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Government Operations: Potential Expansion of the CHAMPUS Reform Initiative

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Report Type Reports and Testimonies
Report Date March 15, 1990
Report No. T-HRD-90-17
Subject
Summary:

GAO discussed its examination of the Department of Defense's (DOD) Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) Reform Initiative demonstration project, focusing on DOD: (1) progress in overcoming implementation problems; and (2) plans for expanding the project. GAO noted that the DOD prime contractor's: (1) financial condition had improved since April 1989 because of its divestitures of unprofitable subsidiaries, better concentration and management, and favorable bank loan refinancing; (2) claims processing efforts were meeting contract standards; and (3) use of resource-sharing agreements increased. GAO also noted that: (1) CHAMPUS claims costs were lower than DOD estimated; (2) DOD needed to perform more research to determine the linkage between historical trends and CHAMPUS cost increases; (3) DOD contracted for more detailed analysis of CHAMPUS claims; and (4) through January 1990, DOD had paid the prime contractor about $742 million for the project.

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