Fiscal Year 2008 Cost Estimation Process for World Trade Center Health Programs
GAO-08-537R, Mar 11, 2008
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Following the World Trade Center (WTC) attack, federal funding was provided to government agencies and private organizations to establish programs for screening, monitoring, or treating responders for illnesses and conditions related to the WTC disaster. Within the Department of Health and Human Services (HHS), the Centers for Disease Control and Prevention's (CDC) National Institute for Occupational Safety and Health (NIOSH) awards grants for and oversees the WTC health programs that provide services for responders to the WTC attack. Federal funds appropriated or awarded for the WTC health programs from October 2001 through November 2007 have totaled $261.1 million. These funds were provided for screening and monitoring services, outpatient and inpatient treatment, and program support. NIOSH has awarded the bulk of the funding. For fiscal year 2007, NIOSH estimated that medical monitoring, treatment services, and associated program support services for WTC health programs could range in cost from about $230 million to $283 million. However, in July 2007 we reported that NIOSH did not have a reliable cost estimation process. We found that NIOSH and its grantees had included potential costs for certain program changes that might not be implemented and, in the absence of actual treatment cost data, had relied on questionable assumptions. We noted that HHS officials had required the two largest grantees--New York City Fire Department's WTC Medical Monitoring and Treatment Program (FDNY) and the New York/New Jersey (NY/NJ) WTC Consortium--to report detailed cost data to improve future cost estimates. In fall 2007 the NIOSH director briefed congressional staff on the cost estimate for the WTC health programs for fiscal year 2008 and on changes NIOSH made to its cost estimation process for that year. In light of our findings on NIOSH's cost estimation process for fiscal year 2007 and of the development of a cost estimate for fiscal year 2008, Congress asked us to identify the changes that NIOSH made for fiscal year 2008 and to determine whether these changes represent an improvement.
In summary, we found that, overall, the cost estimation process NIOSH used to estimate WTC health program costs for fiscal year 2008 represented an improvement over the process it used for fiscal year 2007. For the fiscal year 2008 estimate, NIOSH used actual average costs from the April 2007 through June 2007 quarter as the basis for estimating costs for screening and monitoring exams, instead of using assumptions as it had for fiscal year 2007. For fiscal year 2008, NIOSH also used actual average costs from the April 2007 through June 2007 quarter for estimating outpatient treatment costs--which represented almost two-thirds of the total cost estimate. This is an improvement over NIOSH's fiscal year 2007 methods, which relied on proxy data based on New York State workers' compensation reimbursement payments, as well as on questionable assumptions, to estimate outpatient treatment costs. For fiscal year 2008, while NIOSH again used assumptions to estimate the number of responders to be screened and monitored, these assumptions were better than those NIOSH used for fiscal year 2007 because they were based on data from actual screening and monitoring experience.