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Highlights

Pursuant to a legislative requirement and a congressional request, GAO reviewed several issues regarding the Department of Defense's (DOD) TRICARE Active Duty Family Member Dental Plan (FMDP), focusing on whether: (1) the contractor's, United Concordia Companies, Inc., fee allowances for participating and nonparticipating dentists are appropriate; (2) Concordia has established an adequate network of participating dentists; (3) Concordia's claims processing and marketing efforts meet contract requirements; and (4) DOD is meeting its oversight responsibilities to ensure that Concordia complies with contract requirements.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To position DOD to ensure contractor compliance with the FMDP's requirements, the Secretary of Defense should direct the Assistant Secretary of Defense, Health Affairs, to require that discussions be held with the contractor and, as appropriate, the contract modified to clearly state how prevailing charges are to be established for fee-setting purposes, including the method and frequency for reviewing and, as appropriate, revising the fee schedules.
Closed - Not Implemented
DOD maintains that the subject contractor is required to maintain a participating dentist network, so that prevailing fee schedule rates for participating and non-participating dentists will need to be attractive enough to keep the dental network intact over the contract's life. Nonetheless, in the future, DOD will include a requirement that dentists' startup fees be based on prevailing charges at the start of service delivery.
Department of Defense 2. To position DOD to ensure contractor compliance with the FMDP's requirements, the Secretary of Defense should direct the Assistant Secretary of Defense, Health Affairs, to require that future FMDP requests for proposals require that the contractor's start-up fees it pays to dentists reflect prevailing charges established in the same manner as above or, if needed, be adjusted with a trend factor to approximate such charges.
Closed - Implemented
This dental insurance program covers about 1.8 million beneficiaries and allows up to $1,000 annually per person for a wide range of dental services. The program is administered nationwide for DOD under competitively awarded 5-year contracts. In September 1997, DOD closed out its internal audit recommendation tracking system record on the GAO report and stated that future requests for proposals will incorporate a requirement that, at the start of health care delivery, fee schedules be based upon current reasonably available prevailing charge data or adjusted with a trend factor. DOD will release the next request for proposals for the FMDP in 1999.
Department of Defense 3. To position DOD to ensure contractor compliance with the FMDP's requirements, the Secretary of Defense should direct the Assistant Secretary of Defense, Health Affairs, to require that a contract oversight strategy be developed that efficiently targets the: (1) appropriateness of Concordia's fee schedules; (2) adequacy of its networks; (3) timeliness of its claims and predeterminations processing; and (4) efficiency of its marketing activities.
Closed - Implemented
DOD initiated its first audit of the contractor's performance in June 1997 and submitted its draft report to the contractor for review and comment by September 1997. In addition, DOD hired a consumer survey research company to conduct a telephone survey to obtain beneficiary feedback and determine beneficiary satisfaction with the contractor's performance and the FMDP benefit.

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