prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: Medicare is a federal program that pays for covered health care services of qualified beneficiaries  It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under 65  The program is administered by the Centers for Medicare & Medicaid Services (CMS), within the U S  Department of Health and Human Services (HHS)  Medicare consists of four distinct parts: Part A (Hospital Insurance, or HI) covers inpatient hospital services, skilled nursing care, hospice care, and some home health services  The HI trust fund is mainly funded by a dedicated payroll tax of 2 9% of earnings, shared equally between employers and workers  Since 2013, workers with income of more than $200,000 per year for single tax filers (or more than $250,000 for joint tax filers) pay an additional 0 9% on income over those amounts  Part B (Supplementary Medical Insurance, or SMI) covers physician services, outpatient services, and some home health and preventive services  The SMI trust fund is funded through beneficiary premiums (set at 25% of estimated program costs for the aged) and general revenues (the remaining amount, approximately 75%)  Part C (Medicare Advantage, or MA) is a private plan option for beneficiaries that covers all Parts A and B services, except hospice  Individuals choosing to enroll in Part C must also enroll in Part B  Part C is funded through the HI and SMI trust funds  Part D covers outpatient prescription drug benefits  Funding is included in the SMI trust fund and is financed through beneficiary premiums, general revenues, and state transfer payments  Medicare serves approximately one in six Americans and virtually all of the population aged 65 and older  In 2019, the program will cover an estimated 61 million persons (52 million aged and 9 million disabled)  The Congressional Budget Office (CBO) estimates that total Medicare spending in 2019 will be about $772 billion; of this amount, approximately $749 billion will be spent on benefits  About 28% of Medicare benefit spending is for hospital inpatient and hospital outpatient services (see Figure 1 )  CBO also estimates that federal Medicare spending (after deduction of beneficiary premiums and other offsetting receipts) will be about $637 billion in 2019, accounting for about 14% of total federal spending and 3% of GDP  Medicare is required to pay for all covered services provided to eligible persons, so long as specific criteria are met  Spending under the program (except for a portion of administrative costs) is considered mandatory spending and is not subject to the appropriations process  Medicare is expected to be a high-priority issue in the current Congress  The program has a significant impact on beneficiaries and other stakeholders as well as on the economy in general through its coverage of important health care benefits for the aged and disabled, the payment of premiums and other cost sharing by those beneficiaries, its payments to providers who supply those health care services, and its interaction with other insurance coverage  Projections of future Medicare expenditures and funding indicate that the program will place increasing financial demands on the federal budget and on beneficiaries  In response to these concerns, Congress may consider a range of Medicare reform options, from making changes within the current structure, including modifying provider payments and revising existing oversight and regulatory mechanisms, to restructuring the entire program  The committees of jurisdiction for the mandatory spending (benefits) portion of Medicare are the Senate Committee on Finance, the House Committee on Ways and Means, and the House Committee on Energy and Commerce  The House and Senate Committees on Appropriations have jurisdiction over the discretionary spending used to administer and oversee the program  Medicare was enacted in 1965 (P L  89-97) in response to the concern that only about half of the nation's seniors had health insurance, and most of those had coverage only for inpatient hospital costs  The new program, which became effective July 1, 1966, included Part A coverage for hospital and posthospital services and Part B coverage for doctors and other medical services  As is the case for the Social Security program, Part A is financed by payroll taxes levied on current workers and their employers; persons must pay into the system for 40 quarters to become entitled to premium-free benefits  Medicare Part B is voluntary, with a monthly premium required of beneficiaries who choose to enroll  Payments to health care providers under both Part A and Part B were originally based on the most common form of payment at the time, namely "reasonable costs" for hospital and other institutional services or "usual, customary and reasonable charges" for physicians and other medical services  Medicare is considered a social insurance program and is the second-largest such federal program, after Social Security  The 1965 law also established Medicaid, the federal/state health insurance program for the poor; this was an expansion of previous welfare-based assistance programs  Some low-income individuals qualify for both Medicare and Medicaid  In the ensuing years, Medicare has undergone considerable change  P L  92-603, enacted in 1972, expanded program coverage to certain individuals under 65 (the disabled and persons with end-stage renal disease (ESRD)), and introduced managed care into Medicare by allowing private insurance entities to provide Medicare benefits in exchange for a monthly capitated payment  This law also began to place limitations on the definitions of reasonable costs and charges in order to gain some control over program spending which, even initially, exceeded original projections  During the 1980s and 1990s, a number of laws were enacted that included provisions designed to further stem the rapid increase in program spending through modifications to the way payments to providers were determined, and to postpone the insolvency of the Medicare Part A trust fund  This was typically achieved through tightening rules governing payments to providers of services and limiting the annual updates in such payments  The program moved from payments based on reasonable costs and reasonable charges to payment systems under which a predetermined payment amount was established for a specified unit of service  At the same time, beneficiaries were given expanded options to obtain covered services through private managed care arrangements, typically health maintenance organizations (HMOs)  Most Medicare payment provisions were incorporated into larger budget reconciliation bills designed to control overall federal spending  This effort culminated in the enactment of the Balanced Budget Act of 1997 (BBA 97; P L  105-33 )  This law slowed the rate of growth in payments to providers and established new payment systems for certain categories of providers, including establishing the sustainable growth rate (SGR) methodology for determining the annual update to Medicare physician payments  It also established the Medicare+Choice program, which expanded private plan options for beneficiaries and changed the way most of these plans were paid  BBA 97 further expanded preventive services covered by the program  Subsequently, Congress became concerned that the BBA 97 cuts in payments to providers were somewhat larger than originally anticipated  Therefore, legislation was enacted in both 1999 (Balanced Budget Refinement Act of 1999, or BBRA; P L  106-113 ) and 2000 (Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, or BIPA; P L  106-554 ) to mitigate the impact of BBA 97 on providers  In 2003, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P L  108-173 ), which included a major benefit expansion and placed increasing emphasis on the private sector to deliver and manage benefits  The MMA included provisions that (1) created a new voluntary outpatient prescription drug benefit to be administered by private entities; (2) replaced the Medicare+Choice program with the Medicare Advantage (MA) program and raised payments to plans in order to increase their availability for beneficiaries; (3) introduced the concept of income testing into Medicare, with higher-income persons paying larger Part B premiums beginning in 2007; (4) modified some provider payment rules; (5) expanded covered preventive services; and (6) created a specific process for overall program review if general revenue spending exceeded a specified threshold  During the 109 th Congress, two laws were enacted that incorporated minor modifications to Medicare's payment rules  These were the Deficit Reduction Act of 2005 (DRA; P L  109-171 ) and the Tax Relief and Health Care Act of 2006 (TRHCA; P L  109-432 )  In the 110 th Congress, additional changes were incorporated in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA; P L  110-173 ) and the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA; P L  110-275 )  In the 111 th Congress, comprehensive health reform legislation was enacted that, among other things, made statutory changes to the Medicare program  The Patient Protection and Affordable Care Act (ACA; P L  111-148 ), enacted on March 23, 2010, included numerous provisions affecting Medicare payments, payment rules, covered benefits, and the delivery of care  The Health Care and Education Affordability Reconciliation Act of 2010 (the Reconciliation Act, or HCERA; P L  111-152 ), enacted on March 30, 2010, made changes to a number of Medicare-related provisions in the ACA and added several new provisions  Included in the ACA, as amended, are provisions that (1) constrain Medicare's annual payment increases for certain providers; (2) change payment rates in the MA program so that they more closely resemble those in fee-for-service; (3) reduce payments to hospitals that serve a large number of low-income patients; (4) create an Independent Payment Advisory Board (IPAB) to make recommendations to adjust Medicare payment rates; (5) phase out the Part D prescription drug benefit "doughnut hole"; (6) increase resources and enhance activities to prevent fraud and abuse; and (7) provide incentives to increase the quality and efficiency of care, such as creating value-based purchasing programs for certain types of providers, allowing accountable care organizations (ACOs) that meet certain quality and efficiency standards to share in the savings, creating a voluntary pilot program that bundles payments for physician, hospital, and post-acute care services, and adjusting payments to hospitals for readmissions related to certain potentially preventable conditions  In the 112 th and 113 th Congresses, the American Taxpayer Relief Act of 2012 (ATRA; P L  112-240 ), the Continuing Appropriations Resolution of 2014 ( P L  113-67 ), and the Protecting Access to Medicare Act of 2014 (PAMA; P L  113-93 ) primarily made short-term modifications to physician payment updates and payment adjustments for certain types of providers  PAMA also established a new skilled nursing facility (SNF) value-based purchasing program and a new system for determining payments for clinical diagnostic laboratory tests  The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT; P L  113-185 ) required that post-acute care providers—defined in the law as long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), SNFs, and home health agencies (HHAs)—report standardized patient assessment data and data on quality measures and resource use  IMPACT also modified the annual update to the hospice aggregate payment cap and required that hospices be reviewed every three years to ensure that they are compliant with existing regulations related to patient health and safety and quality of care  In the 114 th Congress, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P L  114-10 ) repealed the SGR formula for calculating updates to Medicare payment rates to physicians and other practitioners and established an alternative set of methods for determining the annual updates   MACRA also introduced alternatives to the current fee-for-service (FFS) based physician payments by creating a new merit-based incentive payment system (MIPS) and put in place processes for developing, evaluating, and adopting alternative payment models (APMs)  Additionally, MACRA reduced updates to hospital and post-acute care provider payments, extended several expiring provider payment adjustments, made adjustments to income-related premiums in Parts B and D, and prohibited using Social Security numbers on beneficiaries' Medicare cards  Among other changes, the Increasing Choice, Access, and Quality in Health Care for Americans Act (Division C of the 21 st Century Cures Act; P L  114-255 ) made adjustments to LTCH reimbursement and modified the average length of stay criteria, which determines whether a hospital qualifies as an LTCH  It also delayed payment reductions and required the Secretary of Health and Human Services (the Secretary) to make changes to how payments are determined for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS)  Lastly, it allowed beneficiaries with ESRD to enroll in MA beginning January 1, 2021  In the 115 th Congress, the Bipartisan Budget Act of 2018 (BBA 18; P L  115-123 ) made a number of changes to federal health care programs, including Medicare  For example, BBA 18 included provisions designed to expand care for beneficiaries with chronic health conditions, such as promoting team-based care by providers, increasing the use of telehealth services, and expanding certain MA supplemental benefits  In addition, BBA 18 extended for five years a number of existing Medicare provisions that were set to expire (or that had temporarily expired), including the Medicare dependent hospital program and add-on payments for low-volume hospitals, rural home health services, and certain ambulance services  BBA 18 also specified payment updates for the Medicare physician fee schedule, SNFs, and home health services; reduced payments for non-emergency ambulance transports; and required modification of the home health prospective payment system starting in 2020  In addition, the act provided for indefinite authority for MA special needs plans, repealed limits on outpatient therapy services, and eliminated the IPAB  Starting in 2019, the act will require that pharmaceutical manufacturers participating in Medicare Part D provide a larger discount on brand-name drugs purchased by enrollees in the coverage gap and will create a new high-income premium category under Parts B and D  Most persons aged 65 or older are automatically entitled to premium-free Part A because they or their spouse paid Medicare payroll taxes for at least 40 quarters (about 10 years) on earnings covered by either the Social Security or the Railroad Retirement systems  Persons under the age of 65 who receive cash disability benefits from Social Security or the Railroad Retirement systems for at least 24 months are also entitled to Part A  (Since there is a five-month waiting period for cash payments, the Medicare waiting period is effectively 29 months ) The 24-month waiting period is waived for persons with amyotrophic lateral sclerosis (ALS, "Lou Gehrig's disease")  Individuals of any age with ESRD who receive dialysis on a regular basis or a kidney transplant are generally eligible for Medicare  Medicare coverage for individuals with ESRD usually starts the first day of the fourth month of dialysis treatments  In addition, individuals with one or more specified lung diseases or types of cancer who lived for six months during a certain period prior to diagnosis in an area subject to a public health emergency declaration by the Environmental Protection Agency (EPA) as of June 17, 2009, are also deemed entitled to benefits under Part A and eligible to enroll in Part B  Persons over the age of 65 who are not entitled to premium-free Part A may obtain coverage by paying a monthly premium ($437 in 2019) or, for persons with at least 30 quarters of covered employment, a reduced monthly premium ($240 in 2019)  In addition, disabled persons who lose their cash benefits solely because of higher earnings, and subsequently lose their extended Medicare coverage, may continue their Medicare enrollment by paying a premium, subject to limitations  Generally, enrollment in Medicare Part B is voluntary  All persons entitled to Part A (and persons over the age of 65 who are not entitled to premium-free Part A) may enroll in Part B by paying a monthly premium  In 2019, the monthly premium is $135 50; however, about 3 5% of Part B enrollees pay less, due to a "hold-harmless" provision in the Social Security Act  Since 2007, higher-income Part B enrollees pay higher premiums  (See " Part B Financing  ") Although enrollment in Part B is voluntary for most individuals, in most cases, those who enroll in Part A by paying a premium also must enroll in Part B  Additionally, ESRD beneficiaries and Medicare Advantage enrollees (discussed below) also must enroll in Part B  Together, Parts A and B of Medicare comprise "original Medicare," which covers benefits on a fee-for-service basis  Beneficiaries have another option for coverage through private plans, called the Medicare Advantage (MA or Part C) program  When beneficiaries first become eligible for Medicare, they may choose either original Medicare or they may enroll in a private MA plan  Each fall, there is an annual open enrollment period during which time Medicare beneficiaries may choose a different MA plan, or leave or join the MA program  Beneficiaries are to receive information about their options to help them make informed decisions  In 2019, the annual open enrollment period runs from October 15 to December 7 for plan choices starting the following January  Since 2012, MA plans with a 5-star quality rating have been allowed to enroll Medicare beneficiaries who are either in traditional Medicare or in an MA plan with a lower quality rating at any time  Finally, each individual enrolled in either Part A or Part B is also entitled to obtain qualified prescription drug coverage through enrollment in a Part D prescription drug plan  Similar to Part B, enrollment in Part D is voluntary and the beneficiary pays a monthly premium  Since 2011, some higher-income enrollees pay higher premiums, similar to enrollees in Part B  Generally, beneficiaries enrolled in an MA plan providing qualified prescription drug coverage (MA-PD plan) must obtain their prescription drug coverage through that plan  In general, individuals who do not enroll in Part B or Part D during an initial enrollment period (when they first become eligible for Medicare) must pay a permanent penalty of increased monthly premiums if they choose to enroll at a later date  Individuals who do not enroll in Part B during their initial enrollment period may enroll only during the annual general enrollment period, which occurs from January 1 to March 31 each year  Coverage begins the following July 1  However, the law waives the Part B late enrollment penalty for current workers who have primary coverage through their own or a spouse's employer-sponsored plan  These individuals have a special enrollment period once their employment ends; as long as they enroll in Part B during this time, they will not be subject to penalty  Individuals who do not enroll in Part D during their initial enrollment period may enroll during the annual open enrollment period, which corresponds with the Part C annual enrollment period—from October 15 to December 7, with coverage effective the following January  Individuals are not subject to the Part D penalty if they have maintained "creditable" drug coverage through another source, such as retiree health coverage offered by a former employer or union  However, once employees retire or have no access to "creditable" Part D coverage, a penalty will apply unless they sign up for coverage during a special enrollment period  Finally, for persons who qualify for the low-income subsidy for Part D, the delayed-enrollment penalty does not apply  Medicare Parts A, B, and D each cover different services, with Part C providing a private plan alternative for all Medicare services covered under Parts A and B, except hospice  The Parts A-D covered services are described below, along with a description of Medicare's payments  Part A provides coverage for inpatient hospital services, posthospital skilled nursing facility (SNF) services, hospice care, and some home health services, subject to certain conditions and limitations  Approximately 20% of fee-for-service enrollees use Part A services during a year  Medicare inpatient hospital services include (1) bed and board; (2) nursing services; (3) use of hospital facilities; (4) drugs, biologics, supplies, appliances, and equipment; and (5) diagnostic and therapeutic items and services  (Physicians' services provided during an inpatient stay are paid under the physician fee schedule and discussed below in the " Physicians and Nonphysician Practitioner Services " section ) Coverage for inpatient services is linked to an individual's benefit period or "spell of illness" (defined as beginning on the day a patient enters a hospital and ending when he or she has not been in a hospital or skilled nursing facility for 60 days)  An individual admitted to a hospital more than 60 days after the last discharge from a hospital or SNF begins a new benefit period  Coverage in each benefit period is subject to the following conditions: Days 1-60  Beneficiary pays a deductible ($1,364 in 2019)  Days 61-90  Beneficiary pays a daily co-payment charge ($341 in 2019)  Days 91-150  After 90 days, the beneficiary may draw on one or more of 60 lifetime reserve days, provided they have not been previously used  (Each of the 60 lifetime reserve days can be used only once during an individual's lifetime ) For lifetime reserve days, the beneficiary pays a daily co-payment charge ($682 in 2019); otherwise the beneficiary pays all costs  Days 151 and over  Beneficiary pays for all costs for these days  Inpatient mental health care in a psychiatric facility is limited to 190 days during a patient's lifetime  Cost sharing is structured similarly to that for stays in a general hospital (above)  Medicare makes payments to most acute care hospitals under the inpatient prospective payment system (IPPS), using a prospectively determined amount for each discharge  Medicare's payments to hospitals is the product of two components: (1) a discharge payment amount adjusted by a wage index for the area where the hospital is located or where it has been reclassified, and (2) the weight associated with the Medicare severity-diagnosis related group (MS-DRG) to which the patient is assigned  This weight reflects the relative costliness of the average patient in that MS-DRG, which is revised annually, generally effective October 1 st of each year  Additional payments are made to hospitals for cases with extraordinary costs (outliers), for indirect costs incurred by teaching hospitals for graduate medical education, and to disproportionate share hospitals (DSH) which provide a certain volume of care to low-income patients  Additional payments may also be made for qualified new technologies that have been approved for special add-on payments  Medicare also makes payments outside the IPPS system for direct costs associated with graduate medical education (GME) for hospital residents, subject to certain limits  In addition, Medicare pays hospitals for 65% of the allowable costs associated with beneficiaries' unpaid deductible and co-payment amounts as well as for the costs for certain other services  IPPS payments may be reduced by certain quality-related programs based on a hospital's quality performance  These quality-related programs include the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition Reduction Program, and the Hospital Value-Based Purchasing Program  Further, hospitals may receive Medicare payment reductions for failing to demonstrate meaningful use of certified electronic health record (EHR) technology  Additional payment adjustments or special treatment under the IPPS may apply for hospitals meeting one of the following designations: (1) sole community hospitals (SCHs), (2) Medicare dependent hospitals, (3) rural referral centers, and (4) low-volume hospitals  Certain hospitals or distinct hospital units are exempt from IPPS and paid on an alternative basis, including (1) inpatient rehabilitation facilities, (2) long-term care hospitals, (3) psychiatric facilities including hospitals and distinct part units, (4) children's hospitals, (5) cancer hospitals, and (6) critical access hospitals  Medicare covers up to 100 days of posthospital care for persons needing skilled nursing or rehabilitation services on a daily basis  The SNF stay must be preceded by an inpatient hospital stay of at least 3 consecutive calendar days, and the transfer to the SNF typically must occur within 30 days of the hospital discharge  Medicare requires SNFs to provide services for a condition the beneficiary was receiving treatment for during his or her qualifying hospital stay (or for an additional condition that arose while in the SNF)  There is no beneficiary cost sharing for the first 20 days of a Medicare-covered SNF stay  For days 21 to 100, beneficiaries are subject to daily co-payment charges ($170 50 in 2019)  The 100-day limit begins again with a new spell of illness  SNF services are paid under a prospective payment system (PPS), which is based on a per diem urban or rural base payment rate, adjusted for case mix (average severity of illness) and area wages  The per diem rate generally covers all services, including room and board, provided to the patient that day  The case-mix adjustment is made using the resource utilization groups (RUGs) classification system, which uses patient assessments to assign a beneficiary to one of 66 groups that reflect the beneficiary's expected use of services  Patient assessments are done at various times during a patient's stay and a beneficiary's designated RUG category can change with changes in the beneficiary's condition  Extra payments are not made for extraordinarily costly cases ("outliers")  The Medicare hospice benefit covers services designed to provide palliative care and management of a terminal illness; the benefit includes drugs and medical and support services  These services are provided to Medicare beneficiaries with a life expectancy of six months or less for two 90-day periods, followed by an unlimited number of 60-day periods  The individual's attending physician and the hospice physician must certify the need for the first benefit period, but only the hospice physician needs to recertify for subsequent periods  Since January 1, 2011, a hospice physician or nurse practitioner must have a face-to-face encounter with the individual to determine continued eligibility prior to the 180 th day recertification, and for each subsequent recertification  Hospice care is provided in lieu of most other Medicare services related to the curative treatment of the terminal illness  Beneficiaries electing hospice care from a hospice program may receive curative services for illnesses or injuries unrelated to their terminal illness, and they may disenroll from the hospice at any time  Nominal cost sharing is required for drugs and respite care  Payment for hospice care is based on one of four prospectively determined rates (which correspond to four different levels of care) for each day a beneficiary is under the care of the hospice  The four rate categories are routine home care, continuous home care, inpatient respite care, and general inpatient care  Payment rates are adjusted to reflect differences in area wage levels, using the hospital wage index  Payments to a hospice are limited by two caps; the first limits the number of days of inpatient care to 20% or less of total patient care days, and the second limits the average annual payment per beneficiary  Home health services and services for individuals with end-stage renal disease are covered under both Parts A and B of Medicare  Medicare covers visits by participating home health agencies for beneficiaries who (1) are confined to home and (2) need either skilled nursing care on an intermittent basis or physical or speech language therapy  After establishing such eligibility, the continuing need for occupational therapy services may extend the eligibility period  Covered services include part-time or intermittent nursing care, physical or occupational therapy or speech language pathology services, medical social services, home health aide services, and medical supplies and durable medical equipment  The services must be provided under a plan of care established by a physician, and the plan must be reviewed by the physician at least every 60 days  There is no beneficiary cost sharing for home health services (though some other Part B services provided in connection with the visit, such as durable medical equipment, may be subject to cost-sharing charges)  Home health services are covered under both Medicare Parts A and B  There are special eligibility requirements and benefit limits for home health services furnished under Part A to beneficiaries who are enrolled in both Parts A and B  For such a beneficiary, Part A pays for only postinstitutional home health services furnished for up to 100 visits during a spell of illness, while Part B covers any medically necessary home health services that exceed the 100-visit limit, as well as medically necessary home health services that do not qualify as "postinstitutional " For beneficiaries enrolled in only Part A or only Part B, the requirements described above do not apply  Part A or Part B, as applicable, covers all medically necessary episodes of home health care, without a visit limit, regardless of whether the episode follows a hospitalization  Regardless of whether the beneficiary is enrolled in Part A only, in Part B only, or in both parts, the scope of the Medicare home health benefit is the same, Medicare's payments to HHAs are calculated using the same methods, and beneficiaries have no cost-sharing  Home health services are paid under a home health PPS, based on 60-day episodes of care; a patient may have an unlimited number of episodes  The physician's certification of an initial 60-day episode of home health must be supported by a face-to-face encounter with the patient related to the primary reason that the patient needs home health services  Under the PPS, for episodes with five or greater visits, a nationwide base payment amount is adjusted by differences in wages (using the hospital wage index)  This amount is then adjusted for case mix using the applicable Home Health Resource Group (HHRG) to which the beneficiary has been assigned  The HHRG applicable to a beneficiary is determined following an assessment of the patient's condition and care needs using the Outcome and Assessment Information Set (OASIS); there are 153 HHRGs  For episodes with four or fewer visits, the PPS reimburses the provider for each visit performed  Further payment adjustments may be made for services provided in rural areas, outlier visits (for extremely costly patients), a partial episode for beneficiaries that have an intervening event during their episode, or an agency's failure to submit quality data to CMS  Since January 1, 2016, home health agencies in nine states are being reimbursed under a home health value-based purchasing (HHVBP) model  These home health agencies can receive increased or decreased home health reimbursements depending on their performance across certain quality measures  Individuals with end-stage renal disease (ESRD) are eligible for all services covered under Parts A and B  Kidney transplantation services, to the extent they are inpatient hospital services, are subject to the inpatient hospital PPS and are reimbursed by both Parts A and B  However, kidney acquisition costs are paid on a reasonable cost basis under Part A  Dialysis treatments, when an individual is admitted to a hospital, are covered under Part A  Part B covers their dialysis services, drugs, biologicals (including erythropoiesis stimulating agents used in treating anemia as a result of ESRD), diagnostic laboratory tests, and other items and services furnished to individuals for the treatment of ESRD  In effect since January 1, 2011, the ESRD prospective payment system (PPS) makes no payment distinction as to the site where renal dialysis services are provided  With the implementation of the ESRD PPS, Medicare dialysis payments provide a single "bundled" payment for Medicare renal dialysis services that includes (1) items and services included in the former payment system's base rate as of December 31, 2010; (2) erythropoiesis stimulating agents (ESAs) for the treatment of ESRD; (3) other drugs and biologicals for which payment was made separately (before bundling); and (4) diagnostic laboratory tests and other items and services furnished to individuals for the treatment of ESRD  The system is case-mix adjusted based on factors such as patient weight, body mass index, comorbidities, length of time on dialysis, age, race, ethnicity, and other appropriate factors as determined by the Secretary  Under the ESRD Quality Incentive Program, dialysis facilities that fail to meet certain performance standards receive reduced payments  Medicare Part B covers physicians' services, outpatient hospital services, durable medical equipment, and other medical services  Initially, over 98% of the eligible population voluntarily enrolled in Part B, but in recent years the percentage has fallen to about 91%  About 89% of enrollees in original (FFS) Medicare use Part B services during a year  The program generally pays 80% of the approved amount (most commonly, a fee schedule or other predetermined amount) for covered services in excess of the annual deductible ($185 in 2019)  The beneficiary is liable for the remaining 20%  Most providers and practitioners are subject to limits on amounts they can bill beneficiaries for covered services  For example, physicians and some other practitioners may choose whether or not to accept "assignment" on a claim  When a physician signs a binding agreement to accept assignment for all Medicare patients, the physician accepts the Medicare payment amount as payment in full and can bill the beneficiary only the 20% coinsurance plus any unmet deductible  The physician agrees to accept assignment on all Medicare claims in a given year and is referred to as a "participating physician " There are several advantages to being a participating provider, including higher payment under the Medicare fee schedule, a lower beneficiary co-payment, and automatic forwarding of Medigap claims  Physicians who do not agree to accept assignment on all Medicare claims in a given year are referred to as nonparticipating physicians  Nonparticipating physicians may or may not accept assignment for a given service  If they do not, they may charge beneficiaries more than the fee schedule amount on nonassigned claims; however, these "balance billing" charges are subject to certain limits  Alternatively, physicians may choose not to accept any Medicare payment and enter into private contracts with their patients where no Medicare restrictions on payment or balance billing apply; however, this requires that physicians "opt out" of Medicare for two years  For some providers, such as nurse practitioners and physician assistants, assignment is mandatory; these providers can only bill the beneficiary the 20% coinsurance and any unmet deductible  For other Part B services, such as durable medical equipment, assignment is optional; for these services, applicable providers may bill beneficiaries for amounts above Medicare's recognized payment level and may do so without limit  Medicare Part B covers medically necessary physician services and medical services provided by some nonphysician practitioners  Covered nonphysician practitioner services include, but are not limited to, those provided by physician assistants, nurse practitioners, certified registered nurse anesthetists, and clinical social workers  Certain limitations apply for services provided by chiropractors and podiatrists  Beneficiary cost sharing is typically 20% of the approved amount, although most preventive services require no coinsurance from the beneficiary  A number of Part B services are paid under the Medicare physician fee schedule (MPFS), including services of physicians, nonphysician practitioners, and therapists  There are over 7,000 service codes under the MPFS  The fee schedule assigns relative values to each service code  These relative values reflect physician work (based on time, skill, and intensity involved), practice expenses (e g , overhead and nonphysician labor), and malpractice expenses  The relative values are adjusted for geographic variations in the costs of practicing medicine  These geographically adjusted relative values are converted into a dollar payment amount by a national conversion factor  Annual updates to payments are determined through changes in the conversion factor  MACRA made several fundamental changes to how Medicare pays for physician and practitioner services by (1) changing the methodology for determining the annual updates to the conversion factor, (2) establishing a merit-based incentive payment system (MIPS) to consolidate and replace several existing incentive programs and to apply value and quality adjustments to the MPFS, and (3) establishing the development of, and participation in, alternative payment models (APMs)  Prior to MACRA, the SGR system, which had been in place since BBA 97, tied annual updates to the Medicare fee schedule to cumulative Part B expenditure targets  MACRA repealed the SGR methodology, established annual fee schedule updates in the short term, and put in place a new method for determining updates thereafter  As a result of the MACRA changes, the update to physician payments under the MPFS was 0% from January 2015 through June 2015; for the remainder of that year—July 2015 through December 2015—the payments were increased by 0 5%  In each of the next four years, 2016 through 2019, the payments were to increase by 0 5% each year; however, the BBA 18 reduced the 2019 update to 0 25%  For the next six years, from 2020 through 2025, the payment update will be 0%  In addition to changes to the annual update, MACRA established two pathways for payment reform, collectively referred to as the Quality Payment Program (QPP)  Medicare payment to all physicians and other practitioners will be determined by which conditions of the QPP, either MIPS or APM, the participant satisfies  The MIPS is a new program that remains based on FFS rates but combines four categories of performance measures (quality of care, cost/resource use, clinical practice improvement activities, and promoting interoperability) into a single adjustment to the base MPFS payment  Following several years of data collection and feedback on measures, the MIPS adjustments will affect actual payments for the first time in 2019  In contrast, qualified advanced APMs are intended to be alternatives to FFS, incorporating new approaches to paying for medical care that reward quality and efficiency while de-emphasizing the number of services billed (volume of care)  Proposed advanced APMs are evaluated by an ad hoc committee (the Physician-Focused Payment Models Technical Advisory Committee), which provides comments and recommendations to the Secretary as to whether new payment models meet the criteria of APMs  For 2019, there are 13 advanced APMs under the QPP, though not all are available to all physicians and practitioners, as some are restricted to certain special services (e g , oncology care, joint replacement) or geographic locations (e g , Vermont's Medicare ACO Initiative, Maryland's Total Cost of Care Model)  MACRA established incentives to make APMs more attractive than MIPS  First, qualifying participants in advanced APMs are eligible for an annual prepaid bonus (paid 2019-2024)  Second, beginning in 2026, there will be two update factors, one for items and services furnished by a participant in an advanced APM and another for those electing to remain in the modified FFS payment system (MIPS) that do not participate in an advanced APM  The update factor for the advanced APM participants will be 0 75%, and the update factor for MIPS will be 0 25%, causing a difference between the payment levels that will grow over time  Medicare covers medically necessary outpatient physical and occupational therapy and speech-language pathology services  Beginning in 1997 and for many years subsequently but intermittently, beneficiaries faced limits ( therapy caps ) on how much Medicare would pay for outpatient therapy services in a calendar year  BBA 18 permanently repealed the outpatient therapy caps beginning January 1, 2018, and established a requirement that therapy services exceeding $3,000 would trigger a manual medical review (MMR) of the medical necessity of these services, in years 2018-2028  Beginning with 2029, the annual MMR threshold limit is to be increased by the percentage increase in the MEI, and it is to be applied separately for (1) physical therapy services and speech-language pathology services combined and (2) occupational therapy services  Medicare statute prohibits payments for covered items and services that are "not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member," which would effectively exclude the coverage of preventive and screening services  However, Congress has explicitly added and expanded Medicare coverage for a number of such services through legislation, including through MMA, MIPPA, and ACA  Under current law, if a preventive service is recommended for use by the U S  Preventive Services Task Force (USPSTF, an independent evidence-review panel) and Medicare covers the service, all cost sharing must be waived  Also, the Secretary may add coverage of a USPSTF-recommended service that is not already covered  Coverage for preventive and screening services currently includes, among other services, (1) a "welcome to Medicare" physical exam during the first year of enrollment in Part B and an annual visit and prevention plan thereafter; (2) flu vaccine (annual), pneumococcal vaccine, and hepatitis B vaccine (for persons at high risk); (3) screening tests for breast, cervical, prostate, and colorectal cancers; (4) screening for other conditions such as depression, alcohol misuse, heart disease, glaucoma, and osteoporosis; and (5) intensive behavioral therapy for heart disease and for obesity  Payments for these services are provided under the physician fee schedule and/or the clinical laboratory fee schedule  Part B covers outpatient clinical laboratory tests, such as certain blood tests, urinalysis, and some screening tests, provided by Medicare-participating laboratories  These services may be furnished by labs located in hospitals and physician offices, as well as by independent labs  Beneficiaries have no co-payments or deductibles for covered clinical lab services  From 1984 until recently, payments for outpatient clinical laboratory services were made on the basis of the Medicare clinical laboratory fee schedule (CLFS), which set payment amounts as the lesser of the amount billed, the local fee for a geographic area, or a national limit amount  Most clinical lab services were paid at the national limit amount  The national limits were set at a percentage (74%) of the median of all local fee schedule amounts for each laboratory test code; therefore, fee schedule amounts may differ by region  In general, annual increases in clinical lab fees have been based on the percentage change in the CPI-U  However, since 1987, Congress has specified lower updates  Beginning in 2014, with certain exceptions, laboratory tests provided in hospital outpatient departments are no longer paid separately under the CLFS and are instead included in the OPPS payments  PAMA introduced a new method for determining clinical laboratory payments and required CMS to base Medicare CLFS reimbursement on reported private insurance payment amounts  Medicare has been using weighted median private insurer rates to calculate Medicare payment rates for laboratory tests paid under the CLFS since January 1, 2018  These payment rates are national and do not vary by geographic area  Part B also covers diagnostic nonlaboratory x-ray tests and other diagnostic tests, as well as x-ray, radium, and radioisotope therapy  Generally, these services are paid for under the physician fee schedule, with beneficiaries responsible for a 20% coinsurance payment  Medicare covers a wide variety of equipment and devices under the heading of durable medical equipment (DME), prosthetics, and orthotics (PO) if they are medically necessary and are prescribed by a physician  DME is defined as equipment that (1) can withstand repeated use, (2) has an expected life of at least three years (effective for items classified as DME after January 1, 2012), (3) is used primarily to serve a medical purpose, (4) is not generally useful in the absence of an illness or injury, and (5) is appropriate for use in the home  DME includes such items as hospital beds, wheelchairs, blood glucose monitors, and oxygen and oxygen equipment  It also includes related supplies (S), such as drugs and biologics that are necessary for the effective use of the product  Prosthetics (P) are items that replace all or part of a body organ or its function, such as colostomy bags, pacemakers, and artificial eyes, arms, or legs  Orthotics (O) are braces that support a weak or deformed body member, such as leg or back braces  Except in competitive bidding areas (CBAs, described below), Medicare pays for most durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) based on fee schedules  Medicare pays 80% of the lower of the supplier's charge for the item or the fee schedule amount  The beneficiary is responsible for the remaining 20%  In general, fee schedule amounts are updated each year by a (1) measure of price inflation, and (2) a measure of economy-wide productivity, which may result in lower fee schedule amounts from one year to the next  Since 2016, the fee schedule rates that applied outside of competitive bidding areas for certain DMEPOS have been reduced based on price information from the competitive bidding program  The reductions were phased in during 2016, and fully phased in starting in January 2017  In response to concerns that the adjusted rates were too low, the Secretary again applied the phase-in rate for rural and noncontiguous areas not subject to competitive bidding starting in June 2018  Currently, two different fee schedules apply outside of CBAs  First, in rural or noncontiguous areas, the fee schedule is a 50/50 blend of the fee schedule with and without the reductions based on information from competitive bidding (i e , the phase-in methodology)  Second, in nonrural and contiguous areas, the fee schedule amounts are fully adjusted by information from the competitive bidding program  Numerous studies and investigations indicated that Medicare paid more for certain items of DME and PO than some other health insurers and some retail outlets  Such overpayments were attributed, in part, to the fee schedule mechanism of payment  MMA required the Secretary to establish a Competitive Acquisition Program for certain DMEPOS in specified areas  Instead of paying for medical equipment based on a fee schedule established by law, payment for items in competitive bidding areas was based on the supplier bids  The program started in 9 metropolitan areas in January 2011 and had expanded to 130 competitive bidding areas in 2018  However, the program has been suspended while a new bidding methodology is established  During the gap, the payments for previously competitively bid items in competitive bidding areas will be the amounts that applied on December 31, 2018, increased, yearly, by a measure of inflation  Certain specified outpatient prescription drugs and biologics are covered under Medicare Part B  (However, most outpatient prescription drugs are covered under Part D, discussed below ) Covered Part B drugs and biologics include drugs furnished incident to physician services, immunosuppressive drugs following a Medicare-covered organ transplant, erythropoietin for treatment of anemia for individuals with ESRD when not part of the ESRD composite rate, oral anticancer drugs (provided they have the same active ingredients and are used for the same indications as chemotherapy drugs that would be covered if furnished incident to physician services), certain vaccines under selected conditions, and drugs administered through DME  Generally, Medicare reimburses physicians and other providers, such as hospital outpatient clinics, for covered Part B drugs and biologics at 106% of the volume weighted average sales price of all drugs billed under the same billing code, although some Part B drugs, such as those administered through DME, are reimbursed at 95% of the drug's average wholesale price  Health care providers also are paid separately for administering Medicare Part B drugs  Medicare pays 80% of the amount paid to providers, and beneficiaries are responsible for the remaining 20%  A hospital outpatient is a person who has not been admitted by the hospital as an inpatient but is registered on the hospital records as an outpatient  Generally, payments under the hospital outpatient prospective payment system (OPPS) cover the operating and capital-related costs that are directly related and integral to performing a procedure or furnishing a service on an outpatient basis  These payments cover services such as the use of an operating suite, treatment, procedure, or recovery room; use of an observation bed as well as anesthesia; certain drugs or pharmaceuticals; incidental services; and other necessary or implantable supplies or services  Payments for services such as those provided by physicians and other professionals as well as therapy and clinical diagnostic laboratory services, among others, are separate  Under the OPPS, the unit of payment for acute care hospitals is the individual service or procedure as assigned to an ambulatory payment classification (APC)  To the extent possible, integral services and items (excluding physician services paid under the physician fee schedule) are bundled within each APC  Specified new technologies are assigned to "new technology APCs" until clinical and cost data are available to permit assignment into a "clinical APC " Medicare's hospital outpatient payment is calculated by multiplying the relative weight associated with an APC by a conversion factor  For most APCs, 60% of the conversion factor is geographically adjusted by the wage index used for the inpatient prospective payment system  Except for new technology APCs, each APC has a relative weight that is based on the median cost of services in that APC  The OPPS also includes pass-through payments for new technologies (specific drugs, biologicals, and devices) and payments for outliers  The Medicare Payment Advisory Commission (MedPAC) has recommended site-neutral payment policies that base payments on the resources needed to provide high-quality care in the most efficient setting  The Bipartisan Budget Act of 2015 (BBA 15; P L  114-74 ) gave CMS the authority to add new restrictions on Medicare payments for services furnished in provider-based off-campus hospital outpatient departments (HOPDs) to address discrepancies between payments under the MPFS and the OPPS for similar services  In its 2019 OPPS Final Rule, CMS explicitly applies the site-neutral policy to clinic visits, the most commonly billed service in hospital outpatient departments  An ambulatory surgical center (ASC) is a distinct entity that furnishes outpatient surgical procedures to patients who do not require an overnight stay after the procedure  According to MedPAC, most ASCs are freestanding facilities rather than part of a larger facility, such as a hospital  Medicare covers surgical and medical services performed in an ambulatory surgical center that are (1) commonly performed on an inpatient basis but may be safely performed in an ASC; (2) not of a type that are commonly performed or that may be safely performed in physicians' offices; (3) limited to procedures requiring a dedicated operating room or suite and generally requiring a postoperative recovery room or short-term (not overnight) convalescent room; and (4) not otherwise excluded from Medicare coverage  Medicare pays for surgery-related facility services provided in ASCs using a prospective payment system based on the OPPS  (Associated physician fees are paid for separately under the physician fee schedule ) Each of the approximately 3,500 procedures approved for payment in an ASC is classified into an APC group on the basis of clinical and cost similarity  The ASC system primarily uses the same payment groups as the OPPS; however, ASC payment rates are generally lower  The ASC weights are scaled (reduced) to account for the different mix of services in an ASC, and the ASC conversion factor (the base payment amount) is lower  A different payment method is used to set ASC payment for office-based procedures, separately payable radiology services, separately payable drugs, and device-intensive procedures  In addition, separate payments are made for certain ancillary items and services when they are integral to surgical procedures, including corneal tissue acquisition, brachytherapy sources, certain radiology services, many drugs, and certain implantable devices  The application of the site-neutral payment policy to clinic visits also affects such payments to ASCs (see discussion above)  Medicare Part B covers emergency and nonemergency ambulance services to or from a hospital, a critical access hospital, a skilled nursing facility, or a dialysis facility for End-Stage Renal Disease (ESRD) beneficiaries who require dialysis when other modes of transportation could endanger the Medicare beneficiary's health  In most cases, the program covers 80% of the allowed amount for the service, and the beneficiary is responsible for the remaining 20%  Generally, ambulance services are covered if (1) transportation of the beneficiary occurs; (2) the beneficiary is taken to an appropriate location (generally, the closest appropriate facility); (3) the ambulance service is medically necessary (other forms of transportation are contraindicated); (4) the ambulance provider or supplier meets state licensing requirements; and (5) the transportation is not part of a Medicare Part A covered stay  Medicare covers both scheduled and nonscheduled nonemergency transports if the beneficiary is bed-confined or meets other medical necessity criteria  Medicare may also cover emergency ambulance transportation by airplane or helicopter if the beneficiary's location is not easily reached by ground transportation or if long distance or obstacles, such as heavy traffic, would prevent the individual from obtaining needed care  Medicare pays for ambulance services according to a national fee schedule  The fee schedule establishes seven categories of ground ambulance services and two categories of air ambulance services  Medicare pays for different levels of ambulance services, which reflect the staff training and equipment required to meet the patient's medical condition or health needs  Generally, basic life support is provided by emergency medical technicians (EMTs)  Advanced life support is provided by EMTs with advanced training or by paramedics  Some rural ground and air ambulance services may qualify for increased payments  Also, ambulance providers that are CAHs, or that are entities that are owned and operated by a CAH, are paid on a reasonable-cost basis rather than the fee schedule if they are the only ambulance provider within a 35-mile radius  Medicare covers Part B services in rural health clinics (RHCs) and federally qualified health centers (FQHCs) provided by (1) physicians and specified nonphysician practitioners; (2) visiting nurses for homebound patients in home health shortage areas; (3) registered dieticians or nutritional professionals for diabetes training and medical nutrition therapy; and (4) others, as well as certain drugs administered by a physician or nonphysician practitioner  RHCs are paid based on an "all-inclusive" cost-based rate per beneficiary visit subject to a per visit upper limit, adjusted annually for inflation  For cost-reporting periods that began on or after October 1, 2014, FQHCs are paid a base payment rate per visit (with a limit, in most cases, of one billable visit per day) under a PPS methodology  Each FQHC's PPS rate is adjusted based on the location where the service is furnished using geographic adjustment factors, which are the geographic practice cost indices (GPCI) used in Medicare's physician fee schedule (MPFS)  This rate is increased by 34% for new patients (those not seen in the FQHC organization within the past three years)  The 34% increase also applies when a beneficiary receives a comprehensive initial Medicare visit (an initial preventive physician examination or an initial annual wellness visit) or a subsequent annual wellness visit  Effective January 1, 2017, the FQHC PPS base rate is updated annually using an FQHC-specific market basket  Medicare's payment to the FQHC is equal to 80% of the lesser of the adjusted PPS rate or the FQHC's actual charges associated with the visit, and the beneficiary is responsible for a 20% coinsurance  Medicare Advantage (MA) is an alternative way for Medicare beneficiaries to receive covered benefits  Under MA, private health plans are paid a per-person amount to provide all Medicare covered benefits (except hospice) to beneficiaries who enroll in their plan  Medicare beneficiaries who are eligible for Part A, enrolled in Part B, and do not have ESRD are eligible to enroll in an MA plan if one is available in their area  Some MA plans may choose their service area (local MA plans), while others agree to serve one or more regions defined by the Secretary (regional MA plans)  In 2019, nearly all Medicare beneficiaries have access to an MA plan and approximately a third of beneficiaries are enrolled in one  Private plans may use different techniques to influence the medical care used by enrollees  Some plans, such as health maintenance organizations (HMOs), may require enrollees to receive care from a restricted network of medical providers; enrollees may be required to see a primary care physician who will coordinate their care and refer them to specialists as necessary  Other types of private plans, such as private fee-for-service (PFFS) plans, may look more like original Medicare, with fewer restrictions on the providers an enrollee can see and minimal coordination of care  In general, MA plans offer additional benefits or require smaller co-payments or deductibles than original Medicare  Sometimes beneficiaries pay for these additional benefits through a higher monthly premium, but sometimes they are financed through plan savings  The extent of extra benefits and reduced cost sharing varies by plan type and geography  However, MA plans are seen by some beneficiaries as an attractive alternative to more expensive supplemental insurance policies found in the private market  By contract with CMS, a plan agrees to provide all required services covered in return for a capitated monthly payment adjusted for the demographics and health history of their enrollees  The same monthly payment is made regardless of how many or few services a beneficiary actually uses  In general, the plan is at-risk if costs, in the aggregate, exceed program payments; conversely, the plan can retain savings if aggregate costs are less than payments  Payments to MA plans are based on a comparison of each plan's estimated cost of providing Medicare covered services (a bid) relative to the maximum amount the federal government will pay for providing those services in the plan's service area (a benchmark)  If a plan's bid is less than the benchmark, its payment equals its bid plus a rebate  The size of the rebate is dependent on plan quality and ranges from 50% to 70% of the difference between the bid and the benchmark  The rebate must be returned to enrollees in the form of additional benefits, reduced cost sharing, reduced Part B or Part D premiums, or some combination of these options  If a plan's bid is equal to or above the benchmark, its payment will be the benchmark amount and each enrollee in that plan will pay an additional premium, equal to the amount by which the bid exceeds the benchmark  The MA benchmarks are determined through statutorily specified formulas that have changed over time  Since BBA 97, formulas have increased the benchmark amounts, in part, to encourage plan participation in all areas of the country  As a result, however, the benchmark amounts (and plan payments) in some areas have been higher than the average cost of original FFS Medicare  The ACA changed the way benchmarks are calculated by tying them closer to (or below) spending in FFS Medicare, and adjusting them based on plan quality  In a recent analysis, MedPAC found that "over the past few years, plan bids and payments have come down in relation to FFS spending while MA enrollment continues to grow  The pressure of lower benchmarks has led to improved efficiencies and more competitive bids that enable MA plans to continue to increase enrollment by offering benefits that beneficiaries find attractive " In 2006, the MA program began to offer MA regional plans  Regional MA plans must agree to serve one or more regions designated by the Secretary  There are 26 MA regions consisting of states or groups of states  Regional plan benchmarks include two components: (1) a statutorily determined amount (comparable to benchmarks described above) and (2) a weighted average of plan bids  Thus, a portion of the benchmark is competitively determined  Similar to local plans, plans with bids below the benchmark are given a rebate, while plans with bids above the benchmark require an additional enrollee premium  In general, MA eligible individuals may enroll in any MA plan that serves their area  However, some MA plans may restrict their enrollment to beneficiaries who meet additional criteria  For example, employer-sponsored MA plans are generally only available to the retirees of the company sponsoring the plan  In addition, Medicare Special Needs Plans (SNPs) are a type of coordinated care MA plan that exclusively enrolls, or enrolls a disproportionate percentage of, special needs individuals  Special needs individuals are any MA eligible individuals who are either institutionalized as defined by the Secretary, eligible for both Medicare and Medicaid, or have a severe or disabling chronic condition and would benefit from enrollment in a specialized MA plan  Medicare Part D provides coverage of outpatient prescription drugs to Medicare beneficiaries who choose to enroll in this optional benefit  (As previously discussed, Part B provides limited coverage of some outpatient prescription drugs ) In 2019, about 47 million (about 77%) of eligible Medicare beneficiaries are estimated to be enrolled in a Part D plan  Prescription drug coverage is provided through private prescription drug plans (PDPs), which offer only prescription drug coverage, or through Medicare Advantage prescription drug plans (MA-PDs), which offer prescription drug coverage that is integrated with the health care coverage they provide to Medicare beneficiaries under Part C  Plans must meet certain minimum requirements; however, there are significant variations among them in benefit design, including differences in premiums, drugs included on plan formularies, and cost sharing for particular drugs  Part D prescription drug plans are required to offer either "standard coverage" or alternative coverage that has actuarially equivalent benefits  In 2019, "standard coverage" has a $415 deductible and a 25% coinsurance for costs between $415 and $3,820  From this point, there is reduced coverage until the beneficiary has out-of-pocket costs of $5,100 (an estimated $8,139 54 in total spending); this coverage gap has been labeled the "doughnut hole " Once the beneficiary reaches the catastrophic limit, the program pays all costs except for the greater of 5% coinsurance or $3 40 for a generic drug and $8 50 for a brand-name drug  As required by the ACA, in 2010, Medicare sent a tax-free, one-time $250 rebate check to each Part D enrollee who reached the doughnut hole  Additionally, starting in 2011, the coverage gap is being gradually reduced each year  Under the ACA, the coverage gap for both brand-name and generic drugs was to be eliminated in 2020, but Congress moved up the date to 2019 for brand-name drugs as part of BBA 18  In 2019, a 70% discount is provided by drug manufacturers and Medicare pays an additional 5% of the cost of brand-name drugs dispensed during the coverage gap  In 2019, Medicare also pays 63% of the cost of generic drugs dispensed during the coverage gap and enrollees pay 37%  (See Figure 2  ) By 2020, through a combination of manufacturer discounts and increased Medicare coverage, Part D enrollees will be responsible for 25% of the costs for brand-name and generic drugs in the coverage gap (the same as during the initial coverage period)  Most plans offer actuarially equivalent benefits rather than the standard package, including alternatives such as reducing or eliminating the deductible, or using tiered cost sharing with lower cost sharing for generic drugs  Medicare's payments to plans are determined through a competitive bidding process, and enrollee premiums are tied to plan bids  Plans are paid a risk-adjusted monthly per capita amount based on their bids during a given plan year  Part D plan sponsors determine payments for drugs and are expected to negotiate prices  The federal government is prohibited from interfering in the price negotiations between drug manufacturers, pharmacies, and plans (the so-called "non-interference clause")  Part D also provides enhanced coverage for low-income enrolled individuals, such as persons who previously received drug benefits under Medicaid (known as "dual eligibles"—enrollees in both Medicare and Medicaid)  Additionally, certain persons who do not qualify for Medicaid, but whose incomes are below 150% of poverty, may also receive assistance for some portion of their premium and cost-sharing charges  The MMA included significant incentives for employers to continue to offer coverage to their retirees by providing a 28% federal subsidy  In 2019, the maximum potential subsidy per covered retiree is $2,264 for employers or unions offering drug coverage that is at least actuarially equivalent (called "creditable" coverage) to standard coverage  Employers or unions may select an alternative option (instead of taking the subsidy) with respect to Part D, such as electing to pay a portion of the Part D premiums  They may also elect to provide enhanced coverage, though this has some financial consequences for the employer or union  Alternatively, employers or unions may contract with a PDP or MA-PD to offer the coverage or become a Part D plan sponsor themselves for their retirees  A variety of public and private entities are involved in carrying out Medicare administrative and oversight functions  CMS, an agency within HHS, has primary operational responsibilities  Such responsibilities include managing program finances, developing policies and regulations, setting payment rates, and developing the program's information-technology infrastructure  CMS conducts its activities through its headquarters and 10 regional offices  The Social Security Administration, however, enrolls beneficiaries into the program and issues Medicare beneficiary cards  CMS also contracts with various private entities, including private health insurance companies, to help administer the program  For example, Medicare Administrative Contractors (MACs) process and pay Parts A and B reimbursement claims, enroll providers and suppliers, educate providers and suppliers on billing requirements, support appeal processes, and answer provider and supplier inquiries through call centers, as well as other activities  Qualified Independent Contractors (QICs) perform second-level reviews on appeals initially reviewed by MACs  Medicare's quality assurance activities are primarily handled by State Survey Agencies and Quality Improvement Organizations (QIOs), which operate in all states and the District of Columbia, Puerto Rico, and the U S  Virgin Islands  The State Survey Agencies are responsible for inspecting Medicare provider facilities (e g , nursing homes, home health agencies, and hospitals) to ensure that they are in compliance with federal safety and quality standards referred to as Conditions (or Requirements) of Participation  Alternatively, some types of providers, including hospitals, may receive certification through private accrediting agencies, such as the Joint Commission  QIOs are mostly private, not-for-profit organizations that monitor the quality of care delivered to Medicare beneficiaries and educate providers on the latest quality-improvement techniques  Medicare program integrity activities, such as audits, provider education, medical review, and predictive data analysis, also are carried out by a variety of government and private entities  For example, the Center for Program Integrity within CMS works together with the U S  Department of Justice (DOJ) and the HHS Office of Inspector General (OIG) to identify and prevent fraud, waste, and abuse in Medicare  CMS also works with private contractors to carry out certain program-integrity functions  Unified Program Integrity Contractors (UPICs) perform integrity-related activities including data analysis to identify potentially fraudulent claims (bills) for Medicare Parts A and B, home health and hospice services, and DME  Similarly, the National Benefit Integrity Medicare Drug Integrity Contractor (MEDIC) is responsible for identifying and investigating fraud, waste, and abuse in Medicare Advantage and Part D  When appropriate, the UPICs and MEDIC work with and refer cases to law enforcement, including OIG and DOJ  In addition, Recovery Audit Contractors (RACs) are responsible for identifying improper Medicare payments, including both underpayments and overpayments, and for recouping any overpayments made to providers  Each year, the Comprehensive Error Rate Testing (CERT) program quantifies a national improper Medicare payment rate by examining a random sample of claims  In turn, the Supplemental Medical Review Contractor targets medical reviews in areas where OIG, RACs, and CERT have identified vulnerabilities and/or questionable billing patterns to identify ways to lower improper payment rates  As required by the ACA, the Center for Medicare and Medicaid Innovation (CMMI) was established in January 2011 to test and evaluate innovative payment and service delivery models to reduce program expenditures under Medicare  Examples of these models include providing payment incentives for groups of doctors, hospitals, and other health care providers (Accountable Care Organizations, or ACOs) to coordinate the services they provide to Medicare beneficiaries; bundling payments for services provided in different settings during a beneficiary's episode of care; and reimbursing health providers based on the quality of care rather than on the volume of services  CMMI also plays an important role in developing and implementing the new physician payment models required by MACRA  Medicare beneficiary education and outreach duties are shared between CMS and the Social Security Administration  Each year, CMS mails out a "Medicare and You" handbook to beneficiaries, which provides information on their benefits for the upcoming year  Additional educational materials and responses to frequently asked questions may be found on the CMS-maintained "Medicare gov" website, and beneficiaries may call a CMS-operated 1-800 number for assistance with specific questions and help with selecting and enrolling in a Medicare Advantage and/or Part D plan  A Medicare beneficiary ombudsman is also available to provide assistance to Medicare consumers with their complaints, grievances, and requests  The Social Security Administration is responsible for notifying low-income Medicare beneficiaries about programs that may be able to assist them with their medical and prescription drug expenses  The Social Security Administration also provides general Medicare eligibility and enrollment information on its webpage and on Social Security benefit statements  Finally, CMS partners with community-based organizations, such as State Health Insurance Assistance Programs, in every state to provide educational resources and personalized assistance to Medicare beneficiaries  Medicare's financial operations are accounted for through two trust funds maintained by the Department of the Treasury—the Hospital Insurance (HI) trust fund for Part A and the Supplementary Medical Insurance (SMI) trust fund for Parts B and D  For beneficiaries enrolled in Medicare Advantage (Part C), payments are made on their behalf in appropriate portions from the HI and SMI trust funds  HI is primarily funded by payroll taxes, while SMI is primarily funded through general revenue transfers and premiums  (See Figure 3  ) The HI and SMI trust funds are overseen by a Board of Trustees that provides annual reports to Congress  The trust funds are accounting mechanisms  Income to the trust funds is credited to the fund in the form of interest-bearing government securities  Expenditures for services and administrative costs are recorded against the fund  These securities represent obligations that the government has issued to itself  As long as a trust fund has a balance, the Department of the Treasury is authorized to make payments for it from the U S  Treasury  Medicare expenditures are primarily paid for through mandatory spending—generally Medicare pays for all covered health care services provided to beneficiaries  Aside from certain constraints in HI described below, the program is not subject to spending limits  Additionally, most Medicare expenditures (aside from premiums paid by beneficiaries) are paid for by current workers through income taxes and dedicated Medicare payroll taxes, that is, current income is used to pay current expenditures  Medicare taxes paid by current workers are not set aside to cover their future Medicare expenses  The primary source of funding for Part A is payroll taxes paid by employees and employers  Each pays a tax of 1 45% on the employee's earnings; the self-employed pay 2 9%  Beginning in 2013, some higher-income employees pay higher payroll taxes  Unlike Social Security, there is no upper limit on earnings subject to the tax  Other sources of income include (1) interest on federal securities held by the trust fund, (2) a portion of federal income taxes that individuals pay on their Social Security benefits, and (3) premiums paid by voluntary enrollees who are not automatically entitled to Medicare Part A  Income for Part A is credited to the HI trust fund  Part A expenditures for CY2019 are estimated to reach approximately $330 billion  Revenue to the trust fund is expected to consist of about $285 billion in payroll tax income and another $38 billion in interest and other income  The Medicare Trustees project that in CY2019, the HI trust fund will incur a deficit of approximately $7 billion  As long as the HI trust fund has a balance, the Treasury Department is authorized to make payments for Medicare Part A services  To date, the HI trust fund has never run out of money (i e , become insolvent), and there are no provisions in the Social Security Act that govern what would happen if that were to occur  Part A expenditures exceeded HI income each year from 2008 through 2015, and the assets credited to the trust fund were drawn down to make up the deficit in those years  Although the HI trust fund accumulated small surpluses in 2016 and 2017, the Medicare Trustees estimate that, beginning in 2018, expenditures will outpace income in all future years, and project that the HI trust fund will become insolvent in 2026 (i e , the balance of the trust fund will reach $0)  At that time there would no longer be sufficient funds to fully cover Part A expenditures  Medicare Part B is financed primarily from federal general revenues and from beneficiary premiums, which are set at 25% of estimated per capita program costs for the aged  (The disabled pay the same premium as the aged ) Income for Part B is credited to the SMI trust fund  Total spending for Part B is estimated to reach about $368 billion in CY2019, with premiums financing about $98 billion of that amount and general revenues financing most of the rest  Most beneficiaries who enroll in Medicare Part B pay a monthly premium  Individuals receiving Social Security benefits have their Part B premium payments automatically deducted from their Social Security benefit checks  Due to a "hold-harmless" provision in the Social Security Act, an individual's Social Security check cannot decrease from one year to the next as a result of the annual Part B premium increase (except in the case of higher-income individuals subject to income-related premiums)  The 2019 monthly Part B premium is $135 50  However, about 3 5% of Medicare enrollees are protected by the hold-harmless provision and pay lower premium amounts because the dollar amount of the 2019 cost-of-living increase in their Social Security benefits was not sufficient to cover the full premium increase  Since 2007, higher-income Part B enrollees have paid higher premiums  In 2019, individuals whose modified adjusted gross income (AGI) exceeds $85,000 and each member of a couple filing jointly whose modified AGI exceeds $170,000 are subject to higher premium amounts  These higher-income premiums range from 35% to 85% of the value of Part B and affect about 5% of Medicare enrollees  (See Appendix B for 2019 Part B premiums and high-income thresholds ) Payments for spending under the Medicare Advantage program are made in appropriate portions from the HI and SMI trust funds  There is no separate trust fund for Part C  Medicare Part D is financed through a combination of beneficiary premiums and federal general revenues  In addition, certain transfers are made from the states  These transfers, referred to as "clawback payments," represent a portion of the amounts states could otherwise have been expected to pay for drugs under Medicaid if drug coverage for the dual eligible population had not been transferred to Part D  Part D revenues are credited to a separate Part D account within the SMI trust fund  In CY2019, total spending for Part D is estimated to reach approximately $98 billion, with about $71 billion of that amount paid for by general revenues, $16 billion from beneficiary premiums, and $12 billion from state transfers  In 2019, the base beneficiary premium is $33 19; however, beneficiaries pay different premiums depending on the plan they have selected and whether they are entitled to low-income premium subsidies  Additionally, beginning in 2011, higher income Part D enrollees pay higher premiums  (The income thresholds are the same as for Part B, as described above ) On average, beneficiary premiums are set at 25 5% of expected total Part D costs for basic coverage  The Budget Control Act of 2011 (BCA; P L  112-25 ) provided for increases in the debt limit and established procedures designed to reduce the federal budget deficit, including the creation of a Joint Select Committee on Deficit Reduction  The failure of the Joint Committee to propose deficit reduction legislation by its mandated deadline triggered automatic spending reductions ("sequestration" of mandatory spending and reductions in discretionary spending) in fiscal years 2013 through 2021  The American Taxpayer Relief Act of 2012 (ATRA; P L  112-240 ) delayed the automatic reductions by two months, while the Bipartisan Budget Act of 2013 (BBA; P L  113-67 ) extended sequestration for mandatory spending for an additional two years—through FY2023  In 2014, the President signed into law an amended version of S  25 ( P L  113-82 ), which included a provision to extend BCA's sequester of mandatory spending through FY2024  BBA 15 extended the sequestration of mandatory spending another year, through FY2025  Most recently, BBA 18 extended the BCA mandatory spending sequester through FY2027  Section 256(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P L  99-177 ) contains special rules for the Medicare program in the event of a sequestration  Among other things, it specifies that for Medicare, sequestration is to begin the month after the sequestration order has been issued  Therefore, as the sequestration order was issued March 2013, Medicare sequestration began April 1, 2013, and will continue through March 31, 2028  Under sequestration, Medicare's benefit structure generally remains unchanged; however, benefit related payments are subject to 2% reductions  In other words, most Medicare payments to health care providers, as well as to MA and Part D plans, are being reduced by 2%  Certain Medicare payments are exempt from sequestration and therefore not reduced  These exemptions include (1) Part D low-income subsidies, (2) the Part D catastrophic subsidy, and (3) Qualified Individual (QI) premiums  Some non-benefit related Medicare expenses, such as administrative and operational spending, are subject to higher reductions, 6 2% in 2019  While Medicare provides broad protection against the costs of many, primarily acute care, services, the program does not cover all services that may be used by its aged and disabled beneficiaries  In general, Medicare does not cover eyeglasses, hearing aids, dentures, or most long-term care services  Further, unlike most private insurance policies, it does not include an annual "catastrophic" cap on out-of-pocket spending on cost-sharing charges for services covered under Parts A and B (except for persons enrolled in Medicare Advantage plans)  Most Medicare beneficiaries have some coverage in addition to Medicare  The following are the main sources of additional coverage for Medicare enrollees: Medicare Advantage  Many MA plans offer services in addition to those covered under original Medicare, reduced cost sharing, or reduced Part B or D premiums  All MA plans have a catastrophic cap  Employer Coverage  Coverage may be provided through a current or former employer  In recent years, a number of employers have cut back on the scope of retiree coverage  Some have dropped such coverage entirely, particularly for future retirees  As noted earlier, the MMA attempted to stem this trend, at least for prescription drug coverage, by offering subsidies to employers who offer drug coverage, at least as good as that available under Part D  Medigap  Individual insurance policies that supplement fee-for-service Medicare are referred to as Medigap policies  Beneficiaries with Medigap insurance typically have coverage for a portion of Medicare's deductibles and coinsurance; they may also have coverage for some items and services not covered by Medicare  Individuals select from a set of standardized plans, though not all plans are offered in all states  Medicaid  Certain low-income Medicare beneficiaries also may be eligible for full or partial benefits under their state's Medicaid program  Individuals eligible for both Medicare and Medicaid are referred to as dual eligibles  The lowest-income dual eligibles qualify for full Medicaid benefits, so that the majority of their health care expenses are paid by either Medicare or Medicaid; Medicare pays first, with Medicaid picking up most of the remaining costs  In addition to full-benefit dual eligibles, state Medicaid programs pay Medicare premiums and some cost sharing for other partial dual eligibles, who have higher income than full-benefit dual eligibles but are still considered to have low income  Other Public Sources  Individuals may have additional coverage through the Department of Veterans Affairs, or TRICARE for military retirees eligible for Medicare (and enrolled in Part B)  In 2015, about 87% of Medicare beneficiaries had some form of additional coverage  Some persons may have had more than one type of additional coverage  Appendix A  Abbreviations Appendix B  2019 Medicare Beneficiary Costs


Report 2:  Post staff noted, for example, that security officers at overseas posts should conduct regular training and drilling exercises to evaluate their local guard force’s effectiveness in searching a vehicle entering the post compound for explosive devices  According to post staff, when these important security oversight activities are not properly and regularly conducted, the level of security risk at these overseas posts may increase  According to State officials in headquarters and staff at overseas posts, as well as reporting by State’s OIG, vacancies in information management positions at overseas posts have increased the vulnerability of posts’ computer networks to potential cybersecurity attacks and other malicious threats  State officials told us that the Foreign Service had faced chronic shortages of information management staff available to fill these positions worldwide  According to State officials, because of ongoing information management vacancies, some required tasks—such as conducting planned network maintenance—were performed infrequently or not at all  In another example, staff at overseas posts said that because of vacancies, information management staff had been unable to regularly check their computer system logs to ensure that security breaches had not taken place  Post staff added that, if a breach did occur, vacancies could increase the amount of time needed to identify an attack and deploy countermeasures, further increasing the risks to posts’ computer networks  Inspections conducted by State’s OIG from fall 2014 to spring 2016 found that information management staff at 33 percent of overseas posts had not performed various required information management duties  According to State’s OIG, neglect of these duties may leave the department vulnerable to increased cybersecurity attacks  According to staff at overseas posts, the office management specialist position at overseas posts has evolved considerably over time; these specialists increasingly play a critical role in ensuring that the work of overseas posts is effectively completed  Post staff said that office management specialists provide administrative and other support services to other Foreign Service employees and are assigned to various sections of post  For example, staff at one post noted that office management specialists assigned to the Security Officer sections at overseas posts reduce the workload of security officers by completing more routine security tasks and allowing the security officers to focus on more challenging or involved tasks necessary to secure overseas posts  Post staff told us that vacancies in office management specialist positions reduce the amount of work that can be completed by other Foreign Service employees at overseas posts  For example, when office management specialist positions assigned to the Security Officer or Information Management sections of posts are vacant, these vacancies further exacerbate the higher number of vacancies that already exist in these sections  According to staff at overseas posts, higher numbers of office management specialist vacancies require other Foreign Service employees to spend a significant amount of time on administrative tasks, reducing the amount of time these staff can spend on mission-critical activities  Officials in headquarters and at overseas posts described various State efforts to help address overseas Foreign Service vacancies  According to State officials, Foreign Service vacancies at overseas posts are a complex problem that multiple offices within State address on an individual basis  State’s various efforts to address overseas Foreign Service vacancies are not guided by an integrated action plan to reduce persistent vacancies  Our 2017 High-Risk Series report calls for agencies to, among other things, design and implement action plan strategies for closing skills gaps  The action plan should (1) define the root cause of all skills gaps within an agency and (2) provide suggested corrective measures, including steps necessary to implement solutions  This report also emphasizes the high risk that mission-critical skills gaps in the federal workforce pose to the nation  While various State offices have implemented the efforts we identified, State lacks an action plan that is integrated—or consolidated—across its relevant offices to guide its efforts to address persistent overseas Foreign Service vacancies  Moreover, some staff at overseas posts acknowledged that the efforts State has taken to help address vacancies have not reduced persistent Foreign Service vacancies, notably in specialist positions  In response to our inquiry about an action plan, State officials said that the agency does not have a single document that addresses Foreign Service staffing gaps at overseas posts  Instead, State officials directed us to State’s Five Year Workforce Plan: Fiscal Years 2016-2020, stating that it was the most comprehensive document that outlines State’s efforts to address Foreign Service vacancies at overseas posts  The workforce plan notes that it provides a framework to address State’s human capital requirements and highlights State’s challenges and achievements in recruiting, hiring, staffing, and training Foreign Service staff  However, in reviewing the portions of the workforce plan that State indicated were most relevant, we found that the workforce plan does not include an integrated action plan that defines the root causes of the persistent overseas Foreign Service vacancies we identified or suggest corrective measures to reduce vacancies in these positions, including steps necessary to implement solutions  State officials also noted that they frequently meet to discuss and address workforce issues  For example, they said they convene a multi-bureau planning group that meets biweekly to discuss strategic workforce issues such as hiring needs based on attrition and other issues  However, according to State officials, this group has not developed an action plan to reduce persistent Foreign Service vacancies at overseas posts  State lacks an integrated action plan to guide its efforts to address persistent Foreign Service vacancies that includes corrective measures to address the root causes of the vacancies  Without defining the root causes of persistent Foreign Service vacancies at overseas posts and identifying appropriate corrective measures, overseas vacancies may persist and continue to adversely affect State’s ability to achieve U S  foreign policy goals  Foreign Service generalists and specialists at overseas posts are critical to advancing U S  foreign policy and economic interests abroad  However, for at least a decade, the Foreign Service has had persistent vacancies in both generalist and specialist positions at overseas posts  In particular, large numbers of vacant positions have persisted over time in certain overseas Foreign Service positions, such as information management and security officer positions  These vacancies in critical positions at overseas posts have adversely affected State’s ability to carry out its mission effectively and threaten State’s ability to ensure the security and safety of its employees, their families, and post facilities  While State has made some efforts to address Foreign Service vacancies, addressing chronic vacancies in critical positions at overseas posts requires a thoughtful, coherent, and integrated action plan that defines the root causes of persistent Foreign Service vacancies at overseas posts along with suggested corrective measures to reduce such vacancies, following what was called for in our 2017 High-Risk Series report  Developing such an action plan would help State address its persistent staffing gaps, improve its ability to achieve U S  foreign policy goals, and help ensure secure and efficient operations  The Secretary of State should develop an integrated action plan that defines the root causes of persistent Foreign Service vacancies at overseas posts and provides suggested corrective measures to reduce such vacancies, including steps necessary to implement solutions  (Recommendation 1) We provided a draft of this report to State for review and comment  In its comments, reproduced in appendix III, State concurred with our recommendation  State also noted that it has taken actions and identified some causes of vacancies, but acknowledged that it lacks an integrated action plan and will take steps to develop such a plan  State also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to the appropriate congressional committees, the Secretary of State, and other interested parties  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-6881 or bairj@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix IV  This report examines (1) vacancies in the Department of State’s (State) Foreign Service staffing at overseas posts, (2) reported effects of Foreign Service vacancies on diplomatic readiness, and (3) State’s efforts to address Foreign Service vacancies  To address these three objectives, we interviewed State officials from the department’s Bureau of Human Resources and Bureau of Consular Affairs as well as State officials representing the Offices of the Executive Director for State’s six regional bureaus  We also interviewed staff at 10 overseas posts  We conducted in-person interviews with staff at 3 of these posts—the U S  Embassy in Beijing and the U S  Consulate in Shanghai, China, and the U S  Embassy in New Delhi, India  We conducted telephone interviews with staff at the other 7 posts—the U S  Embassies in Abuja, Nigeria; Bogota, Colombia; Kinshasa, Democratic Republic of the Congo; Kabul, Afghanistan; Mexico City, Mexico; and N’Djamena, Chad; and the U S  Consulate in Frankfurt, Germany  We used the following criteria to select overseas posts for interviews: (1) posts with larger numbers of Foreign Service vacancies; (2) posts with diversity in the types of Foreign Service positions that were vacant; (3) posts with higher relative importance to U S  economic, national security, and other foreign policy interests; and (4) posts in a range of geographic locations by State region  To examine vacancies in State’s Foreign Service staffing at overseas posts, we analyzed State’s personnel data on Foreign Service staffing at overseas posts from the department’s Global Employment Management System (GEMS), as of March 2018  Our analysis of the GEMS data includes Foreign Service positions filled by permanent Foreign Service employees as well as positions filled by nonpermanent Foreign Service employees, such as Consular Fellows  This analysis does not include the number of staffed and vacant positions at overseas posts in Libya, Syria, and Yemen, which, at the time of our review, were in suspended operations status, as well as U S  Mission Somalia, which was operating under special circumstances at a different location  To calculate vacancy rates, we divided the total number of positions by the number of positions listed as vacant in GEMS  For example, a post with 10 positions and 2 vacancies would have a vacancy rate of 20 percent  We calculated vacancy rates for each of the following categories: type (i e , generalist or specialist), function (e g , consular or information management), regional bureau (i e , Bureau of African Affairs or Bureau of Western Hemisphere Affairs), and embassy and nonembassy rankings from State’s Overseas Staffing Model (i e , Embassy 3+ or 5)  According to State officials, the data in GEMS have a number of limitations: The number of vacant positions at overseas posts listed in GEMS may be overstated, because State has not yet decided to remove some of these positions from its database  Some of the vacancies in GEMS are short-term or temporary  Foreign Service employees periodically rotate out of their positions at their overseas posts, sometimes creating temporary vacancies until the positions are filled by incoming Foreign Service employees  The GEMS data show larger numbers of vacant Foreign Service positions at posts in Afghanistan, Iraq, and Pakistan than actually were unstaffed at these posts  According to State officials, this discrepancy results from State’s relying heavily on shorter-term assignments to fill Foreign Service positions at these locations  These shorter-term assignments are not reflected in GEMS, and the positions therefore appear vacant  The GEMS data may not reflect Foreign Service employees who have been temporarily reassigned from one overseas post to another  The GEMS data may show positions as filled although the Foreign Service employee filling the position has not yet arrived at post  To assess the reliability of the GEMS database, we asked State officials whether State had made any major changes to the database since our 2012 report, when we assessed the GEMS data to be sufficiently reliable  State officials indicated that no major changes had been made  We also tested the data for completeness, confirmed the general accuracy of the data with officials at selected overseas posts, and interviewed knowledgeable officials from State’s Office of Resource Management and Organizational Analysis concerning the data’s reliability  We found the GEMS data to be reliable for the purpose of determining the numbers and percentages of vacant Foreign Service positions at overseas posts  We did not validate whether the total number of authorized overseas Foreign Service positions was appropriate or met State’s needs  We also reviewed State workforce planning documents and budget documents, such as State’s Five Year Workforce and Leadership Succession Plan: Fiscal Years 2016-2020 and Quadrennial Diplomacy and Development Review  In addition, we reviewed State Office of Inspector General reports as well as our previous reports on human capital challenges at State and effective strategic human capital management across the federal government  In particular, our report High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others notes that strategic human capital management is a high-risk issue across the federal government and lists five key elements as a road map for agency efforts to improve and ultimately address such issues  For our third objective, we assessed whether State’s efforts to address vacancies were guided by a corrective action plan that identifies the root causes of persistent Foreign Service vacancies at overseas posts and suggests corrective measures to reduce such vacancies, including steps necessary to implement solutions  We conducted this performance audit from August 2017 to March 2019 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The “Economic” generalist career track includes positions from the “Science Officer” staffing skill group in the GEMS data  170 Foreign Service employees were not staffed to one of the six regional bureaus  In addition to the contact named above, Godwin Agbara (Assistant Director), Ian Ferguson (Analyst-in-Charge), Anthony Costulas, Natalia Pena, Debbie Chung, Chris Keblitis, Reid Lowe, Justin Fisher, and Alexander Welsh made key contributions to this report 

ground_truth: Medicare is a federal program that pays for covered health care services of qualified beneficiaries. It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under the age of 65. Medicare, which consists of four parts (A-D), covers hospitalizations, physician services, prescription drugs, skilled nursing facility care, home health visits, and hospice care, among other services. Generally, individuals are eligible for Medicare if they or their spouse worked for at least 40 quarters in Medicare-covered employment, are 65 years old, and are a citizen or permanent resident of the United States. Individuals may also qualify for coverage if they are a younger person who cannot work because they have a medical condition that is expected to last at least one year or result in death, or have end-stage renal disease (permanent kidney failure requiring dialysis or transplant). The program is administered by the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) and by private entities that contract with CMS to provide claims processing, auditing, and quality oversight services. In FY2019, the program is expected to cover approximately 61 million persons (52 million aged and 9 million disabled) at a total cost of about $772 billion. Spending under the program (except for a portion of administrative costs) is considered mandatory spending and is not subject to the annual appropriations process. Services provided under Parts A and B (also referred to as "original" or "traditional" Medicare) are generally paid directly by the government on a "fee-for-service" basis, using different prospective payment systems or fee schedules. Under Parts C and D, private insurers are paid a monthly "capitated" amount to provide enrollees with required benefits. Medicare is required to pay for all covered services provided to eligible persons, so long as specific criteria are met. Since 1965, the Medicare program has undergone considerable change. For example, during the 111th Congress, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 and P.L. 111-152) made numerous changes to the Medicare program that modified provider reimbursements, provided incentives to increase the quality and efficiency of care, and enhanced certain Medicare benefits. In the 114th Congress, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10) changed the method for calculating updates to Medicare payment rates to physicians and altered how physicians and other practitioners will be paid in the future. Projections of future Medicare expenditures and funding indicate that the program will place increasing financial demands on the federal budget and on beneficiaries. For example, the Hospital Insurance (Part A) trust fund is projected to become insolvent in 2026. Additionally, although the Supplementary Medical Insurance (Parts B and D) trust fund is financed in large part through federal general revenues and cannot become insolvent, associated spending growth is expected to put increasing strains on the country's competing spending priorities. As such, Medicare is expected to be a high-priority issue in the current Congress, and Congress may consider a variety of Medicare reform options ranging from further modifications of provider payment mechanisms to redesigning the entire program. This report provides a general overview of the Medicare program including descriptions of the program's history, eligibility criteria, covered services, provider payment systems, and program administration and financing. A list of commonly used acronyms, as well as information on beneficiary cost sharing, may be found in the appendixes.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2: Safety defect vehicle recalls (auto recalls) are initiated when a defect in a vehicle or vehicle equipment creates an unreasonable safety risk, as determined by NHTSA or a manufacturer  After a recall is initiated, manufacturers are required to provide written notification to vehicle owners via First-Class Mail within 60 days and remedy the defect  Franchised dealers—which sell or lease an auto manufacturer’s new vehicles—perform the recall remedy  Before manufacturers send recall notification letters to affected vehicle owners, NHTSA reviews draft letters and envelopes to ensure they include required information about the safety defect  Required information includes, among other things, a clear description of the safety defect, an evaluation of the risk to vehicle safety, and a statement that the manufacturer will remedy the defect without charge  See appendix II for an example of a notification letter  The number of vehicles affected by safety defect vehicle recalls has increased dramatically since 2011 (see fig  1)  The increase reflects, in part, several large-scale recalls  For example, in 2014, General Motors initiated a recall of over 8 million vehicles with faulty ignition switches  Similarly, according to NHTSA in 2014 and 2015, some passenger vehicle manufacturers began recalling Takata air bag inflators, recalls that have grown to include approximately 34 million vehicles and 19 auto manufacturers  For the Takata recall, NHTSA issued various orders and established a Coordinated Remedy Program under which the agency oversees the supply of remedy parts and risk-based prioritization of vehicles for repair, and manages related recalls with the assistance of an Independent Monitor  The Independent Monitor assesses compliance with the applicable orders issued by NHTSA and makes recommendations aimed at enhancing the remedy program  According to NHTSA’s Strategic Plan 2016–2020, this unprecedented recall activity encouraged the agency to improve its system for identifying and addressing defective vehicles  For example, the plan states that NHTSA’s “vision is to achieve a 100-percent completion rate for every recall by improving communication at every level, at every step of the way ” Thus, according to the plan, NHTSA and the auto industry have committed to identifying and implementing effective strategies to inform consumers of safety defects and envision that their coordination will bolster recall efforts to improve completion rates  NHTSA reported that annual completion rates for passenger vehicle recalls have remained relatively flat, ranging from 63 to 67 percent between calendar year 2011 and calendar year 2014  See appendix III for completion rates by vehicle component and vehicle type  In part, to improve communication and encourage consumers to complete repairs, NHTSA and manufacturers provide auto recall information to the public on their websites  For example, certain motor vehicle manufacturers are required to allow consumers to search a vehicle’s recall remedy status on the Internet using the vehicle identification number (VIN)  NHTSA also provides publicly available auto recall information on its website, including examples of recall notification letters  In December 2016, NHTSA began consolidating its websites into NHTSA gov to provide a single access point for its auto recall content  One of these websites, safercar gov, was once NHTSA’s primary method of communicating auto recall information to consumers; however, the agency is in the process of moving this information to NHTSA gov  NHTSA’s Strategic Plan 2016–2020 states that the agency wants NHTSA gov to be a comprehensive user-friendly platform that serves as the premier source of vehicle safety information by, for example, improving the website’s search capabilities  NHTSA also aims to encourage consumers to use its website’s auto recall information through its communications program  NHTSA’s Office of Communications and Consumer Information (OCCI) is the primary office responsible for implementing the agency’s public communication efforts  OCCI intends to increase public engagement with the agency’s information through its social media channels, such as Instagram, Twitter, and Facebook  The amount OCCI obligated to support the agency’s auto recall efforts has increased from nearly $ 5 million in fiscal year 2011 to about $2 5 million in fiscal year 2016  According to NHTSA officials, these obligations supported various efforts, including public awareness campaigns, an auto recall hotline, advertising agencies, exhibits at auto shows, and NHTSA’s mobile application  As part of our focus group discussion sessions, consumers selected safety risk and convenience as the two most influential factors they considered when using auto recall information to decide whether to complete repairs  All factors considered: During each session, we first asked consumers to describe all the factors they considered  Across the sessions, consumers shared a wide variety of factors including availability of a loaner vehicle, time to schedule and complete the repair, safety risk, and other factors  For example, some consumers had not yet repaired their vehicles because they were “just waiting” for parts to become available  Other consumers considered their previous customer service experiences at the franchised dealership or the distance they would need to travel to complete the repair  For example, one consumer at our rural focus group location told us it would take roughly 2 hours to reach the dealership’s repair shop  Most influential factors considered: After the discussion of all factors, we then asked each consumer to select the single most influential factor they considered  Consumers in the sessions overwhelmingly selected safety risk and convenience as the two most influential factors (see table 1)  More than half of consumers in our focus group discussion sessions selected safety risk as the most influential factor they considered when making repair decisions  They told us that their perception of the risk influenced whether or not they repaired their vehicle  For instance, some consumers stated that they completed repairs immediately, because the risks “sounded serious” or that they considered the defect a “safety concern ” Conversely, some consumers said they did not complete the repairs because the defect “didn’t sound very urgent ” While each recall notification letter is required to include an evaluation of the risk to vehicle safety reasonably related to the defect, consumers in our focus group sessions shared mixed opinions about the quality and clarity of safety risk information included in the notification letter they received  For example, some consumers told us the letter’s safety risk information seemed vague  For instance, one consumer told us the letter’s description of the safety defect did not clearly state the chances of an increased risk of injury and so he “had to figure out on his own ” In addition, some consumers commented that the safety risk information could be more prominent in the notification letter, that the letter could emphasize the severity of the risk, or that the letter could describe the risk in simpler language  However, other consumers stated the notification letter they received adequately described the recall’s safety risk  In June 2011, we recommended that NHTSA modify the requirements for defect notification letters to include additional information to obtain readers’ attention  In 2013, NHTSA responded to our recommendation by requiring manufacturers to include the statement “IMPORTANT SAFETY RECALL” at the top of auto recall notification letters  Focus Group Participant’s Comment “I don't want to be without a car for half the day or stay with my kids all day ” Consumers in our focus group discussion sessions selected convenience as the second most influential factor they considered in making repair decisions  While some consumers described the “hassle” of the repair and being “too busy” to schedule and fix the defect, other consumers told us they repaired their vehicles more easily because, for example, they could take advantage of previously scheduled service appointments to also repair the defect  Also, some consumers in our sessions stated that the letter or notification they received could better address the inconvenience of the recall, for example by including better estimates of how long repairs might take  In addition, some consumers recommended the letter include options for scheduling needed repairs  As we discuss later in the report, NHTSA officials told us they continue to work with auto manufacturers to identify ways to encourage consumers to complete needed repairs, while representatives from some manufacturers we met with described specific steps they have taken to address some of the inconveniences consumers may experience in completing repairs  For example, one manufacturer facilitated a pilot program for a third-party service provider in conjunction with dealers to repair vehicles at the owner’s home or place of work, while another manufacturer told us they work with individual dealers to hold events specifically for recall repairs when consumers can come in to have repairs performed after normal business hours  Industry stakeholders’ use of auto recall information varies because these stakeholders play different roles in the auto recall process  Auto manufacturers are primarily responsible for providing auto recall information to the public and others, including NHTSA and auto dealers  Franchised dealers are responsible for performing the recall remedy for manufacturers and therefore use manufacturer-provided information for that purpose  Specifically, all of the franchised dealers we interviewed told us they identify recalls on new vehicles in their inventory primarily by accessing auto recall information through internal manufacturer databases  These franchised dealers may also use information from third-party providers or publicly available auto recall information on NHTSA’s website to identify recalls affecting used vehicles  Independent dealers—which are not generally authorized by manufacturers to perform recall remedies—may use publicly available auto recall information to identify open recalls  Specifically, 2 of the 3 independent dealers we met with told us they use NHTSA’s VIN look-up tool to search for open recalls affecting vehicles in their inventory before selling them to consumers  However, these dealers told us that the current design of the tool takes too much time to use, because it requires users to search each VIN individually  For example, one dealer told us each search took about 15 seconds to perform, resulting in significant time and cost because the dealership has tens of thousands of vehicles in its inventory  These dealers told us being able to search multiple VINs in a single search (i e , VIN-batch search) could save them time or money  Representatives from the Alliance of Automobile Manufacturers stated they—in coordination with other industry stakeholders—are working with a third-party provider to develop a search tool that would address this concern by enabling VIN-batch searches for use by government agencies, such as state departments of motor vehicles, and commercial entities  The group anticipates the tool will be available in the first half of 2018  Although the vast majority of consumers who participated in our focus group discussion sessions reported a preference to receive auto recall notification by mail, most preferred to receive notifications by at least one additional electronic means such as e-mail, phone calls, and text messages  Eighty of the 94 consumers in our sessions reported a preference for receiving notification by mail, and all but 4 reported actually receiving mailed notification (see fig  2)  However, 69 of the 94 consumers in our sessions also reported a preference for receiving recall notification by electronic means, but only 7 reported actually receiving at least one type of electronic notification  This result suggests a gap between industry recall notification practices and notification preferences for most consumers in our focus groups, especially for younger consumers who were more likely to report a preference for notification by electronic means  For complete results of the questionnaire we administered to consumers for the discussion session, see appendix IV  As we discuss later in this report, in September 2016, NHTSA issued a Notice of Proposed Rulemaking (NPRM) that proposes to require auto manufacturers to notify consumers about auto recalls by electronic means in addition to First-Class Mail  NHTSA officials told us the agency is working with the administration on NHTSA’s regulatory portfolio and priorities, including this rulemaking  Some manufacturers told us they use additional methods to reach consumers, including notifying consumers by electronic means and translating recall information into Spanish  For example, representatives from one manufacturer told us they always notify consumers by e-mail before sending out the required First-Class Mail letter notification  These representatives told us using multiple recall notification means resulted in higher recall completion rates  In addition, eight of the remaining nine manufacturers told us they use supplemental electronic means notification on a case-by-case basis—generally using additional means to improve recall completion rates—while four manufacturers stated they consider safety risk severity when deciding when or how to use additional notification means for individual recalls  Also, representatives from 3 of the 10 manufacturers we spoke with told us they translate the entire mailed notification letter into Spanish  In late 2016, NHTSA launched its redesigned NHTSA gov website, including the auto recall areas consumers assessed during our testing sessions  According to responses to a questionnaire we administered during our testing sessions, 78 of the 94 consumers found the auto recall areas of NHTSA gov either “somewhat” or “very easy” to use (see fig  3)  See appendix V for complete participant responses to the questionnaire we administered to each consumer  To inform the development of the redesigned website, NHTSA worked with a contractor to conduct a usability study in 2015 to evaluate users’ reactions to the agency’s websites, including NHTSA gov  According to agency officials, NHTSA implemented several changes based on the findings from the usability study, including: the creation of a dedicated “recalls” area of NHTSA gov, and the ability for users to access the VIN look-up tool in three different ways—on the homepage, in the “recalls” area, and through direct links either in a NHTSA e-mail for subscribers or from an external website  In addition, NHTSA officials told us that Department of Transportation (DOT) and NHTSA staff meet as needed to discuss the website and consider improvements  For example, the officials said they monitor user searches for the relevance and accuracy of results and adjust the search software to better assist users in finding auto recall information  Officials also told us the agency collects a variety of other information about how visitors use NHTSA gov, including how visitors access the website, and makes adjustments accordingly  For instance, NHTSA incorporated responsive web design as part of the agency’s ongoing consolidation effort—meaning the site is optimized for viewing on desktop, tablet, and mobile devices  In addition to monitoring searches and how visitors access NHTSA gov, NHTSA officials told us they collect and consider online survey data to make website improvements and use web-analytic software to monitor, for example, where visitors choose to exit the website  Officials stated that such monitoring activities have allowed NHTSA to identify and correct problems with NHTSA gov  We did not directly evaluate the accessibility of the auto recall areas of NHTSA gov to ensure the ability of people with physical or mental disabilities to use the website  However, NHTSA officials provided us with an overview of several steps the agency takes to ensure NHTSA gov complies with website accessibility requirements  For example, according to officials, NHTSA subscribes to a service that provides monthly accessibility scans of the agency’s websites  While most consumers in our usability testing sessions generally found the auto recall areas of NHTSA’s website easy to use, some consumers experienced difficulties completing tasks we asked them to perform (see table 2)  Specifically, during each testing session we asked participants to perform tasks using the primary means NHTSA gov provides for consumers to access information about auto recalls affecting their vehicles: searching for auto recalls using their vehicle’s VIN; searching for auto recalls using their vehicle’s year, make, and model; and locating NHTSA’s auto recall notification e-mail subscription service  In addition, an evaluation we requested to corroborate the results of our consumer usability testing, identified similar issues  As discussed below, consumers experienced these difficulties because the auto recall areas of NHTSA gov do not always reflect federal and industry key website usability practices, which describe standards and guidelines for making websites easy to use  Following such practices can assist agencies in creating quality websites while providing the flexibility necessary to meet organizational needs  Website usability is particularly important for agencies, such as NHTSA, that are responsible for conveying safety information to the public  Federal standards for internal control state that agencies should communicate quality information externally and select appropriate methods for communicating with the public  While most consumers in our usability testing sessions found searching for recalls by VIN somewhat or very easy, some consumers found the search results did not provide the information they were seeking  When we asked consumers to perform VIN searches, they generally found the VIN look-up tool easy to use—88 of 94 consumers found searching with a VIN either somewhat or very easy  But some consumers experienced difficulties performing this task  Specifically, some consumers who had had their vehicles repaired expected to find the completed recall on the search results page  However, they were confused because the page is designed to display only open (i e , unrepaired) recalls, not completed (i e , repaired) recalls—leading these consumers to question the accuracy of the results  In addition, the evaluation conducted by website usability professionals found that, when an error occurred during a VIN search, the error message was too difficult to locate on the search results page  The evaluation recommended the error message have greater weight and more prominence on the page  Federal key website usability practices state that agencies should ensure that results of user searches provide the precise information being sought, and in a format matching users’ expectations  When users are confused by search results, or do not immediately find what they are searching for, they become frustrated and may abandon the search or the website entirely  Since NHTSA launched the VIN look-up tool in August 2014, the number of VIN searches performed has increased (see fig  4)  According to NHTSA officials, major increases occurred in mid-2015— when the Takata air bag inflator recalls were announced—and in early 2017, when NHTSA made the VIN look-up tool search function available on NHTSA gov and displayed it prominently on the website  Ensuring the usability of NHTSA’s VIN look-up tool is particularly important because it is the only way on NHTSA gov for a consumer to determine whether their specific vehicle has an open safety recall  Recall Search Using Vehicle Year, Make, and Model Some consumers’ vehicle year, make, and model searches were hampered by the information required to conduct an accurate search, as the content on the website is not always in plain language  We asked consumers to perform a recall search using their vehicles’ year, make, and model, and 78 of 94 consumers found the task to be either somewhat or very easy  However, some consumers found that they did not know enough information about their specific vehicles to feel confident that they were searching for the correct vehicle  For example, a year, make, and model search for a 2009 Toyota Tacoma may ask the consumer to choose among vehicle options, including “2009 TOYOTA TACOMA REGULAR CAB W/SAB RWD/AWD ” Acronyms such as “W/SAB”— which stands for “with side air bags”—may be confusing to consumers  Federal key website usability practices state that federal agencies should write website content using plain language, so website visitors can easily find and use what they need  Focus Group Participant’s Comment “I think [the Recall Notification E-mail System Sign-Up is] poorly placed  I had to scroll to find it  I had to search for it  You want at the top  ” Recall Notification E-mail System Sign-Up Some consumers suggested improvements to make the Recall Notification E-mail System Sign-Up easier to locate on the homepage  NHTSA first made its Recall Notification E-mail System Sign-Up available in March 2008  Of the 94 consumers in our testing sessions, 66 found it either “somewhat” or “very easy” to find the Recall Notification E-mail System Sign-Up—making this the least easy of the three tasks we asked consumers to perform  Specifically, several consumers said the Recall Notification E-mail System Sign-Up should include a clearer description, be easier to find, and be located at the top of the homepage (see fig  5)  These improvements are particularly important because some consumers in our focus group sessions told us that the ability to sign up for auto recall e-mail notifications was the most useful part of the auto recall areas of NHTSA gov  The website evaluation conducted by website usability professionals recommended that NHTSA streamline its homepage with more of a focus on primary website tasks  The evaluation also found that users must move through too many pages to sign up for recall e-mails  Federal key website design and usability practices state that agencies should put important items closer to the top of the page, where users can better locate the information  Key practices also state that agencies should design their websites so users can successfully complete the most common tasks in the fewest number of steps  The website usability difficulties that consumers in our focus groups experienced may be due to the fact that NHTSA has not studied the website’s usability since the agency redesigned NHTSA gov in late 2016 and, therefore, may have been unaware of these difficulties prior to our review  NHTSA plans to conduct a website usability study with consumers after the consolidation effort, discussed above, is complete  However, NHTSA could not provide a general time frame for conducting the study because it has not yet determined when the consolidation effort will be complete  We have previously reported that it is essential for organizations to effectively guide their information technology efforts by establishing timelines to complete them, among other strategic planning best practices  Without establishing a completion date for its website consolidation effort, the website usability difficulties we identified may persist and limit the effectiveness of NHTSA’s primary means of providing consumers with safety recall information about their vehicles on NHTSA gov  In January 2016, NHTSA launched a national advertising campaign encouraging consumers to check for open recalls using the agency’s VIN and year, make, and model look-up tools  Through March 2017, NHTSA spent about $1 million on its Safe Cars Save Lives campaign, which sponsors advertisements on Google, Facebook, and other media platforms  For example, Google might place NHTSA’s advertisement above other search results, when a consumer typed certain keywords— such as “recall,” “airbag recalls,” or “safercar gov”—into the search  NHTSA evaluated the campaign’s effectiveness by monitoring website traffic performance reports to determine how frequently consumers clicked on NHTSA-sponsored advertisements and ultimately searched for open recalls using the agency’s look-up tools  NHTSA also compared results across media platforms and adjusted the campaign’s strategy to improve performance  For example, NHTSA optimized advertisements on mobile devices, since mobile-device users performed more recall searches than other users  According to NHTSA data, the awareness campaign resulted in consumers performing 1 1 million recall searches through March 2017—a cost of about $0 90 per search  Agency data indicate that this cost generally decreased as NHTSA improved the campaign’s strategy  Agency officials told us NHTSA plans to spend another approximately $1 8 million on Safe Cars Save Lives from September 2017 through September 2018 due to the campaign’s effectiveness in raising the public’s awareness about auto recalls  NHTSA began implementing a mandated 2-year pilot grant program intended to evaluate the feasibility and effectiveness of informing consumers about open auto recalls during state vehicle registration  In September 2016, NHTSA solicited applications to participate in the program, wherein selected states would inform consumers—at no charge—about open recalls using all means that permit consumers to register vehicles within the state (e g , in person, Internet, and mail)  According to NHTSA, only one state applied for the grant  In September 2017, NHTSA awarded the sole applicant $223,000  Under the program, the grantee needs to collect and report program performance data, including the extent to which open recalls have been identified and repaired  In addition, the grantee must report whether certain notification means were more effective than others and what could be done to improve the program  Upon completion of the pilot program, NHTSA is required to evaluate the extent to which open recalls identified have been remedied  Auto manufacturers we met with were generally supportive of the program  Specifically, representatives from 9 of the 10 manufacturers told us that notifying consumers about open recalls during vehicle registration can raise consumer awareness or improve recall completion rates  In September 2016, NHTSA issued a Notice of Proposed Rulemaking (NPRM), which proposes to require auto manufacturers to notify consumers about open recalls by electronic means—such as e-mails, phone calls, and text messages, in addition to First-Class Mail  As we described earlier, auto manufacturers are currently required to notify consumers about safety recalls affecting their vehicles via First-Class Mail  According to NHTSA, the NPRM aims to aid in efficiently and effectively improving recall completion rates, by proposing that manufacturers provide notification using electronic means in addition to First-Class Mail  Consumers in our focus groups as well as auto manufacturers and consumer associations we interviewed generally supported additional notification using electronic means  Consumers in our focus groups: As we discussed earlier, 69 of the consumers in our focus group discussion sessions reported they would prefer to receive additional notification by at least one type of electronic means  However, only 7 consumers actually received such notifications—suggesting a gap between industry notification practices and notification preferences for these consumers  Auto manufacturers: Representatives from 9 of 10 manufacturers we interviewed told us they generally support providing notification using electronic means  Although the NPRM proposes a broad definition of electronic means to give manufacturers flexibility to determine the most effective means, these representatives also shared implementation concerns  For example, representatives from 1 of the 9 manufacturers told us that—although the company collects e- mail addresses from some customers for other purposes—not all customers provide e-mail addresses, and those collected are not always accurate  As we discussed previously, most manufacturers we met with currently use supplemental electronic means notification on a case-by-case basis  Consumer associations: Similarly, both consumer associations we interviewed told us additional electronic notification can help reach consumers who do not complete repairs after receiving initial mailed notification  NHTSA’s proposal would maintain manufacturer reporting requirements, though it may result in additional reporting  This additional information could help the agency evaluate the effectiveness of various means of consumer notification  We previously found that NHTSA may be able to use manufacturers’ data to identify what factors make some recalls more or less successful than others  We recommended that NHTSA use the recall data it collects to analyze particular patterns or trends that may characterize successful recalls and determine whether these factors represent best practices  If the NPRM is finalized, manufacturers would provide NHTSA with representative copies of the newly required electronic notifications, in addition to mailed notifications, and would specify the electronic means used, such as e-mail or text message  According to NHTSA officials, this information could allow the agency to track and evaluate the effectiveness of various notification means used by manufacturers by, for example, comparing completion rates across means—a key step in identifying best practices that could encourage consumers to complete repairs  However, it is too early for NHTSA to conduct such an evaluation, because the agency has not issued a final rule  NHTSA officials told us the agency is working with the administration on NHTSA’s regulatory portfolio and priorities, including this rulemaking  NHTSA has also taken steps to collaborate with industry stakeholders and explore consumer education best practices  For example, in April 2015 NHTSA hosted a day-long workshop that brought together auto industry stakeholders to examine public education of the recall process  During the workshop, participants identified current barriers to the public’s awareness of auto recalls and discussed potential solutions to address them, such as using text messages and social media to communicate with younger consumers and using different delivery methods for recall notices  Similarly, in January 2016 NHTSA and 18 auto manufacturers adopted a set of Proactive Safety Principles to explore and employ new ways to increase safety recall participation rates  For example, NHTSA and auto manufacturers agreed to share industry best practices and policies based on lessons learned from ongoing safety recalls  The Independent Monitor of Takata in conjunction with NHTSA has also issued a set of coordinated communications recommendations based on consumer research, best practices observed during the Takata recall, and discussions with manufacturers  For example, the recommendations encourage manufacturers to: pursue a “multi-touch” communications strategy that employs non- traditional means, such as e-mail and text messages; convey risk in clear, accurate and urgent terms; and include a clear “call to action” designed to facilitate prompt and efficient scheduling of repairs  According to NHTSA officials, the agency relies on auto manufacturers to evaluate the effectiveness of these efforts  However, agency officials told us NHTSA reviews manufacturers communication plans as part of the Takata recall’s Coordinated Remedy Program and provides ongoing recommendations on manufacturers’ communication language, approach, and strategies  With the recent steep increase in safety defect vehicle recalls and continued low recall completion rates, it is vital for consumers to be able to easily access and use publicly available auto recall information  NHTSA has taken important steps to improve its website—which provides safety recall information to consumers—resulting in most consumers in our focus groups finding the website easy to use  However, the difficulties some experienced in attempting to complete essential auto recall tasks demonstrated that NHTSA gov does not always reflect key website usability practices for website design  Although NHTSA plans to conduct a website usability study with consumers after consolidating its websites, it has not determined a completion date for this effort—an essential step for organizations to effectively guide their information technology efforts  Without such a date, the website usability difficulties may persist and limit the effectiveness of NHTSA gov in providing consumers with recall information about their vehicles  By addressing these difficulties in the interim, NHTSA can better assure that consumers obtain this information, which can be vital to their safety  We are making the following two recommendations to NHTSA: The Administrator of NHTSA should determine a completion date for the agency’s website consolidation effort  (Recommendation 1) The Administrator of NHTSA should, while the agency continues its website consolidation effort, take interim steps to improve the usability of the auto recall areas of NHTSA gov by addressing the website usability difficulties we identified  (Recommendation 2) We provided a draft of this report to DOT for review and comment  In its written comments, reproduced in appendix VI, DOT stated that it concurred with our recommendations  The department also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to relevant congressional committees, the Secretary of Transportation, and the Administrator of NHTSA  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-2834 or flemings@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix VII  This report examines the use of publicly available auto recall information for safety defects affecting passenger vehicles  The report addresses the following objectives: (1) How do consumers and industry stakeholders use publicly available auto recall information? (2) How easy or difficult to use do consumers find the auto recall areas of NHTSA gov? (3) What steps, if any, has the National Highway Traffic Safety Administration (NHTSA) taken to raise consumer awareness about auto recalls and how has NHTSA evaluated the effectiveness of these steps? We define publicly available auto recall information to include information on the auto recall areas of NHTSA gov, such as examples of notification letters that manufacturers mail to consumers  This report focuses on safety defect vehicle recalls affecting passenger vehicles that are initiated when a defect in a vehicle or vehicle equipment creates an unreasonable safety risk, as determined by NHTSA or a manufacturer  To determine how consumers use publicly available auto recall information, we conducted and analyzed transcripts and questionnaires from 12 consumer focus groups we conducted with used and new vehicle owners who had experienced an auto recall in the last 24 months  Each focus group was split into two sessions: (1) a discussion session to explore participants’ thoughts, experiences, and preferences about auto recall information and (2) a website usability testing session  Also, we administered a questionnaire as part of each of these sessions  For the discussion session, we asked consumers about the recall notification process and how they used the recall information, and for the website usability testing session, we asked consumers to fill in a questionnaire during the session itself as they assessed the usability of the auto recall areas of NHTSA’s website  We conducted the 12 focus groups at six locations across the country, with each group including 7 or 8 consumers for a total of 94 participants  Half of the focus groups were comprised of consumers who had completed the repair and the remaining half included consumers who had not completed the repair  We selected the six focus group locations to provide population and geographic dispersion  To ensure geographic dispersion, we selected at least one location in each U S  Census region (see table 3)  To ensure population dispersion, we selected Metropolitan Statistical Areas representing a range of population sizes based on 2015 U S  Census estimates  To ensure our selection included the perspectives of vehicle owners in geographically distant or isolated communities, we also selected a rural location, which we defined as a city or town that has a population of less than 50,000 inhabitants and is not an urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants  Using information provided by the participants, we selected focus group participants based on age, income, gender, education level, race, and ethnicity to ensure we collected a range of perspectives on auto recall information use  However, since we did not select a representative sample of participants, focus group results are not generalizable to all vehicle owners  During focus group discussion sessions, we asked participants to discuss factors they considered when deciding whether to repair their recalled vehicle and then to select the single most influential factor  Each of the 12 focus group sessions was audio recorded and transcriptions were created; transcripts served as the record for each group  We then evaluated those transcripts using systematic content analysis to identify the factors consumers considered when deciding whether to complete repairs and any suggested improvements to the auto recall communication process  The analysis was conducted in three steps  First, two analysts independently developed a code framework and then worked together to resolve any discrepancies  Second, each transcript was coded independently by analysts using the framework and any discrepancies were resolved by both analysts agreeing on the coding of the associated statement by a participant  Third, if needed, another analyst adjudicated any continued disagreement between coders  Because the transcripts did not include a unique identifier for each focus group participant, we conducted our analysis of focus group session discussions at the group level (i e , of the 12 focus groups we conducted)  We also administered and analyzed a questionnaire as part of each discussion session to quantify responses regarding consumers’ use of auto recall information, including how they received and preferred to receive auto recall notifications  Our analysis of the questionnaire responses was conducted at the individual consumer level (i e , of the 94 consumers who participated)  These focus group sessions were structured, guided by a moderator who used a standardized list of questions to encourage participants to share their thoughts, experiences, and preferences  We also conducted two pretest focus groups at our headquarters and made some revisions to the focus group guide prior to beginning the sessions with consumers  Methodologically, focus groups are not designed to demonstrate the extent of a problem or to generalize results to a larger population or provide statistically representative samples or reliable quantitative estimates  Instead, they are intended to generate in-depth information about the reasons for the focus group participants’ thoughts, experiences, and preferences on specific topics  The projectability of the information produced by our focus group sessions is limited  For example, the information includes only the responses from the vehicle owners from the 12 selected groups and their individual responses to questions we asked  The experiences and preferences expressed may not reflect other vehicle owners’ thoughts and preferences  In addition, while the composition of the groups was designed to ensure a range of age and education levels, among the other criteria mentioned previously, the groups were not constructed using a random sampling method  To determine how industry stakeholders use auto recall information, we interviewed selected auto manufacturers, selected franchised and independent auto dealerships, NHTSA program officials, and other industry stakeholders  Specifically, we interviewed representatives from the following 10 auto manufacturers, selected based on each manufacturer’s sales market share (small, medium, and large), place of ownership (foreign and domestic), and experience with auto recalls (lower to higher based on the average annual number of auto recall campaigns and average market share of each manufacturer from 2010 to 2014) to collect a range of perspectives on how manufacturers use auto recall information: Tesla Motors, Inc  To understand the perspective of auto dealers, we interviewed four franchised dealerships, one in each of the four U S  Census regions where we conducted focus groups with consumers  We also interviewed three independent auto dealerships in two U S  Census regions  The results of these interviews are not generalizable to all auto manufacturers and dealerships, but provide insights about how some industry stakeholders use auto recall information  We conducted interviews with NHTSA program officials to understand NHTSA’s role in the auto recall process  In addition, we interviewed other stakeholders, including the Independent Monitor of Takata, which assists NHTSA in overseeing the Takata recall, as well as officials from consumer associations and other industry groups (see table 4)  To evaluate how easy or difficult consumers find the auto recall areas of NHTSA gov to use, we reviewed various website usability resources to understand federal and industry key website usability practices for making websites easy to use, such as focusing on design and how easily users can find information  In addition, we reviewed federal standards for internal control related to communicating quality information externally  During our usability testing sessions, we asked consumers to attempt to complete auto recall tasks—the primary means NHTSA gov provides for consumers to access information about auto recalls affecting their vehicles—and discuss their experiences  We then compared consumers’ experiences with the usability of the website against these practices  To identify key website usability practices, we analyzed guidance documents from NHTSA and other federal agencies  For example, we analyzed the General Services Administration’s (GSA) and the Department of Health and Human Services’ Research-Based Web Design & Usability Guidelines, which includes quantified, peer-reviewed guidelines intended to help federal agencies improve the design and usability of their information-based websites  We also analyzed GSA’s Requirements for Federal Websites and Digital Services, and the U S  Digital Services Playbook to identify key practices for making websites easy to use  Identified key practices are: (1) design and content— focusing on the layout, headers, and design; (2) navigation—how easily users can find information; (3) clarity—the ability to read and digest content; (4) identity and purpose—whether the site clearly presents its purpose; and (5) accessibility—the ability of people with physical or mental disabilities to use the site  To analyze the results of focus group website testing sessions, we performed a systematic content analysis of the session transcripts using the same content analysis methods described above and an analysis of the questionnaire we administered to each participant during the website usability sessions  Specifically, we analyzed the transcripts from the website usability testing sessions to account for consumers’ experiences, including their initial impressions of the website and any suggested usability improvements  We also analyzed the results of the questionnaire that each participant completed where participants were asked to mark responses regarding their experience including an assessment of the usability of the auto recall areas of NHTSA gov  Our analysis of the results from the questionnaire responses was conducted at the individual consumer level (i e , of the 94 consumers who participated) while our analysis of focus group session discussions was conducted at the group level (i e , of the 12 focus groups we conducted)  To corroborate the results of usability testing sessions we conducted with the consumers in our focus groups, we requested that five website usability professionals from GSA’s Federal User Experience Community conduct an independent evaluation of the auto recall areas of NHTSA gov against federal and industry key website usability practices (described above)  The website usability professionals developed a website usability evaluation form, which they used to individually evaluate the auto recall areas of NHTSA’s website  The website usability professionals then met to form a consensus and provided us with one final group evaluation of the website usability of the auto recall areas of NHTSA gov  Also, although neither our usability testing nor the website usability evaluation conducted by website usability professionals directly addressed accessibility, we interviewed responsible agency officials about how the agency assesses the accessibility of NHTSA gov  We also requested and analyzed website data provided by NHTSA to understand how consumers access and use NHTSA gov  Requested data included the number of subscribers to NHTSA’s Recall Notification E-mail System Sign-up; the number of weekly vehicle identification number (VIN) searches performed on NHTSA gov from August 2014 through May 2017; and NHTSA gov usage data by device (i e , usage by mobile devices, tablets, and desktop computers)  We assessed the reliability of these data by reviewing any supporting documents provided by the agency and interviewing responsible NHTSA officials, and concluded the data were sufficiently reliable for our reporting purposes  While we did not independently review the usability of auto manufacturers’ auto recall websites, we requested and reviewed the results of any audits that NHTSA performed of these websites, including whether the websites met statutory and regulatory requirements for providing auto recall information to the public  We then corroborated any audit findings by reviewing the auto recall websites of the selected auto manufacturers that we interviewed  To determine any steps NHTSA has taken to raise consumer awareness about auto recalls and how NHTSA evaluates the effectiveness of any steps, we reviewed relevant statutes, regulations, and proposed rules, including the Fixing America’s Surface Transportation Act and a Notice of Proposed Rulemaking related to recall notification methods  We also reviewed agency and other documents that describe or evaluate NHTSA’s public awareness activities  For example, we analyzed NHTSA’s strategic planning documents—such as NHTSA’s Strategic Plan 2016–2020—to identify ongoing public awareness activities along with their related goals, objectives, or performance metrics  Similarly, we requested and analyzed any documents NHTSA uses to evaluate the effectiveness of its public awareness activities, including performance reports for NHTSA’s ongoing Safe Cars Save Lives campaign  To assess the reliability of data included in these performance reports— such as VIN searches performed—we reviewed agency documentation and interviewed agency officials about the reliability, accuracy, and completeness of the data and determined the data were sufficiently reliable for our reporting purposes  We reviewed performance management practices as provided in the Government Performance and Results Act of 1993 (GPRA), the GPRA Modernization Act of 2010, and standards for internal control in the federal government to identify any opportunities for improvement  We also performed a literature review to identify any related published articles and research studies  To understand how NHTSA implements and evaluates any public awareness activities, we also interviewed responsible agency officials from NHTSA’s Office of Communications and Consumer Information and other offices  In addition, we discussed NHTSA’s public awareness efforts during interviews with industry stakeholders, including selected auto manufacturers, selected franchised and independent auto dealerships, and other industry stakeholders  We analyzed the results of these interviews along with the focus group discussions we conducted with consumers (discussed above) to identify perspectives on the effectiveness of NHTSA’s public awareness steps  We conducted this performance audit from October 2016 to December 2017 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The National Highway Traffic Safety Administration (NHTSA) is required to conduct a biennial analysis of vehicle safety recall completion rates and submit the results of its analysis in a report to certain congressional committees  The report must include, among other things, the annual recall completion rate by vehicle type and vehicle component (such as brakes, fuel systems, and air bags) for each of the 5 years preceding the year the report is submitted  According to NHTSA’s May 2017 report, completion rates for all vehicles combined ranged between 63 percent and 67 percent between calendar year 2011 and calendar year 2014 (see table 5)  However, NHTSA reported wider variation when the recall completion rates are broken down by vehicle type  Similarly, the report found that completion rates for most component categories fall within a range of 60 percent to 75 percent (see table 6)  The annual completion rate is a volume-based, weighted metric, such that the more vehicles affected by the recall, the more weight or influence it has on the computed rate  Focus group participants responded to a questionnaire we administered to collect information on consumers’ auto recall notification preferences during our discussion sessions  Table 7 shows participants’ responses to the administered questionnaire, by age group  We present these responses by age group, because consumers’ notification preferences may vary according to their ages  Focus group participants responded to a questionnaire we administered to collect information on the usability of NHTSA gov during our usability testing sessions  Table 8 shows focus group participants’ responses to the administered questionnaire, by age group  We present these responses by age group, because consumers’ website usability needs or preferences may vary according to their ages  In addition to the individual named above, H  Brandon Haller (Assistant Director); Katherine Blair; Jason Blake; Melissa Bodeau; Alicia Cackley; William Colwell (Analyst in Charge); Lacey Coppage; Elizabeth Dretsch; Jaci Evans; Marcia Fernandez; Sarah Kaczmarek; Malika Rice; Todd Schartung; and Andrew Stavisky made key contributions to this report 
Report 2:  Post staff noted, for example, that security officers at overseas posts should conduct regular training and drilling exercises to evaluate their local guard force’s effectiveness in searching a vehicle entering the post compound for explosive devices  According to post staff, when these important security oversight activities are not properly and regularly conducted, the level of security risk at these overseas posts may increase  According to State officials in headquarters and staff at overseas posts, as well as reporting by State’s OIG, vacancies in information management positions at overseas posts have increased the vulnerability of posts’ computer networks to potential cybersecurity attacks and other malicious threats  State officials told us that the Foreign Service had faced chronic shortages of information management staff available to fill these positions worldwide  According to State officials, because of ongoing information management vacancies, some required tasks—such as conducting planned network maintenance—were performed infrequently or not at all  In another example, staff at overseas posts said that because of vacancies, information management staff had been unable to regularly check their computer system logs to ensure that security breaches had not taken place  Post staff added that, if a breach did occur, vacancies could increase the amount of time needed to identify an attack and deploy countermeasures, further increasing the risks to posts’ computer networks  Inspections conducted by State’s OIG from fall 2014 to spring 2016 found that information management staff at 33 percent of overseas posts had not performed various required information management duties  According to State’s OIG, neglect of these duties may leave the department vulnerable to increased cybersecurity attacks  According to staff at overseas posts, the office management specialist position at overseas posts has evolved considerably over time; these specialists increasingly play a critical role in ensuring that the work of overseas posts is effectively completed  Post staff said that office management specialists provide administrative and other support services to other Foreign Service employees and are assigned to various sections of post  For example, staff at one post noted that office management specialists assigned to the Security Officer sections at overseas posts reduce the workload of security officers by completing more routine security tasks and allowing the security officers to focus on more challenging or involved tasks necessary to secure overseas posts  Post staff told us that vacancies in office management specialist positions reduce the amount of work that can be completed by other Foreign Service employees at overseas posts  For example, when office management specialist positions assigned to the Security Officer or Information Management sections of posts are vacant, these vacancies further exacerbate the higher number of vacancies that already exist in these sections  According to staff at overseas posts, higher numbers of office management specialist vacancies require other Foreign Service employees to spend a significant amount of time on administrative tasks, reducing the amount of time these staff can spend on mission-critical activities  Officials in headquarters and at overseas posts described various State efforts to help address overseas Foreign Service vacancies  According to State officials, Foreign Service vacancies at overseas posts are a complex problem that multiple offices within State address on an individual basis  State’s various efforts to address overseas Foreign Service vacancies are not guided by an integrated action plan to reduce persistent vacancies  Our 2017 High-Risk Series report calls for agencies to, among other things, design and implement action plan strategies for closing skills gaps  The action plan should (1) define the root cause of all skills gaps within an agency and (2) provide suggested corrective measures, including steps necessary to implement solutions  This report also emphasizes the high risk that mission-critical skills gaps in the federal workforce pose to the nation  While various State offices have implemented the efforts we identified, State lacks an action plan that is integrated—or consolidated—across its relevant offices to guide its efforts to address persistent overseas Foreign Service vacancies  Moreover, some staff at overseas posts acknowledged that the efforts State has taken to help address vacancies have not reduced persistent Foreign Service vacancies, notably in specialist positions  In response to our inquiry about an action plan, State officials said that the agency does not have a single document that addresses Foreign Service staffing gaps at overseas posts  Instead, State officials directed us to State’s Five Year Workforce Plan: Fiscal Years 2016-2020, stating that it was the most comprehensive document that outlines State’s efforts to address Foreign Service vacancies at overseas posts  The workforce plan notes that it provides a framework to address State’s human capital requirements and highlights State’s challenges and achievements in recruiting, hiring, staffing, and training Foreign Service staff  However, in reviewing the portions of the workforce plan that State indicated were most relevant, we found that the workforce plan does not include an integrated action plan that defines the root causes of the persistent overseas Foreign Service vacancies we identified or suggest corrective measures to reduce vacancies in these positions, including steps necessary to implement solutions  State officials also noted that they frequently meet to discuss and address workforce issues  For example, they said they convene a multi-bureau planning group that meets biweekly to discuss strategic workforce issues such as hiring needs based on attrition and other issues  However, according to State officials, this group has not developed an action plan to reduce persistent Foreign Service vacancies at overseas posts  State lacks an integrated action plan to guide its efforts to address persistent Foreign Service vacancies that includes corrective measures to address the root causes of the vacancies  Without defining the root causes of persistent Foreign Service vacancies at overseas posts and identifying appropriate corrective measures, overseas vacancies may persist and continue to adversely affect State’s ability to achieve U S  foreign policy goals  Foreign Service generalists and specialists at overseas posts are critical to advancing U S  foreign policy and economic interests abroad  However, for at least a decade, the Foreign Service has had persistent vacancies in both generalist and specialist positions at overseas posts  In particular, large numbers of vacant positions have persisted over time in certain overseas Foreign Service positions, such as information management and security officer positions  These vacancies in critical positions at overseas posts have adversely affected State’s ability to carry out its mission effectively and threaten State’s ability to ensure the security and safety of its employees, their families, and post facilities  While State has made some efforts to address Foreign Service vacancies, addressing chronic vacancies in critical positions at overseas posts requires a thoughtful, coherent, and integrated action plan that defines the root causes of persistent Foreign Service vacancies at overseas posts along with suggested corrective measures to reduce such vacancies, following what was called for in our 2017 High-Risk Series report  Developing such an action plan would help State address its persistent staffing gaps, improve its ability to achieve U S  foreign policy goals, and help ensure secure and efficient operations  The Secretary of State should develop an integrated action plan that defines the root causes of persistent Foreign Service vacancies at overseas posts and provides suggested corrective measures to reduce such vacancies, including steps necessary to implement solutions  (Recommendation 1) We provided a draft of this report to State for review and comment  In its comments, reproduced in appendix III, State concurred with our recommendation  State also noted that it has taken actions and identified some causes of vacancies, but acknowledged that it lacks an integrated action plan and will take steps to develop such a plan  State also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to the appropriate congressional committees, the Secretary of State, and other interested parties  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-6881 or bairj@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix IV  This report examines (1) vacancies in the Department of State’s (State) Foreign Service staffing at overseas posts, (2) reported effects of Foreign Service vacancies on diplomatic readiness, and (3) State’s efforts to address Foreign Service vacancies  To address these three objectives, we interviewed State officials from the department’s Bureau of Human Resources and Bureau of Consular Affairs as well as State officials representing the Offices of the Executive Director for State’s six regional bureaus  We also interviewed staff at 10 overseas posts  We conducted in-person interviews with staff at 3 of these posts—the U S  Embassy in Beijing and the U S  Consulate in Shanghai, China, and the U S  Embassy in New Delhi, India  We conducted telephone interviews with staff at the other 7 posts—the U S  Embassies in Abuja, Nigeria; Bogota, Colombia; Kinshasa, Democratic Republic of the Congo; Kabul, Afghanistan; Mexico City, Mexico; and N’Djamena, Chad; and the U S  Consulate in Frankfurt, Germany  We used the following criteria to select overseas posts for interviews: (1) posts with larger numbers of Foreign Service vacancies; (2) posts with diversity in the types of Foreign Service positions that were vacant; (3) posts with higher relative importance to U S  economic, national security, and other foreign policy interests; and (4) posts in a range of geographic locations by State region  To examine vacancies in State’s Foreign Service staffing at overseas posts, we analyzed State’s personnel data on Foreign Service staffing at overseas posts from the department’s Global Employment Management System (GEMS), as of March 2018  Our analysis of the GEMS data includes Foreign Service positions filled by permanent Foreign Service employees as well as positions filled by nonpermanent Foreign Service employees, such as Consular Fellows  This analysis does not include the number of staffed and vacant positions at overseas posts in Libya, Syria, and Yemen, which, at the time of our review, were in suspended operations status, as well as U S  Mission Somalia, which was operating under special circumstances at a different location  To calculate vacancy rates, we divided the total number of positions by the number of positions listed as vacant in GEMS  For example, a post with 10 positions and 2 vacancies would have a vacancy rate of 20 percent  We calculated vacancy rates for each of the following categories: type (i e , generalist or specialist), function (e g , consular or information management), regional bureau (i e , Bureau of African Affairs or Bureau of Western Hemisphere Affairs), and embassy and nonembassy rankings from State’s Overseas Staffing Model (i e , Embassy 3+ or 5)  According to State officials, the data in GEMS have a number of limitations: The number of vacant positions at overseas posts listed in GEMS may be overstated, because State has not yet decided to remove some of these positions from its database  Some of the vacancies in GEMS are short-term or temporary  Foreign Service employees periodically rotate out of their positions at their overseas posts, sometimes creating temporary vacancies until the positions are filled by incoming Foreign Service employees  The GEMS data show larger numbers of vacant Foreign Service positions at posts in Afghanistan, Iraq, and Pakistan than actually were unstaffed at these posts  According to State officials, this discrepancy results from State’s relying heavily on shorter-term assignments to fill Foreign Service positions at these locations  These shorter-term assignments are not reflected in GEMS, and the positions therefore appear vacant  The GEMS data may not reflect Foreign Service employees who have been temporarily reassigned from one overseas post to another  The GEMS data may show positions as filled although the Foreign Service employee filling the position has not yet arrived at post  To assess the reliability of the GEMS database, we asked State officials whether State had made any major changes to the database since our 2012 report, when we assessed the GEMS data to be sufficiently reliable  State officials indicated that no major changes had been made  We also tested the data for completeness, confirmed the general accuracy of the data with officials at selected overseas posts, and interviewed knowledgeable officials from State’s Office of Resource Management and Organizational Analysis concerning the data’s reliability  We found the GEMS data to be reliable for the purpose of determining the numbers and percentages of vacant Foreign Service positions at overseas posts  We did not validate whether the total number of authorized overseas Foreign Service positions was appropriate or met State’s needs  We also reviewed State workforce planning documents and budget documents, such as State’s Five Year Workforce and Leadership Succession Plan: Fiscal Years 2016-2020 and Quadrennial Diplomacy and Development Review  In addition, we reviewed State Office of Inspector General reports as well as our previous reports on human capital challenges at State and effective strategic human capital management across the federal government  In particular, our report High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others notes that strategic human capital management is a high-risk issue across the federal government and lists five key elements as a road map for agency efforts to improve and ultimately address such issues  For our third objective, we assessed whether State’s efforts to address vacancies were guided by a corrective action plan that identifies the root causes of persistent Foreign Service vacancies at overseas posts and suggests corrective measures to reduce such vacancies, including steps necessary to implement solutions  We conducted this performance audit from August 2017 to March 2019 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The “Economic” generalist career track includes positions from the “Science Officer” staffing skill group in the GEMS data  170 Foreign Service employees were not staffed to one of the six regional bureaus  In addition to the contact named above, Godwin Agbara (Assistant Director), Ian Ferguson (Analyst-in-Charge), Anthony Costulas, Natalia Pena, Debbie Chung, Chris Keblitis, Reid Lowe, Justin Fisher, and Alexander Welsh made key contributions to this report 

ground_truth: The number of vehicles affected by safety defect recalls increased sharply in recent years—from nearly 13 million in 2011 to over 51 million in 2016. Once a defect is identified, auto manufacturers are required to send written notification to vehicle owners by mail. NHTSA also aims to enhance awareness of auto recalls by providing information on its website, NHTSA.gov . The Fixing America's Surface Transportation Act includes a provision requiring GAO to study the use of publicly available safety recall information. This report addresses: (1) how consumers and industry stakeholders use such information and (2) how easy to use do consumers find the auto recall areas of NHTSA.gov, among other objectives. To understand consumers' use of auto recall information and to test website usability, GAO conducted 12 focus groups with 94 consumers who had a recall. Focus groups were held in six locations selected for population and geographic variation. GAO identified key website usability practices and requested an evaluation by website usability professionals. GAO reviewed statutes, regulations, and NHTSA documents, and interviewed industry stakeholders—including 10 manufacturers selected based on sales market share and other factors. Consumers, manufacturers, and auto dealers use publicly available auto recall information differently. For example, the 94 consumers in 12 focus groups that GAO conducted used this information to decide whether to repair their vehicles. These consumers overwhelmingly cited safety risk and convenience as the two most influential factors they considered. Most consumers reported a preference for receiving recall notification by at least one electronic means, such as by e-mail or text message, in addition to mail. However, only 7 of 94 consumers reported receiving electronic notifications, suggesting a gap between the industry's auto recall notification practices and consumers' preferences. (See fig.). In response to a mandate in law, in September 2016, the National Highway Traffic Safety Administration (NHTSA) issued a proposed rule that, if finalized, would require manufacturers to notify consumers about auto recalls by electronic means in addition to mail. Most consumers in GAO's focus group website usability tests found the auto recall areas of NHTSA's website—NHTSA.gov—easy to use; however, some consumers experienced difficulties when asked to complete auto recall related tasks. For example, when consumers attempted to search for recalls affecting their specific vehicles, some found the search results confusing, leading them to question the accuracy of the results. Similarly, some consumers were hampered in searching for recalls by their vehicles' year, make, and model because the website did not always display model options using plain language. GAO found that the auto recall areas of NHTSA.gov do not always reflect federal and industry key website usability practices, and that an independent evaluation conducted by website usability professionals at GAO's request identified similar issues. NHTSA is in the process of consolidating its websites and plans to conduct a website usability study of NHTSA.gov with consumers after the consolidation is complete. However, the agency has not determined a completion date for the consolidation effort—an essential step for organizations to effectively guide their information technology efforts. Without establishing a completion date and taking interim steps to improve the usability of NHTSA.gov, consumers will likely continue to experience difficulties, which may limit the effectiveness of the website's primary means of providing consumers with information about recalls affecting their vehicles. GAO recommends that NHTSA determine a completion date for its website consolidation effort and take interim steps to improve the usability of NHTSA.gov by addressing the website usability difficulties GAO identified. The Department of Transportation concurred with the recommendations.