In 2003, 7 of the 10 states with the  highest estimated rates of individuals living with HIV were located in the  South. The CARE Act was enacted in 1990 to respond to the needs of individuals  and families living with HIV or AIDS and to direct federal funding to areas  disproportionately affected by the epidemic. Table 1 describes selected CARE Act  formula grants for Titles I and II. CARE Act Funding Provisions Result in Disproportionate Funding

Some CARE Act provisions have led to jurisdictions receiving different  amounts of funding per AIDS cases. The counting of AIDS cases within  EMAs once to determine Title I funding and once again to determine Title  II funding results in states with EMAs receiving more funding per AIDS  case than states without an EMA. The Title I hold-harmless provision has primarily benefited one  EMA. The hold-harmless provision guarantees each  EMA a specified percentage, as legislated by the CARE Act, of the base  grant it received in a previous year regardless of how much a grantee’s  caseload may have decreased in the current year. Because the application of the Title I hold-harmless provision for  San Francisco dates back to the 1996 reauthorization, San Francisco’s  Title I base grant is determined in part by the number of cumulative cases  in the San Francisco EMA as of 1995. The total amount of Severe Need grant  funds available in fiscal year 2004 to distribute among the eligible states  was less than it would have been without the hold-harmless deduction. Funding Impact of Using HIV Case Counts Would Depend on the Adequacy of HIV Reporting Systems and the Number of Reported HIV Cases

If HIV case counts had been used with AIDS case counts in allocating Title  II base funding, about half of the states would have received increased  funding and the other half would have received less funding. While all states have established HIV case reporting systems, there are  currently characteristics of these systems that limit the use of HIV case  counts in the distribution of CARE Act funds. The Use of HIV Case Counts in Funding Formulas Would Change the Distribution of CARE Act Funds

While we are aware of some of the limitations of HIV data, we used two  approaches to examine the potential impact of using HIV cases in addition  to AIDS cases on fiscal year 2004 Title II base grant distributions. Some CARE Act fiscal year 2004 funding would  have shifted if HIV and AIDS case counts had been used to allocate the  funds. State ADAP Eligibility Criteria and Funding Sources Vary Widely

Among state ADAP programs, there is wide variation in the eligibility  criteria used to determine who is covered for ADAP services and in the  funding sources available beyond each state’s Title II ADAP base grant. Eligibility Criteria Contribute to Coverage Differences Among States

States set different eligibility criteria for their ADAP programs, so a person  with HIV or AIDS at a certain income level and needing medication  assistance may be an eligible ADAP client in one state, but not in another. The CARE Act allows states to purchase health insurance to cover HIV and  AIDS drugs for their clients. If an  individual is eligible for a state’s Medicaid drug assistance, the state ADAP  should not provide the same services under its program. This could result in  eligible clients being on an ADAP waiting list. Appendix I: Combined CARE Act Title I and Title II Funding by State, Fiscal Year 2004

	Combined Title I and

Total Title I and Title II  awards per AIDS case State received a Title II base award of $500,000, the minimum it could receive based on the number  of AIDS cases in the state. Appendix III: Estimated Funding Changes Using HIV and AIDS Cases with Hold- Harmless and Minimum Grant Provisions

	Change in Title II base funding if CDC-

Change in Title II base funding if HIV case  accepted HIV case counts and AIDS case  counts from all states and AIDS case counts  counts were used to distribute funding  were used to distribute funding   State received a Title II base award of $500,000, the minimum it could receive based on the number  of AIDS cases in the state. Ryan White Funding Formulas.
Why GAO Did This Study

The Ryan White Comprehensive AIDS Resources Emergency Act (CARE Act) was enacted in 1990 to respond to the needs of individuals and families living with the Human Immunodeficiency Virus (HIV) or Acquired Immunodeficiency Syndrome (AIDS). In fiscal year 2004, over $2 billion in funding was provided through the CARE Act, the majority of which was distributed through Title I grants to eligible metropolitan areas (EMA) and Title II grants to states, the District of Columbia, and territories. Titles I and II use formulas to distribute grants according to a jurisdiction's reported count of AIDS cases. Title II includes grants for state-administered AIDS Drug Assistance Programs (ADAP), which provide medications to HIV-infected individuals. GAO was asked to discuss the distribution of funding under the CARE Act. This testimony presents preliminary findings on (1) the impact of CARE Act provisions that distribute funds based upon the number of AIDS cases in metropolitan areas, (2) the impact of CARE Act provisions that limit annual funding decreases, (3) the potential shifts in funding among grantees if HIV case counts were incorporated with the AIDS cases that are currently used in funding formulas, and (4) the variation in eligibility criteria and funding sources among state ADAPs.

What GAO Found

Under the CARE Act, GAO's preliminary findings show that the amount of funding per AIDS case varied among states and metropolitan areas in fiscal year 2004. Some CARE Act provisions that distribute funds based on the AIDS case count within metropolitan areas result in differing amounts of funding per case. In particular, when a state or territory has an EMA within its borders, the cases within that EMA are counted twice during the distribution of CARE Act funds--once to determine the EMA's funding under Title I, and once again to determine a state's Title II grant. The hold-harmless provisions under Titles I and II guarantee a certain percentage of a previous year's funding amount, thus sustaining the funding levels of CARE Act grantees based upon previous years' measurements of AIDS cases. Title I's hold-harmless provision for EMAs has primarily benefited the San Francisco EMA, which received over 90 percent of the fiscal year 2004 Title I hold-harmless funding. San Francisco alone continues to have deceased cases factored in to its allocation, because it is the only EMA with hold-harmless funding that dates back to the mid-1990s when formula funding was based on the cumulative count of diagnosed AIDS cases. If HIV case counts had been incorporated with AIDS cases in allocating Title II funding to the states in fiscal year 2004, about half of the states would have received an increase in funding and half of the states would have received less funding. Many of those states receiving increased funding would have been in the South, a region that includes 7 of the 10 states with the highest estimated rates of individuals living with HIV. However, wide variation in the maturity of states' HIV reporting systems could limit the adequacy of their HIV case counts for the distribution of CARE Act funding. Among state ADAPs, there is wide variation in the criteria used to determine who is eligible for ADAP medications and services, and in the additional funding received beyond the Title II grant for each state ADAP. States have flexibility to determine what drugs they will cover for their ADAP clients and what income level will entitle a person to eligibility, among other criteria, and the resulting variation can contribute to client coverage differences among state ADAPs. There is similar variation in additional funding sources and eligibility criteria among states that have established waiting lists for eligible clients. The Centers for Disease Control and Prevention and the Health Resources and Services Administration provided comments on the facts contained in this testimony and GAO made changes as appropriate.