Analysis of Variations in Claims Processing Costs of Fiscal Agents for the Civilian Health and Medical Program of the Uniformed Services

HRD-77-93: Published: Jun 8, 1977. Publicly Released: Jun 8, 1977.

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Wide variations exist in the claims processing costs under cost-reimbursable contracts of the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) because of the differences in administrative costs charged to the program, productivity, and wages of claim processors, claim volumes, and other factors.

Claims processing costs are higher than for Medicaid and Medicare, partly because of smaller claim volumes, a complex claim form, and frequent program changes. Differences in services provided by fiscal agents did not appear to be an important factor in the variances of the claim rates.

Matter for Congressional Consideration

  1. Status: Closed

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

    Matter: For any new federally sponsored health insurance program which will need services such as those provided by fiscal agents for CHAMPUS, Congress should require: 1) consolidated fiscal agent operations to achieve large claim volumes and take maximum advantage of economies of scale; 2) simplified claim forms and, to the extent practical, standardized government health insurance forms; 3) specifically defined program benefits and policies to avoid frequent program changes; (4) use of cost-reimbursable contracts only until reliable information is available on program specifications, fiscal agents' performance, and costs; and (5) use of competitive bid fixed-price contracts as soon as reasonably precise specifications, performance data, and reliable cost information are available.

 

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