Defense Health Care:

Reimbursement of Hospitals Not Meeting CHAMPUS Copayment Requirements

HRD-88-102: Published: Jun 1, 1988. Publicly Released: Jun 1, 1988.

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Pursuant to a legislative requirement, GAO reviewed Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) payment procedures for hospitals that failed to require patients to pay for their medical services.

GAO compared CHAMPUS practices to other insurance plans and programs, and found that: (1) the 13 private and federally funded health benefits plans it reviewed denied payments to hospitals that did not require patients to pay for medical services; (2) only CHAMPUS and Medicare dealt with hospitals that did not bill patients for copayments; (3) CHAMPUS denied reimbursement to hospitals that failed to bill their patients for copayments, while Medicare reimbursed such hospitals; (4) hospitals that waived patients' copayments often increased the amount they charged to the insurance companies to recoup lost revenues; (5) CHAMPUS reimbursement to hospitals that do not bill patients for copayments could financially benefit; and (6) CHAMPUS reimbursement would relieve hospitals of the burden of funding the total care of beneficiaries. GAO identified four options that Congress may wish to consider in dealing with this issue, and recommended the one it believes to be most appropriate.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The fiscal year (FY) 1989 DOD authorization and appropriations acts contained language which essentially implemented this recommendation.

    Matter: Congress should enact legislation to authorize the Secretary of Defense to use CHAMPUS funds to reimburse hospitals that do not bill patients for copayments. The legislation should require that hospitals seeking such an exemption: (1) apply to the Department of Defense; and (2) as a minimum, meet the exempting criteria.


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