Medicaid: States' Use and Distribution of Supplemental Payments to Hospitals

Medicaid, the joint federal-state program that finances health care coverage for low-income and medically needy individuals, spent an estimated $177.5 billion on hospital care in fiscal year 2017. About a quarter ($46.3 billion) of those hospital payments were supplemental payments—typically lump sum payments made to providers that are not tied to a specific individual's care. States determine hospital payment amounts within federal limits. In fiscal year 2017, DSH payments totaled about $18.1 billion. Beginning in fiscal year 2020, the amount of DSH payments each state can make is scheduled to be reduced.

GAO was asked to study Medicaid DSH payments to hospitals. Among other things, GAO examined hospital uncompensated care costs and DSH payments by state Medicaid program and hospital characteristics.

GAO analyzed data from the 2014 DSH audits—states' independently audited and certified reports of hospital-level uncompensated care costs and DSH payments—from 47 states and the District of Columbia (48 states). Three states were excluded from the analysis because they either did not make DSH payments or the submitted data were unreliable. The 2014 data were the most recently available audited, hospital-specific, data at the time of GAO's analysis. We provided a draft of this report to HHS for review. HHS provided technical comments, which we incorporated as appropriate.

Medicaid disproportionate share hospital (DSH) payments are one type of supplemental payment and are designed to help offset hospitals' uncompensated care costs for serving Medicaid beneficiaries and uninsured patients. Under the Medicaid DSH program, uncompensated care costs include two components: (1) costs related to care for the uninsured; and (2) the Medicaid shortfall—the gap between a state's Medicaid payment rates and hospitals' costs for serving Medicaid beneficiaries. GAO's analysis of hospitals receiving DSH payments showed that in 2014, costs related to care for the uninsured comprised 68 percent of total uncompensated care costs, and the remaining 32 percent was the Medicaid shortfall.

Across states, GAO found that total DSH payments varied significantly in 2014. DSH payment levels are generally tied to state DSH spending in 1992 and since 1993 states have been subject to a limit on the amount of federal funding that may be used for DSH payments.

Medicaid DSH payments covered 51 percent of the uncompensated care costs. In 19 states, DSH payments covered at least 50 percent of uncompensated care costs.

DSH payments comprised about 14 percent of total Medicaid payments, yet wide variation existed. For example, DSH payments comprised about 97 percent of Medicaid payments to DSH hospitals in Maine and 0.7 percent of Medicaid payments to DSH hospitals in Tennessee.

Some types of hospitals received a greater proportion of DSH payments relative to their share of total uncompensated care costs. For example, states generally provided more DSH payments to public hospitals (in comparison to private and non-profit hospitals) and teaching hospitals (as compared to non-teaching hospitals) relative to their share of total uncompensated care costs.

Medicaid, the joint, federal-state program that finances health care  coverage for low-income and medically needy individuals, spent an  estimated $177.5 billion on hospital care in 2017, the most recent year  data were available. As a component of Medicaid spending, hospital  expenditures exceed spending for any other type of Medicaid service.  About a quarter ($46.3 billion) of Medicaid hospital payments were  supplemental payments—typically lump sum payments made to providers  that are not tied to a specific individual’s care. One type of Medicaid  supplemental payment, disproportionate share hospital (DSH) payments,  is designed to help offset hospital uncompensated care costs for services  provided to Medicaid beneficiaries and uninsured low-income patients.  Under Medicaid DSH, uncompensated care costs consist of two  components: (1) costs related to the care of uninsured patients, for which  hospitals are generally not fully compensated; and (2) the Medicaid  shortfall—the gap between a state’s Medicaid payments and hospital  costs for serving Medicaid beneficiaries. States may also make other  types of supplemental payments, such as those that provide additional  Medicaid payments for certain services or providers. Additionally,  Medicare makes payments to eligible hospitals to offset uncompensated  care costs.

At the federal level, the Centers for Medicare & Medicaid Services (CMS),  within the Department of Health and Human Services (HHS), oversees  the Medicaid program, providing guidance and overseeing states’  compliance with federal requirements, including those for Medicaid DSH  payments. States are responsible for the day-to-day administration of the  Medicaid program, including determining payment amounts to individual  hospitals consistent with any applicable federal limits.

Medicaid has been on our high-risk list since 2003, in part, because of  concerns relating to the appropriate oversight of Medicaid dollars,  including better oversight of supplemental payments. You asked us to  study Medicaid supplemental payments to hospitals. This report  describes  (1)  states’ changes in their use of Medicaid supplemental payments;  (2)  hospital uncompensated care costs and DSH payments by state  Medicaid program and hospital characteristics.

For both objectives, we obtained and analyzed data compiled by a  contractor on behalf of the Medicaid and CHIP Payment and Access  Commission (MACPAC), a legislative agency that provides policy and  data analysis and makes recommendations to the Congress. The data  included state plan rate year 2014 DSH audits and data from Medicare  cost reports. The 2014 DSH audits—the most recently available audited  data at the time of our analysis—report hospital-specific data on  uncompensated care costs and DSH payments. A state plan rate year is  the 12-month period defined in a state’s approved Medicaid state plan.  For purposes of this report, the term “2014 DSH audits” refers to the  audits conducted in the 2014 state plan rate year. The data we analyzed,  which were submitted by 48 states and the District of Columbia, do not  include a census of all hospitals, but only those hospitals that were  reported in the 2014 DSH audits. Two states, Massachusetts and  Hawaii, did not submit a 2014 DSH audit, because they did not make  DSH payments. Additionally, while South Dakota submitted a 2014 DSH  audit, we excluded the state from our analysis over concerns about the  reliability of the reported cost measures. To assess the reliability of the  CMS and state data, we interviewed MACPAC and CMS officials,  reviewed relevant data manuals and other documentation, performed  electronic tests of the data to identify any outliers or anomalies, and  compared the data with data from other published sources. We  determined that the data were sufficiently reliable for the purposes of our  reporting objectives.

To describe changes in states’ use of Medicaid supplemental payments,  we reviewed existing research, including our prior work and reports by  MACPAC, and the Kaiser Family Foundation. Additionally, we reviewed  relevant laws and regulations.

We conducted this performance audit from January 2019 to July 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.

CMS and states jointly administer the Medicaid program and generally  share in the financing of Medicaid payments according to a formula  established in law. States may deliver health care services to Medicaid  beneficiaries through fee-for-service payments to participating providers  or through Medicaid managed care plans, through which states pay plans  a fixed amount per beneficiary—typically per member per month—to  provide a specific set of Medicaid-covered services. States finance their  share (nonfederal share) of Medicaid program spending in a variety of  ways, including state funds, such as state general funds appropriated to  the state Medicaid program and funds collected through taxes levied on  health care providers. Within limits, however, states may also use other  sources of funds—including funding from local government providers,  such as county-owned or county-operated hospitals, or from local  governments on behalf of government providers. Federal law allows  states to finance up to 60 percent of the nonfederal share of Medicaid  payments from local government funds.

State Medicaid agencies have two primary mechanisms for making  payments to hospitals—base payments and supplemental payments— and both can qualify for federal matching funds.

Base payments are payments to hospitals for specific services  provided to Medicaid beneficiaries through both fee-for-service and  managed care. These payments are set by state Medicaid programs  or managed care plans, and can vary considerably across states for  the same services. Payment amounts for the same service may also  vary within a state. States’ Medicaid base payments are typically  lower than other payers’, and often are below the costs of providing  services.

Supplemental payments are typically lump sum payments made to  hospitals that are not specifically tied to an individual’s care. Like all  Medicaid payments, supplemental payments are required to be  economical and efficient. Supplemental payments can be grouped  into two broad categories: (1) DSH payments, which states are  required to make to certain hospitals; and (2) non-DSH payments,  which states are allowed to make, but are not required by law.

DSH payments are designed to help offset uncompensated care costs for  hospitals serving a high proportion of Medicaid beneficiaries and  uninsured low-income patients. In fiscal year 2017, total DSH payments  to hospitals nationally were about $18.1 billion. States may distribute  DSH payments to any eligible hospital in the state; however, under  federal law, the total amount of DSH payments to a hospital must not be  more than the total amount of uncompensated care provided by the  hospital (both the Medicaid shortfall and uncompensated costs for care  for the uninsured). To be eligible for a DSH payment, hospitals must meet  minimum requirements such as having a Medicaid inpatient utilization  rate of at least 1 percent. States are required to make DSH payments to  certain hospitals—termed deemed-DSH hospitals—with a Medicaid inpatient utilization rate of at least one standard deviation above the mean  for hospitals in the state that receive Medicaid payments, or a low-income  utilization rate that exceeds 25 percent.

The amount of federal funding each state may claim for DSH payments is  limited by federal law. Since fiscal year 1993, each state is subject to a  federal DSH allotment that establishes the maximum federal funding  available for the payments. A state’s DSH allotment is largely based on its  fiscal year 1992 DSH spending, although Congress has since made  several incremental adjustments to these allotments. Ultimately, however,  the states that spent the most in fiscal year 1992 continue to have the  largest allotments; conversely, the states that spent the least in fiscal year  1992 have the smallest allotments.

States may choose to make DSH payments to institutions for mental  disease (IMD), which can include state-operated psychiatric hospitals.  Prior to 1997, a large share of DSH payments went to state-operated  IMDs, where they were used to pay for services not covered by Medicaid  and any remaining funds were returned to the state treasuries. In general,  Medicaid excludes fee-for-service base payments for beneficiaries aged  21-64 who are residents of IMDs—called the IMD exclusion—and using  DSH payments allowed states to support the costs of IMDs. In 1997,  Congress restricted the total amount of DSH payments a state could  make to IMDs as a group by establishing an annual limit on payments to  IMDs for each state. Any unspent funds within the IMD-designated limit  can be used for other hospital types.

Non-DSH payments include four types of supplemental payments that  states may make, but are not required to do so, to hospitals and other  providers.

Medicaid upper payment limit (UPL) payments are lump-sum  payments that are made in addition to fee-for-service base payments.  The UPL is a limit or ceiling on the amount of a state’s Medicaid  payments for which the federal government will match spending. The  UPL is based on the difference between Medicaid fee-for-service  base payments and an estimate of what Medicare would pay for  comparable services. The UPL is not a hospital-specific limit, but is  applied in the aggregate across certain categories of providers. States  have some flexibility in deciding which hospitals will receive a UPL  payment, and how to allocate UPL payments among hospitals. In  fiscal year 2017, UPL payments totaled nearly $13 billion.

Uncompensated care pool payments are payments that some states  make to hospitals specifically for uncompensated care costs in  conjunction with section 1115 demonstration waivers and pilot  projects for which they have received approval from the Secretary of  HHS. Specifically, section 1115 of the Social Security Act authorizes  the Secretary of HHS to waive certain federal Medicaid requirements  and allow costs that would not otherwise be eligible for federal  matching funds for experimental, pilot, or demonstration programs  that, in the Secretary’s judgment, are likely to assist in promoting  Medicaid objectives. States have received approval to make  supplemental payments for hospital uncompensated care in their  Medicaid programs. In fiscal year 2017, states reported total spending  of about $8 billion through uncompensated care pools.

Delivery system reform incentive payment (DSRIP) programs, which  have also been authorized under section 1115 demonstrations, allow  states to make supplemental payments to providers engaging in  various improvement projects that align with state delivery system  reform objectives. Examples of reform objectives include improving  care for patients with specific conditions or increasing capacity. In  fiscal year 2017, DSRIP program payments totaled about $7.3  billion.

Graduate medical education payments help support teaching  hospitals, and can include teaching costs, such as physician resident  salaries, though states are not required to make such payments to  teaching hospitals. States have significant flexibility in designing and  administering these payments; however, the payments are subject to  the UPL. In fiscal year 2017, Medicaid graduate medical education  payments totaled about $2 billion.

The Patient Protection and Affordable Care Act (PPACA) and DSH Allotments

Effective January 1, 2014, PPACA allowed states to expand Medicaid  eligibility to certain non-pregnant, non-elderly individuals. PPACA also  required a phased reduction in DSH allotments to states, reflecting the  expectation that the number of uninsured individuals would decline—and  so would hospital spending on uncompensated care. As of May 2019,  there were 37 “expansion states”—those states that chose to expand  Medicaid eligibility—and 14 “non-expansion states”—those that did not  choose to expand Medicaid. Congress has delayed the reduction in DSH  allotments several times. The reductions are scheduled to begin in fiscal  year 2020.

Between 2013 and 2014, both expansion and non-expansion states  reported different degrees of change in care for the uninsured and  Medicaid shortfall. In particular, MACPAC reported that between 2013  and 2014, the year in which most state Medicaid expansions took effect,  expansion states’ uncompensated care costs for the uninsured declined  by $2.2 billion (19 percent), while non-expansion states’ uncompensated  care costs for the uninsured increased by $0.6 billion (5 percent). During  the same period, expansion states’ Medicaid shortfall increased by $2.2  billion (36 percent), and non-expansion states’ Medicaid shortfall  increased by $1.8 billion (546 percent).

States Increasingly Made Supplemental Payments to Hospitals

States’ use of supplemental payments has grown in recent decades,  partly due to the flexibility supplemental payments provide. This flexibility  is twofold: supplemental payments provide states with flexibility in  financing the nonfederal share of supplemental payments, and flexibility  to target the payments to specific hospitals or types of hospitals.

States Increasingly Made Supplemental Payments to Hospitals, while Reducing or Freezing Hospitals’ Base Payments

Total supplemental payments to hospitals have grown over time, while  states’ base payments have often been frozen or reduced. Congress  imposed limits on DSH spending in the 1990s, and since then states’ use  of non-DSH payments has grown. Between fiscal year 2000 and fiscal  year 2017, DSH payments increased about 16 percent, from $15.6 billion  to $18.1 billion. In prior work, we reported that in fiscal year 2006 state  Medicaid agencies made at least $6.3 billion in non-DSH payments,  though the exact amounts are unknown, because states did not report all  their payments to CMS. By fiscal year 2017, the amount of non-DSH  payments had increased to $30.4 billion. Both uncompensated care  pool payments and DSRIP programs are relatively new types of non-DSH  payments, and thus contributed to the overall increase in supplemental  payments. In prior work, we reported that, as of February 2017, CMS  authorized nearly $38.7 billion in DSRIP spending nonconsecutively over  2011 to 2022 in four states with the largest DSRIP programs.

Our prior work found that new or increased supplemental payments  helped mitigate the increasing gap between Medicaid base payments and  hospital costs. While supplemental payments increased, the number of  states reducing or freezing base payments to hospitals has increased, in  part, because states reported challenges paying the nonfederal share  with state general funds. Our work found that from 2008 to 2011, across  all providers, the number of states making at least one base payment  reduction grew from 13 to 34, while the number of states increasing at  least one base payment fell over the same period. Across all 4 years,  states most frequently reported reducing base payments for hospitals.

The Kaiser Family Foundation’s annual survey data shows the trend  continued in more recent years. Specifically, over half of states froze or  reduced inpatient hospital base payments each fiscal year from 2011 to  2018, ranging from a low of 28 states in 2011 and 2018, to a high of 39  states in 2012. (See table 1.)

In a September 2018 study of five states, MACPAC found that hospitals  and state Medicaid officials often prefer increases to supplemental  payments rather than increases to base payments, because supplemental payments come with more predictability. MACPAC found  that all five states reported reducing hospital base payments from 2007 to  2011. After 2011, all five states kept base payments frozen with no  adjustment for inflation. As a result, base payments to hospitals in these  states were lower in 2018 relative to other payers and hospital costs. To  address the growing gap between base payments and hospital costs,  states collaborated with hospitals to establish or increase supplemental  payments. In the five states, supplemental payments ranged from 18  percent to 61 percent of total hospital payments.

States Have Relied on Multiple Sources of Funds to Finance Their Nonfederal Share

More often than with base payments, states have relied on sources other  than state general funds to finance the nonfederal share of supplemental  payments. For example, states may receive funds for the nonfederal  share of supplemental payments through taxes levied on health care  providers. (See fig. 1.) In previous work, we found that funds from local  governments and health care providers constituted about 50 percent of  the nonfederal share for DSH and non-DSH payments in fiscal years  2008 through 2012. In contrast, funds from local governments and  health care providers constituted approximately 30 percent of base  payments during the same time period. The MACPAC study of five states  also found that states and hospitals preferred supplemental payments,  because hospitals can track the extent to which their tax assessments are  recouped through supplemental payments.

In a July 2014 report, we found that the number of states relying on  provider taxes increased, and that provider tax revenues were then used  for the nonfederal share of supplemental payments. In particular, the  total number of provider taxes increased from 119 taxes in 42 states in  2008 to 159 taxes in 47 states in 2012—a 34 percent increase. Kaiser  Family Foundation data show this trend has continued. According to  state survey data, the number of states using inpatient hospital provider  taxes has steadily increased from fiscal year 2011 to 2018, ranging from  a low of 34 states in 2011, to a high of 42 states in 2017 and 2018. (See  table 2.)

Supplemental Payments Allow States to Target Payments to Certain Hospitals or Types of Hospitals

Supplemental payments provide states with flexibility that allows them to  address states’ goals by targeting payments to particular hospitals or  hospital types, such as public hospitals or teaching hospitals. States may  choose to target supplemental payments to hospitals that may not have  the highest uncompensated care costs. Our prior work found some states’  DSH payments were not proportionally targeted to hospitals with the  highest uncompensated care costs, which DSH payments are designed  to address. Based on our prior analysis of annual hospital-specific 2010 DSH data, we reported that in 30 of 42 states, hospitals receiving the  largest share of state DSH payments did not provide the largest share of  total uncompensated care. Moreover, our prior review of the independent  DSH audits found that

41 states made DSH payments to 717 hospitals that exceeded the  individual hospitals’ uncompensated care costs as calculated by the  auditors,

9 states did not accurately calculate the uncompensated care costs of  206 hospitals in those states for purposes of making DSH payments,  and

15 states made DSH payments to a total of 58 hospitals that either did  not retain their DSH payments or were not qualified to receive them.

States’ criteria for identifying eligible DSH hospitals and how much  funding they receive vary, but were often related to hospital ownership,  hospital type, and geographic factors. Our prior work found that 2006  DSH payments to individual hospitals varied widely, ranging from 1 cent  to about $395 million. For example, California reported both the lowest  and highest 2006 DSH payment amounts; the state made a total of only  $160 in DSH payments to 96 private hospitals and paid $2 billion in DSH  payments to 51 government hospitals.

Based on our analysis of 2014 DSH audits, several states targeted DSH  payments to certain hospitals and hospital types, including the following:

Public hospitals: States targeting nearly all (93 percent or higher) of  their DSH funding to public hospitals included Arkansas (99 percent),  California (100 percent), Illinois (99 percent), Iowa (93 percent), Maine  (100 percent), and Washington (97 percent).

Nonprofit hospitals: Nebraska targeted 98 percent of its DSH funding  to nonprofit hospitals.

High-teaching hospitals: Arkansas targeted 98 percent of DSH  funding to high-teaching hospitals, defined as teaching hospitals with  an intern-and-resident-to-bed ratio of 0.25 or greater.

IMDs: Maine makes DSH payments to the two state-run IMDs. In  2014, 18 states directed their entire IMD-designated DSH limit to  IMDs. (For additional information on DSH payments to IMDs, see  table 9 in app. II).

Similarly, states can target UPL payments to certain hospitals. We and  the HHS Office of the Inspector General have reported that some states  concentrated these payments to a small number of providers.

GAO and Others Have Noted Concerns With States’ Use of Supplemental Payments

Our work has highlighted a number of concerns about the use of non- DSH payments from various perspectives, highlighting the need for  transparent reporting, ensuring expenditures meet Medicaid purposes,  and concerns regarding arrangements that shift costs from the states to  the federal government. For example, in November 2012, we  recommended that Congress consider requiring CMS to improve the  transparency of and accountability for non-DSH payments by requiring  facility-specific payment reporting and annual audits. The report noted  that the annual DSH reports and audits that states began submitting in  2010 were important steps toward improving transparency and  accountability for Medicaid DSH payments; however, similar information  is lacking for non-DSH payments. Moreover, the report stated that the  limited information available on non-DSH payments shows that a large  share of these payments are paid to a small number of hospitals; when  these payments are combined with Medicaid base payments, hundreds of  hospitals may be receiving Medicaid payments well in excess of their  actual costs of providing Medicaid services. As of March 2019, Congress  has not taken any action, but CMS announced in fall 2018 that it was  planning a proposed rule on supplemental payments that, if finalized,  would improve transparency by requiring states to provide CMS with  certain information on Medicaid supplemental payments. The agency  plans to release the proposed rule for comment by fall 2019.

In 2014, we recommended that CMS develop a data collection strategy  ensuring states report accurate and complete data on all sources of funds  used to finance the nonfederal share of Medicaid payments. Such data  are needed to (1) track trends in financing the nonfederal share, and (2)  oversee compliance with current limits on sources of financing the  nonfederal share. CMS did not concur with our recommendation, but did  acknowledge the agency does not have sufficient data to oversee  compliance with the 60 percent limit on local government contributions to  a state’s nonfederal share.

Hospital Uncompensated Care Costs and DSH Payments Varied by State; Some Types of Hospitals Received a Greater Proportion of DSH Payments

Uncompensated Care Costs Varied by State and Were Mainly for Costs Related to Treating Uninsured Patients

Among hospitals receiving DSH payments in 2014, total uncompensated  care costs varied by state, ranging from $5.9 million in North Dakota to  $6.2 billion in New York. In the hospitals, most uncompensated care costs  were related to costs to care for uninsured patients, rather than the  Medicaid shortfall. For example, among hospitals receiving DSH  payments in the 48 states studied:

Costs related to care for the uninsured comprised about two-thirds  (67.9 percent) of total uncompensated care costs for DSH hospitals.  The remaining share of DSH hospital uncompensated care costs  consisted of the Medicaid shortfall.

In 34 states, costs for care for the uninsured exceeded the Medicaid  shortfall. In the remaining 14 states, the Medicaid shortfall exceeded  costs related to care for the uninsured.

In 15 states, Medicaid paid hospitals more than the total cost of  services provided to Medicaid beneficiaries, resulting in a surplus of  Medicaid payments—even prior to receiving DSH payments. Termed  a negative Medicaid shortfall, these surplus funds can be the result of  non-DSH Medicaid supplemental payments. The remaining 33 states  had some Medicaid shortfall. (See table 3.) No states had a surplus of  total uncompensated care costs.  (For additional information on state uncompensated care costs and DSH  payments in 2014, see table 10 in app. II.)

Across States, DSH Payments Varied Significantly in Amounts, Percentage of Uncompensated Care Costs Covered, and Percentage of States’ Medicaid Spending on Hospitals

DSH payments—both the federal and nonfederal share—varied  significantly in the amount that each state paid to hospitals in 2014. (See  table 4 and fig. 2.) Wyoming made the smallest amount of DSH payments  at about $500,000, while New York made the largest amount in DSH  payments at $3.5 billion. Differences in DSH payments are largely the  result of differences in the state allocations established in law.

The proportion of total DSH hospital uncompensated care costs covered  by total DSH payments in 2014 also varied considerably by state.  Nationally, DSH payments ($18.3 billion) covered about half of DSH  hospital uncompensated care costs ($36.2 billion). Nineteen states made  DSH payments totaling at least 50 percent of uncompensated care costs  for the states’ DSH hospitals, while 29 states made DSH payments of  less than 50 percent of uncompensated care costs for the states’ DSH  hospitals. (See table 5.) Four states (California, Illinois, Maryland, and  Missouri) made DSH payments that exceeded aggregate hospital  uncompensated care costs. (For additional information on state  uncompensated care costs and DSH payments in 2014, see table 10 in  app. II.)

Among hospitals receiving them, DSH payments accounted for 13.6  percent of total Medicaid payments, nationally, but there was  considerable variation across states. For example, DSH payments  comprised 96.6 percent of Medicaid payments to DSH hospitals in Maine  and 0.7 percent of Medicaid payments to DSH hospitals in Tennessee.  In 40 states, DSH payments accounted for less than 20 percent of total  Medicaid payments to hospitals, but in 8 states, it exceeded 20 percent.  (See table 6.) (For additional information on state Medicaid payments to  hospitals, see table 11 in app. II.)

Deemed-DSH, Public, and Teaching Hospitals Received a Greater Share of DSH Payments Relative to their Proportion of Uncompensated Care Costs

Among deemed and non-deemed DSH hospitals, overall deemed-DSH  hospitals received larger relative DSH payments compared to non- deemed DSH hospitals. Deemed-DSH hospitals received 69.9 percent  of DSH payments in 2014, but carried 51.2 percent of uncompensated  care costs, relative to all hospitals receiving DSH payments that year.  Each of the 48 states that distributed DSH payments in 2014 had at least  one deemed-DSH hospital. (See table 7 for hospital type definitions.)  Most of these states (36) provided deemed-DSH hospitals with a greater  share of DSH payments relative to their share of total uncompensated  care costs. (See table 8 for a summary of how states’ DSH payments to  deemed-DSH hospitals compared to the hospitals’ share of  uncompensated care costs, and table 12 in app. II for additional  information by state.)

In terms of ownership and teaching hospital status, hospitals that were  publicly owned or teaching hospitals also generally received a greater  proportion of DSH payments relative to their share of total  uncompensated care costs.

Among the three different ownership groups (public, non-profit, and  private), public hospitals generally received a larger share of DSH  payments relative to their share of uncompensated care. Among  hospitals receiving DSH payments in 2014, public (36.7 percent) and  nonprofit (53.7 percent) hospitals accounted for more uncompensated  care costs than that of privately owned hospitals (9.6 percent). States  generally provided more DSH payments to public hospitals (62.8  percent) relative to their share of total uncompensated care costs  (36.7 percent). (For additional information on DSH payments and  hospitals’ uncompensated care costs by ownership, see table 13 in  app. II.)

States distribute DSH payments to teaching hospitals at different  rates, but generally provided a greater proportion of DSH payments to  high-teaching hospitals (56.5 percent) relative to their share of total  DSH hospital uncompensated care costs (44.0 percent). (For  additional information on DSH payments and hospitals’  uncompensated care costs by hospital teaching status, see table 14 in  app. II.)

Nationally, urban hospitals received a greater share of DSH payments  relative to rural hospitals, with 89.6 percent of DSH funds distributed  to urban hospitals and the remaining 10.4 percent distributed to rural  hospitals. This proportion corresponds to a similar distribution of  uncompensated care costs, with 88.2 percent of uncompensated care  costs among DSH hospitals carried by urban hospitals and the  remaining 11.8 percent carried by rural hospitals. (For additional  information on DSH payments and hospitals’ uncompensated care  costs by urban/rural status, see table 15 in app. II.)

For additional information on variation in uncompensated care and DSH  payments by hospital category and sole community provider status, and  state characteristics, see tables 16 through 19 in appendix II.

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

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to appropriate congressional  committees, to the Secretary of Health and Human Services, the  Administrator of CMS, and other interested parties. In addition, the report  will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7114, or yocomc@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 III.

This bibliography contains citations for the eight Kaiser Family Foundation  reports referenced in the report.

Kaiser Family Foundation and Health Management Associates. States  Focus on Quality and Outcomes Amid Waiver Changes: Results from a  50-State Medicaid Budget Survey for State Fiscal Years 2018 and 2019.  Washington, D.C.: Kaiser Family Foundation, and National Association of  Medicaid Directors, October 2018.

Kaiser Family Foundation and Health Management Associates. Medicaid  Moving Ahead in Uncertain Times: Results from a 50-State Medicaid  Budget Survey for State Fiscal Years 2017 and 2018. Washington, D.C.:  Kaiser Family Foundation, October 2017.

Kaiser Family Foundation and Health Management Associates.  Implementing Coverage and Payment Initiatives: Results from a 50-State  Medicaid Budget Survey for State Fiscal Years 2016 and 2017.  Washington, D.C.: Kaiser Family Foundation and National Association of  Medicaid Directors, October 2016.

Kaiser Family Foundation and Health Management Associates. Medicaid  Reforms to Expand Coverage, Control Costs and Improve Care: Results  from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and  2016. Washington, D.C.: Kaiser Family Foundation and National  Association of Medicaid Directors, October 2015.

Kaiser Family Foundation and Health Management Associates. Medicaid  in an Era of Health & Delivery System Reform: Results from a 50-State  Medicaid Budget Survey for State Fiscal Years 2014 and 2015.  Washington, D.C.: Kaiser Family Foundation, and National Association of  Medicaid Directors, October 2014.

Kaiser Family Foundation and Health Management Associates. Medicaid  in a Historic Time of Transformation: Results from a 50-State Medicaid  Budget Survey for State Fiscal Years 2013 and 2014. Washington, D.C.:  Kaiser Commission on Medicaid and the Uninsured, Kaiser Family  Foundation, October 2013.

Kaiser Family Foundation and Health Management Associates. Medicaid  Today; Preparing for Tomorrow: A Look at State Medicaid Program  Spending, Enrollment and Policy Trends Results from a 50-State  Medicaid Budget Survey for State Fiscal Years 2012 and 2013.  Washington, D.C.: Kaiser Commission on Medicaid and the Uninsured,  Kaiser Family Foundation, October 2012.

Kaiser Family Foundation and Health Management Associates. Moving  Ahead Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage  and Policy Trends Results from a 50-State Medicaid Budget Survey for  State Fiscal Years 2011 and 2012. Washington, D.C.: Kaiser Commission  on Medicaid and the Uninsured, Kaiser Family Foundation, October 2011.

Appendix II: Data on Disproportionate Share Hospital Payments and Hospital Uncompensated Care Costs by State

To conduct this analysis, we used data compiled by Acumen for the  Medicaid and CHIP Payment and Access Commission. These data  consist of measures from several sources. The measures used within this  report were collected from state disproportionate share hospital (DSH)  audits and Medicare cost reports. The 2014 DSH audits, which report  data on hospital uncompensated care costs and DSH payments to  hospitals, were submitted by 48 states and the District of Columbia.  These data do not include a census of all hospitals, but only those  hospitals that were reported in the 2014 DSH audits. As a result, these  data do not capture all uncompensated care costs in each state, only  uncompensated care costs for those hospitals reported in the 2014 DSH  audits. Two states, Massachusetts and Hawaii, did not submit a 2014  DSH audit, because they did not make DSH payments. Additionally, while  South Dakota submitted a 2014 DSH audit, we excluded the state from  our analysis because of concerns about the reliability of the reported cost  measures.

In addition, not all hospitals reported every data element we analyzed. As  a result, total uncompensated care costs and total DSH payments vary  between tables, as hospitals were excluded from a given table if they did  not report the characteristic described by the table. The numbers of  hospitals excluded because they did not report a given data element are  noted in each table for which this is the case. Likewise, as  uncompensated care costs are an important focus of the report, we also  excluded from all analyses 13 hospitals that did not report a value for  uncompensated care costs.

Appendix III: GAO Contacts and Staff Acknowledgments

In addition to the contact named above, Lori Achman (Assistant Director),  Dawn Nelson (Analyst-in-Charge), Sean Miskell, and Jeffrey Tamburello  made key contributions to this report. Also contributing were Tim  Bushfield, Drew Long, Vikki Porter, and Emily Wilson.

Medicaid spent over $177 billion on hospital care in fiscal year 2017. A quarter of these payments were supplemental payments—lump sum payments that are not tied to a specific patient's care.

Disproportionate share hospital payments are one type of supplemental payment. To help offset the costs for hospital services, these payments are given to hospitals that serve a high proportion of Medicaid and uninsured patients.

We found that these payments covered 51% of the costs of uncompensated care at hospitals receiving payments nationwide.


Aviation Safety: Opportunities Exist for FAA to Improve Airport Terminal Area Safety Efforts

U.S airspace system is one of the safest in the world, but incidents and near misses at and around U.S. terminal areas still occur. FAA oversees the safety of runways and taxiways and works with industry partners—including airlines, airports, pilots, and others—to improve safety in these areas. Despite FAA's continued efforts, the number of reported terminal area incidents has increased over time.

GAO was asked to review various issues related to runway safety and to update its prior work on airport terminal areas. This report examines: (1) the extent to which FAA uses data to analyze terminal area incidents and (2) efforts FAA and others have implemented to improve terminal area safety, and how FAA assesses their effectiveness. GAO analyzed FAA data; interviewed officials from 10 airports selected based on high runway incident rates in the past 3 years, among other factors; and interviewed federal and industry officials.

The Federal Aviation Administration (FAA) uses data to analyze some types of incidents in airport “terminal areas”—runways, taxiways, and ramps. For example, FAA uses data to analyze runway “incursions”—the incorrect presence of an aircraft, vehicle, or person on the runway. According to FAA data, the rate of reported runway incursions nearly doubled from fiscal years 2011 through 2018, with most of this increase due to a rise in reports of less severe incursions, or those without immediate safety consequences. However, GAO found that FAA has not identified or removed all duplicates from its data on runway “excursions”—when an aircraft veers off or overruns a runway—which limits FAA's ability to accurately analyze these incidents. Additionally, FAA does not use data to analyze incidents that occur in ramp areas—the parts of terminal areas where aircraft are prepared for departure and arrival—where injuries to workers and damage to aircraft can occur. Without a process to leverage accurate excursion and ramp incident data, FAA may not be able to assess the risk these incidents pose to passengers, airport staff, and others.

FAA, airports, and airlines have implemented multiple efforts to improve terminal area safety, but FAA has not assessed the effectiveness of many of its efforts. For example, FAA has funded multiple technologies to improve runway safety, such as Airport Surface Detection Equipment, Model X (ASDE-X)—a ground surveillance system that enables air traffic controllers to track landing and departing aircraft and alerts controllers of potential collisions. However, FAA has not assessed the effectiveness of ASDE-X. Similarly, FAA has not assessed the effectiveness of its Runway Safety Program, whereby FAA staff, along with local airport stakeholders, provide data and support to local air traffic managers to help identify and manage terminal area safety incidents. FAA has taken steps to evaluate some of its terminal-area safety efforts, such as tracking the number of runway excursions safely stopped by a lightweight, crushable concrete designed to stop or greatly slow an aircraft that overruns the runway. However, without assessing how all of FAA's efforts contribute to its goal of improving runway and taxiway safety, FAA cannot determine the extent to which it is targeting its limited resources to the most effective strategies.

GAO is making five recommendations including that FAA identify and remove duplicate excursion data, develop processes to analyze ramp area incidents, and establish a plan to assess the effectiveness of its terminal area safety efforts.

The U.S. airspace system is one of the safest in the world, but incidents  and near misses at and around U.S. airport runways and taxiways still  occur. For example, in 2017 at San Francisco International Airport, an  airplane came within 60 feet of landing on a taxiway occupied by four  airplanes full of passengers before the pilot was able to pull up and  attempt another landing. In addition, in fiscal year 2018, the Federal  Aviation Administration (FAA) recorded over 1,800 incidents of planes,  vehicles, or pedestrians entering runways when they were not authorized  to do so. Since establishing runway safety as a strategic objective in  2002, FAA has undertaken many efforts to address this issue, including  collecting and sharing information on incidents and deploying  technologies that can alert air traffic controllers of potential collisions.  Additionally, FAA has implemented a data-driven, risk-based safety  oversight approach that is designed to identify hazards, manage risks,  and take corrective action before an accident occurs. Despite these  efforts, reported runway incidents have continued to increase. FAA data  show runway incidents nearly doubled between fiscal years 2011 and  2018.

You asked us to review FAA’s safety oversight of airport terminal areas— runways, taxiways, and ramp areas (the area from the gate to the taxiway  or runway, where aircraft are prepared for departure and arrival)—and  update our prior work, including our 2011 report on terminal area safety.  This report discusses:  1.  To what extent does FAA use data to analyze terminal area incidents?  2.  What efforts have FAA and others implemented to improve terminal  area safety, and how does FAA assess their effectiveness?

To address both objectives, we reviewed our prior work and other  published work on FAA’s runway and taxiway safety efforts, including  those from FAA, the Department of Transportation’s (DOT) Inspector  General, and the National Transportation Safety Board (NTSB). We  interviewed officials from these agencies as well as the Occupational  Safety and Health Administration (OSHA), airport and airline associations,  and aviation safety organizations. We conducted semi-structured  interviews with airport operators and air traffic controllers from 10 airports  selected from certificated airports to include those with high runway  incident rates in the last 3 years, certain runway safety technologies in  place, and variation in geography. We interviewed officials in person and  observed facility operations at 4 of these 10 airports—Los Angeles  International Airport; Ronald Reagan Washington National Airport (Washington, D.C.); San Antonio International Airport; and William P.  Hobby Airport (Houston, Texas). The perspectives of officials at these 10  airports are not generalizable to those at other airports. However, they  allow us to provide examples of how some air traffic controllers and  airport operator officials manage terminal area safety.

To assess the extent to which FAA uses data to analyze terminal area- incidents, we reviewed FAA data from fiscal years 2011 through 2018 on  reported runway and taxiway incidents and calculated trends in incident  types, severity, and aircraft involved. We selected 2011 because that is  when FAA began collecting data on runway “excursions”—incidents that  occur when an aircraft veers off the side or end of a runway. To assess  the reliability of these data, we reviewed FAA documentation, interviewed  FAA officials, and reviewed incident data for errors such as duplicates or  incomplete records. We also compared FAA’s processes for collecting  and analyzing runway, taxiway, and ramp area data to GAO internal  control and data reliability standards. We found FAA incursion data to be  reliable for the purposes of our reporting objectives but found limitations  with FAA excursion and ramp area data, which are discussed later in this  report.

To identify FAA’s and other stakeholders’ efforts, including technologies,  to improve terminal area safety and determine how FAA assesses their  effectiveness, we reviewed documentation of FAA, airports’ and airlines’  current or planned terminal area initiatives. We analyzed the content of  interviews with airport and air traffic officials and compared common  themes to federal internal control standards, including those on  information and communication. Finally, we compared FAA’s  assessment of its terminal area efforts and technologies to leading  program evaluation practices.

We conducted this performance audit from August 2018 to August 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 the  evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

FAA air traffic controllers are responsible for guiding aircraft that are  departing, landing, and moving around the terminal area at 518 U.S.  airports. Airport terminal areas include “movement areas,” such as  runways and taxiways, and “non-movement areas” such as ramp areas  (see fig. 1).

Incidents can occur in either the movement or non-movement area and  include:

Runway incursions: These incidents involve the incorrect presence  of an aircraft, vehicle, or person on a runway. Incursions fall into three  categories—pilot deviations, operational incidents, and vehicle or  pedestrian deviations—depending on their cause (see fig. 2).

Runway excursions: These incidents occur when an aircraft veers  off the side, or overruns the end, of a runway.

Wrong-surface: These incidents occur when an aircraft lands or  departs, or tries to land or depart, on the wrong runway or on a  taxiway (see fig. 3). Wrong surface incidents also include when an  aircraft lands or tries to land at the wrong airport.

Ramp area: These incidents occur when aircraft, vehicles, or people  cause damage or injuries in the ramp area.

FAA oversees the safety of runways and taxiways and works with  partners such as airlines, airports, pilots, and others to improve safety in  these areas. FAA’s oversight of ramp areas is generally exercised  indirectly through its certification of airports and airlines, which have been  more directly responsible for safety in these areas.

Several FAA offices—with staff in D.C. headquarters, FAA regional  offices, and local district offices—oversee terminal area safety, including:

The Air Traffic Organization (ATO) manages air traffic control,  validates reports of terminal area incidents, develops and maintains  runway safety technology, and leads investigations of operational  incidents. ATO also administers the mandatory reporting system,  which requires air traffic controllers to report certain incidents,  including runway incursions, excursions, and wrong surface  landings.

ATO’s Runway Safety Group leads and coordinates all FAA  terminal area safety efforts. The goal of the Runway Safety Group  is to improve runway and taxiway safety by reducing the risk of  runway incursions, excursions, and other incidents.

The Office of Airports oversees airport-related safety, including  inspecting and certifying operations at commercial airports and  establishing airport design and safety standards. The Office of  Airports also provides grants to airports to help support safety  improvements, and leads investigations of incursions caused by  vehicle/pedestrian deviation.

Office of Aviation Safety investigates aircraft incidents and accidents,  sets aviation safety standards, and certifies aircraft and pilots.

Office of Aviation Safety, Flight Standards Service (Flight  Standards) inspects and certifies airlines, promotes runway safety  initiatives, and provides policies and guidance for pilots. Flight  Standards also administers a reporting program to obtain  information on incidents involving pilots and leads investigations of  incursions caused by pilot deviation.

Office of Aviation Safety, Accident Investigation and Prevention  oversees investigations of terminal area-safety accidents and  incidents, a role which includes coordinating with the NTSB,  OSHA, and other FAA offices.

Runway and taxiway safety has long been a focus of FAA efforts. FAA’s  fiscal year 2019-2022 strategic plan establishes four safety initiatives  related to its data-driven, risk-based safety oversight approach, known as  a Safety Management System (SMS), including two fiscal year 2019  safety initiatives: proactively addressing emerging safety risk by using data-informed  approaches to make risk-based decisions, and  reducing the risk of runway incursions and wrong surface incidents.

Further, FAA’s SMS guides its terminal area oversight. For example,  FAA’s order establishing the Runway Safety Program states that FAA use  SMS to ensure the safety of the national airspace through evaluations,  data tracking, and analysis of incidents to identify new hazards and risks,  and to assess existing safety controls. In our 2011 report on FAA’s  oversight of terminal area safety, we made three recommendations  related to excursions, ramp areas, and information sharing, all three of  which FAA has since implemented.

FAA Uses Data to Analyze Some Terminal Area Incidents

FAA Uses Data to Analyze Runway Incursions

FAA uses data from reports and investigations to analyze runway  incursions. For example, a team of representatives from the Air Traffic  Organization, the Office of Airports, and the Office of Flight Standards,  uses information on each incursion to classify its severity into one of four  categories—A through D. An example of a category A incursion  occurred in June 2018 in Springfield, Missouri, when an aircraft with 53  people on board accelerated for takeoff before noticing an airport  operations vehicle crossing the runway. No injuries or damage were  reported, but a collision was narrowly avoided. An example of a Category  C or D incursion is a pilot entering a runway without authorization, but  without significant potential for a collision. FAA reports the rate of severe  category A and B incursions to Congress and the public in its annual  performance plan.

FAA also uses data to analyze runway incursions over time. For example,  FAA data show that the number and rate of reported runway incursions  nearly doubled from 954 in fiscal year 2011 to 1804 in fiscal year 2018  (see fig. 4). The majority of reported runway incursions (62 percent) were  pilot deviations followed by operational incidents (20 percent) and  vehicle/pedestrian deviations (18 percent).

According to our analysis of FAA data, the increase in reported incursions  was largely due to an increase in less severe incursions. Our analysis  showed that severe incursions (category A and B) in which there is a  significant potential for a collision, are relatively infrequent. Category C  and D incursions, in which there is less potential for a collision, are more  frequent. According to FAA officials, the increase in less severe  incursions may be due to increased reporting of these incidents, which we  also noted in our 2011 report on terminal area safety. However, the  number and rate of reported runway incursions has continued to steadily  increase since then, and may also indicate an increase in the actual  occurrence of incidents.

In 2017, FAA developed a new metric to analyze excursions and other  incidents, as well as incursions. According to FAA officials, the new metric  (“Surface Safety Metric”) measures the relative riskiness of terminal area  incidents by assigning a different severity weight to each incursion,  excursion, or other incident depending on its proximity to a fatal accident.  For example, FAA documentation states that the new metric assigns a  severity weight of 1 to incidents that result in a fatal injury, 0.6 to incidents  with serious injuries, and 0.3 to incidents with minor injuries. Incidents in  which there are no injuries are assigned even lower severity weights—for  example 0.003 for a category A incursion and 0.002 for a category B  incursion. FAA officials said they will analyze these severity weights  year-to-year, so they can identify trends in each type of incident and  across all incidents. For example, FAA officials noted that despite an  increase in the number of runway incursions from fiscal years 2011  through 2018, the estimated risk of these incidents, as measured by their  severity weights, declined. FAA has developed new performance goals  tied to this metric, which it plans to report to Congress and the public by  the end of fiscal year 2019.

Duplicate Data May Affect FAA’s Ability to Analyze Excursions

FAA has analyzed excursion data through special FAA task teams and  other joint industry efforts with airlines, associations, and other  government agencies. Excursions occur when an aircraft veers off the  side or end of a runway, and can result in serious injury, death, or  property damage. For example, on September 27, 2018, a small aircraft  slid off the side of the runway at Greenville Downtown Airport in South  Carolina shortly after landing. The aircraft continued down a 50-foot cliff,  resulting in the deaths of two people. According to data FAA provided to  us, nearly 700 excursions were reported in fiscal year 2018. Additionally,  several joint industry efforts and special task teams have recently  analyzed excursions. For example, the Commercial Aviation Safety  Team (CAST), which FAA co-leads, found that about a third of the  commercial accidents in the U.S. that resulted in fatalities or irreparable  damage to the aircraft from 2006 through 2015 were attributed to runway  excursions.

In 2013, FAA began collecting additional data on excursions, but our  review of FAA’s data found the excursion data FAA has collected since  then contain duplicates. In 2011, we found that FAA was not formally  tracking runway excursions and recommended that FAA develop a plan  to track and assess them, which FAA began doing in 2013. Prior to  2013, FAA collected excursion data from two sources—the NTSB  Aviation Accident Database, which contains information gathered during  NTSB investigations, and FAA’s own Aviation Safety Information Analysis  and Sharing (ASIAS) database, which includes information on incidents  that may not reach the level of an NTSB investigation, such as an incident  without serious injuries or fatalities. In 2013, FAA began identifying  excursions in a third source—mandatory occurrence reports that FAA  requires air traffic controllers to file when they observe an incident. FAA  officials said that the additional excursions they identified through these  mandatory occurrence reports added 15 percent more annual reports to  those that they had identified through only the other two sources.

However, FAA officials said there are likely duplicate records in their  excursion data as a single excursion could be reported in more than one  of these three sources. Although we did not have enough identifying  information in the excursion data FAA provided to confirm the number of  duplicate reports, our analysis of excursion data did identify possible  duplicates. Further, despite containing possible duplicates, FAA recently  began using these excursion data in its new surface safety metric.  Federal standards for internal control state that data should be  appropriate, current, complete, and accurate. A 2017 FAA internal  analysis also noted the importance of identifying duplicates in order to  ensure accurate runway excursion data. FAA officials said that they do  not know how many duplicate records there are, and that they do not  have an automated way to identify (and remove) all duplicates. FAA  officials said that they could manually identify and remove duplicates, but  that they do not currently do this nor plan to do so because duplicate  excursion records would not affect their assessment of excursion risk.  FAA officials said that excursions captured solely by the mandatory  occurrence reports tend to be minor, lower-risk events. However, without  a process to identify duplicates, FAA is not able to verify that this  statement is true, and therefore cannot accurately assess and mitigate  the risk excursions pose to terminal area safety.

FAA Does Not Use Data to Analyze Ramp Area Incidents

FAA does not use data to analyze most ramp area incidents, and does  not plan to do so in its new surface safety metric. While the manager of  the Runway Safety Group said FAA analyzes fatal ramp accidents  through its participation in CAST, it does not analyze non-fatal ramp  incidents, which are estimated to occur more frequently. In addition to  some airport and airline officials telling us that they likely collect ramp  data, FAA’s Runway Safety Group manager said that FAA likely has data  on some non-fatal ramp incidents. For example, some air traffic  controllers we interviewed said that they would report any ramp area  incidents they observed through FAA’s mandatory reporting process, and  officials from a pilot association told us they would also report such  incidents. However, FAA officials said that FAA does not plan to analyze  ramp incidents in the agency’s new surface safety metric. FAA’s Runway  Safety Program Manager said that FAA has not analyzed most ramp area  incidents because the risk of these incidents is lower than that in other  areas, such as runways, and therefore does not merit analysis. For  example, the manager said that aircraft speed in the ramp area is  generally slower than take-off or landing speed, and fatalities are  infrequent.

However, we have previously reported that ramp areas are typically  small, congested areas in which departing and arriving aircraft are  serviced by ramp workers, who include baggage, catering, and fueling  personnel. These areas can be dangerous for ground workers and  passengers. The Flight Safety Foundation, which has collected its own  data on ramp safety, estimated that each year 27,000 ramp accidents and  incidents occur worldwide and can be costly due to effects such as  damage to aircraft and schedule disruptions. In addition, ramp areas are  complex because safety responsibilities in these areas vary by airport and  even by terminal. For example, officials at Boston Logan International  Airport told us that the airport operator shares some responsibilities with  airlines but maintains control over all ramp areas. By contrast, officials at  Los Angeles International Airport told us that in terminals leased by  individual airlines, the airline controls the ramp area, while the airport  operator controls the ramp areas in terminals where multiple airlines  operate. Officials from the Air Line Pilots Association told us that ramp  areas are the “scariest part of airports.” One official gave an example of  inconsistencies between airports that can cause confusion and risk, such  as some airport ramp areas being marked with painted lines while others  are not.

Federal internal control standards state that data should be appropriate,  current, complete, and accurate. In addition, FAA’s own SMS calls for  FAA to use a data-driven approach to analyze safety risks so that it can  control that risk. As part of those efforts, FAA began the rulemaking  process in 2010 to require airports to implement SMS, through which  airports would analyze risks in runways, taxiways, and ramp areas, but as  of August 2019 this rule had not been finalized. Although some airport  officials we interviewed said they are voluntarily implementing SMS and  could be collecting data on ramp area incidents, FAA—with its role in  overseeing safety at all commercial airports—is better positioned to take  steps to analyze ramp incidents across all U.S. airports. For example, an  individual airport implementing SMS would analyze ramp area incidents  at that airport, but FAA could analyze ramp area incidents and identify  trends across hundreds of airports as it does for other terminal area  incidents described above. Beginning to analyze ramp area incidents, for  example in its new metric, would provide FAA with information necessary  to mitigate ramp area incidents and ensure that it is directing its efforts to  the riskiest parts of the terminal area.

FAA and Others Have Implemented Multiple Efforts to Address Terminal Area Safety, but FAA Has Not Assessed the Effectiveness of Many of Its Efforts

FAA, Airports, and Airlines Have Implemented Multiple Efforts to Improve Terminal Area Safety

FAA, airports, and airlines have implemented multiple efforts, including  technologies, to improve runway, taxiway, and ramp safety; FAA’s efforts,  which are coordinated by the Runway Safety Group, focus primarily on  runway and taxiway safety.

FAA’s primary runway and taxiway safety effort is the Runway Safety  Program, whereby staff develop national and regional runway safety  plans, analyze data on runway and taxiway incidents, and help local air  traffic control managers organize annual Runway Safety Action Team  (RSAT) meetings at which FAA, airport operator, and other stakeholders  at each airport discuss recent runway and taxiway incidents. Prior to each  RSAT, FAA’s Regional Runway Safety Program Managers we met with  told us they compile and share available information on each incident that  occurred in the last year at the airport with the local air traffic manager.  This information may include trends in incursions, the location of each  incident on an airport map, and results from vehicle/pedestrian deviation  investigations conducted by the FAA Office of Airports. Each air traffic  manager then presents this information to attendees, who may include  staff from FAA’s Office of Airports or Flights Standards, the airport  operator, and local pilots.

Participants discuss the prior year’s incidents, identify risks, and develop  a plan to mitigate these risks. For example, attendees at an RSAT in  Phoenix, Arizona, discussed risk factors that could be contributing to pilot  deviations, and identified that pilots could be missing taxiway markings  that instruct pilots to stop before proceeding onto a runway.  Consequently, these RSAT attendees developed a plan to add lights to  the surrounding area to improve visibility. The attendees also tasked air  traffic managers with developing a program to provide annual tours of the  tower and airfield to local pilots and personnel working on the airfield to  show both parties what the other sees during flight operations.

Another important FAA effort is the Runway Incursion Mitigation (RIM)  Program established by the Office of Airports in 2015 to identify strategies  to mitigate areas of airport runways or taxiways that do not meet current  FAA airport design standards and have high incursions rates (“RIM  locations”). There can be multiple RIM locations at a single airport. FAA  considers locations for inclusion in the RIM inventory based on whether  the location has a non-standard design and has experienced three or  more incursions in a given calendar year, or averaged at least one  incursion per year over the course of the RIM program. At RIM  locations, FAA provides funding and technical assistance to airports to  mitigate the risk of incursions, such as by changing airport design and by  improving runway and taxiway signage. For example, the airport may  reconfigure a taxiway to intersect a runway at a 90-degree angle (the FAA  standard), or install “hold position” signs at intersections between two  runways. According to FAA, at the end of fiscal year 2018, FAA had  helped airports mitigate 33 RIM locations through the program, leaving  135 locations across 79 airports that still needed to be mitigated.

FAA also collaborates with industry stakeholders to identify and address  runway and taxiway safety issues. For example, FAA serves as Co-Chair  of CAST, which analyzes data across airports to identify root causes of  incidents and develop and track mitigations to address those causes. For  instance, through CAST, FAA and industry stakeholders developed  training for air traffic controllers to mitigate the risk of runway excursions.  The training described factors that can contribute to runway excursions  such as adverse winds, wet or contaminated runways, or unstable aircraft  approaches. In addition, in 2015, FAA convened a forum of aviation  stakeholders representing government, industry, and labor called the  Runway Safety Call to Action which developed 22 short-, medium-, and  long-range mitigations to address the rising number of reported runway  incursions. In 2018, the DOT Office of Inspector General reviewed FAA’s  progress in implementing these 22 mitigations and made three  recommendations to address implementation challenges it identified,  including consolidating duplicate mitigations and, as mentioned below,  developing a plan to measure their effectiveness. As of August 2019,  FAA had not implemented these recommendations.

Individual airport operators and airlines have implemented their own  efforts to improve runway, taxiway, and ramp safety. For example,  officials who manage Daniel K. Inouye International Airport in Honolulu,  Hawaii, told us that they changed the location of markings in an airport  area known to be confusing to some pilots, which reduced incursions at  this location. In addition, officials from Airlines for America and the  Regional Airlines Association told us airlines host safety meetings where  they leverage their collective data to identify and address industry-wide  safety trends. Officials told us that one of the working groups at these  airline safety meetings specifically discusses issues and solutions  pertaining to the ramp area.

FAA, airports, and airlines fund multiple technologies to improve runway  and taxiway safety, primarily through increasing air traffic controller, pilot,  and vehicle operator awareness of their surroundings. See Table 1 for  technologies in place or in development.

FAA surveillance technologies are multi-million dollar programs designed  to help air traffic controllers identify aircraft and vehicles in the terminal  area. For example, at the 35 airports where ASDE-X has been installed  since 2011, FAA estimated the total program cost to FAA to be more than  $800 million. In-aircraft technologies like those mentioned above help  pilots identify their location on runways and taxiways, and could mitigate  risks of injuries and damage caused by excursions.

FAA Has Not Assessed the Effectiveness of Many of Its Terminal-Area Safety Efforts

FAA has taken steps to improve terminal area safety, but has not  assessed the effectiveness of many of its runway and taxiway safety  efforts. For example, FAA has not evaluated how its primary efforts such  as ASDE-X, ASSC, or the Runway Safety Program contribute to runway  and taxiway safety, despite having implemented these efforts years ago.  In some instances, FAA has taken steps to evaluate its terminal-area  safety efforts. For example, FAA tracks the Runway Incursion Mitigation  Program’s outcomes and the number of runway excursions safely  stopped by an Engineered Material Arresting System (EMAS). FAA also  contracted with a research organization in 2017 to evaluate the  effectiveness of Runway Status Lights on the runway incursion rate at 15  airports. Further, the Runway Safety Program manager described other  instances in which local airport officials have taken steps to evaluate the  effect of mitigations at those airports. For example, one of FAA’s runway  safety offices assessed the effect of five informational videos it produced,  to highlight issues identified at specific airports, on runway incursions at  those locations after the videos were released.

However, FAA has not assessed the effectiveness of many of its  numerous other runway and taxiway efforts described above and FAA  officials told us that FAA does not have a plan to do so. Officials told us  that they believe that the assessments described above are sufficient,  based on the availability of agency resources. In June 2018, the DOT IG reported a similar finding related to its assessment of FAA’s 2015  Runway Safety Call to Action, described above. The DOT IG reported  that FAA had a plan to track the completion of mitigations aimed at  improving runway and taxiway safety, but not to link the mitigations to  quantifiable goals or metrics that would measure their effectiveness in  reducing runway incursions.

FAA’s guidance on the Runway Safety Program states that FAA may  evaluate the effectiveness of its runway safety programs, and the extent  to which they are helping FAA meet its safety goals. In addition, in the  2016 Evaluation Roadmap for a More Effective Government, the  American Evaluation Association stated that agencies should consistently  use program evaluation and systematic analysis to improve program  design, implementation, and effectiveness and to assess what works,  what does not work, and why. Evaluating a program’s effectiveness can  include methods such as surveying a program’s managers (e.g., regional  runway safety program managers), or comparing a program’s  performance to an evaluative criterion (e.g., a measure of terminal area  safety). Without assessing the effectiveness of its range of efforts, FAA  cannot determine the extent to which each of its efforts contribute to its  goal of improving runway and taxiway safety, or whether other actions are  needed. As discussed previously, FAA has efforts designed to increase  runway and taxiway safety that range from periodic stakeholder meetings  to multi-million dollar ground surveillance systems. By assessing the  effectiveness of its primary efforts, FAA may be better positioned to make  decisions about how to target its limited resources within and among  these efforts.

FAA May Be Missing Opportunities to Improve Its Terminal-Area Safety Efforts

We also found that FAA may be missing opportunities to improve its  terminal-area safety efforts, including improving communication within  FAA. Specifically, FAA Regional Runway Safety Program staff told us that  they do not receive the results of most runway incursion investigations— information that could aid RSAT discussions about preventing these  incidents in the future. Four of FAA’s five Regional Runway Safety  Program Managers we interviewed reported that, they did not receive the results of investigations of pilot deviations—which constitute the majority  of runway incursions—from the Office of Flight Standards. As part of its  investigations of these incursions, Flight Standards identifies possible  causes and implements mitigations, such as additional pilot training.  However, FAA does not require Flight Standards to automatically provide  their investigations of runway and taxiway incidents to the Runway Safety  Group, which could enhance runway and taxiway safety. FAA officials  said that FAA requires Flight Standards to make its investigations  available to Runway Safety Group staff, if requested, but acknowledged  that this does not always result in Runway Safety Group staff receiving  these investigations in a timely manner.

FAA officials said they are in the process of implementing additional  processes to improve communication between Flight Standards and the  Runway Safety Group, but documentation on these processes FAA  provided to us did not address getting investigations to Runway Safety  program staff in a timely manner. Without this information, the Regional  Runway Safety Program Managers may be unable to provide air traffic  managers with relevant information on most incursion investigations as  they prepare to host their annual RSAT meetings. The manager of the  Runway Safety Group told us that Regional Runway Safety Program  Managers may request individual investigations from regional Flight  Standards officials, but that it would be time consuming for these regional  managers to make such requests for every pilot deviation.

One of FAA’s objectives is to improve runway and taxiway safety, and  federal internal control standards state that management should internally  communicate the information necessary to help meet its objectives.  Without timely access to the results of Flight Standards’ incident  investigations, Regional Runway Safety Program Managers—and  therefore, local air traffic control managers—may not have all of the  relevant information they need to develop appropriate runway and  taxiway safety mitigation strategies and plans.

Selected airport operators we interviewed also reported that they may not  have all information they need to develop appropriate terminal area safety  mitigation strategies. Specifically, most of those we interviewed reported  that air traffic control managers did not provide them with complete and  timely information on all runway and taxiway incidents. Six of 10 airport  operators we interviewed told us that air traffic control managers did not  notify them of all runway and taxiway incidents as they happened.  Further, some airport operators told us that they were not aware of all  incidents until the annual RSAT meeting. For example, the operator of  one airport told us that the air traffic manager notifies the airport of  vehicle/pedestrian deviations immediately, but not of operational incidents  or pilot deviations. The Manager of the Runway Safety Program also  confirmed that communication varies by airport operator and air traffic  manager.

According to federal internal control standards, management should  communicate quality information externally so that external parties can  help the entity achieve its objectives and address related risks. Further,  according to air traffic control procedures, controllers are required to  report as soon as possible to airport managers and others “any  information which may have an adverse effect on air safety.” However,  this requirement does not specify the types of terminal area safety  incidents to which this applies. Also, through a 2018 internal risk  management process, FAA identified the need for enhanced  communication among airport management, the FAA Air Traffic  Organization, and pilots at towered airport facilities, in order to mitigate  the safety risks associated with runway incursions. Lacking complete  information on runway and taxiway incidents at their airports could  hamper airport operators’ ability to develop appropriate safety strategies  or make investment decisions related to safety in a timely manner. For  example, the operator of one airport told us that not being notified of  operational incidents means the airport does not have a complete picture  of the safety incidents there, which limits their ability to identify trends or  training needs.

FAA’s safety oversight approach is designed to use data to identify  hazards, manage risks, and mitigate them before an accident occurs.

FAA uses data to analyze runway incursions, and recently developed a  new metric to track the risk of terminal-area incidents. However, without  leveraging data to analyze all terminal-area incidents, FAA may be  missing opportunities to better target the agency’s resources, and  ultimately to further improve safety. For example, because FAA does not  have a process to eliminate all duplicates from its excursion data, it does  not have assurance that its excursion data are accurate, and it may be  missing opportunities to mitigate the risks excursions pose. Similarly,  taking steps to analyze ramp area incidents by identifying such incidents  in its new metric would help FAA determine whether it needs to focus  more on improving safety in ramp areas. In addition, establishing a plan  to evaluate all of its runway and taxiway safety efforts would help FAA  direct its resources toward activities and technologies proven to enhance  safety and identify ways to strengthen those efforts. Moreover, improving  internal communication among FAA offices could make the annual  Runway Safety Action Team meetings—a key component of FAA’s  terminal area safety efforts—more effective. And last, improving external  communication between air traffic managers and airport operators would  help airports identify and implement needed mitigations more quickly.

We are making the following five recommendations to FAA:  1.  The Runway Safety Manager should develop a process to identify and  remove duplicate excursion records. (Recommendation 1)  2.  The Runway Safety Manager should take steps to analyze data on  ramp area incidents in FAA’s new surface safety metric.  (Recommendation 2)  3.  The Runway Safety Manager should establish a plan to assess the  effectiveness of all of FAA’s terminal area-safety efforts, including  Airport Surface Detection Equipment, Model X (ASDE-X) and the  Runway Safety Program. (Recommendation 3)  4.  The Administrator of FAA should require Flight Standards to share the  results of its investigations with the Runway Safety Group, in a timely  manner. (Recommendation 4)  5.  The Administrator of FAA should require air traffic control managers to  share information on terminal area incidents, such as operational  incidents and pilot deviations, with airport operators, in a timely  manner. (Recommendation 5)

We provided the Department of Transportation (DOT), the Department of  Labor (DOL), the National Aeronautics and Space Administration (NASA),  and the National Transportation Safety Board (NTSB), with a draft of this  report for review and comment. In its written comments reproduced in  appendix I, DOT concurred with our recommendations. DOL, NASA, and  NTSB did not provide technical comments.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 11 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, DOT, DOL, NASA, NTSB, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or krauseh@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 major contributions to this report  are listed in appendix II.

Appendix I: Comments from the Department of Transportation

Appendix II: GAO Contact and Staff Acknowledgements

In addition to the individual named above, other key contributors to this  report were Heather MacLeod (Assistant Director); Sarah Farkas  (Analyst-in-Charge); Dave Hooper; Josh Ormond; Madhav Panwar;  Steven Rabinowitz; Laurel Voloder; Madeline Welter; and Elizabeth  Wood.

Air travel in the U.S. is among the safest in the world, but incidents and near misses still occur. They can happen in the air, and in the areas around airport terminals—runways, taxiways, and ramps. For example, in 2017 at San Francisco International Airport, an airplane came within 60 feet of landing on a taxiway occupied by four airplanes full of passengers before the pilot pulled up and attempted another landing.

We found that FAA data on terminal area incidents is incomplete, which makes it harder for FAA to accurately analyze and prepare for these incidents. We recommended that FAA develop processes to improve its terminal area data.