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Just In | The Hill 

As the 118th Congress begins, Americans may be wondering what, if anything, the legislative branch will accomplish in 2023. For a dose of optimism, they should look to the recently enacted National Defense Authorization Act, which included a bipartisan measure providing a blueprint for good government reforms in the 118th Congress. 

The Improving Government for America’s Taxpayers Act requires the comptroller general to provide an annual report to Congress with a streamlined list of open recommendations from Congress’s watchdog, the Government Accountability Office. The law, which was sponsored by Reps. Derek Kilmer (D-Wash.), William Timmons (R-S.C.), Sens. Rob Portman (R-Ohio), and Gary Peters (D-Mich.), requires the comptroller general to tell Congress how long priority recommendations have been open and provide estimates of potential savings. 

Each year, GAO issues more than 1,000 recommendations for ways to make the government work better, based on its reviews of government agencies and programs. GAO’s work is routinely used by federal agencies to improve management and by lawmakers developing legislation. 

It was already clear that GAO’s work was a great investment in good government: the office has resulted in an estimated $1.3 trillion in savings since 2002, and $55.6 billion in 2022. With a budget of just $722 million, this amounts to a return on investment of $74 for each dollar Congress spent on its watchdog. 

But federal agencies and Congress waste billions of dollars every year by failing to act on GAO’s recommendations. Only 77 percent of GAO’s recommendations are implemented within four years. More than 4,800 recommendations remain open, including 490 “priority recommendations” that “can save large amounts of money.” Fifty recommendations have been open for more than 12 years. If Congress and federal agencies acted on these good government reforms in a timely manner, taxpayers could save tens, if not hundreds, of billions of dollars.

Now, thanks to new nonpublic data we obtained from GAO through an open records request, we have a clearer picture than ever of the office’s past and potential achievements. Agency oversight has led to substantial savings, but far more could be done. For example, GAO’s oversight of the Department of Defense has resulted in $440 billion in savings since 2002, but 639 recommendations for the Pentagon remain open, including 52 priority recommendations. 

Other major savings have included more than $250 billion from oversight of the Department of Health and Human Services, which still has 151 open recommendations, and more than $100 billion from the Treasury Department, which has 95 open recommendations.

These outstanding recommendations aren’t controversial austerity measures, but rather commonsense reforms to get the federal government working more smoothly. One area ripe for reform, for example, is improper payments, which have cost federal agencies nearly $250 billion this year, according to the Office of Management and Budget. GAO has more than 100 open recommendations to prevent misspending. 

Similar nonpartisan open recommendations apply to virtually every part of the government. To take just two examples, according to GAO, Congress could save tens of billions of dollars by clarifying the Department of Energy’s rules for nuclear waste disposal, and billions more by correcting how Medicare pays for its laboratory tests.

Now, with the streamlined reporting and savings estimates mandated by the Improving Government for America’s Taxpayers Act, responsibility falls on congressional committees, which can use oversight hearings and legislation to require agencies to implement good government reforms. As Kilmer reasoned, “The folks at the Government Accountability Office work tirelessly to improve efficiency and save taxpayer dollars. But the GAO often makes recommendations that are never implemented. With the passage of the Improving Government for America’s Taxpayers Act, Congress will be better able to act on GAO recommendations—and to make government work better.”

Portman similarly told us, “Increasing transparency and visibility into the Government Accountability Office recommendations will make our government work better for all Americans—by saving money, reducing fraud, and increasing efficiency. This is good, commonsense legislation that will help members of Congress serve their constituents more effectively.”

Congressional leaders can encourage committees to focus on implementing watchdog recommendations in the 118th Congress. For example, the House of Representatives’ current rules require committees to prepare oversight plans, with bipartisan input, by March 1 to organize committees’ efforts. The House should amend this rule so that committees’ oversight plans must include reviewing open watchdog recommendations and taking actions to require federal agencies to implement them.

While partisan divisions will continue in the 118th Congress, following GAO’s recommendations offers a strong bipartisan opportunity for reform. As Americans realize the need to get their finances in order amid fears of a looming recession, we ought to demand the same from our government. 

Dan Lips is head of policy and Robert Bellafiore is research manager with Lincoln Network.

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Just In | The Hill 

A federal watchdog has found that Medicare lost out on millions of potential savings due to spotty oversight of the average sales price of medications, impacting how much Medicare Part B beneficiaries pay for coverage.

The Centers for Medicare & Medicaid Services (CMS) requires drug manufacturers to submit the quarterly average sales price (ASP) for medications, which is determined by dividing the amount of sales dollars by the volume of medication sold.

This information, along with additional drug data that must be submitted, affects where Medicare Part B payments are set. If this data in incomplete, then the CMS uses the wholesale acquisition cost for the specific drug, which is the price set by the manufacturer for direct sales without rebates, discounts or other reductions in price.

An online ASP data submission system was created in 2019 to help collect accurate data. This data is then subjected to quality checks each quarter by the CMS.

The Office of Inspector General (OIG) for the Department of Health and Human Services found in two reports released Tuesday that while the CMS has an established procedure to oversee data on the average sales price of medications, the agency lacks a process to review the manual analysis. Invalid or missing ASP data resulted in the CMS being unable to determine payment amounts for 8 percent of products between 2016 and 2020.

A limited number of outpatient drugs are covered under Medicare Part B, including medications that usually require equipment such as injections and those administered through nebulizers. The payment for covered medications is determined after the CMS calculates a drug’s average price per volume, which in turn is seen in Medicare Part B payments.

Due to quarterly changes in sale prices and volume, manufacturers sometimes submit pricing data for a drug that is equal to or less than zero, which can be an error but can also be an appropriate amount in certain situations, such as when the manufacturer had no sales to report for that specific quarter.

According to the OIG, regardless of whether these valueless or negative prices are appropriate, the CMS does not include them in its calculations for Part B payments.

“CMS did not accurately implement all price reductions, which are an important tool to lower prescription drug costs. Gaps in CMS’s oversight processes prevented the program and its enrollees from realizing millions in savings,” the OIG said.

These incorrectly implemented reductions resulted in a loss of $2.8 million in savings, according to the OIG. The agency came to this conclusion after reviewing drug payment data from the first quarter of 2016 to the last quarter of 2020.

Edward Burley, the OIG’s deputy regional inspector general, told The Hill that the $2.8 million lost in savings was the result of the CMS setting Medicare payment amounts at a higher, incorrect number for two drugs.

Burley’s office had recommended that these prices be adjusted down, which the CMS did not do.

“By virtue of making that mistake, they lost out on $2.8 million in savings. So that that was a specific issue about essentially CMS taking our recommendations and just incorrectly inputting the payment amounts and making an error on that front, which resulted in the lost savings,” said Burley.

The OIG recommended that the CMS develop a strategy of internal controls to ensure the accuracy of Medicare Part B payments.

In its response to the OIG report, the CMS said it identified “legitimate reasons” for not calculating payment amounts for certain drugs and said its current system fell within “statutory requirements.” The agency, however, said it shared in the report’s concerns regarding Part B payments.

“We are proactively looking for ways to strengthen our internal controls and are actively working on enhancements to the current ASP system and internal processes. We will take OIG’s suggestions into considerations as we continue to make enhancements in this area,” the CMS said in its response.

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