Airline Consumer Protections: Information on Airlines' Denied Boarding Practices

Some airlines overbook their scheduled flights (intentionally sell more seats than are available) to compensate for passenger no-shows. It is not illegal for airlines to overbook their flights. However, it can result in an “oversale” where airlines cannot accommodate all passengers on a particular flight. In response, airlines may have to deny boarding to some passengers. DOT is responsible for ensuring airlines adhere to their denied boarding practices as part of its consumer protection enforcement responsibilities.

The FAA Reauthorization Act of 2018 included a provision that GAO examine airlines' oversales practices. This report focuses on denied boardings—the result of an oversale—and describes (1) trends in denied boardings and (2) airlines' actions related to denied boardings and mitigating the effects on passengers. GAO analyzed data on denied boardings and related passenger complaints submitted to DOT from 2012 through 2018, and reviewed seven airlines' publicly available documents describing their overbooking and denied boarding policies. Airlines were selected to generally include the largest airlines that GAO previously reported had varying practices on overbookings and denied boardings.

GAO also reviewed relevant statutes and DOT regulations, summarized GAO work published in 2018 describing airlines actions to reduce denied boardings, and interviewed DOT officials, one airline industry association, two consumer advocate organizations, and three airline revenue management specialists. The selection of stakeholders was non-generalizable and based on inclusion in prior GAO work and their relevance regarding denied boarding practices.

The number of passengers denied boarding (not allowed to board flights they have tickets on) generally decreased in recent years, according to Department of Transportation (DOT) data. Combined, on an annual basis, voluntary and involuntary denied boardings account for less than 1 percent of actual passenger boardings.

Voluntary denied boardings. As shown below, most denied boardings are passengers who “voluntarily” gave up their seat for compensation of the airline's choosing, such as airline vouchers. Passengers can negotiate compensation amounts. For every 100,000 actual boardings in 2018, about 43 passengers were voluntarily denied boarding.

Involuntary denied boardings. All other denied boardings occur “involuntarily.” These passengers may be eligible for compensation in an amount set by DOT. For every 100,000 actual boardings in 2018, about one passenger was involuntarily denied boarding.

While few denied boardings are involuntary, these passengers may encounter significant costs and travel disruptions. GAO's review of passenger complaints submitted to DOT showed instances where passengers involuntarily denied boarding reported missing significant events—e.g., a wedding or a cruise—and incurring additional costs. Airlines can face challenges rebooking passengers, such as those flying to smaller communities, exacerbating these disruptions.

Passengers Denied Boarding Voluntarily and Involuntarily per 100,000 Actual Boardings, 2012-2018

Airlines have taken a range of actions, aimed at reducing involuntary denied boardings. Actions include reducing overbookings; requesting volunteers earlier (e.g., at check-in); and increasing compensation for volunteers. While consumer advocates GAO interviewed generally supported these actions, they advocated for an end to overbooking. Three airline revenue management specialists said if airlines were prohibited from overbooking, some airlines may offer fewer discounted fare tickets. Two of these specialists also said airlines might also slightly increase average fares across all tickets.

Some airlines overbook their scheduled flights (i.e., intentionally sell more  seats than are available on a flight) to compensate for passenger no- shows and to help airlines operate fuller flights, on average. It is not illegal  for airlines to overbook their flights. When airlines correctly predict no- show rates, all confirmed passengers are able to board their flight.  However, in some circumstances, airlines can have an “oversale”  situation—when all passengers with tickets cannot be accommodated on  a flight. In response, airlines may have to deny boarding to some  passengers, either by encouraging passengers to volunteer to not board  or by denying boarding to passengers involuntarily.

Denied boardings can also result from factors other than overbookings,  such as airline maintenance issues or the need to accommodate airline  crews. For example, on March 13, 2019, the Federal Aviation  Administration (FAA) ordered the immediate grounding of the Boeing 737  MAX aircraft. As a result, some airlines were forced to substitute smaller  aircraft on some of their flights, among other actions, resulting in a  significant number of passengers being denied boarding involuntarily.  Regardless of the cause, involuntary denied boardings can be  inconvenient and costly for passengers.

The Department of Transportation (DOT) is responsible for ensuring that  airlines adhere to federal consumer protections afforded to passengers,  including those related to airlines’ denied boarding practices. The FAA  Reauthorization Act of 2018 included provisions for us to examine  airlines’ oversales practices. Our report focuses on denied boardings,  which are the resulting action of an oversale and affect both airlines and  passengers. This report describes (1) trends in DOT’s data on denied  boardings from 2012 through 2018, and (2) airlines’ actions related to  denied boardings and mitigating the effects of these incidents on  passengers.

To describe trends in voluntary and involuntary denied boardings, we  analyzed data collected by DOT from 2012 through 2018. DOT requires  larger airlines to report data on voluntary denied boardings, involuntary  denied boardings, and related compensation amounts, among other  things, on a quarterly basis. We also analyzed passenger complaint data  on denied boardings submitted to DOT by passengers from 2012 through  2018 to identify the frequency, types, and changes in the number and  types of complaints submitted to DOT over time. To assess the reliability  of the denied boarding data, we reviewed relevant federal regulations  describing airlines’ reporting requirements for denied boardings and DOT  technical directives, which provide additional information to airlines on the  types of data they are required to report and how to report such  information to DOT. For both the denied boardings and passenger  complaint data, we analyzed the data and compared it to published DOT  reports to search for outliers or data anomalies. We also interviewed  DOT program officials to confirm that DOT had not made any changes to  how either data source are collected or reported since our last review in  2018. Since we determined that no changes had been made to the  processes, we also relied on our 2018 data reliability assessment. We  determined that the data were sufficiently reliable to present trends over  time.

To describe airlines’ legal responsibilities regarding overbookings and  denied boardings, we reviewed relevant statutes and DOT regulations  and interviewed DOT officials. To identify airlines’ actions to reduce  denied boardings or mitigate the effect of such actions on passengers, we  interviewed representatives from one airline industry association and two  consumer advocate organizations, as well as three airline revenue  management specialists. We selected these stakeholders based on the  following factors: their inclusion in prior GAO reports, their relevant role  regarding denied boardings or airline revenue management, and  recommendations from other stakeholders or DOT. We also summarized  our recent work, where we asked 11 selected airlines about their  business practices on denied boardings from 2013 through 2017.

We also reviewed publicly available documents on seven selected  airlines’ websites about their overbooking and denied boarding policies.  We selected these seven airlines to include both network and low-cost  airlines that boarded among the most passengers in 2018 and that we  had previously reported had varying practices on overbookings and  denied boardings. We reviewed each airline’s publicly available  customer service documents—e.g., contracts of carriage, customer  service plans, and other available materials—to describe their  overbooking policies, denied boarding priority rules, and denied boarding  policies, among other things.

We conducted this performance audit from June 2019 to December 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Airlines commonly overbook their flights to avoid revenue losses  associated with passenger no-shows as part of their revenue  management strategies. Successfully overbooking requires that airlines  accurately predict the number of passengers who will not show up for a  given flight. In deciding how much to overbook flights, airlines use  historical data to identify factors that make passengers more or less likely  to show up for their flights; these factors can be passenger or flight  specific. For example, according to representatives from an airline  industry association, leisure passengers are less likely than business  passengers to change their flights at the last minute, because their tickets  typically have more restrictions and higher change fees. As a result,  according to these representatives, airlines generally oversell fewer seats  on flights heavily traveled by leisure passengers, such as flights during  the holiday season or flights to common vacation destinations (e.g.,  Disney World). Similarly, these same representatives said that airlines are  less likely to overbook the last flight of the day on a given route because  passengers are more likely to show up for these flights.

A number of other factors, in addition to overbookings, can lead to airlines  denying boarding to passengers. These factors can be driven by safety  concerns, operational necessity, or personnel needs. For example, a  passenger may be denied boarding for safety or security reasons if they  are too intoxicated to fly or if they are unruly (e.g., they get into a fight).  Passengers may also be denied boarding to accommodate flight crews  that need to get to a different location or U.S. air marshals, who tend to  book flights near planned departure times.

DOT does not regulate airlines’ overbooking practices, aside from  requiring airlines to inform passengers that a flight may be overbooked.  Instead, DOT’s regulations primarily focus on oversales, which can be the  result of an overbooking and occur when some passengers with  confirmed space on a flight cannot be accommodated (i.e., “denied  boardings”). Passengers are voluntarily denied boarding if they willingly  accept the airline’s offer of compensation, in any amount, in exchange for  relinquishing their confirmed seat. Any other passenger denied boarding  is considered to have been denied boarding involuntarily. Because of  these regulations, airlines generally have a standard process for denying  boarding to passengers, both voluntarily and involuntarily, and  communicating denied boarding information to passengers.

When a flight is oversold, airlines are required to solicit passengers to  voluntarily give up their seats, before denying boarding to passengers  involuntarily. To encourage passengers to volunteer to relinquish their  seat, airlines may offer incentives, such as money or vouchers for future  flights. There is no minimum or maximum amount of money or vouchers  that the airline is required to offer, and passengers can negotiate  compensation amounts. Federal regulation requires that airlines inform  each passenger solicited to volunteer for denied boarding whether they  are in danger of being involuntarily denied boarding and, if so, the  compensation the airline is obligated to pay. In cases where a flight is  oversold and airlines do not get enough volunteers who are willing to  relinquish their seat, they will select passengers to give up their seats  involuntarily—sometimes referred to as being “bumped.”

Airlines are required by regulation to establish boarding priority rules  detailing the factors they consider when selecting passengers to be  denied boarding involuntarily. These factors may include when the  passenger checks in, the fare paid, and the passenger’s frequent flyer  status. However, according to DOT’s website, the criteria cannot subject  a passenger to any unjust or unreasonable prejudice or disadvantage.  For example, an airline cannot use a passenger’s race when making  decisions about denied boardings. Further, some airlines make  exceptions to their boarding priority rules for passengers with disabilities,  including generally not denying them boarding.

Airlines are required to compensate certain passengers who are denied  boarding involuntarily. Minimum compensation amounts are set in  regulation and, as shown in table 1 below, vary based on the price of the  ticket, the length of time the passenger is delayed reaching their  destination, and whether the flight’s arrival airport is domestic or  international. Airlines generally must provide compensation by cash or  check when the passenger is denied boarding involuntarily, in addition to  a written statement explaining the terms, conditions, and limitations of the  compensation, and describing the airlines’ boarding priority rules and  criteria.

Denied Boardings Have Declined in Recent Years, but Some Passengers Denied Boarding Reported Significant Inconveniences

The total number of passengers denied boarding—voluntarily or  involuntarily— generally decreased from 2012 to 2018. Moreover,  denied boardings represented a small percentage of the total number of  passengers who boarded flights. On an annual basis, denied boardings  accounted for between about 44 (in 2018) and about 100 (in 2012)  passengers per 100,000 actual boardings—a rate of less than 0.1 percent  of actual boardings. As illustrated in figure 1, of these passengers  denied boarding, most are voluntary. For example, in 2018, for every  100,000 actual boardings, about 43 passengers were voluntarily denied  boarding and about one passenger was involuntarily denied boarding.

Passenger complaints submitted directly to DOT about denied boardings  also generally decreased from 2012 to 2018, relative to total complaints  and passenger boardings. As shown in figure 2, the number of passenger  complaints to DOT about denied boardings represented a small  percentage of total passenger complaints from 2012 to 2018, annually  accounting for less than 4 percent of all complaints. On an annual basis,  from 2012 through 2018, the number of complaints about denied  boardings reported to DOT ranged from about 410 (in 2018) to about 650  (in 2015). We have previously reported, however, that DOT’s complaint  data provide an incomplete picture of all passenger complaints because  passengers may not be aware that they can report complaints to DOT,  and DOT’s complaint data do not include complaints from passengers  submitted directly to airlines. Specifically, in 2018, we reported that  across all complaint categories, DOT estimated it received one complaint  for every 50 complaints the airline receives.

In an effort to avoid denied boardings, airlines can, in some cases,  accommodate passengers in a different section of the aircraft, either by  upgrading or downgrading passengers. A revenue management specialist  and representatives from an airline industry association we interviewed  said that, with limited exceptions, airlines generally do not overbook their  premium cabins. Our review of DOT data found that in recent years, until  2018, airlines have generally upgraded fewer passengers to avoid denied  boardings. According to representatives from an airline industry  association, the decrease in the number of passengers upgraded is likely  because airlines have fewer empty premium seats in their first-class  cabins than in past years because they are selling more of these seats.  For example, a stakeholder said that airlines are now selling upgrades on  the day of departure and allowing more customers to use miles to  upgrade their seat, leaving fewer available empty premium seats when  flights are oversold.

DOT permits airlines to downgrade passengers, as long as the airline  refunds the passenger the difference in fares. In practice,  representatives from an airline industry association said that when a  passenger in a premium cabin is to be denied boarding, airlines generally  offer the passenger the option of a premium cabin seat on another flight  or to downgrade to the economy cabin along with compensation for the  fare differential. In our review of seven airline’s contracts of carriage, five  explicitly stated that if passengers are downgraded, they will be entitled to  an appropriate refund, and the other two airlines do not include  information about downgrades in their documents because they do not  have different cabins of service. According to representatives from an  airline industry association, the refund amount is calculated based on the  average difference of fare paid between the two cabins, and it is  dependent on the flight’s origin and destination.

Passenger Compensation for Involuntary Denied Boarding

While the average amount of compensation for passengers involuntarily  denied boarding has increased in recent years, a smaller percentage of  such passengers received compensation. As previously mentioned, in  certain situations, passengers who are denied boarding involuntarily may  not be eligible for compensation. For example, airlines are not required to  compensate passengers if an airline uses a smaller aircraft than originally  planned for operational or safety reasons and thus cannot accommodate  all confirmed passengers. Our review found that the percentage of  passengers that were involuntarily denied boarding who qualified for  compensation decreased from 76 percent in 2012 to 64 percent in 2018.

Aircraft substitution may be contributing to fewer passengers being  eligible for compensation, according to DOT data. For example, one  airline that does not overbook experienced a number of operational  issues in 2016 and 2017 that forced it to operate many of its flights with  smaller aircraft. As a result, the airline had to deny passengers boarding  involuntarily, and these passengers were not eligible for compensation.  As figure 3 shows, from 2015 to 2018, most of the passengers who were  denied boarding involuntarily and were not eligible for compensation were  ineligible due to airlines using smaller aircraft on some flights.

Effects of Involuntary Denied Boardings on Passengers

Although the total number of involuntary denied boardings decreased  from 2012 to 2018, any passenger involuntarily denied boarding could  face varying levels of disruptions to their travel plans. Passengers who  are rebooked on the next scheduled flight may encounter minimal  inconveniences or expenses. However, other passengers may face more  significant travel disruptions, according to representatives from consumer  advocate organizations we interviewed. Our review of a non- generalizable sample of passenger complaints submitted to DOT in May  and June 2019 also identified instances where passengers reported  incurring significant costs in terms of time and money as a result of being  denied boarding involuntarily. For example, one passenger reported  missing a wedding and paid about $450 in additional hotel costs. In  another instance, a passenger missed their cruise after being denied  boarding involuntarily. Consumer advocates also told us that passengers  may incur costs such as lodging, meals, and transportation, or might miss  work as a result of being denied boarding involuntarily.

Airlines’ ability to rebook passengers who are involuntarily denied  boarding on the next available flight can be limited. Over the past several  years, airlines have increasingly flown with fewer empty seats— particularly on certain routes—than was typical in the past, according to  DOT data. With fewer open seats, airlines have limited options to rebook  passengers who are denied boarding. For example, across all departing  flights at Hartsfield-Jackson Atlanta International Airport in 2018, on  average, 86 percent of seats were filled. These data represent averages  across all flights and stakeholders said that factors such as time of day,  day of the week, season, and flight origin or destination can affect the  number of empty seats on a particular flight. For example, flights on  Sunday evening tend to be fuller than flights on Tuesday. One airline  revenue management specialist estimated that about 25 to 30 percent of  all flights have no empty seats. Representatives from consumer advocate  organizations that we interviewed said that planes are operating at  record-high levels of capacity, and one advocate stated that no  transportation system is designed to operate at or near capacity all of the  time, which they believe some airlines are doing on certain routes.

In addition, we have previously reported that service to smaller  communities is generally less frequent, providing airlines with fewer  opportunities to rebook passengers than for more traveled routes.  Airlines may also not be able to rebook passengers who are denied  boarding on a different airline that has seat availability if they lack  commercial agreements to do so. Further, according to representatives from an industry association representing airlines, while most airlines  have agreements in place that allow passengers to be rebooked on a  different airline, these agreements are primarily used to accommodate  passengers on delayed and canceled flights. According to these  representatives, passengers who are denied boarding are almost always  re-accommodated on the same airline, given that the customer typically  volunteers to take a later flight on the same day. Our review of seven  airlines’ contracts of carriage found that four of them have documented  policies in place to rebook passengers who are denied boarding on a  different airline.

Our review of DOT data found that fewer passengers are being rebooked  on flights that arrive within an hour of their original flight. Specifically, in  2012, 11.5 percent of rebooked passengers were accommodated on such  a flight, compared to 0.11 percent in 2018. While DOT collects data on  passengers who are delayed less than an hour, no other information is  available to measure the amount of time a passenger is delayed when  they are denied boarding. However, based on our review of passenger  complaints, we found instances where passengers reported having to  wait until the following day to board a flight with available seats.

Airlines Have Taken a Range of Actions to Reduce Denied Boardings and Minimize Their Effects on Passengers

Decreases in involuntary denied boardings are due in part to recent  airline actions. As mentioned previously, involuntary denied boardings  can be costly for both passengers whose travel plans are disrupted, and  airlines that have to compensate passengers for such disruptions and  then face criticism for denying boarding to passengers with confirmed  seats. As a result, airlines have taken a range of actions, primarily  intended to reduce such incidents. Some of these actions also provide  additional incentives for passengers to volunteer to be denied boarding.  Moreover, stakeholders, including consumer advocates and an  association representing airlines, agreed that voluntary denied boardings  are preferred to involuntary denied boardings, given that airlines and  passengers willingly accept the outcome.

Reducing the rate or eliminating overbookings. Some airlines  have reduced their rate of overbooking or eliminated them altogether  in an effort to reduce voluntary and involuntary denied boardings,  according to stakeholders and our prior work. In our 2018 report,  representatives from three airlines told us their airline had reduced or  stopped overbooking flights. Our review of seven airlines’ customer  service documents found that two airlines explicitly stated that they do  not overbook their flights.

Improving the ability to predict no-shows or rebook passengers.  According to representatives from an industry association  representing airlines, airlines have made investments to improve their  software for predicting the number of passenger no-shows in an effort  to reduce voluntary and involuntary denied boardings. These  representatives also told us that airlines have hired additional  personnel dedicated to more precisely forecasting no-show rates and  proactively identifying rebooking options for passengers who are  denied boarding.

Improving communication with passengers. Some airlines have  taken steps to notify passengers about potential denied boardings  earlier in the travel process—in some cases before travelers have left  for the airport—in an effort to encourage volunteers, according to  stakeholders we interviewed. These stakeholders said that providing  advance notice likely further reduces any burden on passengers  associated with changing their travel plans. In 2018, five of the nine  airlines we interviewed told us they had begun soliciting volunteers to  give up their seat earlier in the process. More specifically, according  to representatives from an industry association that represents  airlines, some airlines call passengers prior to their arrival at the  airport to gauge their willingness to give up their seat. Other airlines  solicit volunteers at the check-in kiosk, which limits the need for  airlines to identify passengers during the boarding process at the  gate. None of the stakeholders we interviewed described any  communication methods that were specific to passengers with  disabilities. Nevertheless, as previously mentioned, four airlines (out  of seven) explicitly state in their contracts of carriage that they  generally do not deny boarding to passengers with disabilities.

Increasing and diversifying compensation for passengers. Some  airlines have offered additional incentives or increased compensation  amounts to encourage passengers to voluntarily give up their seat.  While airlines have historically provided passengers with travel  vouchers to solicit volunteers, some have started offering alternative  forms of compensation, such as gift cards for Amazon and other  retailers, iPads, or travel vouchers with fewer restrictions or that also  cover ancillary fees.

Our review of DOT data indicates that relative to the number of  passengers denied boarding involuntarily, more passengers have  volunteered to give up their seat, lessening the need to deny  passengers boarding involuntarily. For example, in 2012, for every  one passenger denied boarding involuntarily, about nine volunteered  to be denied boarding. In contrast, in 2018, for every one passenger  denied boarding involuntarily, about 33 volunteered to be denied  boarding.

Providing passengers with the opportunity to propose  acceptable voluntary denied boarding compensation. Some  airlines solicit passengers with flexible travel plans to identify  compensation amounts they would willingly accept in exchange for  voluntarily giving up their seats and taking another flight. Once  passengers submit their required compensation amount to the airline,  the airline can then use that information to select passengers with the  lowest amount of required compensation to accept a denied  boarding. This process allows airlines to, among other things,  potentially avoid involuntary denied boardings, and identify which  passengers require the least compensation in exchange for their  travel flexibility. Airlines conduct this process on their website, via their  mobile app, or at the check-in kiosk. In some cases, passengers who  would consider changing their plans in exchange for compensation  provide the airline with a specific dollar amount that they would be  willing to accept to give up their seat. In other cases, airlines require  each passenger to select a predetermined amount of compensation  that they would accept to give up their seat, as illustrated in figure 4.  For example, based on the figure below, an airline that oversold its  flight would select a passenger who volunteered to give up their seat  in exchange for $250, assuming at least one passenger selected that  amount. If no passengers selected that amount, the airline would  identify a passenger with the next lowest amount—in this case, $350.  Our review identified at least three airlines that use this type of  process to solicit volunteers to give up their seats.

Providing additional tools to employees. According to stakeholders  we interviewed, airlines have given their employees more discretion  regarding the offers they can make to encourage passengers to  volunteer to be denied boarding on an oversold flight, or provide  training on handling such incidents.

While representatives from both consumer advocate organizations we  interviewed generally supported some of the airlines’ actions to manage  oversold flights, they also identified additional actions that airlines or DOT  could take. Both consumer advocates we spoke to would like to see  airlines increase transparency and passenger education related to denied  boarding compensation. For example, these advocates believe that prior  to agreeing to be voluntarily denied boarding, airlines should be required  to inform passengers: (1) of the current compensation amounts for  involuntary denied boardings, and (2) that compensation can be provided  by cash or check (as opposed to a voucher). Having such information  would allow passengers to make more informed decisions about the  compensation they would willingly accept to be voluntarily denied  boarding. Additionally, one consumer advocate said explicitly that they  would also like airlines to inform passengers who are involuntary denied  boarding that compensation amounts set by DOT are minimum amounts.

Regarding potential additional actions, the FAA Reauthorization Act of  2018 required that DOT issue a rulemaking clarifying, among other  things, that the compensation amounts set by DOT for involuntary denied  boardings are the minimum compensation amounts that passengers can  receive. In October 2019, DOT officials indicated that DOT intends to  issue its final rule in July 2020. Moreover, in November 2018, we made  three recommendations to DOT to improve its passenger education  efforts by, among other things, capturing feedback from passengers  directly, and identifying available short- and long-term budgetary  resources for these efforts. DOT agreed with our recommendations and  is in the process of implementing them.

More broadly, both consumer advocates we interviewed called for an end  to overbookings. This could be achieved either voluntarily by airlines or in  regulation by DOT. These advocates said that overbooking is an outdated  practice that protected airlines from high no-show rates during a time  when passengers could make multiple reservations and did not incur  change fees. Given that this is no longer the case, it is not necessary for  airlines to overbook their flights, according to these consumer advocates.  They also pointed out that airlines have significant flexibility in their  business operations, including, denying boarding when a flight is  overbooked, or changing flight schedules. In contrast, passengers have  little, if any, recourse if they need to change their travel plans. Most  tickets have restrictions that prevent passengers from making changes to  their flights without incurring high change fees. Consumer advocates  believe that eliminating overbooking would have limited effects on  airlines, given the restrictions on passengers’ tickets.

According to three airline revenue management specialists, if airlines  were prohibited from overbooking flights, they would likely end up  operating aircraft with more empty seats, compared to current trends.  Moreover, they also noted that if flights were less full, there could be  certain negative implications for airlines and passengers. For example,  when fewer seats on a flight are filled with paying passengers, airlines’  average costs per passenger are higher because many aspects of  airlines’ operational costs—such as salaries for crew, mechanic services,  and airport landing fees—are generally the same, regardless of the  number of passengers onboard. These same revenue management  specialists also noted that a greater number of empty seats will generally  decrease airline’s revenue. One of them estimated that the reduced  revenues could amount to tens of millions of dollars.

Some airlines would also likely change their revenue management  practices, according to airline revenue management specialists. Those  changes would largely focus on how airlines price their tickets. While two  airlines have made a business decision not to overbook and have  accepted the financial trade-off, revenue management specialists said  that eliminating overbooking would be difficult for other airlines. In  particular, all three revenue management specialists agreed that if airlines  were prohibited from overbooking, some airlines may offer fewer  discounted fare tickets. Two revenue management specialists also said  that it is likely that airlines would increase the average fare across all  tickets slightly to account for the increased costs and potential lost  revenue. Finally, one revenue management specialist also said that  airlines might add additional restrictions on tickets, such as by increasing  penalties associated with a passenger not showing up for their flight or  cancelling their ticket at the last minute. Moreover, even if airlines  stopped overbooking, some passengers would still be denied boarding  because factors other than overbooking—including some that are beyond  the airline’s control—can lead to denied boardings.

We provided a draft of this report to DOT for review and comment. DOT  provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of the Department of Transportation, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.

If you or your staff have questions concerning this report, please contact  me at (202) 512-2834 or VonahA@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix I.

Appendix I: GAO Contact and Staff Acknowledgments

Andrew Von Ah, (202) 512-2834 or VonahA@gao.gov.

In addition to the individual named above, other key contributors to this  report were: Ed Laughlin (Assistant Director); Amy Suntoke (Analyst-in- Charge); Amy Abramowitz; Sarah Arnett; Melissa Bodeau; Colson  Campbell; Lori Fields; Dave Hooper; Mary-Catherine Overcash; Malika  Rice; Pam Snedden; Melissa Swearingen; and Elizabeth Wood.

Airlines sometimes overbook flights, which can mean they have to deny boarding to some passengers. Generally, fewer passengers have been denied boarding in recent years, with less than 1% of passengers affected.

Passengers may volunteer to give up a seat in exchange for some benefit from the airline, like a travel voucher.

Passengers who don’t volunteer and are denied boarding anyway—involuntarily denied boarding or “bumped”—can face travel disruptions and significant costs. While some of these passengers may be eligible for compensation, we found that the percentage of passengers receiving such compensation has declined in recent years.


Military Personnel: DOD Has Made Limited Progress toward Improving Oversight of the Exceptional Family Member Program

Military families with special needs face unique challenges because of their frequent moves. To assist these families, each Military Service implements its own program, known as EFMP. The National Defense Authorization Act (NDAA) for Fiscal Year 2017 included a provision for GAO to review the Military Services' EFMPs, including DOD's role in providing guidance for these programs.

This statement focuses on the extent to which (1) each Military Service provides family support in the continental United States and (2) the Military Services monitor and DOD evaluates assignment coordination and family support. This statement is based on a May 2018 GAO report and updates its three recommendations as of January 2020. For the report, GAO analyzed EFMP guidance and documents; reviewed federal laws; analyzed fiscal year 2016 EFMP data; visited military installations, selected for their large numbers of military-connected students; and interviewed officials responsible for implementing, monitoring, and evaluating the EFMPs.

In May 2018, GAO found that variation in support provided to military family members with special medical and educational needs through the Department of Defense's (DOD) Exceptional Family Member Program (EFMP) could lead to potential gaps in assistance. GAO recommended that DOD assess the extent to which each Military Service is developing services plans for each family with special needs and is providing sufficient resources to staff an appropriate number of family support providers, as required. DOD concurred.

Services plans are important because they describe the necessary services and support for a family with special needs enrolled in the EFMP as well as during the relocation process, such as when a servicemember is assigned to a new location. In April 2019, DOD reported that the Military Services had adopted a standardized form to use when developing services plans; however, DOD has not yet assessed the extent to which each Military Service is developing these plans. In January 2020, a senior DOD official said that the Department began collecting data related to services plans in the last quarter of 2019.

In April 2019 (the most recent update), DOD officials said they were planning to pilot a staffing tool to help the Military Services determine the number of family support providers needed at each installation. However, the pilot is expected to last 2 years before it can be implemented across the Military Services.

GAO also found that DOD lacked common performance measures for the EFMP and was unable to compare the program's performance across the Military Services. GAO recommended that DOD develop common performance metrics for the program. DOD concurred, and in April 2019 said that it was still in the process of developing performance metrics for assignment coordination and family support. In January 2020, DOD noted that it had not yet developed guidance regarding use of forms that would help improve its ability to collect common performance measures across the Military Services.

Further, GAO found that DOD does not have a process to systemically evaluate the results of each Military Service's monitoring activities. GAO also reported that DOD did not systematically review the results of monitoring activities because it relies on each Military Service to self-monitor. DOD officials said efforts to standardize certification of EFMPs have been unsuccessful because the Military Services cannot agree on a set of standards that can be used across installations. GAO recommended that DOD implement a systematic process for evaluating the results of the Military Services' monitoring activities. DOD concurred with the recommendation, but has not yet fully implemented it.

In the May 2018 report, GAO made three recommendations to DOD. DOD concurred, but has made limited progress toward addressing them.

Thank you for the opportunity to discuss issues related to the Department  of Defense (DOD) Exceptional Family Member Program (EFMP). Recent  executive branch, congressional, and advocacy group initiatives have  focused on increasing support for military families with special medical or  educational needs. In April 2019, DOD reported that it serves more than  135,000 military family members with special needs through the EFMP.

The National Defense Authorization Act (NDAA) for Fiscal Year 2017  included a provision for GAO to assess the effectiveness of the Military  Services’ EFMPs, including DOD’s role in providing guidance for these  programs. These programs include family support services, such as  referrals to military or community resources for families with special  needs; and a process for considering the medical or educational needs of  these families before they are relocated to a different installation (known  as assignment coordination).

My statement today is based on our May 2018 report on DOD’s EFMP.  Specifically, this statement focuses on (1) the extent to which each  Military Service has provided family support in the continental United  States (CONUS) and (2) the extent to which the Military Services monitor  and DOD evaluates assignment coordination and family support. In the  2018 report, we made three recommendations to DOD regarding ways to  improve its oversight of the EFMP; this statement includes updated  information on DOD’s progress addressing our recommendations.

In our May 2018 report, we obtained and reviewed documents to assess  how the Air Force, Army, Marine Corps, and Navy provided family support  services. We also obtained Military Service-level data about family  support for fiscal year 2016. In addition, we visited seven installations in  five states to learn more about how Military Service-specific guidance for  the EFMP is implemented. At each of the seven installations, we  interviewed a self-selected group of military family members and  caregivers enrolled in the EFMP who have used family support services.  We also reviewed each Military Service’s procedures for monitoring  assignment coordination and family support, and we reviewed DOD’s  efforts to monitor these procedures across the Military Services. More  detailed information about our scope and methodology can be found in  appendix I of the issued report. DOD provided information in April 2019  and January 2020 regarding the status of each recommendation, which  we have summarized as appropriate.

We conducted the work on which this testimony is based in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.

DOD requires each Military Service to establish its own EFMP for active  duty servicemembers. According to DOD guidance, EFMPs are to have  three components—identification and enrollment, assignment  coordination, and family support.

Identification and enrollment: DOD requires servicemembers to  enroll in their Military Service’s EFMP once eligible family members  are identified by medical and educational personnel at each  installation.

Assignment coordination: Before finalizing a servicemember’s  assignment to a new location, DOD requires each Military Service to  consider any family member’s special needs, including the availability  of required medical and special educational services at a new  location.

Family support: DOD requires each Military Service’s EFMP to help  families with special needs identify and gain access to programs and  services at their current, as well as proposed locations.

As required by the NDAA for Fiscal Year 2010, DOD established the  Office of Community Support for Military Families with Special Needs  (Office of Special Needs or OSN) to develop, implement, and oversee a  policy to support these families. Among other things, this policy must (1)  address assignment coordination and family support services for families  with special needs; (2) incorporate requirements for resources and  staffing to ensure appropriate numbers of case managers are available to  develop and maintain services plans that support these families; and (3)  include requirements regarding the development and continuous updating  of a services plan for each military family with special needs.

OSN is also responsible for monitoring the Military Services’ EFMPs and  collaborating with the Military Services to standardize EFMP components  as appropriate. For example, as part of its guidance for monitoring the  Military Services’ EFMPs, DOD requires each Military Service to certify or  accredit its family support services provided through the EFMP. In  addition, DOD states that each Military Service must balance the need for  overarching consistency across EFMPs with the need for each Military  Service to provide family support that is consistent with their specific  mission. Table 1 provides an overview of the procedures each Military  Service must establish for the assignment coordination and family support  components of the EFMP that we identified in our May 2018 report.

Key Aspects of Assistance for Families with Special Needs Vary Widely Across DOD Which Leads to Potential Gaps in Support

In May 2018, DOD reported that each Military Service provides family  support services in accordance with DOD guidance, as well as Military  Service-specific guidance. However, we found that, the type, amount, and  frequency of assistance families with special needs receive varied by  Military Service, which could lead to gaps in assistance (see table 2).

For example, in our May 2018 report, we found that the Marine Corps is  the only Military Service that specifies a minimum frequency (quarterly)  with which families with special needs should be contacted by their family  support providers. The other Military Services either do not have  requirements for regular contact with these families (Air Force and Army)  or require contact only for selected families (Navy). In addition, we  reported that unlike the Marine Corps, the Air Force, Army, and Navy  choose not to employ special education attorneys. For example, Marine  Corps attorneys may represent families with special needs who fail to  receive special education services from local school districts, as specified  in their children’s individualized education programs (IEP). Officials from  the Air Force, Army, and Navy told us that they find other ways to help  families with special needs resolve special education issues. For  example, Army officials said EFMP managers could refer families with  special needs to other organizations that provide legal support.

As we reported in May 2018, services plans are an important part of  providing family support during the relocation process because they  describe the necessary services and support for a family with special  needs and provide a record for the gaining installation. However, we  found that every Military Service had created relatively few services plans  compared to the number of servicemembers or the number of family  members enrolled in the EFMP (see table 3).

The Military Services and OSN provided a number of reasons as to why  they do not develop and maintain a services plan for each family with  special needs. For example, Air Force officials said they first consider  whether a services plan will help each family receive the required  services. In addition, Army and Marine Corps officials said they may not  develop a services plan if a family does not request it. According to a  Navy official, some families also lack the required services plans because  installations may not have the staff needed to develop them. Finally, OSN  officials said the Military Services may not have developed many services  plans during fiscal year 2016 because DOD had not yet approved a  standardized form that all of the Military Services could use, and because  some families’ circumstances did not require a services plan.

In our May 2018 report, we recommended that DOD assess the extent to  which each Military Service is developing a services plan for each family  with special needs. DOD concurred with our recommendation, but as of  January 2020, we determined that DOD has not fully implemented the  recommendation because it has not yet assessed the extent to which  each Military Service is developing services plans for each family with  special needs. In its annual report to the congressional defense  committees in April 2019, DOD stated that it was exploring legislative  changes to the law that would require a services plan to be developed  and updated only for those families who request services. A senior official  from DOD stated that although this proposal received Office of  Management and Budget approval, it was not included in the NDAA for  fiscal year 2020. Also, in April 2019, in response to our recommendation,  DOD reported to us that the Military Services had begun using a  standardized form to develop services plans. In January 2020, a senior  DOD official said its standardized form provides an option for a family to  decline a services plan, and that the Department began collecting data  related to services plans in the last quarter of 2019.

To meet requirements of the NDAA for Fiscal Year 2010, in April 2017,  DOD stated that it issued to the Military Services guidance that directed  them to “rogram, budget, and allocate sufficient funds and other  resources, including staffing,” to meet DOD’s policy objectives for the  EFMP. We reported in May 2018 that DOD relies on each Military  Service to determine what level of funds and resources are sufficient and  what constitutes an appropriate number of family support personnel. To  determine the appropriate number of family support providers and staffing  levels, the Military Service officials with whom we spoke said they  consider a number of factors, including the number of families with  special needs enrolled in the EFMP at any given installation. See Table 4  for a summary of EFMP family support providers and other key personnel  at CONUS installations.

In May 2018, based on our analysis of EFMP family support providers  and other key personnel at CONUS installations, we found that DOD had  not developed a standard for determining the sufficiency of funding and  resources each Military Service allocates for family support. As a result,  the Military Services may not know the extent to which their funding and  resources for family support comply with DOD’s policy. Federal internal  control standards require that agencies establish control activities, such  as developing clear policies, in order to accomplish agency objectives,  such as those of the Military Services’ EFMPs.

Because DOD had not identified and addressed potential gaps in family  support across the Military Services’ EFMPs, such as those we identified  in types of assistance, services plans, and resources, we concluded that  some families with special needs may not get the assistance they require,  particularly when they relocate. We recommended in our May 2018 report  that DOD assess the extent to which each Military Service is providing  sufficient resources to staff an appropriate number of family support  providers. DOD concurred with our recommendation. In April 2019, the  most recent update DOD provided on this recommendation, DOD officials  said they were planning to pilot a staffing tool to help the Military Services  determine the number of family support providers needed at each  installation; the pilot is expected to last 2 years before it can be  implemented across the Military Services.

DOD Described Plans to Improve EFMP Oversight, but Lacks a Way to Fully Assess Performance across the Military Services and a Process for Evaluating Their Monitoring Activities

We reported in May 2018 that OSN had several efforts underway to  improve its oversight of the EFMP. For example, to help provide a more  consistent EFMP screening process across the Military Services and  improve the collection of comparable assignment coordination data, OSN  had planned for each Military Service to use standard screening forms for  family members with special medical or educational needs prior to making  new assignments. In January 2020, DOD told us that the forms were  approved, but related guidance had not yet been developed for  implementation across all of the Military Services. In addition, OSN  planned to centralize the management of EFMP data across the Military  Services. In April 2019, DOD reported that 82 percent of the EFMP  related data terms were collectable across the Military Services which can  improve OSN’s monitoring and reporting capabilities of the EFMP.

Despite OSN’s initial efforts, we found that DOD lacked common  performance measures for assignment coordination and family support,  and therefore is unable to fully assess EFMP performance across the  Military Services. In our May 2018 report, we recommended that DOD  direct OSN to develop common performance metrics for assignment  coordination and family support, in accordance with leading practices for  performance measurement. DOD concurred with our recommendation. In  April 2019, the most recent update DOD provided on this  recommendation, DOD officials told us that each Military Service submits  data on assignment coordination and family support to the EFMP data  repository on a quarterly basis, and that OSN was currently developing  additional performance metrics for assignment coordination and family  support. Until these metrics are fully developed and implemented, DOD  will remain unable to fully assess the effectiveness of its efforts related to  assignment coordination and family support at each of its installations.

We also found in May 2018 that OSN did not have a process to  systematically evaluate the results of the Military Services’ monitoring  activities. Instead, DOD requires each Military Service to monitor its own  assignment coordination and family support provided through the EFMP  and requires each Military Service to assess performance at least once  every 4 years using standards developed by a national accrediting  body. In addition, DOD requires personnel from each of the Military  Service’s headquarters to periodically visit installations as part of their  monitoring activities. We also reported that the Military Services’ family  support programs were not accredited by a national accrediting body  because, according to Military Service officials, they were unable to  obtain funding for engaging in that process. Instead, each Military Service  has a self-certification process based on standards that meet those of a  national accrediting body, Military Service-specific standards, and best  practices. We also reported in May 2018 that OSN officials did not  systematically review the results of monitoring activities, such as the  certification process, because they rely on each Military Service to self- monitor. In addition, officials said efforts to standardize certification of  EFMPs have been unsuccessful because the Military Services cannot  agree on a set of standards that can be used across installations.

We recommended in our May 2018 report that DOD implement a  systematic process for evaluating the results of the Military Services’  monitoring activities. DOD concurred with our recommendation but has  not yet fully implemented it. DOD last commented on this  recommendation in April 2019 and said the family support component is  monitored and evaluated through each Military Service’s certification  process, which includes specific standards for the EFMP. In addition,  OSN participated in a monitoring site visit to Marine Corps Base Quantico  in December 2018 and plans to participate in additional site visits that are  coordinated by each Military Service’s certification team. We will consider  this recommendation implemented only when DOD provides evidence  that it has implemented a systematic process to evaluate the results of  each Military Service’s monitoring activities.

In conclusion, DOD relies on each Military Service to implement its policy  on support for families with special needs. In doing so, they also rely on  each Military Service to determine the extent to which its assistance to  families with special needs complies with this policy. As it plans for the  future, DOD will need to balance the flexibility it provides each Military  Service to implement its policy with the need to assess the adequacy of  the Military Services’ EFMPs in serving families with special needs,  including any gaps in services these families receive.

Chairwoman Speier, Ranking Member Kelly, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

For further information regarding this testimony, please contact  Jacqueline M. Nowicki, Director of Education, Workforce, and Income  Security Issues at (617) 788-0580 or nowickij@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this statement.

GAO staff who made key contributions to this statement include Bill  MacBlane (Assistant Director), Brian Egger (Analyst-in-Charge), Holly  Dye, Robin Marion, James Rebbe, Shelia Thorpe, Walter Vance, Kelsey  Kreider, and Mimi Nguyen.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

DOD requires each military service to support military family members with special medical and education needs by running an Exceptional Family Member Program.

In our 2018 report we found the services’ programs vary, which could cause gaps in support—particularly for those who relocate frequently. For example, only the Marines’ program ensures that attorneys will represent families who have trouble getting the special education services they need from local school districts.

We testified that DOD has not fully implemented recommendations from our report, including that DOD develop a common way for the services to measure program effectiveness.


Veterans Health Care: VA Needs to Address Challenges as It Implements the Veterans Community Care Program

In June 2018, Congress passed the VA MISSION Act of 2018, which requires VA to establish a permanent community care program. VA plans to consolidate the Choice Program and its other VA community care programs into one community care program—the VCCP. This legislation helps address some of the challenges faced by the Choice Program and VA's other community care programs. VA's implementation of the VCCP can benefit from the lessons learned under the Choice Program. Ignoring these lessons learned increases VA's risk for not being able to ensure that all veterans receive timely access to care in the community and that community providers are reimbursed in a timely manner.

This testimony focuses on lessons learned from the Choice Program, including recommendations GAO has made to VA to help ensure (1) veterans' timely access to care under the VCCP (2) effective monitoring of veterans' access to care under the VCCP, and (3) timely payments to community providers under the VCCP. This testimony is based on GAO reports on the Choice Program that were issued in June 2018 and September 2018.

The Department of Veterans Affairs' (VA) Veterans Choice Program (Choice Program) allows eligible veterans to obtain health care services from providers not directly employed by VA (community providers). The program is largely managed by third party administrators (TPA), who are responsible for establishing provider networks, scheduling veterans' appointments, and paying providers. GAO has identified the following challenges to the Choice Program that VA needs to address as it implements its new Veterans Community Care Program (VCCP).

Factors that adversely affected veterans' timely access to care. GAO found that numerous factors adversely affected veterans' timely access to care through the Choice Program. These factors included (1) administrative burden caused by complexities of referral and appointment scheduling processes; (2) poor communication between VA and its medical facilities; and (3) inadequacies in the networks of community providers established by the TPAs, including an insufficient number, mix, or geographic distribution of community providers. VA has taken steps intended to help address these factors, however, some have not been fully addressed. In June 2018, GAO made five recommendations to VA, including that VA establish a system that will facilitate care coordination and exchanges of information among VA medical facilities, VA clinicians, TPAs, community providers, and veterans. VA agreed or agreed in principle with all five recommendations, but has not yet implemented them.

Unavailable and unreliable data. GAO found that VA cannot systematically monitor the timeliness of veterans' access to Choice Program care because it lacks complete, reliable data to do so. The data limitations GAO identified included a lack of data on the timeliness of accepting referrals and opting veterans in to the program, inaccurate data on clinically indicated dates (which are used to measure the timeliness of care), and unreliable data on the timeliness of urgent care. In June 2018, GAO made five recommendations to VA, including that VA implement mechanisms to allow VA to systematically monitor the amount of time taken to prepare referrals, schedule appointments, and complete appointments. VA agreed with four of the five recommendations, but has not yet implemented them.

Untimely payments to community providers. GAO identified three key factors that affected timeliness of payments to community providers under the Choice Program. These factors included (1) VA's untimely payments to TPAs, which in turn extended the length of time TPAs took to pay providers' claims; (2) Choice Program reimbursement requirements, which led to claim denials; and (3) inadequate provider education on filing claims. GAO found that VA has taken actions to address the factors, such as amending certain reimbursement requirements. However, two of these factors have not been fully addressed. In September 2018, GAO made two recommendations to VA, including that VA collect data on and monitor compliance with its requirements pertaining to customer service for community providers. VA agreed with the recommendations, but has not yet implemented them.

GAO has made 12 recommendations to VA to improve its management and oversight of the Choice Program and the VCCP. VA generally agreed with all but one of GAO's recommendations. GAO continues to believe that all of the recommendations are warranted. As of April 2019, these recommendations have not been implemented.

I am pleased to be here today to discuss the challenges the Department  of Veterans Affairs (VA) has faced in implementing the Veterans Choice  Program (Choice Program) that VA needs to address as it plans and  implements its new community care program.

In June 2018, the VA MISSION Act of 2018 was enacted and required VA  to establish a permanent community care program. VA plans to  consolidate the Choice Program and its other VA community care  programs into one community care program—the Veterans Community  Care Program (VCCP). This legislation helps address some of the  challenges faced by VA in ensuring timely access to care through the  Choice Program and VA’s other community care programs.

My testimony today focuses on lessons learned from the Choice  Program, including recommendations we have made to VA to help ensure  1.  veterans’ timely access to care under the VCCP,  2.  effective monitoring of veterans’ access to care under the VCCP, and  3.  timely payments to community providers under the VCCP.

My remarks are based on our work examining the Choice Program;  specifically, our reports issued in June 2018 and September 2018 and  recommendations therein. These reports provide details on our scope  and methodology. We conducted all of the work on which this statement  is based in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

The Veterans Access, Choice, and Accountability Act of 2014 provided up  to $10 billion in funding for veterans to obtain health care services from  community providers through the Choice Program when veterans faced  long wait times, lengthy travel distances, or other challenges accessing  care at VA medical facilities. The temporary authority and funding for the  Choice Program was separate from other previously existing programs  through which VA has the option to purchase care from community  providers. Legislation enacted in April, August, and December of 2017  and June 2018 extended the Choice Program and provided an additional  $9.4 billion for the Veterans Choice Fund. Authority for the Choice  Program will sunset on June 6, 2019.

Responsibilities of the Choice Program’s Third Party Administrators

In October 2014, VA modified its existing contracts with two contractors— referred to as third party administrators (TPA)—that were administering  another VA community care program to add certain administrative  responsibilities associated with the Choice Program. For the Choice  Program, each of the two TPAs—Health Net and TriWest—was  responsible for managing networks of community providers who deliver  care in a specific multi-state region. Specifically, the TPAs were  responsible for establishing networks of community providers, scheduling  appointments with community providers for eligible veterans, and paying  community providers for their services. Health Net’s contract for  administering the Choice Program ended on September 30, 2018, with  TriWest continuing to administer the Choice Program in its region and the  region previously administered by HealthNet until the program ends.

Process for Choice Program Appointment Scheduling

Through policies and standard operating procedures for VA medical  facilities and contracts with the TPAs, VA established processes for  referring and scheduling appointments through the Choice Program: one  process for time-eligible veterans and another for distance-eligible  veterans. Table 1 provides an overview of the appointment scheduling  process that applies when a veteran is referred to the Choice Program  because the veteran is time-eligible—that is, the next available medical  appointment with a VA clinician is more than 30 days from the veteran’s  preferred date or, in the absence of such a date, the date the veteran’s  physician determines he or she should be seen.

When veterans reside more than 40 miles from a VA medical facility or  meet other travel-related criteria, VA uses the appointment scheduling  process it developed for distance-eligible veterans. The process for  distance-eligible veterans differs from that for time-eligible veterans in that  VA medical facilities do not prepare a referral and send it to the TPA.

Instead, distance-eligible veterans contact the TPA directly to request  Choice Program care.

Choice Program Claim Processing and Payment

VA’s Choice Program TPA processes claims it receives from community  providers for the care they deliver to veterans and pays providers for  approved claims. Figure 1 provides an overview of the steps the TPA  follows for processing claims and paying community providers.

To be reimbursed for its payments to providers, the TPA in turn submits  electronic invoices—or requests for payment—to VA. The TPA generates  an invoice for every claim it receives from community providers and pays.  VA reviews the TPA’s invoices and either approves or rejects them.  Invoices may be rejected, for example, if care provided was not  authorized. Approved invoices are paid, whereas rejected invoices are  returned to the TPA. Under the Prompt Payment Act, VA is required to  pay its TPAs within 30 days of receipt of a clean Choice Program  invoice.

VA’s Planned Veterans Community Care Program

The VA MISSION Act of 2018, among other things, requires VA to  establish a permanent community care program no later than 1 year after  passage of the Act (June 6, 2019) and authorizes VA to utilize a TPA for  claims processing. VA refers to the consolidated program as the VCCP.  In December 2016, prior to enactment of the VA MISSION Act of 2018,  VA issued a request for proposals for contractors to help administer the  VCCP. The VCCP will be similar to the current Choice Program in certain  respects. For example, under the VCCP, TPAs will be responsible for  establishing regional networks of community providers and processing  and paying those providers’ claims. However, unlike the Choice Program,  under the VCCP, VA is planning to have medical facilities—not the  TPAs—generally be responsible for scheduling veterans’ appointments  with community providers. VA awarded contracts for administering the  VCCP in three of six regions on December 28, 2018. As of April 3, 2019,  VA had not yet awarded contracts for the remaining three regions.

Generally, all veterans enrolled in the VA health care system would be  able to qualify for care through the VCCP when (1) VA does not offer the  care or service required by the veteran; (2) the veteran resides in a state  without a full-service VA medical facility; (3) the veteran would have been  eligible under the 40-mile criterion of the Choice Program before June 6,  2018; (4) VA cannot provide the veteran with care and services that  comply with its designated access standards; or (5) the veteran and the  veteran’s referring clinician agree that it is in the best interest of the  veteran to receive care in the community. In January 2019, VA proposed  new access standards for the VCCP based on average drive times and  wait times:

For primary care, mental health, and non-institutional extended care  services, VA is proposing a 30-minute average drive time standard.

For specialty care, VA is proposing a 60-minute average drive time  standard.

VA is proposing appointment wait-time standards of 20 days for  primary care, mental health care, and non-institutional extended care  services, and 28 days for specialty care from the date of request with  certain exceptions.

Eligible veterans who cannot access care within those standards would  be able to choose between eligible community providers and care at a VA  medical facility. VA expects to issue the final regulation establishing  access standards for the VCCP by June 2019.

VA Needs to Address Various Factors That Adversely Affected Veterans’ Access to Care through the Choice Program to Help Ensure Timely Care under the VCCP

In June 2018, we reported that numerous factors adversely affected  veterans’ timely access to care through the Choice Program and could  affect implementation of the VCCP. These factors included the  following: (1) administrative burden caused by complexities of VA’s  referral and appointment scheduling processes; (2) poor communication  between VA and its medical facilities; and (3) inadequacies in the  networks of community providers established by the TPAs, including an  insufficient number, mix, or geographic distribution of community  providers. VA has taken steps to help address these factors; however, not  all access factors have been fully addressed. For example, to help  address administrative burden and improve the process of coordinating  veterans’ Choice Program care, VA established a secure e-mail system  and a mechanism for TPAs and community providers to remotely access  veterans’ VA electronic health records. However, these mechanisms only  facilitate a one-way transfer of necessary information. They do not  provide a means by which VA medical facilities or veterans can view the  TPAs’ step-by-step progress in scheduling appointments or electronically  receive medical documentation associated with Choice Program  appointments.

We made five recommendations to VA to address the factors that  adversely affected veterans’ access to Choice Program care. VA agreed  or agreed in principle with all five recommendations. Our  recommendations and the steps, if any, VA has taken in response to  these recommendations are described in table 2.

VA Needs Complete and Reliable Data to Effectively Monitor Veterans’ Access to Care under the VCCP

In June 2018, we reported that VA cannot systematically monitor the  timeliness of veterans’ access to Choice Program care because it lacks  complete, reliable data to do so. VA will need to address these data  limitations in order to effectively monitor the care delivered to veterans  through the VCCP. The data limitations we identified included the  following:

A lack of data on the timeliness of accepting referrals and opting  veterans in to the program. We found that the data VA uses to monitor  the timeliness of Choice Program appointments do not capture the time it  takes VA medical facilities to prepare veterans’ referrals and send them to  the TPAs, nor do they capture the time spent by the TPAs in accepting  VA medical facilities’ referrals and opting veterans in to the Choice  Program. VA had implemented an interim solution to monitor overall wait  times that relies on VA medical facility staff consistently and accurately  entering unique identification numbers on VA clinicians’ requests for care  and on Choice Program referrals, a process that is prone to error.

Inaccuracy of clinically indicated dates. We found that clinically  indicated dates (used to measure the timeliness of care) are sometimes  changed by VA medical facility staff before they send Choice Program  referrals to the TPAs, which could mask veterans’ true wait times. We  found that VA medical facility staff entered later clinically indicated dates  on referrals for about 23 percent of the 196 authorizations we reviewed.  It is unclear if VA medical facility staff mistakenly entered incorrect dates  manually, or if they inappropriately entered later dates when the VA  medical facility was delayed in contacting the veteran, compiling relevant  clinical information, and sending the referral to the TPA.

Unreliable data on the timeliness of urgent care. We found that VA  medical facilities and TPAs do not always categorize Choice Program  referrals and authorizations in accordance with the contractual definition  for urgent care. According to the contracts, a referral is to be marked as  “urgent,” and an appointment is to take place within 2 business days of  the TPA accepting it, when a VA clinician has determined that the needed  care is (1) essential to evaluate and stabilize the veteran’s condition, and  (2) if delayed would likely result in unacceptable morbidity or pain. We  reviewed a sample of 53 urgent care authorizations and determined that  about 28 percent of the authorizations were originally marked as routine  care authorizations but were changed to urgent by VA medical facility or  TPA staff, in an effort to administratively expedite appointment  scheduling.

We made five recommendations to VA on improving the completeness  and accuracy of data on veterans’ wait times for care. VA agreed with  four of the five recommendations. Our recommendations and the steps  VA has taken in response to these recommendations are described in  table 3.

Further Improvements Are Needed to Help Ensure Timely Payments to Community Providers

In September 2018, we reported that three key factors affected timeliness  of payments to community providers under the Choice Program and that  if unaddressed could affect provider payment timeliness for the VCCP.  These factors included the following: (1) VA’s untimely payments to  TPAs, which in turn extended the length of time TPAs took to pay  community providers’ claims; (2) Choice Program reimbursement  requirements, which led to claim denials; and (3) inadequate provider  education on filing claims. We reported that VA has taken some actions to  address these factors. For example, VA updated its payment system and  related processes to pay TPAs more quickly. According to VA data, as of  July 2018, VA was paying at least 90 percent of the TPAs’ invoices within  7 days, a significant increase from the 50 percent timely payments VA  made to TPAs between November 2014 and September 2016. In  addition, VA and the TPAs had taken steps to amend certain  reimbursement requirements and improve provider education to help  providers resolve claims processing issues.

However, we found that VA has not fully addressed two of these factors.  First, with respect to reimbursement requirements, VA does not have  complete data allowing it to effectively monitor adherence with its policy  for VA medical facilities to perform timely reviews and approvals of  secondary authorization requests. Community providers request  secondary authorization requests when veterans need health care  services that exceed the period or scope of the original authorization.  Incomplete data impacted VA’s ability to meet the requirement. When VA  medical facilities delay these reviews and approvals, community providers  may have to delay care or deliver care that is not authorized, which in turn  increases the likelihood that the providers’ claims will be denied and the  providers will not be paid. Second, with respect to provider education on  filing claims, VA requires the TPAs to establish a customer call center to  respond to calls from veterans and non-VA providers. However, VA does  not enforce the contractual requirement for responding to calls from  community providers and allows the TPAs to prioritize calls from veterans  over calls from community providers. Consequently, VA is not collecting  data, monitoring, or enforcing compliance with its contractual  requirements for the TPAs to provide timely customer service to  providers. As a result, VA does not have information on the extent to  which community providers face challenges when contacting the TPAs  about claims payment issues, which could contribute to the amount of  time it takes to receive reimbursement for services.

To address remaining factors that affect provider payment timeliness, we  made two recommendations to VA. VA agreed with both  recommendations. Our recommendations and the steps VA has taken in  response to these recommendations are described in table 4.

In summary, consolidating its existing community care programs into the  VCCP and launching this new program in June 2019 is a large and  complex undertaking, which comes with many risks and challenges for  VA. Heeding the lessons learned from its implementation and  management of the Choice Program will better position VA to ensure  veterans receive timely access to care under the VCCP and avoid past  challenges such as delays in scheduling appointments and untimely  payments to community providers. Continued oversight of VA’s  implementation of the VCCP will be critical given the scale of change and  the associated risks. We stand ready to assist this Committee with this  continued oversight.

Chairman Isakson, Ranking Member Tester, and Members of the  Committee, this concludes my prepared statement. I would be pleased to  respond to any questions you may have.

If you or your staff members have any questions concerning this  testimony, please contact me at (202) 512-7114 or silass@gao.gov.  Contact points for our Office of Congressional Relations and Public  Affairs may be found on the last page of this statement. Other individuals  who made key contributions to this testimony include Marcia Mann  (Assistant Director), Michael Zose (Analyst-in-Charge), Jacquelyn  Hamilton, Christina Ritchie, Kate Tussey, and Emilie Weisser.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

The VA plans to replace the Veterans Choice Program in June 2019 with the Veterans Community Care Program. The Veterans Choice Program allowed eligible veterans to obtain health care services from providers not directly employed by VA (community providers).

We testified on challenges and lessons learned from the Veterans Choice Program that could help VA successfully implement its new program. These challenges include:

Complex referral and appointment scheduling processes

Incomplete and unreliable data on the timeliness of veterans' access to care

A lack of timely payments to community providers