Department of Health and Human Services, Centers for Medicare &, B-302710, May 19, 2004

B-302710 May 19, 2004 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Centers for Medicare & Medicaid Services's (CMS) use of appropriated funds to pay for the production and distribution of story packages that were not attributed to CMS violated the restriction on using appropriated funds for publicity or propaganda purposes in the Consolidated Appropriations Resolution of 2003, Pub. L. No. 108-7, Div. J, Tit. VI, 626, 117 Stat. 11, 470 (2003). CMS, in using appropriations in violation of the publicity or propaganda prohibition, incurred obligations in excess of appropriations available for that purpose. Accordingly, CMS violated the Antideficiency Act, 31 U.S.C. 1341, and must report the violation to the Congress and President in accordance with 31 U.S.C. 1351 and Office of Management and Budget Circular No. A-11. View Decision B-302710, Department of Health and Human Services, Centers for Medicare & Medicaid Services --Video News Releases, May 19, 2004 Matter of: File: Date: DIGEST See DECISION Use of VNRs broadcast advertising.[1] While the practice is widespread and widely known by those in the media industry, the quality and content of materials considered to constitute a VNR can vary greatly.[2] Generally, a VNR package may contain a prepackaged news story, referred to as a story package, accompanied by a suggested script, video clips known as B-roll film, and various other promotional materials.[3] These materials are produced in the same manner in which television news organizations produce materials for their own news segments.[4] By eliminating the production effort and costs of news organizations, producers of VNRs find news organizations willing to broadcast a favorable news segment on the desired topic.[5] Since 1990, there has been a notable rise in the distribution of VNR materials.[6] With growing use of VNRs, journalism scholars began questioning the effect of this third-party material upon the perception that news was derived from a neutral source.[7] In particular, scholars raised concerns regarding the influence of third-party sources.[8] Given these ethical concerns, there have been a number of studies of the use of VNRs by the broadcast industry. Several journalism scholars attribute the rise in the use of VNRs to the economic circumstances of the industry.[9] In smaller broadcast markets during the early 1990s, news stations suffered significant reductions in staff and budget, and had difficulty obtaining footage of certain public interest events.[10] Footage from an outside source helped stations fill airtime with programming that would otherwise not be available and helped avoid depletion of already overextended funds.[11] Studies also show, however, that most news organizations using VNR materials often use only a portion or edited versions of the materials provided.[12] Still, parties interested in obtaining the maximum audience for VNR materials argue that, even if the story package or scripted materials are not used in full, the production of a professionally complete news story provides a framework for the message conveyed in the final broadcast.[13] This allows the story package producer to assert some control over the message conveyed to the target audience. Also, the use of VNRs may be attributed to the ease with which the materials may be distributed. While some packages are distributed directly from the source to the television stations, satellite and electronic news services such as provided by CNN Newsource facilitate distribution to a number of news markets in a short period of time.[14] Broadcast stations subscribe to these services, which provide, in addition to VNR materials, journalist reports and stories, and advertising.[15] While the news services label VNRs differently than independent journalist news reports, there apparently is no industry standard as to the labeling of VNRs. In fact, when questioned about the use of the VNR materials at issue here, some news organizations indicated that they misread the label or they mistook the story package as an independent journalist news story on CNN Newsource.[16] Professional journalism societies have noted in their codes of ethics that journalists should resist influence from outside sources, including advertisers and special interest groups.[17] Because VNRs consist of information generated by a group with a distinct perspective on an issue, the unfettered use of VNRs may run afoul of these principles.[18] Moreover, professional organizations warn against using materials that would deceive audiences.[19] VNRs that disclose the source of information to the target audience alleviate these ethical concerns. CMS's Medicare VNRs The CMS VNRs consist of three videotapes with corresponding scripts. CMS informed us that these videotapes represent what a news organization would receive when obtaining the VNR materials.