Loss of Millions of Dollars in Revenue Because of Inadequate Charges for Medical Care

FGMSD-76-102: Published: Mar 8, 1977. Publicly Released: Mar 8, 1977.

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A review was conducted of policies and procedures used for determining and charging rates for medical care in military medical facilities. Pertinent accounting records and reports were also reviewed.

Persons other than active and retired military personnel and their dependents must pay for the medical care they get in military medical facilities. The rates charged paying patients are so low that about $12 million in medical costs are not recovered annually. Computations of full reimbursement rates excluded many costs of medical operations because of inconsistencies in accounting data submitted by the military services to the Department of Defense (DOD) and because of the exclusion of certain costs by DOD in computing the rates. Reimbursements could be increased by about $3.2 million annually if full charge rates were increased to recover all costs of providing medical care. Reimbursements could be increased another $8.7 million annually if the special charges for U.S. civilians and foreign nationals and their dependents working for the government overseas were revised to recover the costs of providing the medical care. Legislative history indicates that the charges should be high enough to recover costs.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should: (1) provide the military services with specific guidance for reporting accounting data so that complete and consistent costs are used to compute reimbursement rates; (2) establish procedures so that all applicable costs are included in rate computations; and (3) revise the rates periodically. Rates for inpatient and outpatient medical care which are intended to recover all costs should be increased.

    Agency Affected:


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