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	Claims processing Contract performance Defense cost control Department of Defense contractors Financial management Health care cost control Health care services Health resources utilization Medical expense claims Program management Arizona California CHAMPUS CHAMPUS Reform Initiative Civilian Health and Medical Program of the Uniformed Services Hawaii Nevada New Mexico

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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Government Operations: Potential Expansion of the CHAMPUS Reform Initiative