Medicare Subvention Demonstration: DOD Start-Up Overcame Obstacles, Yields Lessons, and Raises Issues

DOD and HCFA discussed the need for waivers as Medicare+Choice regulations took shape and issued an expanded list of waivers in the spring of 2000. GAO's recent site visits suggested that potential duplication remained an issue. However, conditions have since changed. The Floyd D. Spence National Defense Authorization Act of 2001 authorized a new approach to combining Medicare with TRICARE, one that does not involve DOD in Medicare+Choice. In view of this new approach, DOD decided not to continue with the approach that was the subject of this demonstration. The recommendation, which sought to improve the demonstration approach, is thus no longer relevant.

GAO's site visits during a later phase of the demonstration revealed that the division of roles between sites and central offices was still an issue. However, subsequent events made clarification irrelevant. The Floyd D. Spence National Defense Authorization Act of 2001 authorized a new approach to combining Medicare with TRICARE. In view of this new approach, DOD decided not to continue with the approach that was the subject of this demonstration.

After the end of the demonstration December 30, 2001, DOD will no longer enroll Medicare recipients in TRICARE Prime. Its new plan, TRICARE Plus, will enroll them only for primary care, and only at military facilities that have primary care capacity not occupied by TRICARE Prime enrollees or medical readiness demands. (Seniors will continue to receive specialty care when needed to support graduate medical education or to sustain readiness-related readiness skills.) Specialty care services needed by TRICARE Plus enrollees under Medicare will be obtained from private providers. Since DOD will be providing a smaller portion of seniors' care, readiness activities will be less likely to disrupt that care.

DOD and HCFA discussed the need for waivers as Medicare+Choice regulations took shape and issued an expanded list of waivers in the spring of 2000. GAO's recent site visits suggest that potential duplication remained an issue. However, conditions have changed. The Floyd D. Spence National Defense Authorization Act of 2001 authorized a new approach to combining Medicare with TRICARE. DOD decided not to continue with the approach that was the subject of this demonstration, so this portion of the recommendation is no longer relevant. DOD issued a policy statement describing the new approach, called TRICARE Plus. This statement provides for transition of demonstration participants into the new program.