Federal Reports

What We Looked AtEffective evacuations of aircraft during emergencies can help save lives. Two aircraft accidents involving evacuations—one in September 2015 involving a British Airways aircraft and another in October 2016 involving an American Airlines aircraft—resulted in no fatalities, and highlighted the importance of effective aircraft evacuation standards. Federal Aviation Administration (FAA) regulations require that aircraft manufacturers demonstrate that all passengers and crew can evacuate an aircraft within 90 seconds by conducting live demonstrations of simulated evacuations or through a combination of analyses and testing. Our audit objective was to assess FAA’s process for developing and updating aircraft emergency evacuation standards, including how changes in passenger behavior, passenger demographics, and seating capacity affect the standards.What We FoundFAA’s process for updating its evacuation standards lacks data collection and analysis on current risks. FAA largely updates evacuation standards only after accidents and it conducted its last update based on an accident in 1991. FAA also has not conducted sufficient research on passenger behaviors—such as evacuations with carry-on bags and the presence of emotional support animals—and seat dimensions to show how they affect evacuation standards. Furthermore, FAA does not collect comprehensive evacuation data to identify needs for regulation updates, and allows manufacturers to use decade-old data in evacuation analyses. FAA’s Safety Management System requires FAA programs to collect and analyze comprehensive data using systematic procedures and policies for the management of safety risk. However, FAA has not established a systematic process to obtain and evaluate data from accidents and demonstrations. As a result, FAA is inhibiting its ability to identify current evacuation risks and updates to its aircraft emergency evacuation standards.RecommendationsWe made two recommendations to help FAA improve its data collection and analysis for developing and updating aircraft emergency evacuation standards. FAA concurred with both recommendations. 

Noridian Healthcare Solutions, LLC, and MedicareNHS is a subsidiary of Blue Cross Blue Shield of North Dakota (BCBS North Dakota) (formerly Noridian Mutual Insurance Company), whose home office is in Fargo, North Dakota. NHS administered Medicare Part A, Medicare Part B, and Medicare Durable Medical Equipment (DME) contract operations under MAC contracts for Medicare Parts A and B Jurisdictions E and F and Medicare DME Jurisdictions A and D. In addition, NHS held the Pricing, Data Analysis and Coding (PDAC) contract. Nonqualified PlansBCBS North Dakota sponsors nonqualified plans called the Supplemental Retirement Program for Certain Employees of Blue Cross Blue Shield of North Dakota (SERP plan) and the Noridian Select Retirement Plan for Select Approved Employees of Noridian Mutual Insurance Company (Select plan). The purpose of the SERP plan is to provide deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974. The purpose of the Select plan is to provide benefits for select executive employees who are unable to participate in certain other programs. Select plan benefits are accrued similarly to benefit accrual under the SERP plan. NHS claimed nonqualified costs (for both plans) using the pay-as-you-go basis of accounting. This report addresses the allowable nonqualified costs claimed by NHS under the provisions of its MAC contracts and its CAS- and FAR-covered contracts. The disclosure statement that NHS submits to CMS states that NHS uses pooled cost accounting. Medicare contractors use pooled cost accounting to calculate the indirect cost rates (whose computations include pension, postretirement benefit, nonqualified, and Restoration Plan costs) that they submit on their ICPs. Medicare contractors use the indirect cost rates to calculate the contract costs that they report on their ICPs. In turn, CMS uses these indirect cost rates in determining the final indirect cost rates for each contract. Accounting Methodologies The Medicare contracts require NHS to calculate nonqualified costs in accordance with the FAR and CAS 412 and 413. The FAR and the CAS require that the costs for nonqualified plans be measured under either the accrual method or the pay-as-you-go method. Under the accrual method, allowable costs are based on the annual contributions that the employer deposits into its trust fund. For nonqualified plans that are not funded through the use of a funding agency, costs are to be accounted for under the pay-as-you-go method. This method is based on the actual benefits paid to participants, which are comprised of lump-sum payments and annuity payments. Incurred Cost Proposal AuditsAt CMS’s request, Kearney and Company (Kearney) and Davis Farr, LLP (Farr), performed audits of the ICPs that NHS submitted for CYs 2014 through 2016. The objectives of the Kearney and Farr ICP audits were to determine whether costs were allowable in accordance with the FAR, the U.S. Department of Health and Human Services Acquisition Regulation, and the CAS. For our current audit, we relied on the Kearney and Farr ICP audit findings and recommendations when computing the allowable nonqualified costs discussed in this report. We incorporated the results of the Kearney and Farr audits into our computations of the audited indirect cost rates, and ultimately the nonqualified costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable nonqualified costs, as well as the Kearney and Farr ICP audit reports, to determine the final indirect cost rates and the total allowable contract costs for NHS for CYs 2014 through 2016. The cognizant Contracting Officer will perform a final settlement with the contractor to determine the final indirect cost rates. These rates ultimately determine the final costs of each contract.

The Unaccompanied Alien Children ProgramThe UAC Program funds temporary shelter care and other related services for children in ORR custody. For project periods with services beginning during FYs 2014 and 2015, ORR awarded grants totaling $2.1 billion to providers for the care and placement of children. The UAC Program is separate from State-run child welfare and traditional foster care systems. Applicable Federal RequirementsFederal regulations establish uniform administrative requirements for awards to nonprofit organizations. For grant awards made on or after December 26, 2014, 45 CFR part 75 establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities. Southwest Key had three cooperative agreements—90ZU0148, 90ZU0149, and 90ZU0153—that were in effect from October 1, 2014, through September 30, 2017. However, our audit period included awards made after December 26, 2014, to which Part 75 applied. Southwest Key Programs Southwest Key is a nonprofit organization based in Austin, Texas. For nearly 20 years, Southwest Key has participated in the UAC Program. In FY 2016, Southwest Key was awarded approximately $236 million in grants for residential services for children in the UAC Program and claimed approximately $231 million in Federal funds to care for children in its custody, which included approximately 25,000 children who were released directly to parents, family members, or other adults who are able to provide for their care; aged out of the program; ran away; or transferred to another facility. During FY 2016 Southwest Key operated a total of 26 residential shelter programs in Arizona (8), California (3), and Texas (15).

This audit involved individuals eligible for Medicare who were covered under traditional Medicare in one year but chose to enroll in Medicare Advantage (MA) the following year (transferred enrollees). The Centers for Medicare & Medicaid Services (CMS) maps certain diagnosis codes into Hierarchical Condition Categories (HCCs). For transferred enrollees who, while covered under traditional Medicare, receive a diagnosis that maps to an HCC, CMS makes higher payments to MA organizations for the following year.Through data mining and discussions with medical professionals, we have identified several diagnosis codes that were at high risk of being miscoded and resulting in inaccurate payments. For this audit, we focused only on selected acute stroke diagnosis codes (which map to the Ischemic or Unspecified Stroke HCC) that were reported on one physician’s claim without being reported on a corresponding inpatient claim.Our objective was to determine whether selected acute stroke diagnosis codes submitted by physicians under traditional Medicare that CMS later used to make payments to MA organizations on behalf of transferred enrollees complied with Federal requirements.We reviewed 582 of 8,437 transferred enrollees (that we selected with a stratified random sample) who received one instance of a high-risk acute stroke diagnosis code during 2014 or 2015. We had reviews performed to determine whether the medical records supported the submitted diagnosis codes. We relied on these reviews as the basis for our conclusions.

Medicare-allowed charges for noninvasive ventilators increased from $279.9 million in 2016 to $424.4 million in 2018, an increase of 52 percent. We are concerned about the relationship of these increased costs to prices per noninvasive ventilator, and specifically concerned about whether Medicare-allowed charges are comparable with payment rates of select non-Medicare payers.Our objective was to determine whether Medicare-allowed charges for noninvasive ventilators were comparable with payment rates of select non-Medicare payers.

In 2019, carriers delivered nearly 6 billion packages to every corner of America—more than 19 million every day. This represents an 87 percent increase in the U.S. Postal Service’s package volume since 2013, driven by booming ecommerce sales.

The Office of Inspector General assessed NASA’s management of its planetary science portfolio, which consists of 30 space flight missions in various stages of operation, and examined whether its Planetary Science Division is meeting its goals and priorities.

The Postal Service owns and operates a fleet of over 227,000 vehicles. The Postal Service has 7- and 11-ton cargo vans that Postal Vehicle Service (PVS) drivers use to transport mail between facilities and to load/unload mail from cargo vans. In September 2017, the Postal Service began replacing 7- and 11-ton cargo vans and adding new lift gates. A lift gate is a piece of equipment on the rear of a cargo van that helps load/unload mail transport equipment (MTE) containing mail. When the Postal Service replaced the older cargo vans, transportation managers could choose between a tuck under lift gate (84 inches wide by 50 inches long) or rail lift gate (89 inches wide by 54 inches long). Tuck under lift gates tuck beneath the cargo van while rail lift gates fold against the back of the cargo van when not in use. The Postal Service purchased 1,167 tuck under lift gates and 446 rail lift gates on the 7- and 11-ton cargo vans for an estimated total cost of $6.5 million. Our objective was to evaluate the efficiency and safety of lift gates used on U.S. Postal Service cargo vans.