Relevant aspects of the federal budget environment  include the following. We have previously reported on the effects of CRs and shutdowns  for federal agencies. Budget authority during a funding gap. In this regard, funds for Indian health services that IHS transfers to tribes  and tribal organizations during the 1-year period of availability are  deemed to be obligated at the time of the award and thereafter remain  available to the tribes to operate their own health care programs without  fiscal year limitation. Interest in Advance Appropriation Authority for IHS

Citing funding uncertainty associated with continued use of CRs, AI/AN  advocacy groups such as the National Indian Health Board have  requested that Congress grant IHS advance appropriation authority;  legislation to provide IHS this authority has been introduced more than  once. Under this authority, VA  receives advance appropriations for VHA’s Medical Services, Medical  Support and Compliance, Medical Facilities, and Medical Community  Care appropriations accounts and is required to provide Congress with  detailed estimates of funds needed to provide its health care services for  the fiscal year for which advance appropriations are to be provided. Budget Uncertainty Effects on the Provision of IHS- Funded Health Care That Were Cited by Stakeholders

IHS officials, tribal representatives, and other stakeholders we spoke with  described how budget uncertainty resulting from CRs and government  shutdowns can have a variety of effects on the provision of IHS-funded  health care services for AI/ANs. Health care program planning. Provider recruitment and retention. IHS officials and tribal  representatives said existing challenges related to their recruitment and  retention of health care providers—many of which are related to the rural  and remote locations of many of IHS’s facilities—are exacerbated by  funding uncertainty resulting from CRs or potential government  shutdowns. IHS officials said CRs and government shutdowns can  disrupt recruitment activities such as IHS marketing efforts, job  advertisements, application review, interviews, and candidate site visits. IHS officials and tribal  representatives said budget uncertainty can lead to vendor reluctance to  provide services to IHS and tribally operated facilities. IHS officials and tribal  representatives said the agency and tribes incur additional administrative  burden and costs when the government is funded through multiple CRs,  due to the high proportion of IHS funding that is transferred to tribes  through contracts and compacts. IHS officials said that advance appropriations would reduce this  administrative burden, and added that having advance appropriations  would allow for more efficiency in processing payments to tribes. Financial effects on tribes. According to tribal representatives we spoke  with, funding uncertainty from recurring CRs and from government  shutdowns has led to particular adverse financial effects on tribes that  operate their own health care programs with funding from IHS. Specifically, a tribal representative said the  uncertainty of the availability of funds due to a CR resulted in a  downgrading of the tribe’s credit rating, and hence higher interest  rates, as it was planning a clinic expansion. Considerations for Policymakers Related to Providing Advance Appropriation Authority to IHS

We identified three types of considerations for policymakers related to  providing advanced appropriation authority to IHS—operational,  congressional flexibility, and agency capacity and leadership  considerations. In our 2009 testimony, we  noted that proposals to change the availability of the appropriations for  VA deserved careful scrutiny, given the challenges the agency faces in  formulating its health care budget and the changing nature of health  care. Operational considerations. Which appropriations accounts would be included? (2) Under what conditions, if any, would there be changes to funding  provided through advance appropriations during the next budget  cycle? Congressional flexibility considerations. We reported in 2009 that  consideration of any proposal to change the availability of the  appropriations VA receives for health care should take into account the  impact of any change on congressional flexibility and oversight. Specifically,  advance appropriation authority reduces flexibility for congressional  appropriators, because it reduces what is left for the overall budget for the  rest of the government—meaning the total available for appropriations for  a budget year is reduced by the amount of advance appropriations for  that year, when budgets have caps. Agency Comments and Third-Party Views

We provided a draft of this report to HHS and VA for review and  comment. NIHB provided technical comments,  which we incorporated as appropriate. We are sending copies of this report to the Secretaries of the Department  of Health and Human Services and the Department of Veterans Affairs,  and other interested parties.
Why GAO Did This Study

IHS, an agency within the Department of Health and Human Services (HHS), receives an annual appropriation from Congress to provide health care services to over 2 million American Indians and Alaska Natives (AI/AN) who are members of 573 tribes. IHS generally provides services through direct care at facilities such as hospitals and health centers. Some tribes receive IHS funding to operate their own health care facilities. Tribal representatives have sought legislative approval to provide IHS advance appropriation authority stating that it would facilitate planning and more efficient spending. Experts have reported that agencies can use the authority to prevent funding gaps, and avoid uncertainties associated with receiving funds through CRs.
House Report 114-632 included a provision for GAO to review the use of advance appropriations authority and applications to IHS. Among other things, this report (1) describes advance appropriation authority considerations identified by stakeholders for providing IHS-funded health care services, and (2) identifies other considerations for policymakers related to providing the authority to IHS. GAO reviewed its prior reports related to IHS, VA, government shutdowns, and CRs, and interviewed officials from IHS, several tribes and other organizations representing AI/AN interests, the Office of Management and Budget, VA and other experts.
GAO provided a draft of this report to HHS, which had no comments; to VA, which provided general comments; and to tribal representatives, which provided technical comments that were incorporated as appropriate.

What GAO Found

The Indian Health Service (IHS), like most federal agencies, must use appropriations in the year for which they are enacted. However, there has been interest in providing IHS with advance appropriation authority, which would give the agency authority to spend a specific amount 1 or more fiscal years after the fiscal year for which the appropriation providing it is enacted. Currently, the Department of Veterans Affairs (VA) is the only federal provider of health care services to have such authority.
Stakeholders interviewed by GAO, including IHS officials and tribal representatives, identified effects of budget uncertainty on the provision of IHS-funded health care as considerations for providing IHS with advance appropriation authority. Budget uncertainty arises during continuing resolutions (CR)—temporary funding periods during which the federal government has not passed a budget—and during government shutdowns. Officials said that advance appropriation authority could mitigate the effects of this uncertainty. IHS officials and tribal representatives specifically described several effects of budget uncertainty on their health care programs and operations, including the following:
Provider recruitment and retention. Existing challenges related to the recruitment and retention of health care providers—such as difficulty recruiting providers in rural locations—are exacerbated by funding uncertainty. For example, CRs and government shutdowns can disrupt recruitment activities like application reviews and interviews.
Administrative burden and costs. Both IHS and tribes incur additional administrative burden and costs as IHS staff calculate proportional allocations for each tribally operated health care program and modify hundreds of tribal contracts each time a new CR is enacted by Congress to conform to limits on available funding.
Financial effects on tribes. Funding uncertainty resulting from recurring CRs and from government shutdowns has led to adverse financial effects on tribes and their health care programs. For instance, one tribe incurred higher interest on loans when the uncertainty of the availability of federal funds led to a downgraded credit rating, as it was financing construction of a health care facility.
GAO identified various considerations for policymakers to take into account for any proposal to change the availability of the appropriations that IHS receives. These considerations include operational considerations, such as what proportion of the agency's budget would be provided in the advance appropriation and under what conditions changes to the funding provided through advance appropriations would be permitted in the following year. Additionally, congressional flexibility considerations arise because advance appropriation authority reduces what is left for the overall budget for the rest of the government. Another consideration is agency capacity and leadership, including whether IHS has the processes in place to develop and manage an advance appropriation. GAO has reported that proposals to change the availability of appropriations deserve careful scrutiny, an issue underscored by concerns raised when GAO added IHS to its High-Risk List in 2017.