You are given two reports by the government agency.  

Report 1:
Postal retiree health benefits are provided as part of the Federal Employees Health Benefits Program (FEHBP). FEHBP covers federal employees and retirees, including postal and nonpostal retirees, who receive health insurance from companies that contract with OPM. Retiree participation is voluntary; in fiscal year 2018, about 500,000 postal retirees have participated in FEHBP. Funding requirements for postal retiree health benefits are established by law, which divides responsibility among USPS, the federal government, and postal retirees. USPS is responsible for a specific percentage of premiums, the federal government is responsible for paying a prorated share, and retirees are responsible for the rest. The funding requirements for these benefits changed in 2006. Before then, a “pay-as- you-go” system governed USPS’s payments, which required USPS to pay its share of premiums for current postal retirees. The 2006 Postal Accountability and Enhancement Act (PAEA) required USPS to start fully “prefunding” retiree health benefits. This meant that USPS was required to make annual prefunding payments to a newly established fund to build up funds to cover USPS’s share of future postal retiree health benefit costs. PAEA also established the RHB Fund as a new fund in the U.S. Treasury for USPS to deposit money into, and specified that beginning in fiscal year 2017, the fund would be used by OPM to pay USPS’s share of postal retiree premiums for health benefits. Under PAEA, the first 10 years of prefunding payments were fixed—ranging from $5.4 billion to $5.8 billion annually from fiscal years 2007 to 2016. From fiscal years 2007 through 2016, USPS was also required to continue “pay-as-you-go” payments for its share of premiums for current retirees. The permanent schedule for USPS payments to prefund postal retiree health benefits under PAEA started in fiscal year 2017. We have reported that USPS’s financial condition continues to deteriorate and its outlook is bleak. We have separately issued reports and testimonies that examined USPS’s financial condition, including its liabilities, and identified strategies and options for USPS and Congress to reduce postal costs, generate revenue, and restructure the funding of USPS’s pension and retiree health benefits. Looking forward, we have reported that USPS is facing unsustainable financial challenges as First- Class Mail volume continues to decline. USPS has recently reported that its revenue generation options are constrained, including by the price cap on market-dominant mail, and that any cost-cutting opportunities within its control are “relatively limited and dwindling.” USPS stated that the opportunity for further cost savings within its control will not come close to filling its financial gap. With respect to actions taken by companies and state governments, we have previously reported on the long-term trend for these organizations to eliminate or reduce retiree health benefits. Factors contributing to this decline include financial challenges for companies and states, current and expected retiree health benefit costs, and the legal ability to change retiree health benefit programs. The RHB Fund is on an unsustainable path and is projected to be depleted in 12 years under the status quo. USPS has missed approximately $38 billion in payments to the fund since fiscal year 2010, and the fund’s balance is declining. Beginning in fiscal year 2017, OPM started drawing from the fund to pay USPS’s share of premiums for postal retirees’ health benefits. OPM’s payments in that year exceeded the fund’s income from interest, and OPM projects that, based on the status quo, future payments will continue to exceed the fund’s income from interest. As long as USPS continues to miss its annual payments—which were nearly $4.3 billion in fiscal year 2017 and are $4.5 billion in fiscal year 2018—the fund is on track to be depleted in fiscal year 2030 based on OPM projections requested by us (see fig. 1). We reported similar results in our December 2012 report on postal retiree health benefits. At our request, OPM conducted a sensitivity analysis in which alternative projections were made that assumed USPS made payments to the fund of $1 billion per year or $2 billion per year; these alternative projections extended the fund’s projected depletion date from fiscal year 2030 to fiscal years 2032 or 2035, respectively (see fig. 2). OPM estimates the number of postal retirees eligible for federal retiree health benefits will remain near the current level of 500,000 through fiscal year 2035. The outlook for the RHB Fund is poor as USPS has inadequate resources to cover its required payments to the RHB Fund and, in our view, based on past practices and USPS statements, appears unlikely to make partial payments. USPS has repeatedly testified that its required payments to the RHB Fund are “unaffordable” relative to its current financial situation and outlook. In this regard, USPS accumulated net losses of more than $65 billion in the last 11 years and has budgeted for a net loss of about $5 billion in fiscal year 2018. Further, USPS reached its statutory borrowing limit of $15 billion in 2012. Although USPS accumulated liquid assets (cash and cash equivalents) of about $10.5 billion at the end of fiscal year 2017, it did not make $6.9 billion in required payments for retiree health and pension benefits. According to USPS officials, USPS did not make these payments in order to preserve liquidity and cover operational costs. If the RHB Fund is depleted, PAEA requires USPS to fill the resulting financial gap by resuming “pay-as-you-go” payments for its share of retiree health premiums that are currently being paid by the fund. However, PAEA does not address how funding will be provided or whether benefits will be provided if the fund becomes depleted and USPS does not make payments to cover its share of premiums. OPM and USPS have identified the following issues should the fund be depleted: According to OPM: (1) The RHB Fund is the initial funding source for USPS’s share of postal retirees’ health insurance premiums as long as money remains in the fund. (2) If the fund is depleted, then USPS becomes the funding source responsible for paying USPS’s share of these premiums. (3) Regardless of whether funds are available to pay USPS’s share of premiums, postal retirees are statutorily entitled to remain enrolled in their FEHBP plans. (4) Therefore, if the fund is depleted and USPS does not pay its share of premiums, the providers of these FEHBP plans would be underpaid. According to USPS: (1) Current law does not appear to contemplate a situation in which USPS itself is unable to make payments to the RHB Fund after the fund is depleted. (2) The law does not condition postal retirees’ eligibility for health benefits upon the fund or the payment of government contributions by USPS and the federal government. (3) Therefore, USPS stated it is reasonable to expect that postal retirees would remain eligible for health coverage even if USPS is unable to make payments to the RHB Fund after it is depleted. Regarding who would pay for their health coverage at this point, USPS stated that ultimately, it would be up to Congress to legislate a resolution to the funding issue. As the above projections show, the RHB Fund could be depleted in as little as 12 years—and USPS may be unable to cover its share of retiree health insurance premiums should its financial condition remain precarious. Depletion of the fund could affect postal retirees—who have provided a vital service to the nation—as well as USPS, postal customers and other stakeholders, including the federal government. Survey data we reviewed indicate that most companies do not offer retiree health benefits and that the number of companies providing such benefits is decreasing over time. For example, the percentage of all private and public organizations (e.g., state or local governments) with more than 200 employees that offer employee health benefits and that also offer retiree health benefits is estimated to have declined from 40 percent in 1999 to 25 percent in 2017, according to annual surveys conducted by the Henry J. Kaiser Family Foundation and the Health Research & Educational Trust (Kaiser/HRET). Focusing specifically on the results for private for-profit companies, the 2017 Kaiser/HRET survey estimated that only 11 percent of companies with at least 200 employees that offered health benefits to active employees also offered retiree health benefits in 2017, the smallest percentage since comparable data were measured in 2012. The 2017 Kaiser/HRET survey also estimated that the percentage of companies offering retiree health benefits was greater among companies with at least 5,000 employees (35 percent) than those with 1,000 to 4,999 employees (18 percent) and those with 200 to 999 employees (9 percent) (see fig. 3). Surveys sponsored by the Agency for Healthcare Research and Quality (AHRQ) have estimated similar trends for private sector establishments with at least 1,000 employees and with 100-999 employees. According to the AHRQ surveys, an estimated 25 percent of private sector establishments with at least 1,000 employees offered health insurance coverage to retirees age 65 and older in 2016, down from 41 percent in 2003. For retirees under 65, an estimated 32 percent offered such coverage in 2016, down from 42 percent in 2003 (see fig. 4). Based on reports we reviewed and experts we interviewed, many companies that have retained their retiree health benefits have done so by making changes to control costs, including tightening eligibility and restructuring benefits. Depending on the company, the changes have applied to new hires, current employees, or retirees. Specific changes have included the following: Tightening eligibility: Some companies have made new employees and/or employees hired after a given date ineligible to receive retiree health benefits, while other companies have increased the minimum age and/or length of service requirements for eligibility, according to reports and experts we interviewed. Restructuring benefits: Many companies have restructured retiree health benefits to reduce the level of the benefit, to shift costs to retirees, and to change how the benefits are provided. For example, some companies have shifted from an approach under which a company pays a percentage of premiums for a selected health benefit plan, to an approach under which a company pays a fixed dollar amount that employees may put toward health care costs. The 2017 Kaiser/HRET survey estimated that 30 percent of private and public organizations with 200 or more employees that offer retiree health benefits provide a fixed dollar amount that the retiree can use to purchase a retiree health plan they choose. Experts on retiree health benefits that we interviewed told us such companies often shift costs to retirees by maintaining defined contributions at the same level over time, even as overall health care costs increase. Based on multiple reports and experts, nearly all state governments continue to offer retiree health benefits to at least some state government retirees but generally have shifted some costs from the state to retirees and/or active employees in various ways. For example, in 2016, the Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation reported on the following recent changes at the state level related to eligibility for retiree health benefits, benefit levels, and aspects of how the benefits coordinate with Medicare: Tightening eligibility or limiting benefit levels: Most states varied eligibility for retiree health benefits based on factors such as age and years of service, and varied benefit levels based on factors such as date of hire, date of retirement, or vesting eligibility; some states varied benefit levels based on years of service. Between 2000 and 2015, more than a dozen states changed the minimum age or the number of state service years required for retirees to be eligible for health benefits. During that timeframe, at least 10 states adopted formulas for prorating benefits that required different premium-sharing amounts based on years of service, or altered existing prorating formulas, bringing the total to 31 states that used prorating in 2015. At least 5 states stopped making any contributions to health premiums for certain retirees. Medicare coordination: Thirty-five states provided employer- sponsored Medicare Advantage or Medicare Part D plans, known as Employer Group Waiver Plans, to provide health or prescription drug benefit coverage for Medicare-eligible retirees since these options were authorized in 2003. According to the report, “These cost- saving programs provide states with financial subsidies from the federal Medicare program to provide Medicare plus wraparound benefits.” We identified eight potential policy approaches to address the financial sustainability of postal retiree health benefits, primarily based on a review of legislative proposals and pertinent literature on actions that were taken by private companies and state governments and are discussed above. These approaches fall into three categories: (1) approaches that shift costs to the federal government; (2) approaches that reduce benefits or increase costs to postal retirees and/or postal employees; and (3) approaches that change how the benefits are financed. These eight approaches are not mutually exclusive, nor are they an exhaustive list of possible approaches. Each approach could include a range of specific options; thus, even if successfully implemented, no one approach would necessarily be sufficient to make postal retiree health benefits financially sustainable. Although our discussion of the various policy approaches specifically addresses postal retiree health benefits, most approaches could address federal retiree health benefits more broadly, as both postal and non-postal federal employees participate in the same federal health benefits program. All approaches we identified have different potential effects and would require congressional action because current law establishes certain requirements for postal retiree health benefit plans, including basic rules for benefits, enrollment, and participation, and how benefits are to be paid for. Because the RHB Fund has a large and growing financial gap, any approach that would have a significant financial impact could affect the federal government, postal retirees, postal employees, USPS, and customers to varying degrees. Medicare Integration: Various legislative proposals have been made to increase postal retirees’ participation in Medicare—a shift that would decrease USPS’s costs but increase Medicare’s costs, according to analyses by the Congressional Budget Office (CBO). These proposals would establish a program within FEHBP for active postal employees and postal retirees. Under these bills, Medicare-eligible postal retirees enrolled in this program would generally also be required to be enrolled in Medicare Parts A, B, and D. According to CBO analyses, the bills would have resulted in USPS savings, in part because increased participation in Medicare would shift primary responsibility for covering certain health care services to Medicare for those who enroll. As we have previously reported, the primary policy decision for Congress to make is whether to increase postal retirees’ use of Medicare. Supplemental federal appropriations: If the RHB Fund becomes depleted and USPS does not fill the financial gap, supplemental federal appropriations could be an alternative if Congress wants benefits to continue at the same level. As previously noted, OPM officials told us that regardless of whether funds are available to pay USPS’s share of premiums, postal retirees are statutorily entitled to remain enrolled in their FEHBP plans. However, supplemental federal appropriations for postal retiree health benefits could increase the federal budget deficit. In addition, supplemental appropriations for postal retiree health benefits would be inconsistent with USPS functioning as a self-financing entity that covers its costs with revenue it generates. Tighten eligibility or reduce or eliminate retiree health benefits: As some companies and state governments have done, eligibility restrictions could be tightened for postal retiree health benefits, or other actions could reduce the level of benefits or even eliminate benefits, such as making new hires ineligible to receive retiree health benefits. The effects would depend on the specific changes and whether they were made to apply to current retirees, current employees, or future hires. Depending on the extent of the changes, this approach would reduce USPS’s liability for postal retiree health benefits and thereby reduce its unfunded liability. Increase premium payments by postal retirees and/or postal employees: As some companies and state governments have done, premium payments for postal retiree health benefits by postal retirees and/or postal employees could be increased. For example, as others have reported, some companies and state governments have required retirees to pay 100 percent of the health insurance premium for their retiree health benefits. Similarly, a larger share of retiree health premiums could be borne by postal retirees or postal employees could be required to pay for retiree health benefits before they retire. Such changes would require changes to current law that allocates specific financial responsibility for payments among USPS, the federal government, and retirees participating in FEHBP, as active postal employees make no payment for retiree health benefits under current law. The expenses of the RHB Fund could be decreased by these approaches that shift costs to postal retirees, postal employees, or both. Depending on how much of the costs are shifted, the additional costs could increase the challenge for retirees to ensure their accumulated resources last throughout retirement, or for postal employees to save for retirement. Further, as we have reported, rising health care costs can increase the overall amount individuals may need to save to ensure they have an adequate income once they retire. Change the federal contribution to a fixed subsidy: As some companies and state governments have done, postal retiree health benefits could be shifted to a structure with a fixed amount subsidizing the benefit. This amount could be adjusted over time; any adjustments might or might not keep up with costs. Depending on the initial size of the fixed subsidy and any adjustments over time, this approach could reduce the expenses of the RHB Fund and USPS’s required payments. RHB Fund expenses could be reduced over time if the fixed subsidy increases less than postal retiree health premiums. This approach would require changes to current law and regulations that prescribe the federal government’s financial contribution to FEHBP. For example, CBO recently identified one option to change FEHBP’s statutory structure from a premium-sharing structure that is required by law to fixed subsidies for health benefits. Under this option, the fixed subsidies would grow at the rate of inflation rather than at the average rate of growth for FEHBP premiums; CBO stated this change would be expected to slow the growth of federal contributions to FEHBP. A fixed subsidy for retiree health benefits could increase incentives for retirees to make less costly decisions with respect to health care. However, this approach could result in greater cost exposure for retirees, who may face difficult decisions regarding their health care, particularly if their financial resources are limited. As we have reported, individuals face the risk that rising and unpredictable health care or long-term care costs may lead them to draw down their retirement savings faster than expected. Establish a non-federal voluntary employees’ beneficiary association (VEBA) for postal retiree health benefits: As some companies have done to provide retiree health benefits separately from the employer, a VEBA outside the federal government could be established to manage postal retiree health benefits. This approach means that postal retiree health benefits would be provided through the VEBA instead of through the OPM-administered FEHBP. The non-federal VEBA would administer the postal retiree health benefits program, including determining the specific benefits that would be provided and the level of contributions from the VEBA members—who could include retirees and employees—and the investing of its assets. Such an approach would require determining the VEBA’s governance structure, funding sources, level of funding, type of investments, and associated market risks. One issue could be determining the source and level of initial funding for a new VEBA for postal retiree health benefits, such as whether initial funding would come from the RHB Fund, the Treasury, or both. Other issues could be what funds would be provided to the VEBA going forward, including the source(s) and level of funding, and what the benefit levels would be. If the entire RHB Fund were transferred into a VEBA, the current level of benefits would ultimately not be sustainable unless further funding is provided from one or more sources, such as from USPS, retirees, active employees, or the federal government. Thus, trade-offs would involve what level of benefits would be provided, who would bear the costs, and what might happen if VEBA assets decline or become depleted. Reduce the required level of prefunding: Proposed legislation includes an 80 percent funding target for postal retiree health benefits instead of the 100 percent target established by current law. This would reduce USPS’s required payments to the RHB Fund but could increase costs for future postal ratepayers and increase the risk that USPS may not be able to pay for these costs. As previously discussed in this report, state governments either do not prefund their retiree health benefits or generally have a low level of prefunding. We have expressed concern about a proposed 80 percent funding target for postal retiree health benefits that would have the effect of carrying a permanent unfunded liability equal to roughly 20 percent of USPS’s liability, which could be a significant amount. As we previously reported, an alternative could be to build in a schedule to achieve 100 percent funding in a later time period after the 80 percent level is achieved. Although USPS payments with an 80 percent funding target would reduce USPS’s required payments, fully funded benefits protect against an inability to make payments later, make promised benefits less vulnerable to cuts, and protect USPS’s long-term viability. Further, reducing the funding target is unlikely to have any effect as long as USPS continues to make no payments to the RHB Fund, as discussed earlier. We continue to believe that as long as USPS is required by law to pay its share of retiree health benefits premiums, it is important for USPS to prefund its retiree health benefit liability to the maximum extent that its finances permit. We recognize that multiple options exist to prefund benefits and amortize unfunded liability and that no prefunding approach will be viable unless USPS can make the payments and maintain liquidity. As we have reported, making affordable prefunding payments would protect the viability of USPS by not saddling it with bills later on, when employees are already retired and no longer helping it to generate revenue; making payments can also make the promised benefits more secure. We also have reported that deferring payments can pass costs from current to future postal ratepayers. To the extent prefunding is postponed by using a lower funding target, larger payments will be required later, when they likely would be supported by lower levels of profitable First-Class Mail volume. Outside investment: Proposed legislation would initially require 25 percent of the RHB Fund to be invested in index funds modeled after those used for federal Thrift Savings Plan investments. The objective of investing RHB Fund assets outside of U.S. Treasury securities would be to seek a greater rate of return on these assets in an attempt to reduce unfunded liabilities and the amount of required prefunding payments. Such outside investment would require legislation because current law limits RHB Fund assets to U.S. Treasury securities that are backed by the full faith and credit of the federal government. A higher rate of return on RHB Fund assets could reduce long-term funding needs. However, there are other considerations. For example, we have reported that if fund assets were invested in non-Treasury securities, the fund may experience losses in a market downturn and would thus have reduced assets available for health care. Assuming there would be no explicit federal guarantee of the value of the invested assets, we stated that USPS is not well positioned to deal with a potentially significant decline in their value, given its significant operating losses and continuing decline in mail volume. We also reported that the impact of any asset losses could be magnified because a market downturn that negatively affects asset value could be associated with a more general economic downturn that negatively affects USPS mail volume and revenues. About a half million postal retirees receive retiree health benefits. Postal retirees have provided a vital service to the nation, and resolving a key aspect of their future situation warrants congressional action. Failure to address the poor financial outlook of the RHB Fund could pose serious consequences for these retirees as well as USPS, postal customers, and other stakeholders, including the federal government. It is reasonable to believe that USPS will not be able to fill the financial gap once the RHB fund is depleted—a situation that could occur in as little as 12 years under the status quo. There is no certainty on what actions should be taken to address this problem. However, we have identified multiple approaches that could be used, individually or in combination, that Congress could consider to help address the financial shortfall in this area. All of these approaches have different potential effects, and it is up to Congress to consider the merits of the approaches and determine the most appropriate action to take. It would be preferable to take action when careful consideration is possible, rather than wait until lack of adequate funding could disrupt postal retiree health benefits. Congress should consider passing legislation to put postal retiree health benefits on a more sustainable financial footing. We provided a draft of this report to OPM and USPS for their review and comment. OPM provided technical comments, which we incorporated as appropriate. USPS provided a written response, which is reproduced in appendix II of this report. In its written response, USPS stated that it concurred with our matter for congressional consideration that congressional action is necessary to achieve a financially sustainable Postal Service Retiree Health Benefits Fund (RHB Fund). However, USPS said our discussion of potential policy approaches for postal retiree health benefits would benefit from additional context and balance. USPS also put forth additional information for three of the potential policy approaches highlighted in our report. Our report presents a high-level overview of eight potential policy approaches. It was not designed to be a comprehensive catalog of possible options with an analysis of the various considerations relevant to each. With regard to the Medicare integration approach, USPS stated that increased Medicare participation by postal retirees is not limited to the “full Medicare integration option,” as represented in our report and identified variations of such an approach. USPS said readers would benefit from a fuller picture of Medicare integration practices, stating that among employers that continue to provide retiree health benefits, full Medicare integration is a uniform best practice. USPS cited a 2014 report that said Medicare integration is the most common arrangement for employer-provided retiree health benefits, adding that retiree health benefits for Medicare-eligible employees are assumed to be merely supplemental to Medicare as a matter of course. Our report discussed Medicare integration by state governments, but did not present recent data on the percentage of private companies that coordinate their retiree health benefits with Medicare because such data are not publicly available. Additionally, USPS said our report framed the issue of Medicare integration as “solely” a tradeoff between USPS and Medicare costs while there are other factors to consider, such as the relative benefits to USPS compared to the overall cost for the Medicare program. As we noted in our report, the eight potential policy approaches were not designed to be mutually exclusive, nor an exhaustive list of possible approaches. Additionally, we recognize there are various factors related to this approach, but that the primary one is whether to increase postal retirees’ use of Medicare which would lead to further increasing Medicare costs. Second, USPS said it believed our statements about approaches for changing the level of prefunding for retiree health benefits below the 100 percent level were misplaced, citing “universally accepted practices” for other entities to “pay-as-you-go” (i.e., not prefund at all), or to prefund at much lower levels. We have reported on such funding levels in the past as well. However, a proposed 80 percent funding target for postal retiree health benefits would have the effect of carrying a permanent unfunded liability equal to roughly 20 percent of USPS’s liability, which could be a significant amount. As we previously reported, an alternative could be to build in a schedule to achieve 100 percent funding in a later time period after the 80 percent level is achieved. As our report also explained, although USPS payments with an 80 percent funding target would reduce USPS’s required payments, fully funded benefits protect against an inability to make payments later, make promised benefits less vulnerable to cuts, and protect USPS’s long-term viability. Finally, USPS said that our statements about potential risks associated with investment of assets outside the U.S. Treasury seem disproportionate given USPS’s view that diversification of assets set aside for retiree health benefits is “universally accepted” as a best practice. We recognize that a higher rate of return on RHB Fund assets could reduce long-term funding needs for the RHB Fund. However, there are considerations specific to USPS. For example, assuming there would be no explicit federal guarantee of the value of the invested assets, we stated that USPS is not well positioned to deal with a potentially significant decline in their value, given its significant operating losses and continuing decline in mail volume. We also noted that, as we have previously reported, the impact of any asset losses could be magnified because a market downturn that negatively affects asset value could be associated with a more general economic downturn that also negatively affects USPS mail volume and revenues. In summary, we believe our report presents a balanced description of a wide range of possible policy options; it does not endorse or recommend any particular option for Congress. As we concluded, all of these approaches have different potential effects, and the information we present, as well as the additional views presented by USPS, provide critical information for congressional decision-makers to assess as they consider the merits of the approaches and determine the most appropriate action to take. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees; the Postmaster General; and the Director of the Office of Personnel Management. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions concerning this report, please contact me at (202) 512-2834 or rectanusl@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 that made key contributions to this report are listed in appendix III. End of year net funded status (unfunded) (55.0) Missed USPS payments to the fund (53.5) (52.0) (48.6) (46.2) (47.8) (48.3) (48.9) (54.8) (52.1) payments due on Sept. 30, 2017, of $955 million for the amortization of USPS’s unfunded liability for postal retiree health benefits, and $3.3 billion for the “normal costs” of retiree health benefits. The “normal cost” is the annual expected growth in liability attributable to an additional year of employees’ service. In addition to the individual named above, Derrick Collins (Assistant Director); Kenneth John (Analyst-in-Charge); Amy Abramowitz; Taiyshawna Battle; William Colwell; Swati Deo; John Dicken; Leia Dickerson; William Hadley; James Leonard; Emei Li; Thanh Lu; Sara Ann Moessbauer; Joshua Parr; Malika Rice; Matthew Rosenberg; Amy Rosewarne; Frank Todisco; and Crystal Wesco made key contributions to this report.

 

 Report 2:
NAS is a withdrawal condition within infants that can result from the prenatal use of opioids by pregnant women. Prenatal opioid use occurs when a woman, during the course of her pregnancy, uses an opioid- based medication or substance. Prenatal opioid use can take various forms, including (1) the use of prescriptions for pain management, such as fentanyl and oxycodone; (2) medication-assisted treatment for opioid addiction, such as methadone and buprenorphine; (3) prescription drug misuse or use disorder (such as using an opioid without a prescription, using a different dosage than prescribed, or continuing to use an opioid when it is no longer needed for pain); and (4) illicit opioid use, such as heroin use. These types of prenatal opioid use are not mutually exclusive. A 2014 study found that almost 22 percent of pregnant Medicaid beneficiaries filled a prescription for an opioid during their pregnancy. Medication-assisted treatment—an approach that combines the use of certain medications and behavioral therapy—is generally considered by HHS and medical specialty societies to be the standard of care for treating pregnant women with opioid use disorders, depending on the individual and her circumstances. SAMHSA and several medical specialty societies, including the American College of Obstetricians and Gynecologists and the American Society of Addiction Medicine, have noted that providing medication-assisted treatment during pregnancy prevents complications associated with illicit opioid use, encourages prenatal care, and reduces the risk of obstetric complications. Further, women may use multiple substances in addition to opioids during pregnancy—known as maternal polysubstance use—such as tobacco, alcohol, or anti-depressants, among others. GAO reported in 2015 that the gaps in efforts to address prenatal opioid use and NAS most commonly cited by federal agency officials and experts were related to the treatment of prenatal opioid use and NAS. Agency officials and experts said that there has not been adequate research comparing different types of treatment approaches and that research is needed on how best to treat a pregnant woman with an opioid use disorder so that the treatment is most effective for the woman while offering minimal risk to the fetus. See GAO-15-203. For more information on factors that can affect access to medication- assisted treatment, see GAO, Opioid Addiction: Laws, Regulations, and Other Factors Can Affect Medication-Assisted Treatment Access, GAO-16-833 (Washington, D.C.: Sept. 2016). respiratory distress. There is currently no national standard of care for screening or treating NAS. There have been a few scoring tools developed to screen the infant to determine the appropriate course of treatment. Health care providers predominantly diagnose NAS using the Finnegan Neonatal Abstinence Scoring Tool, which calculates a score based on a variety of central nervous, metabolic, respiratory, and gastro-intestinal symptoms that might be observed. The American Academy of Pediatrics and the American College of Obstetricians and Gynecologists recommend that infants with NAS should not be initially treated with medication, known as pharmacologic treatment. Instead, these organizations recommend starting with non-pharmacologic treatment, which includes placing the infant in a dark and quiet environment, swaddling, breastfeeding, rooming-in with the mother, and providing high-calorie nutrition, among other things. For example, rooming-in—allowing the mother to reside with the infant during the infant’s treatment—may have benefits, such as helping to develop a bond between the mother and infant and to reduce the severity of the infant’s NAS symptoms. Pharmacologic treatment, such as using methadone or morphine, may be necessary only for the relief of moderate to severe signs of NAS. See figure 1 for more information on non-pharmacologic and pharmacologic treatment. HHS has published several guidance and educational resources related to NAS and prenatal opioid use. These documents serve as tools to help stakeholders, including state entities and health care providers, who work with this population. For example, SAMHSA published a clinical report for health care providers in 2016 that provides recommendations to help them when making decisions regarding the evaluation, care, and treatment of women with opioid use disorders and infants with NAS. As of July 2017, SAMHSA is in the process of producing a clinical guide based on this report and expects to publish an updated report later this year. In another example, SAMHSA published a guidance document in 2016 that aims to support the efforts of states, tribes, and local communities in addressing the needs of pregnant women with opioid use disorders and their infants. Among other things, the document includes strategies and guidance to promote care coordination among stakeholders, including child welfare agencies and medical professionals, when treating infants with NAS. (See app. II for a list of federal educational resources related to NAS and prenatal opioid use published by HHS.) As we previously noted, more than 80 percent of NAS cases are paid for by Medicaid, which is a federal-state health care program that finances health care coverage for low-income and medically needy populations, including children and aged or disabled adults. States administer their Medicaid programs within broad federal requirements and according to a state plan approved by CMS, the federal agency within HHS that oversees Medicaid. The Medicaid program allows states to design and implement their programs within certain federal parameters, resulting in more than 50 distinct state-based programs. For example, states generally determine the type and scope of services to cover, set payment rates that different health care providers will receive for various covered services, and pay these providers for claims submitted for services rendered. In addition, states vary in the extent to which they enroll beneficiaries in managed care versus delivering care through the more traditional fee-for-service model. Under a managed care delivery model, states typically contract with managed care plans to provide a specific set of Medicaid-covered services to beneficiaries and pay them a set amount per beneficiary—referred to as capitation payments—to provide those services. Under fee-for-service, Medicaid pays health care providers a fee for each service provided to a Medicaid beneficiary. Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment benefit, which states are required to provide, covers comprehensive health screenings, preventive health services, and all medically necessary treatment and services—for Medicaid eligible-children under the age of 21—to correct or ameliorate health conditions discovered through screenings. According to the literature we reviewed, most infants with NAS in the United States are treated in a hospital setting, often in the neonatal intensive care unit (NICU), which has a relatively high daily cost of care. Stakeholders we interviewed told us that these infants may also be treated in other hospital settings. According to state and perinatal collaborative officials in the four selected states we reviewed, infants diagnosed with NAS begin—and most complete—treatment for the condition in various hospital settings which provide different levels of care: a well newborn nursery (level I), special care nursery (level II), or NICU (level III or IV). For example, according to these officials, most infants with NAS in Vermont are treated in well newborn nurseries, while most infants with NAS in Kentucky and Wisconsin are treated in NICUs. West Virginia perinatal collaborative officials told us that about a third of infants with NAS are treated in well newborn nurseries, while two-thirds receive treatment in either a special care nursery or NICU. According to perinatal collaborative officials and hospital providers in the four selected states, the severity of the infant’s NAS symptoms or the hospital’s capability to treat NAS can determine whether the infant receives care in a nursery or NICU. Health care providers in the four selected states described the general clinical approach for treating infants with NAS. According to these providers, they generally start with non-pharmacologic treatment—for example, swaddling or placing the infant in a quiet, dark room. Health care providers may continue to monitor and assess the severity of the infant’s NAS symptoms using one of the available scoring tools for NAS. If the infant’s symptoms meet or exceed a certain threshold, these providers may initiate pharmacologic treatment by administering morphine or methadone, for example. Some perinatal collaborative officials that we interviewed in the four selected states told us that not all hospitals may have the capability to provide pharmacologic treatment. For example, these officials told us that level I hospitals—hospitals with only well newborn nurseries—in Kentucky and Wisconsin may not provide pharmacologic treatment to infants with NAS because these hospitals may not have the staff expertise to administer the needed medication and monitor the infants who receive it. Instead, these hospitals may transfer infants with NAS who require pharmacologic treatment to hospitals with higher levels of care, such as those with a NICU. Table 1 provides information on the eight selected hospitals in our review that provide NAS services. According to a 2015 study we reviewed, nationwide, infants with NAS who require pharmacologic treatment generally have longer average hospital stays (23 days) compared with infants with NAS who do not require such medication (17 days). Health care providers from our selected hospitals also indicated a similar trend—the average length of hospital stay in calendar year 2016 for infants with NAS who received pharmacologic treatment ranged from 7 to 30 days, while the stays for infants who did not require such medication ranged from 3 to 7 days. Medicaid generally pays for NAS treatment services in our four selected states using a diagnosis-related group (DRG) based payment system, in which hospitals receive a fixed amount for a bundle of services. In general, the DRG-based system used in Medicaid pays for the medical services necessary for treating infants with NAS, such as medication, bed space, and nursing staff, according to CMS officials. CMS officials said that the DRG-based system generally does not pay for professional services, such as physician visits; instead, these services are typically paid under a fee-for-service payment schedule, in which states or contracted managed care plans pay health care providers directly for their services. Officials in our selected states said information on total Medicaid payments for hospital-based NAS services was not readily available. Several DRGs are typically used to bill Medicaid for services provided to infants. However, these codes alone cannot provide an accurate estimate of Medicaid payments for NAS treatment services because the codes are not used exclusively for NAS. For example, according to some health care providers we interviewed, two DRG codes that may be used to bill Medicaid and other payers for NAS treatment services are 791 (prematurity with major problems) and 793 (full term neonate with major problems). However, these codes could be used to bill for over 2,000 diagnoses—for example, pneumonia or measles. One state official said that while they could provide us with information on Medicaid payments for these infants, they could not parse out the costs by diagnosis codes, such as those related to NAS. Thus, estimates of total Medicaid payments based only on DRG codes likely overstate the amount paid for NAS hospital-based services. Officials from two of the four selected states told us that their state has a public health surveillance system that tracks the incidence of infants diagnosed with NAS; however, the surveillance systems do not capture financial information, including Medicaid payments for NAS. At our request, one of the states cross-referenced their surveillance and Medicaid data and estimated that in 2016, their state Medicaid program spent over $22 million to treat 1,565 infants with NAS. While selected states generally could not provide information on total Medicaid payments for infants with NAS, some hospitals in our selected states were able to generate this information at our request using diagnosis codes that they identified as related to NAS from hospital claims data. Six of our selected eight hospitals reported that in calendar year 2016, the average Medicaid payment for treating infants with NAS ranged from about $1,500 to about $20,200 per infant per stay. The wide range in Medicaid payment averages may be because the averages included both infants who did and did not require pharmacologic treatment and because these hospitals treated infants in various settings, such as a nursery or a NICU. The literature we reviewed also had limited information on Medicaid payments for NAS treatment services provided in hospitals. A recent study reported that from 2009 through 2012—the most recent data available at the time of the study—Medicaid payments to hospitals for NAS treatment services increased from about $564 million to $1.2 billion nationwide. While most infants with NAS typically complete treatment in a hospital setting, stakeholders told us that some of these infants may be transferred to a non-hospital setting to complete pharmacologic treatment and continue non-pharmacologic treatment. HHS officials told us that there is not a comprehensive list of facilities that may treat infants with NAS outside of the hospital. Based on information from the stakeholders we interviewed and the literature we reviewed, we identified two types of non-hospital settings available in certain states that treat infants with NAS: (1) outpatient clinics and programs and (2) neonatal withdrawal centers. For the purposes of this report, we defined neonatal withdrawal centers as facilities that can treat infants who are prenatally exposed to drugs, including infants with NAS, within the facility. Outpatient clinics and programs to treat NAS Through stakeholder interviews and the literature we reviewed, we identified examples of outpatient clinics and programs in certain states where infants with NAS can continue pharmacologic treatment after their discharge from the hospital. For example, some stakeholders we interviewed told us about a Neonatal Medical Follow-Up Clinic in Vermont used to follow-up with infants with NAS who have been discharged from the hospital and are being weaned off methadone on an outpatient basis. Hospital providers train the infant’s family on how to administer the infant’s medication at home and provide a referral to the clinic. After hospital discharge, the infant and family have follow-up visits in the clinic every 1 to 2 weeks, during which the family discusses with health care providers the weaning schedule and demonstrate how they administer the infant’s medication. Health care providers told us that they also encourage the family to continue providing non-pharmacologic treatment to the infant. After weaning is complete, the infant continues to follow-up at the clinic every 1 to 2 months until the infant reaches 12 to 18 months of age. Literature we reviewed indicated that other outpatient treatment clinics or programs such as the one in Vermont have been established or considered in other states. Specifically, four studies we reviewed described instances in which infants began their treatment in the hospital but completed their treatment through a dedicated outpatient program in Florida, Ohio, and Pennsylvania. Each study noted that the inpatient-to- outpatient approach can result in a shorter hospital length of stay. For example, one 2015 study found that infants who began treatment in a hospital and completed their treatment in an outpatient setting stayed in the hospital an average of 11 days, compared to infants who completed treatment in the hospital, where the stays averaged about 25 days. However, the studies also noted that the inpatient-to-outpatient approach resulted in a longer overall treatment duration across the two settings. Neonatal withdrawal centers to treat NAS Some stakeholders we interviewed, including health care providers, described examples of neonatal withdrawal centers in two states, where infants with NAS can continue pharmacologic treatment after their discharge from the hospital. Health care providers in these facilities told us that in Washington and West Virginia, some infants with NAS who began treatment in a hospital may be referred to these facilities, where they reside until they complete treatment and are discharged from the facility. These providers explained that in these facilities, the infants are placed in nursery rooms, where health care providers can monitor them and administer and adjust their medication as needed. In addition, nursing staff or other caregivers are responsible for providing continuous non-pharmacologic treatment, and mothers are encouraged to visit and continue this care. For example, health care providers told us that in Washington, two to three infants may share a nursery room where trained caregivers provide them with non-pharmacologic treatment. In West Virginia, health care providers said infants are typically placed in individual nursery rooms where nurses provide them with non- pharmacologic treatment. The rooms in the West Virginia facility are also equipped with a rocking chair to encourage mothers to visit and provide this care as well. Health care providers told us that the facility currently offers one nursery room equipped with a bed to help prepare mothers on what to expect after discharge; they also said that they encourage mothers to spend the night prior to the infant’s discharge from the facility. (See text box below). Treating infants with neonatal abstinence syndrome (NAS) in a neonatal withdrawal center One health care provider from a neonatal withdrawal center told us that the practice of rooming-in helps to facilitate the bond between the mother and infant. He also said that rooming-in allows health care providers to model care for the mothers and for mothers to learn how to care for their infants with NAS. Health care providers told us that the facility currently offers one nursery room equipped with a bed to help prepare mothers on what to expect after discharge and that they encourage mothers to spend the night prior to the infant’s discharge from the facility. One health care provider told us that one mother, after staying overnight with her infant, realized that she was not prepared to take care of her infant and consequently gave up custody of the infant. Because of rooming-in, health care providers were able to ensure that the infant was safe because the mother came to this realization at the facility, rather than alone at home. Although the lack of physical space at the facility currently makes it difficult to accommodate rooming-in for the entire course of the infant’s treatment, these providers noted the importance of this practice and that they are committed to parental involvement when treating infants with NAS at their facility. Figure 2 depicts nursery rooms in the neonatal withdrawal center in West Virginia. Efforts are also underway to open a neonatal withdrawal center in Arizona and Ohio, according to stakeholders we interviewed. Stakeholders we interviewed and the literature we reviewed suggest some limitations as well as benefits of treating infants with NAS in non- hospital settings, including factors to consider in these settings. Health care providers from one of the hospitals we visited in Vermont told us that their hospital is the only one in the state that allows infants with NAS to complete pharmacologic treatment through the Vermont outpatient clinic because they have established the necessary infrastructure to ensure families’ compliance and safe practices at home. These providers said that they worked with one local pharmacy to ensure proper dispensing of the medication. Additionally, these providers measured the amount of medication left over at each follow- up visit with the families. Some state and perinatal collaborative officials told us that neonatal withdrawal centers may not be the best environment to treat infants with NAS because these settings may limit a mother’s access to her infant, since she may not always be allowed to reside with the infant. Such limits, according to officials, do not facilitate bonding between mother and infant. Another state perinatal collaborative official, as well as health care providers and staff, told us that neonatal withdrawal centers may be better for treating infants with NAS because the environment is quieter and less stimulating than hospital settings, such as NICUs. Several studies we reviewed also emphasized that the inpatient-to- outpatient approach requires ongoing coordination, communication, and commitment from multidisciplinary providers, as well as the families. These studies highlighted instances in which these approaches reduced the length of the infants’ stay in a hospital, though the studies emphasized that more work needs to be done to determine whether these are the optimal approaches for infants with NAS, as well as the potential long-term benefits of such approaches. Medicaid pays for NAS treatment services provided in the non-hospital settings we identified in certain states, according to CMS officials and other stakeholders we spoke with, but generally pays for these services separately, in contrast with the single bundled payment paid to hospitals. State officials and health care providers in the non-hospital settings we examined described various ways in which Medicaid covered services they provided to treat infants with NAS. For example: Outpatient follow-up clinic in Vermont. State officials and staff at this facility told us that the Vermont Medicaid program pays for an infant’s outpatient physician visits using a fee-for-service payment schedule. They added that the Vermont Medicaid program also pays for the infant’s medication used in pharmacologic treatment and explained that the pharmacy that dispenses the medication bills Medicaid for these services. Neonatal withdrawal center in Washington. Health care providers at this facility told us that the Washington Medicaid program or their contracted managed care plans pay for physician visits using a fee- for-service payment schedule, noting that the facility decided to stop billing Medicaid for medical supplies because of the low reimbursement. Additionally, these providers suggested that because the facility does not meet the Medicaid standards required for receiving payment for hospital inpatient, nursing, or other covered facility services, the facility is ineligible to receive Medicaid payment for the costs of room and board. These providers said that they receive funding for the cost of these services through state appropriations, foster care payments, city contracts, grants, and private donations. Neonatal withdrawal center in West Virginia. State officials and health care providers at this facility told us that West Virginia pays for NAS services through two mechanisms, depending on whether the infant is in foster care. Specifically, if the infant is in foster care, the facility receives a bundled payment from the state Medicaid program and the Bureau of Children and Families. However, if the infant is not in foster care, the state Medicaid program pays for physician visits using a fee-for-service schedule. Additionally, the facility can receive payment under a per diem rate that is negotiated with state Medicaid managed care plans. The health care providers said that they also receive funding through grants and private donations to help cover the costs of NAS services. Stakeholders we interviewed and literature we reviewed suggest that the costs of treating infants with NAS in non-hospital settings were lower than treating them in hospital settings. However, supporting data and research of the costs in different settings are anecdotal or otherwise limited. For example: Health care providers from the neonatal withdrawal center in Washington told us that their facility could treat infants at a lower average cost per day than could hospitals—at about $700 per infant per day compared to an average cost of about $1,500-2,500 per infant per day in a hospital. These providers said that this cost savings is in part due to their limited staffing of nurses and their ability to leverage specially trained caregivers to provide infants with non-pharmacologic treatment and hands-on care, such as feeding and bathing. These providers also said they use volunteers to help with household duties, such as laundry and replenishing supplies. A health care provider from the neonatal withdrawal center in West Virginia conducted a study that found that the average daily charges per infant were about $400 in their facility, compared to about $2,600 in a special care nursery and $4,000 in a NICU. Two studies we reviewed found that inpatient-to-outpatient treatment approaches reduced hospital costs for NAS treatment; however, these studies were not generalizable and did not account for the duration of treatment across the two settings. Specifically, one study found that an inpatient-to-outpatient treatment approach reduced hospital length of stay by 55 percent—estimated to save hospitals $396 million annually—compared with treatment provided solely in a hospital. The second study found that infants who received care for NAS through an inpatient-to-outpatient treatment approach had an average length of stay of 13 days and cost about $14,000, while an inpatient- only approach had an average length of stay of 25 days and cost about $28,000. The 32 stakeholders we interviewed and the literature we reviewed identified several recommended practices for addressing NAS—that is, treating women with opioid use disorders during pregnancy or treating infants diagnosed with NAS after birth. The most frequently recommended practices were (1) prioritizing non-pharmacologic treatment, such as allowing the mother to reside with the infant during treatment, to facilitate the mother-infant bond; (2) educating mothers on prenatal care, treatment for NAS, and available resources for after an infant’s discharge; (3) educating health care providers on the stigma faced by women who use opioids during pregnancy and on how to screen for and treat NAS; and (4) using a protocol in a hospital or non-hospital setting for screening and treating infants with NAS. These recommended practices are described in more detail below. Volunteer programs to provide non- pharmacologic treatment for neonatal abstinence syndrome (NAS) Some stakeholders told us that some hospitals have established volunteer cuddler programs that train volunteers to help provide some of these non-pharmacologic treatments—-namely, swaddling, feeding, soothing, and coddling infants. However, health care providers at some facilities noted that volunteers are not necessarily available during late shifts. indicated that non-pharmacologic treatment may (1) facilitate the mother- infant bond, (2) reduce the severity of NAS symptoms, (3) reduce the need for pharmacologic treatment, and (4) reduce the length of an infant’s hospital stay. For example, two of the articles we reviewed noted that rooming-in has been shown to help decrease the need for pharmacologic treatment, the number of admissions to the NICU, and the length of an infant’s hospital stay. Additionally, 17 of the stakeholders we interviewed and nine articles we reviewed recommended that mothers be allowed to breastfeed while their infants are treated for NAS, as it helps to build a bond between the mother and infant. Most of these articles also noted that breastfeeding has been shown to reduce the severity of NAS. Educating mothers on prenatal care, treatment for NAS, and resources for after an infant’s hospital discharge. Most stakeholders we interviewed and several of the literature articles we reviewed recommended providing comprehensive, ongoing education to mothers on prenatal care and treatment for NAS and on the resources that are available after an infant’s discharge. (See text box below). The stakeholders and literature indicated that this education may (1) facilitate a non-combative relationship between the mother and health care providers; (2) help to reassure and support the mother, who may feel responsible for the infant’s suffering, in addition to facilitating treatment of NAS; and (3) help the mother understand her infant’s behavior and develop greater confidence in her parenting skills. For example, one article noted that an infant’s withdrawal behavior, such as fisting, back arching, and jaw clenching, may be misinterpreted by the mother as dislike of touch, and that educating mothers on these behaviors can help alleviate feelings of guilt. Education for mothers on prenatal care, treatment for neonatal abstinence syndrome (NAS), and resources for after an infant’s hospital discharge Explaining to the mother during the prenatal period what she can expect when the infant is born to help ensure she understands the effects of and treatment for NAS; Informing the mother about non-pharmacologic treatment techniques that can help reduce the severity of the infant’s NAS symptoms; Modeling good parenting skills, such as demonstrating how to comfort an infant who may be crying inconsolably for hours because of withdrawal; and Informing the mother about contraception for preventing future pregnancies. Educating health care providers on the stigma faced by women who use opioids during pregnancy, and how to screen for and treat NAS. Most stakeholders we interviewed and several of the literature articles we reviewed recommended educating health care providers, including providers who are not addiction specialists, on both the stigma faced by women who use opioids during pregnancy as well as on how to screen for and treat infants with NAS. The stakeholders and literature indicated that this education may: (1) improve care so that mothers with opioid use disorders feel more comfortable seeking and obtaining prenatal care, (2) help health care providers know how to recognize NAS symptoms to help ensure infants receive appropriate treatment, and (3) allow for more consistency among these providers in NAS screening and treatment. For example, 26 stakeholders told us that educating health care providers about stigma is important because provider attitudes affect how and if pregnant women obtain prenatal care and treatment for their opioid use disorders, which can affect the severity of NAS. Additionally, several articles we reviewed noted the importance of educating and training clinicians on how to administer the screening tools used to identify infants with NAS, which helps ensure infants are identified and receive optimal care. Using a protocol for screening and treating infants with NAS. While there is no single national standard of care for screening and treating NAS, most stakeholders we interviewed and several of the literature articles we reviewed recommended that hospital and non-hospital settings use a protocol to screen for and treat infants with NAS. The stakeholders and literature indicated that having a protocol can help: (1) identify infants at risk for NAS, (2) ensure that care is provided consistently, and (3) reduce the length of stay for infants receiving pharmacologic treatment. For example, the stakeholders we interviewed explained that a standard protocol also helps health care providers understand the tools used to assess the severity of NAS; know the types of medication used in treatment, including amounts and duration; and learn how to wean the infant off these medications. Similarly, one article we reviewed noted that infants who were treated at facilities that adopted standard treatment protocols experienced shorter durations of pharmacologic treatment compared with infants who were treated at facilities that did not use a standard protocol. Stakeholders we interviewed and literature we reviewed identified several challenges health care providers face in their efforts to address NAS. The most frequently cited challenges included (1) the use of multiple substances by pregnant women, which can exacerbate NAS; (2) the stigma faced by women who use opioids during pregnancy, which may affect whether they seek prenatal care to address NAS, among other things; (3) hospital staff burden and limited physical capacity to care for infants with NAS; (4) limited coordination of care for mothers and infants with NAS; and (5) gaps in research and data on NAS. These challenges are described in more detail below. The use of multiple substances by pregnant women, which can exacerbate NAS. Most stakeholders we interviewed and some of the literature we reviewed noted that the use of multiple substances by pregnant women, including opioids—referred to as maternal polysubstance use—can be a challenge, and some stated that the use of these substances can exacerbate NAS symptoms. According to the stakeholders, the substances can include methamphetamines, nicotine, alcohol, cocaine, marijuana, benzodiazepines, and Gabapentin. The stakeholders and literature indicated that maternal polysubstance use can lead to multiple conditions in the infant—such as prematurity or Hepatitis C—that can exacerbate NAS symptoms and prolong the length of an infant’s hospital stay. For example, one expert noted that many women with opioid use disorders are also heavy cigarette smokers, and the nicotine typically exacerbates NAS withdrawal symptoms. Additionally, officials from a hospital and non-hospital setting we visited told us that they had developed a separate protocol for treating infants exposed to multiple substances that includes the use of several medications to address the more severe NAS withdrawal symptoms. Stigma faced by women who use opioids which may affect whether they seek prenatal care to mitigate the severity of NAS, among other things. Most stakeholders we interviewed and several of the literature articles we reviewed noted that the stigma faced by pregnant women with opioid use disorders is a challenge in addressing NAS. The stakeholders and literature indicated that stigma may: (1) prevent pregnant women from seeking substance use treatment or prenatal care; (2) prevent them from disclosing their drug use to health care providers during pregnancy; or (3) cause the women to fear punitive effects, such as losing custody of their children, being detained, or losing their jobs. For example, officials from one perinatal quality collaborative told us that these women may fail to seek care because of stigma, which can ultimately make it more difficult for health care providers to build relationships with these women and identify infants at risk for NAS. Hospital staff burden and limited physical capacity to care for infants with NAS. According to most stakeholders we interviewed and some literature we reviewed, staff burden and a limited physical capacity at facilities can pose challenges for addressing NAS. The stakeholders and literature indicated that there is increased burden on staff to care for these infants because they require frequent, personal attention. For example, the stakeholders explained that a hospital may have to increase the number of nurses on duty in order to provide the care the infants need. Health care providers at one hospital said that nurses still struggle to care for infants with NAS, even with additional staff, because these infants are overstimulated, cry, and do not eat or sleep well. As a result, they require much time and one-on-one attention—including cuddling— from nurses. With respect to physical capacity, some stakeholders told us that limited physical capacity can make it difficult to (1) find space in the facility where the infants can be protected from high levels of stimulation and (2) facilitate the mother-infant bond. For example, some stakeholders told us that hospitals may not have a dedicated space for rooming-in, making it more difficult to facilitate bonding between mothers and infants. Limited coordination of care for mothers and infants with NAS. Most stakeholders we interviewed explained that the lack of coordination among health care providers and others for the mother and infant with NAS during the prenatal period, after the infant is born, and following the infant’s discharge can be a challenge. This coordination includes organizing patient care activities and sharing information among health care providers, social workers, and all other participants concerned with the mother and infant’s care. The stakeholders indicated that this lack of coordination can make it difficult for families to get the resources or support they need. (See text box below). For example, some stakeholders told us that women may miss health care visits because of a lack of access to enabling services such as transportation or child care. Limited coordination of care for mothers and infants with neonatal abstinence syndrome (NAS) One expert told us that there is a disproportionate number of infants with NAS born in rural areas. Infants in these areas may be discharged from the hospital without many follow-up services, such as transportation and care coordination. Gaps in research and data on NAS. Some stakeholders we interviewed noted that gaps in research and data on NAS make it challenging to conduct research on the affected population and fully understand the magnitude of the problem. The stakeholders indicated that there are gaps in adequate research and data on (1) the different types of treatment approaches for NAS; (2) the extent and effects of maternal polysubstance use among pregnant women; (3) the long-term effects of prenatal drug exposure, including the effects seen in childhood and adolescence; and (4) the efforts to ensure more consistent provider diagnosis and screening, such as through an improved screening tool. For example, the stakeholders told us that gaps in research and data may contribute to a lack of a national standard of care for screening and treating infants with NAS. According to some stakeholders, this may result in missed opportunities for identifying and treating infants with NAS. Some stakeholders also told us that because of gaps in research on the long- term effects of prenatal drug exposure, there is limited information on the types of services that infants with NAS may need in early childhood. Additionally, some stakeholders noted they found that because NAS was not consistently diagnosed and coded in medical records using diagnosis codes, the condition may be under-reported, and researchers may be limited in their ability to track these infants. In May 2017, HHS published the Protecting Our Infants Act: Report to Congress, which—among other things—presents a strategy that identifies key recommendations related to addressing NAS. Specifically, HHS’s strategy—known as the Protecting Our Infants Act: Final Strategy—made 39 recommendations related to the prevention, treatment, and related services for NAS and prenatal opioid use. Of the 39 recommendations HHS made in its report, we found that 28 of them directly relate to the recommended practices or challenges that we describe above. For example, the Strategy recommends the following: promoting non-pharmacologic treatment, such as rooming-in; providing continuing medical education to health care providers for managing and treating infants with NAS, such as on NAS treatment protocols; conducting research on the long-term effects of prenatal drug exposure so that appropriate services can be developed for infants with NAS; and establishing clear definitions of NAS and standardizing the use of diagnosis codes to collect more meaningful and actionable data on NAS. According to the Strategy, the recommendations will be used to inform planning and policy across HHS. However, HHS does not include any information in the Strategy on how the department and other stakeholders will implement the recommendations. Specifically, HHS does not include in its Strategy the following: the explicit priorities among the numerous recommendations and associated efforts the department has initiated related to NAS; timeframes for partial or full implementation of these recommendations; clear roles and responsibilities for the recommendations, such as the extent to which HHS will need to rely on the medical community and federal and public stakeholders for implementation; and the methods that will be used to assess the department’s progress in implementing any of these recommendations. HHS officials told us that they expect to develop a separate plan to guide implementation of the recommendations and that efforts to develop this plan were likely to begin in July 2017. However, as of September 2017, HHS could not provide any documentation that it had started to develop this implementation plan or establish a timeline for completing the plan; nor was HHS able to provide any information on what the plan may include. Having such a plan in place is important to ensure priorities are known and responsibilities are clear so that agencies and stakeholders can take appropriate action. Federal internal control standards call for agencies to have defined objectives clearly as part of their objective- setting process and to assign roles and responsibilities for achieving these objectives. Objectives defined in specific and measurable terms allow for the assessment of performance toward achieving objectives. Furthermore, leading principles on sound planning we have identified in our prior work call for developing robust plans to achieve agency goals. Until HHS finalizes an implementation plan that includes specific priorities, timeframes, responsibilities, and methods for evaluating progress, it is at risk of not being able to provide reasonable assurance that it can successfully implement these recommendations in a timely manner and assess the effectiveness of its efforts. The rising opioid crisis has caused a significant increase in the number of infants born and diagnosed with NAS, a condition that affects infants and their families, hospitals, and other health care providers who are treating them. The increase in infants born with NAS also increases medical and other treatment costs experienced by the federal government and states. HHS recently published a strategy with key recommendations that have the potential to address some of the challenges related to treating NAS. However, HHS lacks a sound plan for implementing these recommendations. The absence of such planning raises questions about whether and when HHS will be able to implement these recommendations in a timely manner and be able to assess its progress. The Secretary of HHS should expeditiously develop a plan—that includes priorities, timeframes, clear roles and responsibilities, and methods for assessing progress—to effectively implement the NAS-related recommendations identified in the Protecting Our Infants Act: Final Strategy. (Recommendation 1) We provided a draft of this report to HHS for review, and HHS provided written comments, which are reprinted in appendix III. HHS also provided technical comments, which we incorporated as appropriate. In its written comments, HHS concurred with our recommendation to expeditiously take steps to address NAS and re-stated that its Strategy will be used to inform planning and policy across HHS. Specifically, HHS said that as part of its broader initiative to address the opioid crisis, the department will develop and implement a plan—that will include priorities, timeframes, roles and responsibilities, and methods for assessing progress—to address as appropriate and possible, the NAS-related recommendations in its Strategy. HHS also stated that full implementation would be contingent on funding, though it provided no information on how much funding was needed or how the funding would be used. Developing a plan to guide implementation can help the department determine what resources, if any, are needed to implement the recommendations in its Strategy. We are sending copies of this report to the appropriate congressional addressees, the Secretary of Health and Human Services, and other interested parties. In addition, the report will be available at no charge on GAO’s website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7114 or at iritanik@gao.gov. Contact points for our Office of Congressional Relations and Office of Public Affairs can be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV. To address our first three audit objectives to describe care settings for treating infants with neonatal abstinence syndrome (NAS), Medicaid payment for NAS treatment, and the recommended practices and challenges for addressing NAS, we selected 32 stakeholders based on their relevant experience to cover a range of perspectives on NAS. Specifically, these stakeholders included those from site visits we conducted to four states—Kentucky, Vermont, West Virginia, and Wisconsin. We selected these states because they met the following criteria: 1. the state had one of the top 10 highest incidence rates of NAS, according to data from the Centers for Disease Control and Prevention (CDC) for 2013, the most recent year of publicly available data; 2. the state provided variation in United States geographic regions with high rates of NAS, as of 2012; 3. more than 40 percent of births in the state were financed by Medicaid, according to a 2016 Kaiser Family Foundation Medicaid Budget Survey; and 4. the state has a perinatal quality collaborative—a state or multi-state network of teams working to improve health outcomes for mothers and infants—with work related to NAS, which we identified through the American College of Obstetricians and Gynecologists. As part of these site visits, we interviewed (1) officials from each of the four states, including Medicaid officials, Maternal and Child Health Directors, and Women’s Services Coordinators; (2) representatives from the four state perinatal collaboratives; (3) health care providers (including physicians or nurses) from eight hospitals of varying levels of care (two hospitals in each state), which were selected based on recommendations from the state perinatal collaboratives because of the hospitals’ experience treating NAS; and (4) officials from a residential treatment facility in each of the four states that provide prenatal and postpartum care to mothers, which were also selected based on recommendations from the state perinatal collaboratives regarding the facilities’ experience with pregnant women with opioid use disorders and their infants with NAS. In addition to our site visits, we selected 12 additional stakeholders that included health care providers or administrators in non-hospital settings across the United States; officials from medical specialty societies; and experts. Specifically, we spoke with (1) health care providers (including physicians or nurses) or administrators from four non-hospital settings in Arizona, Ohio, Washington, and West Virginia, which were selected based on recommendations from stakeholders we interviewed and on the availability of such settings and their experience treating NAS; (2) health care providers from five medical specialty societies, including the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, the American Society of Addiction Medicine, MedNAX (a network of physicians that specialize in neonatal care, including NAS treatment), and the National Association of Neonatal Nurses; and (3) three experts, including the authors of published literature we reviewed. We interviewed each of these 32 stakeholders and requested information from stakeholders about treating infants with NAS, including the utilization of available hospital and non-hospital care settings and associated costs of treatment services. For example, we requested protocols for screening and treating infants with NAS from hospital and non-hospital care settings. We reviewed available protocols provided by hospitals and a non-hospital care setting. We also reviewed available information reported by state officials, hospital and non-hospital providers, and state perinatal collaboratives on the utilization of hospital and non-hospital care settings, the facilities’ cost of treating NAS in hospital and non-hospital settings, the lengths of stay for treating infants with NAS, or the amount of Medicaid payments for treating infants with NAS. We discussed the information provided by stakeholders and examined the information for obvious errors. The information obtained from these stakeholders is not generalizable to other states or other hospital and non-hospital settings. In addition, in some cases, stakeholders used different methods to collect the information they reported, including information on Medicaid payments; as a result, the information reported by stakeholders is not directly comparable. Additionally, we interviewed officials from HHS, including those from the Centers for Medicare & Medicaid Services (CMS) and HHS’s Behavioral Health Coordinating Council—which includes officials from the Substance Abuse and Mental Health Services Administration (SAMHSA), the Indian Health Service, the Centers for Disease Control and Prevention (CDC), and the Food and Drug Administration, among others—concerning NAS treatment services, settings of care, Medicaid payment, and recommended practices and challenges related to addressing NAS. We also conducted a comprehensive literature review to identify relevant studies on NAS published in peer-reviewed journals from January 2013 to December 2016. We searched more than 40 databases for research published in relevant peer-reviewed journals, including BIOSIS Previews®, Embase®, Gale Group Health Periodicals Database, MEDLINE®, and New England Journal of Medicine. Key search terms included “neonatal abstinence syndrome,” “neonatal opioid withdrawal syndrome,” and “newborn infants.” After excluding duplicates, we identified and reviewed 325 abstracts. For those abstracts we found relevant, we obtained and reviewed the full study and selected 40 that were relevant to (1) hospital and non-hospital settings and related treatment services for infants with NAS; (2) the costs associated with treating infants with NAS, including Medicaid payments for services in these care settings; or (3) recommended practices and challenges for addressing NAS. We examined the methodologies for each of these studies and interviewed some of their authors. We determined that the studies were sufficiently reliable for our audit objectives. For a complete list of the studies we reviewed, see below. To examine our last audit objective on HHS’s strategy related to addressing NAS, we interviewed agency officials and reviewed agency documents on the agency’s efforts to develop a strategy. Specifically, we interviewed relevant officials from CMS and HHS’s Behavioral Health Coordinating Council concerning their efforts to develop a strategy related to addressing NAS. In reviewing relevant HHS documents, we focused on HHS’s Protecting Our Infants Act Report to Congress, which includes a strategy to address identified gaps, challenges, and recommendations related to NAS and prenatal opioid use. In addition, we reviewed the relevant standards for internal control in the federal government and the relevant criteria from GAO’s body of work on effectively managing performance under the Government Performance and Results Act (GPRA) of 1993 and the GPRA Modernization Act of 2010. Allocco, E., M. Melker, F. Rojas-Miguez, C. Bradley, K. A. Hahn, and E. M. Wachman. “Comparison of Neonatal Abstinence Syndrome Manifestations in Preterm Versus Term Opioid-Exposed Infants.” Advances in Neonatal Care, vol. 16, no.5 (2016). Artigas, V. “Management of Neonatal Abstinence Syndrome in the Newborn Nursery.” Nursing for Women’s Health, vol. 18, issue 6 (Dec. 2014/Jan. 2015). Asti, L., J. S. Magers, E. Keels, J. Wispe, and R. E. McLead. “A Quality Improvement Project to Reduce Length of Stay for Neonatal Abstinence Syndrome.” Pediatrics, vol. 135, no. 6 (2015). Busch, D. W. “Clinical management of the Breast-Feeding Mother-Infant Dyad in Recovery from Opioid Dependence.” Journal of Addictions Nursery, vol. 27, no. 2 (2016). Casper, T. and M. Arbour. “Evidence-Based Nurse-Driven Interventions for the Care of Newborns with Neonatal Abstinence Syndrome.” Advances in Neonatal Care, vol. 14, no. 6 (2014). Chau, K. T., J. Nguyen, B. Miladinovic, C. M. Lilly, T. L. Ashmeade, and M. Balakrishnan. “Outpatient Management of Neonatal Abstinence Syndrome: A Quality Improvement Project.” The Joint Commission Journal on Quality and Patient Safety, vol. 42, no. 11 (2016). Cirillo, C. and K. Francis. “Does Breast Milk Affect Neonatal Abstinence Syndrome Severity, the Need for Pharmacologic Therapy, and Length of Stay for Infants of Mothers on Opioid Maintenance Therapy During Pregnancy?” Advances in Neonatal Care, vol. 16, no.5 (2016). Clark, L. and A. Rohan. “Identifying and Assessing the Substance- Exposed Infant.” MCN in Advance (2015). Demirci, J. R., D. L. Bogen, and Y. Klionsky. “Breastfeeding and Methadone Therapy: The Maternal Experience.” Substance Abuse, vol. 36, no. 2 (2015). Edwards, L. and L. F. Brown. “Nonpharmacologic Management of Neonatal Abstinence Syndrome: An Integrative Review.” Neonatal Network, vol. 35, no. 5 (2016). Gregory, K. E. “Caring for the Infant with neonatal Abstinence Syndrome in a Community-Based Setting.” The Journal of Perinatal & Neonatal Nursing, (2014). Grim, K., T. E. Harrison, and R. T. Wilder. “Management of Neonatal Abstinence Syndrome from Opioids.” Clinics in Perinatology, (2013). Hahn, J., A. Lengerich, R. Byrd, R. Stoltz, J. Hench, S. Byrd, and C. Ford. “Neonatal Abstinence Syndrome: The Experience of Infant Massage.” Creative Nursing, vol. 22, issue 1 (2016). Hall, E. S., S. L. Wexelblatt, M. Crowley, J. L. Grow, L. R. Jasin, M. A. Klebanoff, R. E. McClead, J. Meinzen-Derr, V. K. Mohan, H. Stein, and M. C. Walsh. “A Multicenter Cohort Study of Treatments and Hospital Outcomes in Neonatal Abstinence Syndrome.” Pediatrics, vol. 134, no. 2 (2014). Hall, E. S., S. L. Wexelblatt, M. Crowley, J. L. Grow, L. R. Jasin, M. A. Klebanoff, R. E. McClead, J. Meinzen-Derr, V. k. Mohan, H. Stein, and M. C. Walsh. “Implementation of a Neonatal Abstinence Syndrome Weaning Protocol: A Multicenter Cohort Study.” Pediatrics, vol. 136, no. 4 (2015). Holmes, A. V., E. C. Atwood, B. Whalen, J. Beliveau, J. D. Jarvis, J. C. Matulis, and S. L. Ralston. “Rooming-In to Treat Neonatal Abstinence Syndrome: Improved Family-Centered Care at Lower Cost.” Pediatrics, vol. 137, no. 6 (2016). Jones, H. E., K. Deppen, M. L. Hudak, L. Leffert, C. McClelland, L. Sahin, J. Starer, M. Terplan, J. M. Throrp Jr., J. Walsh, and A. A. Creanga. “Clinical Care for Opioid-Using Pregnant and Postpartum Women: The Role of Obstetric Providers.” American Journal of Obstetrics & Gynecology, vol. 210, issue 4 (2014). Jones, H.E., C. Seashore, E. Johnson, E. Horton, K.E. O’Grady, K. Andringa, M. R. Grossman, B. Whalen, and A.V. Holmes. “Brief Report: Psychometric Assessment of the Neonatal Abstinence Scoring System and the MOTHER NAS Scale.” American Journal on Addictions, (2016). Kraft, W.K., M. W. Stover, and J. M. Davis. “Neonatal Abstinence Syndrome: Pharmacologic Strategies for the Mother and Infant.” Seminars in Perinatology, vol. 40, issue 3 (2016). Krans, E. E., G. Cochran, and D. L. Bogen. “Caring for Opioid Dependent Pregnant Women: Prenatal and Postpartum Care Considerations.” Clinical Obstetrics and Gynecology, vol. 58, no. 2 (2015). Lee, J., S. Hulman, M. Musci Jr., and E. Stang. “Neonatal Abstinence Syndrome: Influence of a Combined Inpatient/Outpatient Methadone Treatment Regimen on the Average Length of Stay of a Medicaid NICU Population.” Population Health Management, vol. 18, no.5 (2015). MacMullen, N. J., L. A. Dulski, and P. Blobaum. “Evidence-Based Interventions for Neonatal Abstinence Syndrome.” Pediatric Nursing, vol. 40, no. 4 (2014). Maguire, D. J., “Mothers on Methadone: Care in the NICU.” Neonatal Network, vol. 32, no. 6 (2013). Marcellus, L. “Supporting Women with Substance Use Issues: Trauma- Informed Care as a Foundation for Practice in the NICU.” Neonatal Network, vol. 33, no.6 (2014). McKeever, A. E., S. Spaeth-Brayton, and S. Sheerin. “The Role of Nurses in Comprehensive Care Management of Pregnant Women with Drug Addiction.” Nursing for Women’s Health, vol. 18, no.4 (2014). Meyer, M. and J. Phillips. “Caring for Pregnant Opioid Abusers in Vermont: A Potential Model for Non-Urban Areas.” Preventive Medicine, vol. 80 (2015). Newnam, K. M. “The Right Tool at the Right Time: Examining the Evidence Surrounding Measurement of Neonatal Abstinence Syndrome.” Advances in Neonatal Care, vol. 14, no.3 (2014). Orlando, S. “An Overview of Clinical Tools Used to Assess Neonatal Abstinence Syndrome.” Journal of Perinatal and Neonatal Nursing, vol. 28, no.3 (2014). Patrick, S.W., M.M. Davis, C.U. Lehman, and W.O. Cooper. “Increasing Incidence and Geographic Distribution of Neonatal Abstinence Syndrome: United States 2009 to 2012.” Journal of Perinatology, vol. 35 (2015). Patrick, S.W., H.C. Kaplan, M. Passarella, M.M. Davis, and S.A. Lorch. “Variation in Treatment of Neonatal Abstinence Syndrome in U.S. Children’s Hospitals, 2004-2011.” Journal of Perinatology, vol. 34, no. 11 (2014). Patrick, S.W., J. Dudley, P.R. Martin, F.E. Harrell, M.D. Warren, K.E. Hartmann, E.W. Ely, C.G. Grijalva, and W.O. Cooper. “Prescription Opioid Epidemic and Infant Outcomes.” Pediatrics, vol. 135, no.5 (2015). Patrick, S.W., R. E. Schumacher, J. D. Horbar, M. E. Buus-Frank, E. M. Edwards, K. A. Morrow, K. R. Ferrelli, A. P. Picarillo, M. Gupta, and R. F. Soll. “Improving Care for Neonatal Abstinence Syndrome.” Pediatrics, vol. 137, no. 5 (2016). Reece-Stremtan, S., and K. A. Marinelli. “ABM Clinical Protocol #21: Guidelines for Breastfeeding and the Drug-Dependent Woman, Revised 2015.” Breastfeeding Medicine, vol. 10, no.3 (2015). Shaw, M. R., C. Lederhos, M. Haberman, D. Howell, S. Fleming, and J. Roll. “Nurses Perceptions of Caring for Childbearing Women Who Misuse Opioids.” The American Journal of Maternal-Child Nursing, vol. 41, no. 1 (2016). Sublett, J. “Neonatal Abstinence Syndrome: Therapeutic Interventions.” The American Journal of Maternal-Child Nursing, vol. 38, no. 2 (2013). Sutter, M. B., L. Leeman, and A. Hsi. “Neonatal Opioid Withdrawal Syndrome.” Obstetrics and Gynecology Clinics of North America, vol. 41, issue 2 (2014). Teague, A. H., A. J. Jnah, and D. Newberry. “Intraprofessional Excellence in Nursing: Collaborative Strategies for Neonatal Abstinence Syndrome.” Neonatal Network, vol. 34, no.6 (2015). Terplan, M., A. Kennedy-Hendricks, and M. S. Chisolm. “Prenatal Substance Use: Exploring Assumptions of Maternal Unfitness.” Substance Abuse: Research and Treatment (2015). Tolia, V. N., S. W. Patrick, M. M. Bennett, K. Murthy, J. Sousa, P. B. Smith, R. H. Clark, and A. R. Spitzer. “Increasing Incidence of the Neonatal Abstinence Syndrome in U.S. Neonatal ICUs.” The New England Journal of Medicine, vol. 372, no. 22 (2015). Wiles, J. R., B. Isemann, L. P. Ward, A. A. Vinks, and H. Akinbi. “Current Management of Neonatal Abstinence Syndrome Secondary to Intrauterine Opioid Exposure.” Journal of Pediatrics, vol. 165, no. 3 (2014). The Department of Health and Human Services (HHS) has published several guidance and educational resources related to neonatal abstinence syndrome and prenatal opioid use. According to HHS, these documents serve as tools to help stakeholders, including state entities and health care providers, and policymakers. Examples of these resources are listed below. Centers for Disease Control and Prevention (CDC), Pregnancy and Opioid Medications Factsheet, accessed June 8, 2017, https://www.cdc.gov/drugoverdose/pdf/pregnancy_opioid_pain_factsheet- a.pdf. CDC Public Health Grand Rounds, Primary Prevention and Public Strategies to Prevent Neonatal Abstinence Syndrome (Atlanta, GA: CDC, last updated August 18, 2016), accessed July 19, 2017, https://www.cdc.gov/cdcgrandrounds/archives/2016/August2016.htm. CDC, Treating for Two: Safer Medication Use in Pregnancy Initiative (Atlanta, GA: CDC, last updated May 5, 2016), accessed June 8, 2017, https://www.cdc.gov/pregnancy/meds/treatingfortwo. Department of Health and Human Services, Opioids: The Prescription Drug & Heroin Overdose Epidemic (Washington, D.C., last reviewed March 24, 2016), accessed June 8, 2017, https://www.hhs.gov/opioids/index.html. Department of Health and Human Services, National Center for Substance Abuse and Child Welfare, Resources & Topics on Neonatal Abstinence Syndrome, accessed June 8, 2017, https://www.ncsacw.samhsa.gov/resources/opioid-use-disorders-and-me dication-assisted-treatment/neonatal-abstinence-syndrome.aspx. Jean Y. Ko. et al., “CDC Grand Rounds: Public Health Strategies to Prevent Neonatal Abstinence Syndrome,” Morbidity and Mortality Weekly Report (Centers for Disease Control and Prevention, March 10, 2017), accessed June 8, 2017, https://www.cdc.gov/mmwr/volumes/66/wr/mm6609a2.htm. National Institute on Drug Abuse, Principles of Substance Abuse Prevention for Early Childhood: A Research Based Guide (last updated March 2016), accessed June 8, 2017, https://www.drugabuse.gov/publications/principles-substance-abuse-prev ention-early-childhood/principles-substance-abuse-prevention-early-child hood. National Institute on Drug Abuse, Substance Use in Women (last updated September 2016), accessed June 8, 2017, https://www.drugabuse.gov/publications/research-reports/substance-use-i n-women/summary. Reddy, Uma M. J. M. Davis, Z. Ren, and M. F. Greene, “Opioid Use in Pregnancy, Neonatal Abstinence Syndrome, and Childhood Outcomes: Executive Summary of a Joint Workshop.” Obstetrics and Gynecology, vol. 130, issue 1 (July 2017). Substance Abuse and Mental Health Services Administration, A Collaborative Approach to the Treatment of Pregnant Women with Opioid Use Disorders. HHS Publications No. (SMA) 16-4978. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2016. Substance Abuse and Mental Health Services Administration, “Advancing the Care of Pregnant and Parenting Women With Opioid Use Disorder and Their Infants: A Foundation for Clinical Guidance,” Rockville, MD: Substance Abuse and Mental Health Services Administration, 2016. Substance Abuse and Mental Health Services Administration, “Methadone Treatment for Pregnant Women.” HHS Publication No. (SMA) 14-4124 (Rockville, MD: Substance Abuse and Mental Health Services Administration, revised 2014). In addition to the contact named above, Rashmi Agarwal, Assistant Director; Amy Leone, Analyst-in-Charge; Melissa Duong; Krister Friday; Jacquelyn Hamilton; Giao N. Nguyen; and Laurie Pachter made key contributions to this report. Drug Control Policy: Information on Status of Federal Efforts and Key Issues for Preventing Illicit Drug Use. GAO-17-766T. Washington, D.C.: July 26, 2017. Medicaid Expansion: Behavioral Health Treatment Use in Selected States in 2014. GAO-17-529. Washington, D.C.: July 21, 2017. VA Health Care: Actions Needed to Ensure Medical Facility Controlled Substance Inspection Programs Meet Agency Requirements. GAO-17-242. Washington, D.C.: February 15, 2017. Highlights of a Forum: Preventing Illicit Drug Use. GAO-17-146SP. Washington, D.C.: November 14, 2016. Opioid Addiction: Laws, Regulations, and Other Factors Can Affect Medication-Assisted Treatment Access. GAO-16-833. Washington, D.C.: September 27, 2016. Drug Enforcement Administration: Additional Actions Needed to Address Prior GAO Recommendations. GAO-16-737T. Washington, D.C.: June 22, 2016. Office of National Drug Control Policy: Progress toward Some National Drug Control Strategy Goals, but None Have Been Fully Achieved. GAO-16-660T. Washington, D.C.: May 17, 2016. Veterans Justice Outreach Program: VA Could Improve Management by Establishing Performance Measures and Fully Assessing Risks. GAO-16-393. Washington, D.C.: April 28, 2016. State Marijuana Legalization: DOJ Should Document Its Approach to Monitoring the Effects of Legalization. GAO-16-1. Washington, D.C.: December 30, 2015. Prescription Drugs: More DEA Information about Registrants’ Controlled Substances Roles Could Improve Their Understanding and Help Ensure Access. GAO-15-471. Washington, D.C.: June 25, 2015. Mental Health: Better Documentation Needed to Oversee Substance Abuse and Mental Health Services Administration Grantees. GAO-15-405. Washington, D.C.: May 12, 2015. Prenatal Drug Use and Newborn Health: Federal Efforts Need Better Planning and Coordination. GAO-15-203. Washington, D.C.: February 10, 2015. Medicare Program Integrity: CMS Pursues Many Practices to Address Prescription Drug Fraud, Waste, and Abuse. GAO-15-66. Washington, D.C.: October 24, 2014. Office of National Drug Control Policy: Office Could Better Identify Opportunities to Increase Program Coordination. GAO-13-333. Washington D.C.: March 26, 2013. Child Welfare: States Use Flexible Federal Funds, But Struggle to Meet Service Needs. GAO-13-170. Washington, D.C.: January 30, 2013.

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

Answer: USPS is required to prefund its share of health benefits costs for its retirees. To do so, USPS is required to make payments into the RHB Fund, which is administered by OPM. However, USPS has not made any payments to the fund since fiscal year 2010. At the end of fiscal year 2017, USPS had missed $38.2 billion in payments, leaving the fund 44 percent funded. Pursuant to law, beginning in fiscal year 2017, OPM started drawing from the fund to cover USPS's share of postal retirees' health benefits premiums. GAO was asked to review issues related to the sustainability of the RHB Fund. This report examines (1) the financial outlook for the RHB Fund and (2) policy approaches for postal retiree health benefits, among other topics. GAO evaluated financial projections for the RHB Fund from OPM. GAO reviewed laws and regulations and identified policy approaches primarily by identifying legislative proposals, and literature on actions of companies and state governments to address retiree health benefits. These approaches are not exhaustive or mutually exclusive. GAO also interviewed experts in retiree health benefits and postal stakeholders, chosen on the basis of relevant publications and prior GAO work, and interviewed and obtained written responses from OPM and USPS officials. The financial outlook of the Postal Service Retiree Health Benefits Fund (RHB Fund) is poor. At the end of fiscal year 2017, the fund's assets declined to $49.8 billion and unfunded liabilities rose to $62.2 billion. Based on Office of Personnel Management (OPM) projections requested by GAO, the fund is on track to be depleted in fiscal year 2030 if the United States Postal Service (USPS) continues to make no payments into the fund. Annual payments of $1 billion or $2 billion into the fund would extend the projected depletion date by 2 to 5 years (see figure). USPS has said that its required payments to the fund are unaffordable relative to its current financial situation and outlook. For the past 11 years USPS has incurred large operating losses that it expects will continue. Additionally, USPS has stated that its opportunities for revenue generation and cost-cutting are limited. USPS reported that it did not make required fund payments in 2017 in order to preserve liquidity and cover operational costs. If the fund becomes depleted, USPS would be required by law to make the payments necessary to cover its share of health benefits premiums for current postal retirees. Current law does not address what would happen if the fund becomes depleted and USPS does not make payments to cover those premiums. Depletion of the fund could affect postal retirees as well as USPS, customers, and other stakeholders, including the federal government. About 500,000 postal retirees receive health benefits and OPM expects that number to remain about the same through 2035. GAO identified three categories of policy approaches for postal retiree health benefits, based on legislative proposals and pertinent literature. First, some approaches, such as generally requiring eligible postal retirees to participate in Medicare, would shift costs to the federal government. Second, some approaches would reduce benefits or increase costs to postal retirees and/or employees. Third, some approaches would change how benefits are financed (see table). All of these approaches have different potential effects and would require congressional action. Thus, it is up to Congress to consider the merits of different approaches and determine the most appropriate action to take. It would be preferable to take action when careful consideration is possible, rather than wait until lack of adequate funding could disrupt postal retiree health benefits. Congress should consider passing legislation to put postal retiree health benefits on a more sustainable financial footing. USPS agreed that congressional action is needed and offered views on some policy approaches discussed in this report.