Defense Health Care:

Additional Improvements Needed in CHAMPUS's Mental Health Program

HRD-93-34: Published: May 6, 1993. Publicly Released: May 6, 1993.

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GAO provided updated information on the Department of Defense's (DOD) efforts to improve the Civilian Health and Medical Program of the Uniformed Services' (CHAMPUS) management and quality of mental health care services.

GAO found that: (1) recent DOD management initiatives, payment controls, and demonstration projects that employ utilization management techniques have reduced mental health care costs and improved the quality of care; (2) DOD medical records reviews have identified poor record documentation, potentially inappropriate admissions, excessive hospital stays, and poor-quality care; (3) residential treatment center inspections have identified unlicensed and unqualified staff, inappropriate use of patient seclusion and medication, inadequate staff-to-patient ratios, and inadequate treatment documentation; and (4) DOD has planned to change the CHAMPUS facility reimbursement methodology because it has paid psychiatric facilities more for comparable services than other federal programs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD has decided that to perform onsite surveys of RTC as a routine part of certification is not cost-effective. DOD will rely heavily on private-sector certification. Oversight of the RTC will be a primary mission of the CHAMPUS national quality monitoring contractor (NQMC). The NQMC contract was awarded on July 12, 1993.

    Recommendation: The Secretary of Defense should control costs and improve the quality of mental health care by implementing specific definitions, procedures, and time frames to govern the decertification or other actions DOD should take against residential treatment centers (RTC) found to be noncompliant with DOD standards.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD decided to transition from per diem payment based on historical billed charges to per diem rates based on facility costs. DOD has published a rule on CHAMPUS mental health services which reforms payment methods as recommended. The final rule was published in the Federal Register on March 7, 1995.

    Recommendation: The Secretary of Defense should control costs and improve the quality of mental health care by establishing a system of reimbursing psychiatric facilities, RTC, and specialized treatment facilities based on a cost-based system similar to Medicare, adjusted appropriately for differences in beneficiary demographics rather than the present per diem or billed charges system.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD has published a rule covering CHAMPUS mental health services. The rule provides that the update factor used to calculate cost based on payment rates from base year per day costs will be the applicable Medicare update factor for hospitals and units exempt from the Medicare prospective payment system. The final rule was published in the Federal Register on March 7, 1995.

    Recommendation: The Secretary of Defense should control costs and improve the quality of mental health care by adopting the hospital annual index used in the Medicare and CHAMPUS prospective payment systems to adjust the annual reimbursement to RTC.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: DOD has published a rule for CHAMPUS mental health services which provides for a copayment of $20 per inpatient day for active duty dependents. This closely equates to the daily out-of-pocket expense of inpatient and outpatient care and thus reduces the incentive for beneficiary use of inpatient care. The final rule was published in the Federal Register on March 7, 1995.

    Recommendation: The Secretary of Defense should control costs and improve the quality of mental health care by reversing the financial incentives to use inpatient care by introducing larger copayments for CHAMPUS inpatient care.

    Agency Affected: Department of Defense

 

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