Congress passed a revision of the Hyde Amendment
pertaining to Federal funding of abortions under the Medicaid program. Federal
funding (FFP) is now available for abortions performed to save the life of the mother or
to terminate pregnancies resulting from rape or incest when the claim for such an
abortion is paid by the State on or after October 1, 1993. Please note that it is the date
that the State pays the claim and not the date of the service which determines the
availability of FFP.
Subsequent congressional measures have continued to make Federal funds available for
abortions performed to save the life of the mother or to terminate pregnancies resulting
from rape or incest when the claim for such an abortion is paid by the State on or after
October 1, 1993. See P.L. No. 103-333.
1539
Page 6 • Abortions
Part n • Data on Medicaid Financed Abortions
Following the implementation, on Febniaiy 14, 1978, of regulations which resulted from
the Hyde Amendment, a specific reporting procedure was developed for reporting
information on Medicaid financed abortions. Data are reported quarterly by the States
on the numbers of abortions and the allowable abortion-related expenditures. Data on
the number of reported abortions for FYs 1978 - 94 are given in table 1 wiult
expenditure amounts are given in table 2.
Since February 14. 1978, 60,885 Medicaid financed abortions have been reported by 48
jurisdictions through September 30, 1994. Total Medicaid expenditures, including
Federal and State shares, for abortions have been $18,276,182 during the period
February 14, 1978 through September 30, 1994. Seven jurisdictions (American Samoa,
Arizona, Hawaii, New York, the Northern Mariana Islands, Puerto Rico, and the Virgin
Islands) have not claimed Federal funds for abortions. California has subnutted claims
for FFP for abortions but has subsequently withdrawn these claims.
Of the 56 jurisdictions which reported for the period October 1, 1993 through
September 30, 1994 (FY 1994), 21 jurisdictions claimed FFP under the Medicaid
program for 226 abortions at a cost of $431,789 including both Federal and State shares.
By comparison, 23 jurisdictions claimed FFP under the Medicaid program in FY 1993
for 223 abortions at a cost of $411,799 including both Federal and State shares. Of the
226 abortions claimed in FY 1994, 224 were due to endangerment to the life of the
mother and 2 were due to rape in the states of Georgia and Wisconsin.
All abortion claims are subject to review by regional office staff. All claims found not to
meet the applicable Federal criteria for FFP will be either withdrawn by the State or
disallowed by HCFA.
The Health Care Financing Administration has not collected information on the number
of abortions provided to Medicaid recipients where the State did not claim FFP, or on
the number of federally financed Medicaid abortions prior to the implementation of the
regulations on the Federal financing of abortions on February 14, 1978.
The abortion data in the attached tables reflect the most current information available as
of January 23, 1995. Because States submit revised abortion claim data, the data
contained in this report may differ with information contained in reports previously
issued.
1540
TABLE 1
TOTAL NUMBER OF REPORTED MEOtCAlO ABORTIONS BY STATE AND FEDERAL FISCAL YEAR
FEBRUARY 14. 197B • SEFTBttBER 30. 1W4 1/
TOTAL rrnti fyt» fy* fyii fym fym fym nu rti»
ALASKA
•4
MIEMCANMMOAV
0
AIUZONA4/
0
AMKANMS
an
CAUFOANIA
e
OOLORAOO
S.1S1
OONNSCTCUT
1JM
DOAWAAE
*B
DtCrmCTOFOOUMSU
t.m
FLOnOA
1416
aeoRou
S2«
euAU
*
MAWAH
0
OAHO
IS*
BJJNOW
sxss
MOIANA
•M
IOWA
SM
KANSAS
442
KENTUCKY
SI
L0UI6UNA
MS
MAINE
tu
mabylano
4.260
WASSACHUSETT6
•.too
uchioan
•1
UrNNESOTA
1.611
uississim
11
MISSOURI
4a
MONTANA
23
NEBRASKA
114
MEVADA
1M
<EW HAMPSHIRE
•4
NEW JERSEY
*M»
NEWMEXICC
232
NEW YORK
0
NORTH CAROUNA
1.4*0
NORTH DAKOTA
•
N. MARIANA V
0
OHIO
a^o
OKLAHOMA
347
OREQON
1.241
PENNSYLVANIA
•.ai
PUERTO RICO
0
RHODE lElANO
a
COUTH CAROUNA
C7S
SOUTH DAKOTA
1
TENNESSEE
447
TEXAS
130
UTAH
230
VERMONT
las
VIRGIN ISLANDS
0
VIROINIA
124
WASHINGTON
390
WEST VIROINIA
3
WISCONSIN
1.643
WYOMING
3
1/ DATA FOR THIS REPORT ARE TAKEN FROM THE 64a FORMS SUBMtTTEO BY THE MEDICAID JURISDICTIONS AS PART OF
THEIR QUARTERLY STATEMENT OF EXPENDITURES THIS REPORT REFLECTS THE MOST CURRENT INFORMATION
AVAILABLE AS OF JANUARY 23. ISBS. BECAUSE THE STATES SUBMIT REVISED ABORTION CLAIM DATA THE DATA
CONTAINED IN THIS REPORT MAY DIFFER WITH INFORMATION CONTAINED IN REPORTS PREVIOUSLY ISSUED
2/ DATA FOR FY IITI ARE ONLY FOR THE PERIOD FROM FBRUARY 14. 1671 THROUGH SEFTB4BER 30. 1371
3/ NO MEDCAID PROGRAM IN EFFECT UNTIL FY 13(2.
41 NO MEDICAID PROGRAM IN EFFECT UNTIL FY 1363.
II NO MEDICAID PROGRAM IN EFFECT UNTIL FY IBTS.
1541
TABLET
TOTAL NUMBER OF REPORTED MEDICAID ABOmiONS BY STATE AND FEDERAL FISCAL YEAR
FEBRUARY 14. 1978 - SEFT84BER 30. 1994 1/
ALUKA
AUERICAN SAMOA V
ARIZONA «
ARKANSAS
CALIFORNIA
COLORADO
OONNeCTICUT
DELAWARE
OltTRICT OF COLLWBIA
RjORDA
OEonaiA
•UAM
HAWAfl
CAHO
OJJNOIS
MDIANA
»WA
KANSAS
KEKTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MCHIQAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NaRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
N.MARIANA 6/
OHIO
OKLAHOMA
OREOON
PENNSYLVANIA
PUERTO RICO
RHOOE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VBMONT
VIRGIN ISLANDS
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING
AVAILABLE AS OF JANUARY 23. 1 WS BECAUSE THE STATES SUBMIT REVISED ABORTION CLAIM DATA THE DATA
CONTAINED IN THIS REPORT MAY DIFFER wrTH INFORMATION CONTAINED
2/ DATA FOR FY 1S7i ARE ONLY FOR THE PERIOD FROM FEBRUARY 14. 1S7t
a/ NO MEDICAID PROGRAM IN EFFECT UNTIL FY IU2
4/ NO MEDICAID PROGRAM IN EFFECT UNTIL FY 1W3
«/ NO MEDICAID PROGRAM IN EFFECT UNTIL FY 1S78.
1542
TABLES
TOTAL RS>ORTB} EXPENDTTURES FOR MEDICAID ABORTIONS BY STATE AND FEDERAL FISCAL YEAR
FEBRUARY 14. 1978 - SEPTBWIBER SO, 19»4 V
TAL rrnt/ fvti fyio rrti fym fym fym fvm rrtt r
TOTAL
t1iJ7S.1«l
asoijMe
r.iioj6«
•SJ6M16
•4ja2.661
•447.066
•721.716
•767406
r4S2.462
•1».066
r27416
ALUMIA
rmn
«J14
11.TM
4S.7W
41.466
4467
6446
•466
14I2
2442
1452
tfU»\
S6.S11
0
•
0
6
0
0
0
AMEHCANCMIOA
0
0
•
0
0
•
0
0
0
AflrZONA«
e
0
0
•
0
•
0
0
0
ARKANM*
M-MT
1.716
•J7S
40.478
t1««7
44»
•466
■470
•67
1444
166
CAUPOMNIA
•
6
•
0
0
0
0
0
0
OOLOMOO
•07MO
16.616
•6.210
1«6.066
106 J61
41464
76462
27405
11.601
CONNECTICUT
SiLTlB
«6«1
76J64
•68.211
110J76
11464
6466
•487
4.676
4416
661
OCLAWAW
1«J»
6
•17
6U12
18.767
176
1468
2.771
1461
«.674
612
OlSTWCTOfOOtO
S71M0
0
•
•a6.S76
64.464
6
0
0
0
FLOWDA
SM.74*
4J16
•61
167.047
61J67
•0.061
11462
2.114
12461
6.816
11.711
OEomu
snjM
1M7
•«7
161.211
76.402
10.427
•76
•86
0
4471
2.144
QUAH
74*
0
•as
420
0
6
0
6
0
HAWAU
e
e
e
0
0
C
•
•
0
OAHO
*1«S
t.T12
1.467
6J21
2.670
666
tsi
7*2
■.■■S
461
6o:
•41.612
•6.411
26.182
•16M8
•IJli
6.616
•466
726
687
lie
253
MOIANA
118.241
1JS4
0
118.616
2.470
672
180
10.077
180
210
»WA
141 JCI
0
4.801
42.616
12.086
1.664
4468
4.071
2.117
141S
11.779
KANSAS
1S9.102
0
7.615
106.116
11.121
t.111
8.650
261
0
612
470
KENTUCKY
127.670
•
6J17
726
1.476
0
0
0
0
6.647
LOUISIANA
4a.(ao
0
0
20.672
21.221
0
0
0
0
MAINE
1(1.»77
1J26
1.611
46.061
18.761
1462
6.118
0
6.141
2.612
2417
MARYLAND
1.064 .S22
20JU
66.466
771.114
206.164
11.667
0
0
0
1.117J61
0
61.046
CS7M0
478.611
601
0
0
0
MICHIQAN
141.407
•
0
0
0
0
0
0
0
MINNESOTA
lOlJOO
0
0
142.771
142.665
2466
106
411
1421
161
661
MISSISSIPPI
710
720
60
0
0
0
0
0
0
MISSOURI
W17
0
t»>*
0
•06
6
0
0
0
■5NTANA
•.7U
0
0
0
764
•
0
466
1467
2.S11
216
BRASKA
27.746
0
460
4.111
I6J1S
1.746
1467
416
164
245
.eVADA
lo.oeo
0
1.266
21 .261
6.716
164
442
0
127
NEW HAMPSHIRE
12.116
100
667
7.166
4.166
0
0
0
0
NEW JERSEY
664.071
12.214
44.UI
4MM6
•28.266
1408
0
0
0
NEW MEXICO
41J60
S6«
1.165
24.176
16J01
881
0
0
0
NEW YORK
0
0
0
0
0
0
0
0
0
NORTH CAROUNA
666.7M
4.676
6.416
214.166
117.646
10442
10470
60411
n.w5
11442
12.8U
NORTH DAKOTA
1.067
162
0
211
0
170
612
0
0
N. MARIANA V
0
0
0
0
0
0
0
0
0
OHIO
6.12S.266
210.671
617.188
660 J76
1.186.166
241.864
•41.781
eu.eii
1.126.046
20.712
S4.1S5
OKLAHOMA
176.161
•J64
101.461
24.616
16J21
1411.
1416
0
0
OREGON
157 J71
1.162
7.701
66.627
82.652
1.324
2.167
1426
645
PENNSYLVANIA
vn\32i
«SJ66
62.780
1.242417
611401
11466
•.120
16.764
20.410
66.676
PUERTO RWO
0
0
0
0
0
0
•
0
0
RHODE ISLAND
S.067
664
2.126
0
2.177
0
6
0
0
SOUTH CAROUNA
265.660
4.676
1.672
61.467
17421
11.676
6.460
•411
4.660
4411
1486
SOUTH DAKOTA
202
202
0
0
0
0
0
e
0
TENNESSEE
17BJ66
6.S76
661
MMT
12447
6
117
•10
0
•460
2242C
TEXAS
160.641
•J76
2.162
11.170
1.766
•
0
0
0
UTAH
6SJ$6
B20
too
64.618
11.717
•.on
•412
1.411
0
VERMONT
•6A22
1«5
6.048
16.661
16460
.61
0
■00
0
2410
2.482
VIRQIN ISLANDS
0
0
0
0
0
6
0
0
0
VIROINIA
66.611
1.164
7J16
16.742
4.166
•.678
4.466
1426
6.161
760
i.iec
WASHINQTON
66.061
0
6.670
1.648
•6476
0
•
0
0
WEST VIRGINIA
661
6*1
0
0
0
0
•
0
0
WISCONSIN
616.107
661
1.611
166.185
11.720
2428
1401
1462
110
SI2
WYOMING
2J76
200
0
1M6
0
0
0
0
0
0
1/ DATA FOR THIS REPORT ARE TAKEN FROM THE 64 6 FORMS GUBMrTTED BY THE MEOICMD JURIS0ICTK3NS AS PART OF
THEIR QUARTERLY STATEMEKT OF EXPENDITURES THIS REPORT REFLECTS THE MOST CURRENT INFORMATION
AVAILABLE AS OF JANUARY 21. 16B5 BECAUSE THE STATES SUBUrT REVISED ABORTION CLAIM DATA. THE DATA
CONTAINED IN THIS REPORT MAY DIFFER WITH INFORMATION CONTAINED IN REPORTS PREVIOUSLY ISSUED
VOATA FROM FY 1671 ARE ONLY FOR THE PERIOD FROM FEBRUARY 14. 1671 THROUGH SEPTEMBER 10. 1676.
y NO MEDICAID PROORAM IN EFFECT UNTIL FY 1662
*l NO MB>ICAID PROGRAM IN EFFECT UNTIL FY 1661
m wo MPICAID FWOORAM IN BTECT UNTIL FY 1>76.
1543
TABL£2
TOTAL REPORTED EXPENDTTURES FOR MEDICAIO ABORTIONS BY STATE AND FEDERAL FISCAL YEAR
FEBRUARY 14. IBTB - SBTaWER 30, 19»4 1/
FYM FYM FYM FY«1 FV« FYn rtt
•nije7 et4.itt tiatJiT tiirjK K«.i<e mii.tm msi.tm
ALM»M«
11««
73(
IS^S
SM
U14
•jmo
ALUM
•
0
AMERICAN MMOA
•
0
MVZOHAAI
•
•
0
4S(
1«1
CAUTOMWA
•
0
OOLOMOO
T4S
ijao
1JSS4
UM
n(
CXlNNBCnCUT
•
«
DELAWARE
•44
njut
•44
•07
BiSTRICTOfCOLU
•
0
RAAIOA
•
0
•EOROIA
1M11
•.«7D
14J00
s.e«o
tS.7*3
trma
•UAM
•
0
HAWAU
0
0
BAHO
tjtu
301
xn
410
1.240
LUN0I8
sas
•S3
•71
•30
1.7(4
3.403
7.311
MOIANA
0
•47
««0
1J(3
2(0
DWA
•.427
1.740
t.4«4
•.420
3.(43
3.»71
»SU
J.TBS
1.0»
3411
•00
3.3(4
0
KENTUCKY
14.407
114
^^M»
js.en
ttJUt
(.7(0
1(.022
LOUISUNA
0
0
0
oao
MAINE
».T43
•14
•3*
lajn
3.107
i4jao
X220
MARYLANO
0
MASSACHUSETTS
0
MICHIGAN
2.4S3
1S.72S
20.731
2(.«3S
•0.(00
MINNESOTA
1fl«J
1*4»
*Ma
S40
*MT
S7(
1.221
MISSISSIPPI
0
MISSOURI
0
MONTANA
•70
ise
0
NEBRASKA
0
NEVADA
7««
NEW HAMPSHIRE
0
NEW JERSEY
0
NEW MEXICO
0
NEW YORK
0
NORTH CAROUNA
4.730
1IM0
10.70S
7.7«»
44.334
101.341
•3.7SS
NORTH DAKOTA
0
N. MARIANA V
0
OHIO
130.610
1714(4
as.sio
1M.SS3
1S4JM
OKLAHOMA
400
•eo
2.(00
3.a2S
•13
OREOON
0
PENNSYLVANIA
0
rUERTORK»
0
RHODE ISLAND
0
SOUTH CAROUNA
SMS
7J0«
i4.sas
ti.ooi
27J43
M.oe7
21.74«
SOUTH DAKOTA
0
TB<NES8EE
10.7C0
•.705
3.«3a
1S*1(
10.320
S0.120
2.2*4
TEXAS
••SI
•0.400
SOU
1(.(9(
•4.011
IffAH
0
VERMONT
33
KMO
•
t.1S^
VIRQIN ISLANDS
•
VIRSINIA
4JS1
0
WASHINQTON
•
WEST VIRQINIA
0
WISCONSIN
S.404
•JB7
M13
•40
S4«
WYOMINQ
0
•
•41
0
1/OATA FOR THIS REPORT ARE TAKEN FBOM TNE MS FORMS BUSMrTTED BY THE MEDICAID JURISOICTK>NS AS PART OF
THEIR QUARTERLY STATEMENT OF EXPENDITURES THIS REPORT REFLECTS THE MOST CURRENT INFORMATION
AVAILABLE AS OF JANUARY 23. tOSS BECAUSE THE STATES SUBMIT REVISED ABORTK3N CLAIM DATA. THE DATA
CONTAINED IN THIS REPORT MAY DIFFER WITH INFORMATION CONTAINED IN REPORTS PREVKJUSLY ISSUED
2/ DATA FROM FY 117( ARE ONLY FOR THE PERIOD FBOM FBRUARY 14. 1»7( THROUQH SEPTB4BER 10, 1»7(.
»l NO MEDICAID PROGRAM IN EFFECT UNTIL FY ISU
*l NO MEDICAID PROGRAM IN EFFECT UNTIL FY l«U
•/ NO MBICAID PROORAM IN EFFECT UNTIL FY ISTO
1544
(O in «
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34
1546
History of Congressional Action on Budget Requests
for National Institutes of Bealth
Fiscal Year
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
194B
1949
1950 ,
1951 ,
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Budget
Estimate
to Congress
$48,
54,
50,
64,
64,
464,
515,
587,
712,
705,
1,278,
1,291,
2,835,
2,078,
10,799,
22,403,
45,701,
40,567,
49,845,
53,386,
55,005,
56,340,
71,128,
72,525,
104,976,
154,966,
174,026,
241,895,
332,437,
494,676,
653,501
732,055
762,268
844,931
950,032
,079,787
,130,644
000
775
000
000
000
000
000
000
120
000
,270
,000
,000
,000
,000
,000
,460
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
,000
1/
Appropriation
S4B,000
54,775
50,000
64,000
64,000
464,000
515,000
707,000
711,000
700,000
,278,270
,555,020
,835,000
,414,700
,125,448
,876,000
,668,000
,167,000
,334,750 2/
,447,291
,030,750
,153,000
,268,000
,457,000
,810,000
,966,000
,964,000
,910,000
,100,000
,459,000
,201,000
,379,000
,091,000
,931,000
,254,000
,461,000
,753,000
Fiscal Year
Budget
Estinate
to Congress
Appropriation
80
147
171
241
331
459
629
737
730
773
873
1,014
1,076
1,109
1970 SI, 084, 420, 000
1971 1,118,584,000
1972 1,359,873,000
1973 1,619,780,000
1974 1,576,770,000
1975 1,835,110,000
1976 1,980,474,000
1977 2,165,047,000
1978 2,596,077,000
1979 2,884,720,000
1980 3,185,928,000
1981 3,512,320,000
1982 3,310,985,000
1983 3,748,771,000
1984 4,091,958,000
1985 4,566,453,000
1986 4,852,680,000
1987 4,936,157,000
1988 5,534,277,000
1989 7,122,837,000
1990 7,529,397,000
1991 7,929,686,000
1992 8,774,886,000
1993 10,579,684,000
1994 10,667,984,000
1995 11,473,000,000
1996 11,773,066,000
$1,061
1,212,
1,506,
1,762,
1,790,
2,092,
2,302,
2,544,
2.842,
3,189,
3,428,
4/ 3,569,
3,641,
4,023,
5/ 4,493,
5,149,
5,262,
6/ 6,182,
6,666,
7,144,
7,576,
8,276,
8,921,
10,326,
10,937
11,321
13/
,007,000
847,000
156,000
565,000
425,000
897,000
126,000
078,000
936,000
978,000
935,000
406,000
875,000
969,000
588,000
459,000
211,000
910,000
693,000
767,000 7/
352,000
739,000 8/
687,000 9/
,604,000 IC
,653,000 11
,906,000 i:
31
1547
'I Includes $386,500 in transfers.
I Not less than $3,-000,000 was earmarked in liquidating cash; an additional
$1,175,000 was used for that purpose.
3/ Excludes $3,216,250,000 rescinded.
4/ September budget; original request was $3,762,483,000.
5/ Includes $14,866,000 for AIDS research.
6/ Reflects transfer of AIDS research activities to OASH.
7/ Reflects transfer of $7,443,000 for AZT to OASH.
8/ Reflects administrative reduction and sequestration.
9/ Reflects 2.41% reduction and NlH's share of $50M for salaries and expenses.
10/ Reflects enacted administrative reduction of an across the board .8%
reduction of $83,571,000, salaries and expenses reduction of $34,857,000
and a consultant service reduction of $1,342,000. 1993 columns have been
adjusted to include transfer from ADAMHA.
11/ Includes rescission of $18,120,000.
12/ Includes $1,299,328,000 for HIV /research appropriated to the office of AIDS R
Reflects enacted reductions of $7,406,000 for procurement, $345,000 for rent a
for bonus pay. Excludes proposed rescission of $1,000,000 in NCRR related con
13/ Includes $1,407,824,000 for HIV Research.
32
1548
WOMEN'S HEALTH
Obligations
Dollars in Thousands
FY 1995
Food & Drug Administration
Direct
...
3,000
15,000
21.500
28,000
Indirect
...
...
...
Total, FDA
0
3.000
15,000
21,500
28,000
Health Resources & Services
Administration
Direct
416.929
417.749
450.732
474.783
469,387
Indirect
469,373
452.260
484,249
507.975
510,399
Total, HRSA
866,302
870.009
934.981
982.758
979,786
Indian Health Service
i
Direct
100,713
105,418
110,945
118.497
125,308
Indirect
...
...
Total, IHS
100.713
105.418
110,945
118.497
125,308
Centers for Disease Control
& Prevention
Direct
100.244
129.986
158.244
188.650
233.380
Indirect
54.975
55.515
57.024
65,975
67,169
Total, CDC
155.219
185.501
215,268
254,625
300,549
National Institutes of Health
Direct
568,680
718,586
833.248
937,291
1,009,002
Indirect
630,358
677,499
701,580
717,955
731.062
Total, NIH
1.199.038
1.396.085
1.534.828
1,655.246
1 .740.064
Substance Abuse & Mental Health
Services Administration
Direct 1/ 65.313 153.870 160.023 158.255 152,895
Indirect 67.791 77,030 74.312 65.661 47,539
Total. SAMHSA 133,104 230,900 234,335 223,916 200.434
1/ FY 1991 and FY 1992 do not include SAMHSAs Substance Abuse Block Grant.
This data was unavailable.
29
1549
WOMEN'S HEALTH
Obligations
Dollars in Thousands
Agency for Health Care Policy
& Research
Direct
7,100
4.322
5.402
6,568
8.200
Indirect
...
...
...
Total. AHCPR
7.100
4,322
5.402
6.568
8.200
Office of the Assistant Secretary
for Health
Direct
7.754
7,598
7,175
9,260
8,696
Indirect
...
...
...
...
Total, OASH
7.754
7.598
7.175
9.260
8.696
Total, PHS
Direct
1.266,733
1.540,529
1 .740.769
1,914,804
2,034,868
Indirect
1,222.497
1.262,304
1,317,165
1 ,357,566
1,356,169
Total, PHS
2,489,230
2.802,833
3,057,934
3,272,370
3,391.037
HCFA
Direct
114.890,692
127,426,237
128,292,273
139,914.664
154.981,304
Indirect
...
Total, HCFA
114,890,692
127.426,237
128.292,273
139,914,664
154,981.304
Total. UHHS
Direct
116,157.425
128.966,766
130.033.042
141,829,468
157.016,172
Indirect
1.222.497
117.379.922
1.262,304
1.317.165
1,357,566
143,187.034
1,356,169
Total, L/HHS
130,229.070
131.350.207
158,372.341
30
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1557
T-4
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
New Programs in FY 1996 Budget
(IXdlars in thousands)
FY l^
APFROPRIATIC^I / mOGMJM
BUDGET RB<HJBSrr
PUBUC HEALTH SERVICE
Hedth ResonrcM and ServicM Adminutratioa
Bureau of Primaiy Heallfa Care:
$756,399
— Prograins for Special Populalioas
17,259
Health Profeaaiooa:
— H.P. Workforce Development Cluater
127,218
38,783
— Minority/Diaadvantaged H.P. Cluster
89,450
— Primaiy Care Medicine and Public Health Cluster
76,055
— Nurcing Education/Practice Cluster
56,750
Maternal and Child Health:
— Emergency Medical Services Cluster
14.784
Rural Heallfa:
— Rural Health Program Cluster
29,029
Centers for Disease Control
HTV/STDZ/TB Partnership Grant
487,700
Chronic Disease/Disability Prevention Partnership Grant
118,100
Immunization Partnership Grant
176,700
Crime Bill:
— Rape Prevention and Education
35,000
— Coomiunity Programs on Domestic Violence
4,000
— Injuries Research
100
Substance Abase and Mental HesJth Service* Adrainistntiaa
113,092
Mental Health Training and Demonstration
Mental Healdi Partnership Block Grants
326,377
Substance Abuse Training and Demonstiatiaa
452.774
Substance Abuse Partnership Block GranU
1.294,107
ADMINISTRATION FOR CHILDREN AND FAMILIES
Crime Bill:
— Community Economic Partnership Investment Fund
10.000
— Runaway Youth Preventian
7.000
— Youth Education and Domestic Vioknce
400
— Battered Women's Sbelten
15.000
EBT Task Force
2.000
1558
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1563
T~6
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
FY 1996 L^islative Programs
(Dollars in thousands)
APPkcaimAnoti i hiogram
BUDGET
AUTHORrrY
OUTLAYS
PUBUC HEALTH SERVICB
SAMHSA
Mental Health Training and Demoostratioo
Mental Healdi Partnership Block Grants
Substance Abuse Training and Demoostratioa
Substance Abuse Partnership Block Grants
TOTAL, SAMHSA
AHCPR
Healdi Care Costs, Quality & Access
NMESm
Medical Treatment Effectiveness
Program Support
TOTAL, AHCPR
OASH
Office of Adolescent Health
Office of Minority Health
TOTAL, OASH
GRANTS TO STATES FOR MEDICAID
HEALTH CARE
FINANCINO ADMINISTRATION
Excise Tax, VFC Program
PROGRAM MANAGEMENT
Immigratioa Reform
HHA Survey Flexibility
MEDICARE PART A OUTLAYS
Extend Savings of Skilled Nursing
Facility Coat Limits Freeze
Extend Savings of Home Health
Facility Cost Limits Freeze
Negative Supplemental: Research
Survey & Certification: Home Healdi
Agency Initiative
$113,092
326,377
452,374
1.294.107
$2,1SS.9S0
$53,515
9,91S
76,568
2.423
$142,424
$6,144
20.592
$26,736
-$46,800
150,000
-8.800
-130.000
-10.000
-11.000
-8.800
$113,092
326.377
452,374
1.294.107
$2,185,950
$50,756
10.133
75.731
2.423
$139,043
$5,584
19.454
$25,038
-$46,800
150.000
-8.800
-130.000
-10,000
-11,000
-8,800
1564
T-6
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
FY 1SK)6 Legislative Programs
(Dfdlan in tfaousands)
Bl}DGEr
AFPROnOATIOK / I^OGRAM
AUTHORirY
OUTLAYS
306.711
306.513
ADMINISTRATION ON A<HNO
Suppo
rtive Services and Centers
Aging
Congregate Meals
375,809
375,696
Aging
Home-Delivered MeaJs
94.065
94,044
Aging In-Home Services
9.263
9.234
Preventive Health Services
16,982
16.915
Trmining, Research and Discretionary
Programs
45.134
28.614
Grants to Indian Tribes
18.402
16,299
Aging Ombudsman Services
4.449
4.431
Aging Elder Abuse Preveotioo
6,232
5.537
Outreach, PuUic Benefit and
Insurance Counseling
1.976
1.974
Federal Council oo Aging
226
218
Federal Administratiao
17.399
17.333
White House Conference on Aging
500
1.750
1565
t T-7
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
Total Budget Authority by Fund
FY 1976-1996
(Ddlars in dxMisands)
BoineLil
"~ '^K^^RMPiPiPpI
T'^msT mmm
TOTAL
1976
23.682.544
70.696,427
94.378,971
1977
24.673.677
81,182,631
105,856,308
1978
43.575.360
89,605,443
133.180,803
1979
46,766.315
102,101.736
148.868.051
1980
55.846.605
117.453.758
173.300,363
1981
62.263.073
134,584.179
196.847,252
1982
65.045.753
148,042,785
213.088,538
1983
70.529.310
184,526,993
255.056.303
1984
76.818.931
180,598.508
257.417.439
198S
81.367.272
198.190.768
279.558.040
1986
84.745.149
205.813.431
290.558.580
1987
91.308.604
227.711.463
319,020.067
1988
102.893.171
259,105,107
361.998.278
1989
114.908.558
286,122.344
401.030.902
1990
126.299.388
308.044.029
434.343,417
1991
151,863.395
327.919.130
479.782,525
1992
175.759.334
340.547.189
516.306,523
1993
199.544.649
353.602.359
553,147.008
1994
215.955.378
378,675,212
594.630.590
1 1995
208.422.119
402.433.348
610.855.467
1996
227,255.005
424.485.682
651.740.687
1566
r T~8 '
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
Total Expenditures
FY 1976-1996
(Dollars in thousands)
^^^^S^'^S^QI^^^^^^^^^^
.:'MPfeHiiiii
'ZcMdM!^^'
1976
23.239,009
73,916.647
97,155,656
1977
24.075.665
85.081.662
109.157,327
1978
44.577,578
93,871,447
138.449,025
1979
47.372.654
104.085,672
151.458.326
1980
54.288.050
118,573.639
172,861,689
1981
60.689.217
135.316.823
196.006.040
1982
66.631.065
155.979.794
222.610.859
1983
74.029.202
170.8*9,266
244.878.468
1984
75.513.570
178.999,651
254,513,221
198S
81.714.630
189,444,841
271,159,471
1986
82.863.995
199.313,114
282.177,109
1987
89.363.115
208,141.522
297.504,637
1988
100.259.452
220.305,529
320,564,981
1989
112.846.711
233.677,675
346,524,386
1990
124,893.703
249,809.726
374,703,429
1991
145,854.459
274,286.274
420.140.733
1992
172.662,704
289.776.487
462.439.191
1993
189.161.956
306.742.863
495.904.819
1994
197.571,187
321.782.230
519.353.417
1995
206,865,428
338.435,231
545.300.659
'.., 1996
241.982.818
358,426,911
600.409.729
1567
DEPARTMF.NT OF HEALTH AND HUMAN SERVICl
SUMMARY
Tnvd by ^ifH-opriatioas
FY 1994-1996
(Ddlan in thousands)
T-9 1
IS
APntOFRIATlON
FY 1994
FY 1995
FY 1996
PUBUC HEALTH SERVICE
$2,612
14,270
17,964
1,693
334
1,158
$2,334
13.627
19.080
1,552
391
1.046
$2,334
14,427
19.899
1,552
407
1.073
Health Resources &. Services Administratioa
Centers for Disease Cootrol & Preventioo
National Institutes of Health
Substance Abuse & Mental Health Services
Agency for HealA Care Policy & Research
Office of the Assistant Secretary for Health
SUBTOTAL, PHS (Ltbor/HHS)
$38,031
$38,030
$39,692
Food and Drug Administration
Indian Health Services
20,387
36.468
20.397
38,849
20,407
37.201
TOTAL, PHS
$94,886
$97,276
$97,300
HEALTH CARE FINANCING ADMINISTRATION
SOCL\L SECURITY ADMINISTRATION
ADMINISTRATION FOR FAMILIES AND CHILDREN
ADMINISTRATION ON AGING
OFFICE OF THE SECRETARY
5,835
23,975
2,502
371
$832
3.423
160
37
86
1.203
5.786
30.112
2.506
359
$800
3.507
265
50
115
1.102
5,707
37.152
4.556
395
$796
3,051
200
36
115
1,059
General Departmental Management
Office of Inspector General
Office for Civil Rights
j OfBce of Consumer Affairs
Policy Research
Working Capital Fund
i TOTAL, OS
$5,741
$5,839
$5,257
TOTAL. HHS O-abor/HHS)
$76,455
$82,632
$92,759
TOTAL, HHS
$133,310
$141,878
$150,367
1568
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1569
T-ll
DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUMMARY
ENTTTLEMENT VS. DISCIIETIONARY
and
REQUEST VS. APPROPRIATION
(Dollars in thousands)
::■. ;>-?:.Sk.,i,:;::: ■
BNTrrUSMENI
DISCREnONARY
■'■■•■■■ -ttMr'-
FY 1987
67,472,817
17.708,360
85,181,177
Request
AppropnatioD
73,190,688
19.680,681
92,871.369
FY 1988
80,991,049
18,230.451
99.221,500
Request
AppropriatioD
84,418.825
20,448,310
104.867.135
FY 1989
92,298.643
21,131,192
113.429.835
Request
Appropriatioo
94,800,152
22,173,173
116,973,325
FY 1990
100,752,593
22,425,943
123,178.536
Request
Appropriatioo
106,831.022
23.717.295
130,548.317
FY 1991
118.186.318
26,024.726
144,211.044
Request
Appropriation
126.440.921
27.395.767
153,836,688
FY 1992
137.808.525
28.566.163
166,374.688
Request
Appropriatioo
148,064.883
30.032.352
178,097,235
FY 1993
150,462,034
25.188.990
175,651.024
Request
Appropriation
151,694,040
26.129.089
177,823,129
FY 1994
185,171,692
35.935.027
221,106,719
Request
Apfn-opriatioo
185,864.043
34,242.331
220,106.374
FY 1995
178,067,354
35.667.631
213,734,985
Request
^>propnation
178,752,960
35.180.912
213.933,872
FY 1996
196.557.312
37,237,955
233,795,267
Request
1570
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WITNESSES
Page
Bane, M.J 791
Beldon, W.R 295
Blancato, R.B 1327
Broome, C.V 1
Brown, J.G 1, 1431
Chater, S.S 555
Duquette, Dennis 1431
Dyer, J.R 555
Mangano, Michael 1431
Mosedale, Lee 295
Rolston, Howard 1
Rosewater, Ann 791
Savet, A.D 1327
Shalala, Hon. D.E 93
Thompson, L.H 555
Torres-Gil, Dr. F.M 1327
Vladeck, B.C 295
Williams, D.P 1, 555, 791, 1327, 1431
(i)
INDEX
DEPARTMENT OF HEALTH AND HUMAN SERVICES
TECHNICAL BRIEFING
Aquired Immunodeficiency Syndrome: Page
Cases, Number of 79
HIV/AIDS Prevention 82
Number of Persons Infected with HIV 82
Spending 78
Spending on AIDS vs. Cancer v. Heart Disease 79
Treatment Costs of AIDS vs. Cancer vs. Heart Disease 80
Trends 81
Child Poverty Rates, Child Support Enforcement and 64
Consumer Price Index 78
Discretionary vs. Entitlement Spending 83
Fraud and Abuse 76
Head Start 63
Managed Care 78
Overview, Administration of Children and Families 37
Family Structure and Persistent Poverty 40
Poor Children, Composition of 39
Poverty Rates 37
Poverty Rates for Children 37
Poverty Rates for Elderly 37
Overview, Centers for Disease Control and Prevention 25
Death, Leading Causes of 25
Haemophilus Influenzae Virus Type B, Vaccine for 27
Hantavirus 26
Healthy People 2000 Objectives 25
Lead Poisoning, Childhood 27
Public Health Problems, Approach to 26
Overview, Department of Health and Human Services 49
Discretionary Programs 49
Discretionary Programs, Trends in 52
Health Care Financing Administration 49
Social Secvirity Administration 49
Spending Mechanisms 52
Overview, Office of Inspector General 2, 8
Administration for Children and Families 3, 16
Health Care Financing Administration 2, 9
Public Health Service 3, 13
Social Security Administration 4, 18
Poor and Non-poor Living Standards, Comparison of 85
Poverty Level, Change in Definition of 65
Poverty Rates Using Various Definition of Income 66
(iii)
IV
Page
Program Additions and Eliminations 91
Red Book, Use of 77
Statements of:
Broome, Claire V 25, 29
Brown, June Gibbs 2, 6
Rolston, Howard 37, 41
Williams, Dennis P 9, 53, 62
Zebley Decision 90, 91
Zebley, SSI/Medicaid Costs for 90
Secretary of Health and Human Services
Departmental Management
Office for Civil Rights
Acquired Immunodeficiency Syndrome:
Breast Cancer Research, AIDS and 154
Cases, HIV/AIDS 152, 159
Demographics 199
Funding 156
Promotion of Healthy Sexual Behaviors 178
Aflirmative Action within HHS, Impact of 196
Block Grants:
Block Grants vs. Entitlement 151
Funding Mechanism, As a 151
Breast and Cervical Cancer:
Breast Cancer, African American and Minority Females 185
Breast Cancer Research 164
Crime Bill 171
FoUowup Hearing 168
Food Stamp Program 147, 152
Full-time Equivalent: EmplojTnent Levels 172
Funding Levels:
Determining 179
Increasing 180
Head Start:
Benefits of 142
Children Served, Number of 169
Integrating Head Start Children 145
Quality Control 123
Health Care Reform 131
Health Professions Shortage Areas 194
Healthy People 2000:
Partnership with the States 181
Progress of 127, 181
Immunization, Childhood 119, 149
Investment in People 124
Justification of Budget Estimates 200
Low Income Home Energy Assistance: Recipient benefits 169
Managed Care:
Graduate Medical Education 167
Incentives for 117
Medicaid 149
Medicaid Rates 120
V
Page
Medical Research 122
PajTnent Management System 176
Program Consolidation:
Administration for Children and Families programs 171
Consolidation and Clustering 126, 190
Cost Savings 159
Refuge Assistance 121
Reinventing Government 170
Rescissions 119, 193
Secretary's Opening Statement 93, 97
SSA Independence 170
SSI Payments 142
Statements of:
EUwood, David T 107
Hayashi, Dennis 112
James, Elizabeth M 104
Substance Abuse:
Alcohol, Drug and Tobacco Abuse 178
Drug Abuse Education 120
Vaccine Purchase 150
Waste, Fraud and Abuse 147
Welfare Reform:
Effectiveness of 184
Employing People 163
Federal Role in 154
Proposals 131
Working Capital Fund 176
Health Care Financing Administration
Budget Highlights 295, 304, 379
Customer Service 297, 302
Effective Management 296, 300
Flexibility 298,303
Beneficiary Services:
"800" Number Service 322
HCFAOn-Line Initiative 356, 537
Medicare Handbook 321, 356
Clinical Laboratory Improvement Admendments 526
Budget Estimate Rationale 530
Facility Inspections 368
Obligations by Object 460
PHS/HCFA Implementation 528
Regulations 528
Status of Clinical Laboratories 368
Survey Cycles 527
User Fees 527
Entitlement Spending 377
Executive Summsiry 381
Federal Administration 531
Budget Estimate Rationale 532
Data Capacity Alternatives 474
Data Processing Needs 474
Employee Bonuses 477
Full-Time Equivalent Employment (FTE) 439
VI
Federal Administration — Continued P*ge
HCFA's Organizational Chart 380
Health Care Information Infrastructure 475
ObUgations by Object 462
Resoiirces for Health Care Reform 334
Single Site 357
Health Care Proposals 320
Control Program Spending 333
Spending Cuts 329
Health Care Trust Funds, Payments to 426
Amounts Available for Obligation 429
Appropriation Language 427
Authorizing Legislation 433
Budget Authority:
By Activity 431
By Object 432
Estimates and Appropriations 434
Hospital Insurance:
For the Uninsured 442
Budget Estimate Rationale 443
For Uninsured Federal Annuitants 445
Budget Estimate Rationale 445
Program Management Administrative Expenses 446
Budget Estimate Rationale 447
Quinquennial Adjustment — Military Service Credits 448
Increase Over FY 1995 354
Justification 436
Svunmary of Changes 430
Supplementary Medical Insurance 437
Budget Estimate Rationale 438
Summary of Changes 440
HMO Loan and Loan Guarantee Fund 541
Amounts Available for Obligation 544
Budget Estimate Rationale 545
Language 542
Justification of Budget Estimates 378
Managed Care 375
Graduate Medical Education under Medicaid 368
Growing Numbers Served 351
Population Served 347
Pricing Demonstration 328
Reducing Managed Care Costs 376
Savings from 327
Medicaid 388
Abortion, General Provision 355
Automation Demonstration 396
Budget:
State Estimates:
Adjustments 406
National Trends 409
Impact of Proposed Legislation 406
Requirements 405
Disallowances 331
Disproportionate Share Hospital (DSH) Payments 316, 333
vu
Medicaid — Continued
Drug Purchases: *^^^
Escalating Cost of Medication 3*71
Federal Upper Limits 340
Grants to States ^01
Amounts Available for Obligation 392
Authorizing Legislation 398, 400
Budget Authority:
By Activity 394
By Object 395
Estimates and Appropriations 399
Language ^®^
Svmimary of Changes 393
Federal Matching Rate Under Waivers 316
Growth in Beneficiaries and Expenditures 311, 326, 332, 371
Matching Rates 313, 365
Prevention of Impermissible Taxes 366
Recipient Data ^^^
By EligibiUty Category 414
Growth Rates '^^3
Section 1115 Demonstration Waivers:
Criteria
Illinois
346
339
Learning from 346
New York 321
Oklahoma
317
Status of 345, 404
Service Growth 409
State Estimates:
Explanation of Changes 415
Florida 417
Georgia 422
Illinois 423
Louisiana
421
Massachusetts 423
Michigan 420
New Jersey ^^^
New York 416
North Carolina 419
Ohio
Texas
418
417
For Grant Awards 424
State:
Fraud Control Units 403
Survey and Certification 403
Transfer of Assets 366
Undocumented Aliens 355, 366
Vaccines for Children (VFC) Program 396
Medicare:
Block Grant Programs 363
Contractors 489
Beneficiary and Provider Services 509
Benefits Integrity (Fraud and Abuse) 471
Budget 490
VIU
Medicare — Continued
Contractors — Continued
Budget— Continued ^^^
Rationale 494
Claims:
Processing 506
Unallowable Costs and Penalties 473
Uniform Electronic Billings, Claims 472
Contract Support 512
Durable Medical Equipment 473
Adaptive Devices for Low-Vision Diabetics 372
Transition 365
Funding Levels 489
Legislation 370, 493
Obligations by Object 458
Participating Physician Incentive Payments 511
Payment Safeguards 311, 375, 494
Funding for 354
Methods used by Private Insurers 470
Overpayments 471
Productivity Investments 502
Program Initiatives 491
Transaction System (MTS) 472
Transitions 354
Current Procedural Terminology (CPT) Codes 313, 359
Disabled Beneficiaries:
Effect of 318
Population Growth of 325
Expenditures per Capita 324, 329, 340
Growth in Beneficiaries and Expenditures 311,
326, 329, 332, 363, 371
Ljmiphedema Pumps:
Coverage 338
Effectiveness 359
Prognosis for Fee-for-service 345
State Certification 513
Budget Estimate Rationale 517
Unit Cost Methodology 518
Coverage Levels 516
Obligations by Object 459
Redesign Survey Process and Infrastructiire 519
Support Contract Activities 519
Survey Flexibility 518
Terminations 515
State-by-State Expenditures and Beneficiaries 342
Status of the Trust Funds 323
Trust Fund Solvency 319
Medicare/Medicaid Coverage Data Bank 476
Nursing Facilities:
Certifying Room Size 467
Conditions 465
Emerging Issues 369
Opening Statement 295, 300
Program Integrity 344
IX
Program Integrity — Continued ^^«
Fraud and Abuse 343
GAO Study on Fraud and Abuse 343
Program Management 451
Administrative Expenses 464
Amounts Available for Obligation 454
Authorizing Legislation 478
Budget:
Account Summary 480
Authority by Activity 456
Estimate:
Rationale 481
Appropriations 479
Obligations by Object 457
Language 452
Summary of Changes 455
Registry for Nurse Aids 322
Research, Demonstrations and Evaluation 482
Budget Estimate Rationale 485
Congressional Mandates 488
Demonstrations:
Chronic Ventilator Patients in Subacute Care 470
Program for All-Inclusive Cau*e for the Elderly 466
Funding Levels 483
Multi-Year Plan 468
Research:
Basic Resesirch 486
Budget by Program Areas 484
Current Beneficiary Survey (MCBS) 486
Grants, ICA 361, 372, 373, 374, 485
Nurse Practitioner Services 469
Obligations by Object 457
Other State and Local Programs 362
State Network Reform 485
Seniors' Health Rights 364
Strategic Plan 381
Supplemental, FY 1995 ($20 million reduction) 546
Amounts Available for Obligation 549
Budget Authority:
By Activity 551
By Object 552
Budget Estimate Rationale 553
Language 547
Summary of Changes 550
Survey and Certification 335
Constituents Awaiting Initial Surveys 336
Dallas Region 337
Evaluation of Computer Technology 467
Financing through User Fees 358
Home Health Agency Inspections 358, 369
Performance and Outcome Measures 357
Social Security Administration
Affirmative Action 672
X
Page
Agency Strategic Plan (ASP) 666
Automation Funding:
Senate Rescission 576
Long-Term Savings 614
Automation Investment Funding 556, 589, 636
Baby Boomers 657
Benefit Outlays 601
Chronic Fatigue Syndrome:
Report on 603
Surveillance Project 605, 643
Coaching of Children 655
Collaboration with the Department of Veterans Affairs 661
Continuing Disability Review (CDR):
Historical Table 594
Backlog 605
Case Classifications 605
Timetable 605
Trust Fund Cost 607
Functional Assessment Standards 612
Contract with America 671
Customer Service Standards 651
Direct Deposit of Benefit Checks 586
Disability Allowance Rates 649
DisabUity Determination Criteria 600
Disabihty Claims Estimates 602, 652
DisabUity Programs:
Growth 601,613
New Technology Integration 612
Disability Reengineering Project 612
Disability, Workloads 648, 665
Disability Redesign Process 587, 639, 664
Disability Investment Funding 557, 653
Disability Claims Processing Time 590
Drug Addict and AlcohoUc Legislation 612, 650
Ergonomic Furniture 588
Fraud, Waste and Abuse 667
FY 1996 Budget Request 555
Hesiring Cases:
Processing Time 655
Prompt Dispositions 656
Historical Tables 626
Impact of Senate Rescission 577
Independent Agency Authority 659
Individual Functional Assessments 603, 642
IWS/LAN:
Savings 597
Installations 598
Justification for Investment Requests 587
Justification of Budget Estimates 674
LAE Request 556
Medical Exam Study (MES) 663
Modifications to Automation Plan 577
National 800 Number 644
XI
Page
Notch Commission 654
Opening Statement 555, 559
Other Initiatives 557
PEBES— Administrative Costs 597
Pending Court Cases 593
Performance Goals 615
Plan for Long-Term Efficiencies 580
Productivity and Service Improvements 575
Project ABLE 665
Public Confidence 660
Ratio of Computers to Staff 576
Research and Demonstration Projects 597, 641
Service Delivery Goals 647
Social Security Number Fraud 586
Social Security Trust Fund 657
Social Security Programs — ^Administrative Budget 600
Software Needs/Contracting for Hardware 576
SSI:
Outreach 657
Recipients 668
Disability Claims Estimates 591
Magnitude of Program 601
Growth 614
Staffing:
Reductions 653
Buyouts 597
Substance Abuse Initiative 669
Trust Fund Reserve and Federal Deficit 654
Union Activities:
Funding 590, 640
Part-Time Representatives 590
Impact of Restriction on Funding 591, 641
Unnegotiated Checks — Funding Level 598
Welfare Reform:
Impact 600
Implications 672
Childhood Disability Rolls 614
Administration for Children and Families
Anti-Lobbying Law:
General Counsel Advice 824
Responses to Requests for information 825
Child Abuse:
Impact of Economic Circimistances 836
Religious Exemption Regulations 828
Child Care 802
Child Care and Development Block Grant:
Family Profile 883
Rationale for Increase 882
Request 792
Child Care Bureau 834
Child Care Quality 818
Child Care Services 883
Child Support Enforcement 831
xu
Page
Child Welfare and Child Protection 793
Child Welfare Automated Systems 831
Child Welfare Block Grant Proposals 834
Communications Efficiencies 832
Community Schools Programs 802
Community Services:
Block Grant 868
Consolidation 874
Discretionary Programs 874
Congressional Caucus on Women's Issues 830
Consolidations Proposed 829
Coordination of Resources 893
Crime Bill Programs 870
Dependent Care Consolidation 834
Domestic Violence 803
Entitlements 794
Federal Administration 810
Foster Care:
Cap 835
Growth in Administrative Costs 835, 869
Rescission 832, 869
Grandparents Assistance 884
Head Start:
Appropriation History 864
Block Grant Support 888
Classes 866
Early Head Start Initiative 892
Facilities 828
Grantees 865, 887
Increases 826, 864
Long Range Impact 833
Performance Standards 889
Quality Control 810, 879, 886
Request 792,881
Rescission 890
Salaries 827
Senate Bill 881
Slots 882
Teacher Salaries 864
Triennial Reviews 888
Justification of Budget Estimates 897
Legislative Meetings 822
LIHEAP:
Administrative Costs 806, 861
Average Resources 847
Carryover 809, 864
Constant Dollar Value of Benefits 849
Elderly Recipients 811
Emergency Fund 872
Fuel Consumption Expenditures 854
History Table 838
Management 872
Oil Overcharge Funds 853
XIU
LIHEAP— Continued Page
Rationale for Request 805
Recipients 837,872
Request 793,804
Rescission 878
Special Needs Tables 840
Trends in Consumption, Expenditures, and Burden 855
Types of Assistance 845
Winter Energy Allowance 844
Opening Statement 795
Personal Responsibility Act 820
Program Consolidations 809
Programs Requiring Reauthorization 809
Refugee Assistance and Resettlement 794, 873
Reinventing Government 810
Sharing Information with Outside Organizations 823
Social Services Block Grant 867
Teenage Pregnancy Policy 817
Testimony Summary 792
Violent Crime Reduction 793
Welfare Reform:
Analysis 821
Child Welfare Programs 891
Flexibility Versus Accountability 877
Impact of Proposed Changes 875, 884, 890, 891
Welfare Reform and Health Care 818
Work Provisions 876
Witnesses 791
Administration on Aging
Applied Research 1358
Area Agencies on Aging 1350
Authorizing Legislation 1340
Biographical Sketch of Fernando M. Torres-Gil 1332
Block Grants 1338
Budget Increase 1333
Collaboration 1359
Elder Abuse 1343, 1363
Gerontological Training and Careers Pipeline 1358
Grandparents Raising Children 1364
In-Home and Community-Based Long-Term Care 1360
Intrastate Funding Formula 1351
Justification of Budget Estimates 1367
Legal Hotline 1359
Legal Services 1350
Meal Program 1346
Older Population 1341
Opening Statement 1327
Outreach and Preventive Health 1362
Preventive Health 1346
Program Consolidation 1348
Prolonging Independence, Nutritional Factor 1361
Regional Offices 1345
Targeting of Title III Aging 1350
XIV
Page
Title rV 1347
Title rV for Home and Community-Based Services 1352
Training and Research 1355
Use of Vans 1339
Welfare Reform 1360
White House Conference on Aging 1340, 1365
Office of Inspector General
Accomplishments 1432
Asset Forfeiture Sharing 1467
Audit Contracts 1466
Audit Priorities 1446
Audit Reports, Significant 1462
Audit Resolution Process 1464
Biography of June Gibbs Brown 1440
Budget and Staff by Activity 1466
Budget Reductions, Effect of 1441
Budget Request 1433, 1465
CFOAct 1461
Congressionally-Requested Reports 1464
Fraud in Health Care Programs 1446
Fraud in Medicare and Medicaid Programs 1447, 1450
Fraud in SSI Program 1442, 1443
Fraud, Prevention and Detection of 1442
Indirect Costs in Biomedical Research 1462
Justification of Budget Estimates, 1996 1470
Lobbying Using Federal Funds 1447, 1450
Medicaid and Medicare Audits 1469
Needed Legislative Changes 1451
Opening Statement 1431, 1436
Patents of NIH — Funded Inventions 1461
Plans, 1996 1434
Red and Orange Books 1468
Research Project Grants 1469
Streamlining 1468
Vacancies 1467
Welfare Reform 1468
Special Tables
Health Tables:
Acquired Immunodeficiency Sjmdrome 1500
Alzheimer's Disease 1503
Bone Marrow 1505
Cancer 1506
Cystic Fibrosis 1508
Diabetes and Related Research 1509
Homeless Programs 1511
Immunization 1514
Infant Mortality 1515
Long Term Care 1517
Mental Retardation 1518
Minority Health and Assistance 1519
Pediatric AIDS 1521
XV
Page
Health Tables— Continued
Rural Health 1522
Sexually Transmitted Diseases 1523
Stroke 1524
Substance Abuse 1525
Non-Health Tables:
Administration on Aging 1528
ChUdCare 1530
Family Planning 1532
Special Tables: Impact of Federal Abortion Funding Limitation 1534
Health-Related Tables:
National and Federal Expenditures 1544
Congressional Action on Budget for NIH 1546
Women's Health 1548
Cross-Cutting Tables:
T-1 — Expired Legislative Authority * 1550
T-2— Employment 1555
T-3— Entertainment Fund 1556
T-4 — New Programs 1557
T-5 — Unobligated Carryover Balances 1558
T-6 — Legislative Programs 1563
T-7— Budget Authority 1565
T-8— Expenditures 1566
T-9— Travel 1567
T-10 — Program Support and Program Management 1568
T-11 — Entitlement vs. Discretionary 1569
T-12 — ^Administrative Expenses 1570
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