Summary: The Defense Department (DOD) has taken several steps to better manage mental health costs under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) and improve the quality of care for beneficiaries. DOD has undertaken initiatives and demonstration projects that use management techniques similar to those used by private-sector companies and health plans that intensively manage mental health care. DOD has also instituted controls over payments to psychiatric facilities and improved standards for residential treatment centers. As a result, CHAMPUS mental health costs leveled off in fiscal years 1990 and 1991. Several problems persist, however, including poor medical record documentation, potentially inappropriate admissions, excessive hospital stays, and poor-quality care. Inspections of residential treatment facilities continue to reveal significant safety and health problems, and corrective actions often took many months. Moreover, DOD has proposed further changes to its methods of reimbursing psychiatric facilities. DOD should adopt these additional changes because it pays considerably higher rates for comparable services than do other public programs.
