Defense Health Care:

Implementing Coordinated Care--A Status Report

HRD-92-10: Published: Oct 3, 1991. Publicly Released: Oct 3, 1991.

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Pursuant to a congressional request, GAO examined the status of the Department of Defense's (DOD) efforts in implementing Coordinated Care, its managed health care concept, throughout the military health services system.

GAO found that: (1) since June 1990, DOD has made significant advances in moving to a managed health care system, especially in light of the magnitude and complexity of this undertaking; (2) since many complex operational details and some policies still need to be developed and decided upon, DOD is behind schedule in implementing the program; (3) it is unclear exactly what will be expected of military hospital commanders in terms of management responsibilities and accountability, how the Civilian Health and Medical Program of the Uniformed Services Reform initiative will be blended into the Coordinated Care program, what additional resources will be needed to implement the program and where they will come from, when sufficient budgeting and resource allocation systems will be in place to implement a managed care system, when the military services will be ready to implement Coordinated Care, and how Coordinated Care will be evaluated; (4) until recently, DOD had made little progress in implementing the program at its one test site, but assigning the Assistant Secretary of Health Affairs responsibility for developing a unified medical budget and allocating resources should help resolve funding disputes that may arise among the services; (5) DOD still has not addressed the need to provide uniform benefits and cost sharing; and (6) uneven benefits and cost-sharing requirements vary across the country, adding to beneficiaries' confusion and uncertainty about their medical benefits.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: A uniform benefit design has been completed. The final rule was published in the "Federal Register" in October 1995.

    Recommendation: The Secretary of Defense should develop and submit to Congress a plan for adopting uniform DOD benefits and cost sharing within each category of enrolled beneficiary, regardless of whether the care is provided in a military hospital or a civilian setting.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Transition from Coordinated Care to the Department's managed care program, TRICARE, began in October 1993. TRICARE policy guidelines, including a timetable for implementation, were updated in February 1994. A three-year phase in is expected to be completed in 1997.

    Recommendation: The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to review the DOD timetable for the systemwide implementation of Coordinated Care and report the results of that review, including revised time frames, as appropriate, to Congress.

    Agency Affected: Department of Defense


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