Summary: GAO reviewed the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) to determine whether it could better contain costs for professional services if it adopted two cost-containment techniques used in the Medicare program, including: (1) a fee schedule for outpatient laboratory services; and (2) an economic index for physician services.
GAO analyzed five states' payment records and found that the maximum allowable charges under CHAMPUS were 80 percent of the customary charges, while Medicare allows only 75 percent. If CHAMPUS used: (1) the Medicare fee schedule, it would reduce its laboratory services costs and its intermediaries would not have to maintain allowable-charge data for most laboratory services; and (2) the Medicare economic index for physician services, it would limit increases in allowable charges to those resulting from changes in physician operating costs and general wage changes. However, the impact of these alternative reimbursement techniques on CHAMPUS beneficiary costs will depend on providers' willingness to accept the CHAMPUS allowable charges as payment-in-full. If providers do not accept the CHAMPUS allowable charges, beneficiaries will be responsible for the difference.
