Medicare Subvention Demonstration: DOD Data Limitations May Require Adjustments and Raise Broader Concerns

Published by the Government Accountability Office on 1999-05-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Committees

May 1999
                 DOD Data Limitations
                 May Require Adjustments
                 and Raise Broader

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division


      May 28, 1999

      Congressional Committees

      The Balanced Budget Act of 1997 (BBA) authorized a 3-year test, called
      Medicare subvention, allowing Medicare-eligible military retirees, their
      dependents, and survivors to enroll in a new Department of Defense (DOD)
      health maintenance organization (HMO). The demonstration’s stated goal is
      to implement an alternative for delivering accessible and quality care to
      Medicare-eligible military beneficiaries, while not increasing the cost to
      either DOD or Medicare. Currently, care for these beneficiaries at military
      treatment facilities (MTF) is provided on a space-available basis that lacks
      the continuity often important to older retirees. Under this demonstration,
      the Medicare Trust Funds will pay DOD for health care provided to eligible
      retirees at six sites. DOD will provide enrollees the full range of
      Medicare-covered services as well as some additional services. In
      principle, beneficiaries, DOD, and Medicare could all gain under
      subvention. Beneficiaries who choose DOD’s plan can use their Medicare
      benefit to receive care at an MTF. Under subvention, Medicare’s payment
      for enrollees could be less than what it pays private plans serving other
      Medicare beneficiaries, and DOD could gain additional funds and use
      excess capacity where it exists.

      The BBA required that, before Medicare reimburses DOD under the
      demonstration, the test sites spend the amount they would have spent
      without the demonstration on Medicare-eligible retirees’ care.1 DOD already
      receives money for its care of retirees aged 65 and over as part of its
      annual appropriation. Since DOD does not have an accounting system that
      can measure the cost of care provided to individuals, DOD developed, and
      the Health Care Financing Administration (HCFA), within the Department
      of Health and Human Services, agreed with, a complex method to estimate
      this “level of effort” (LOE), or baseline. It is important that LOE be
      correctly calculated. If LOE is underestimated, Medicare may overpay; if
      LOE is overstated, Medicare may underpay, which could cause DOD to
      further reduce space-available care or shift resources from other programs
      or beneficiary groups to pay for demonstration enrollees’ care. Using 1996
      data, DOD currently estimates its LOE for the six sites to be $172 million.2 To
      further protect the Trust Funds, the BBA caps payments to DOD at

       More precisely, the requirement is in the Social Security Act, as amended by the BBA. (Section 4015 of
      the BBA, P.L. 105-33, 111 Stat. 251, 337, added section 1896 to the Social Security Act. This section
      authorizes the subvention demonstration. See 42 U.S.C. 1395ggg.)
       App. I describes in more detail the process used to determine Medicare payments.

      Page 1                                                GAO/HEHS-99-39 DOD/Medicare Subvention

                   $50 million in the demonstration’s first year, $60 million in the second
                   year, and $65 million in the third year.

                   The BBA also directed GAO to report annually on the demonstration’s effect
                   on Medicare costs.3 Because the demonstration began delivering care at its
                   first site in September 1998 and was not fully implemented at all sites until
                   January 1999, there is not yet sufficient evidence to assess subvention’s
                   cost to Medicare. Consequently, this first report to your committees
                   focuses on the sufficiency of DOD’s data systems for (1) determining DOD’s
                   historical LOE and Medicare payments and (2) managing the demonstration
                   and assessing its cost effects. In conducting our evaluation, we reviewed
                   not only DOD’s method for measuring LOE and capturing DOD health care
                   costs but also source data from key DOD information and accounting
                   systems used to calculate LOE and manage the military health care system
                   in general. We conducted our review in accordance with generally
                   accepted government auditing standards. (Addressees are listed at the end
                   of this letter. App. II describes the scope and methodology of our work in
                   more detail.)

                   Portions of DOD’s baseline costs may be understated, which could lead to
Results in Brief   Medicare overpayments if not adjusted. This results from data
                   inaccuracies in areas of DOD’s medical cost accounting system such as pay
                   and prescription drugs. Our findings show that the DOD cost system
                   problems we and others have reported on over the years continue to affect
                   the DOD health care activities that rely on these systems. At the root of the
                   problem is the long-standing lack of DOD and services’ oversight as well as
                   a lack of incentives to ensure the data’s accuracy, timeliness, and
                   completeness. DOD officials told us that DOD is committed to making the
                   adjustments necessary to ensure Medicare does not overpay DOD.

                   Data problems also make the subvention demonstration more difficult to
                   manage at both the national and local levels. For example, DOD managers
                   do not have sufficiently accurate or timely data to know whether Medicare
                   capitated payments will cover DOD’s costs to provide the full range of
                   health care to beneficiaries or to determine whether it is more
                   cost-effective to deliver care in DOD facilities or purchase it from network
                   providers. Timely and accurate tracking of cost and utilization data is
                   critical to these decisions, as is the case in other managed care

                    We are to report on a number of other issues, including the demonstration’s impact on access, quality,
                   and military readiness, as well as DOD’s management of the demonstration and compliance with
                   Medicare regulations. These issues will be the subjects of future reports.

                   Page 2                                                GAO/HEHS-99-39 DOD/Medicare Subvention

             Acting on the problems we identified, DOD officials developed a
             management improvement plan to begin addressing baseline and systemic
             data weaknesses, and HCFA plans to hire a contractor to review DOD’s data
             and methodology. In their reviews, these agencies may need to reestimate
             the baseline using more reliable data or consider alternate ways to
             determine the baseline.

             Because DOD uses its cost accounting systems for many other health care
             management purposes beyond the demonstration’s needs, such as
             resource allocation and “make-versus-buy” decisions, we believe DOD
             needs to dedicate sufficient management attention and effort to ensure
             data reliability and accuracy. Recently, DOD established a health care data
             quality task force to begin addressing the broader system causes of the
             data problems that we and others have continued to identify. We make
             several recommendations in this report concerning these matters.

             Currently, about 1.3 million retired military personnel and their
Background   dependents and survivors who reside in the United States are age 65 or
             older. This number is expected to increase to about 1.6 million by 2004. By
             contrast, the number of active duty personnel and their dependents is
             projected to remain constant. Of the 1.3 million dual eligibles (that is,
             eligible for both military health care and Medicare), about half live within
             40 miles of an MTF. This 40-mile radius is a rule of thumb for defining such
             facilities’ “catchment” (or service) areas.

             Retirees are eligible for a broad range of health care services under
             TRICARE Prime,4 DOD’s HMO program, until they turn 65, when they
             become eligible for Medicare. Once they turn 65, retirees lose their
             eligibility for TRICARE Prime. They continue to qualify for inpatient and
             outpatient care in MTFs, but only on a space-available basis. Limited space
             and resources, coupled with the priority given to active duty personnel
             and other beneficiaries who are under age 65, mean that military retirees
             aged 65 and over often do not get appointments and other services at an
             MTF when they need them (although they may continue to get prescription
             drugs from MTFs).

             Most military retirees who are 65 and over are eligible for Medicare, a
             federal program administered by HCFA that covers health care expenses of
             the elderly, some disabled people, and people with end-stage kidney

              As an employer, DOD established its TRICARE program to provide comprehensive health care to
             active duty personnel, their dependents, and military retirees. TRICARE beneficiaries may get care at
             MTFs as well as from civilian providers in the local community.

             Page 3                                               GAO/HEHS-99-39 DOD/Medicare Subvention

                      disease. Medicare part A covers inpatient hospital, skilled nursing facility,
                      and hospice care; Medicare part B covers physician and other outpatient
                      services for beneficiaries choosing to pay a monthly premium. Original, or
                      traditional, fee-for-service Medicare has two distinctive features: it allows
                      the patient to choose his or her physician, and it reimburses beneficiaries’
                      claims for hospital, physician, and other care on a fee-for-service basis.
                      Beneficiaries who receive care are responsible for part of the charges—for
                      example, 20 percent of the Medicare fee schedule amount for physician
                      services, or the $768 deductible for hospital care.

                      As an alternative to fee-for-service Medicare, beneficiaries may choose the
                      Medicare+Choice option, which permits them to enroll in private Medicare
                      HMOs and other private health plans. These plans provide all standard
                      Medicare benefits. Beneficiaries in these plans, like beneficiaries in
                      original Medicare, must pay the program’s monthly premium for part B
                      coverage. Medicare+Choice plans also may offer additional benefits, such
                      as prescription drug coverage, and may waive cost-sharing required by
                      original Medicare. For these additional benefits, plans may charge an extra
                      premium, though many do not. Medicare pays a capitated rate (a fixed
                      amount each month per enrollee) to Medicare+Choice plans, and the plans
                      bear the financial risk if the beneficiary’s costs exceed the capitated rate.

                      About 125,000 dual-eligible military retirees reside in the catchment areas
How the               of the six sites—about one-fifth of dual eligibles living within 40 miles of
Demonstration Works   an MTF. About 30,000 will be allowed to enroll in the demonstration on a
                      first-come, first-served basis. Demonstration participants will enroll in
                      TRICARE Senior Prime, a new, DOD-run HMO exclusively for the
                      demonstration areas and open to dual eligibles only. Senior Prime offers
                      hospital, physician, and other Medicare-covered services. Senior Prime
                      builds on TRICARE Prime, adding home health and other
                      Medicare-required services. Under the demonstration, DOD will not charge
                      enrollees a premium, at least for the first year. Services may, at Senior
                      Prime’s option, be provided at an MTF or by a civilian network provider,
                      but copayments differ by where the service is provided. For example,
                      inpatient hospitalization will be free at the MTF but require a copayment for
                      civilian providers. DOD anticipates that most services will be provided in

                      Like enrollees in private Medicare HMOs, Senior Prime enrollees are
                      “locked out” of Medicare fee-for-service coverage. An enrollee who uses
                      a civilian provider without a Senior Prime referral or authorization is

                      Page 4                                  GAO/HEHS-99-39 DOD/Medicare Subvention

    responsible for the full charge. Like commercial Medicare HMOs and other
    private, managed care plans available through Medicare+Choice, Senior
    Prime gets a capitated Medicare payment for each enrollee.5 In addition,
    Senior Prime must comply with all Medicare requirements for the
    protection of beneficiaries, provision of information, cost-sharing
    limitations, access, quality assurance, external review, and appeal and
    grievance procedures. Unlike a conventional Medicare+Choice plan,
    Senior Prime is established and operated by DOD; in addition to the
    standard benefits offered by a private Medicare+Choice plan, Senior Prime
    gives its members priority for treatment at MTFs over other dual eligibles.6
    To be eligible for Senior Prime, a military retiree (or dependent or
    survivor) must:

•   be enrolled in both Medicare part A and part B (an estimated 90 percent of
    dual eligibles are enrolled in part B);
•   reside in one of the six geographic areas covered by the demonstration;
•   be a dual-eligible beneficiary who used an MTF before January 1, 1998, or
    became dually eligible (turned 65) after December 31, 1997; and
•   agree to use Medicare-covered and MTF services only through Senior

    The six sites for the demonstration differ considerably in their numbers of
    retired Medicare-eligible beneficiaries and in what DOD terms “enrollment
    capacity”—in effect, each site’s planned enrollment (see table 1). The
    sites also differ in several other ways, such as region, branch of service
    responsible for the MTF, size, and amount of managed care penetration in
    the local market.

     The BBA provided that the demonstration rates be 95 percent of Medicare+Choice rates, adjusted to
    exclude payments for direct and indirect medical education and disproportionate share hospitals.
    Furthermore, the BBA also provided that a share of DOD’s capital costs be excluded from the rate, and
    that HHS and DOD must decide what that percentage share is. They have set the capital cost exclusion
    at 67 percent.
     The subvention demonstration has a second component—Medicare Partners. Under Medicare
    Partners, a demonstration MTF can contract with Medicare+Choice plans to provide dual-eligibles
    enrolled in these plans with selected services at the MTF. It appears that generally MTFs will “sell”
    only specific services, such as the services of certain specialties, for which they have excess capacity.
    DOD agreed not to implement Medicare Partners until at least 90 days after the beginning of Senior
    Prime enrollment. It appears that it may be a year before Medicare Partners is activated at any site.

    Page 5                                                 GAO/HEHS-99-39 DOD/Medicare Subvention

Table 1: Demonstration Sites for Medicare Subvention
                                      Start of service                                                                   Current enrollment
Site name                             delivery                           Dual eligiblesa     Planned enrollment               (as of 5/1/99)b
Colorado Springs
Evans Army Community Hospital,          January 1, 1999                           13,689                       3,200                     2,895
Ft. Carson; and 10th Medical Group,
Air Force Academy, CO
436th Medical Group, Dover Air Force    January 1, 1999                             3,905                      1,500                      678
Base, Dover, DE
Keesler Medical Center, Biloxi, MS      December 1, 1998                            7,361                      3,100                     2,687
Madigan Army Medical Center,            September 1, 1998                         21,709                       3,300                     3,634
Ft. Lewis, Takoma, WA
San Antonio
San Antonio
Wilford Hall Medical Center, Lackland   October 1, 1998                           34,148                     10,000                     10,413
Air Force Base; and Brooke Army
Medical Center, Ft. Sam Houston, TX

Reynolds Army                           December 1, 1998                            7,067                      2,700                     1,844
Community Hospital, Ft. Sill, Lawton,
OK; and Sheppard Air Force
Base Hospital, Wichita Falls, TX
San Diego
Naval Medical Center San Diego,         November 1, 1998                          35,619                       4,000                     2,897
San Diego, CA
Total                                                                            123,498                     27,800                     25,048
                                            Note: A site may include more than one MTF and more than one geographic area.
                                            Data are from the Defense Medical Information System for fiscal year 1998, third quarter.
                                             Current enrollment can be more than planned because of “age-ins,” which are enrollees who
                                            reached age 65 after December 31, 1997.

                                            Source: DOD.

                                            The amount that Medicare will pay DOD for subvention enrollees depends
                                            not only on Medicare’s capitated rate for Senior Prime but also on DOD’s
                                            historical, or baseline, health care costs, termed LOE. The BBA required that
                                            DOD maintain its previous LOE in providing space-available care to
                                            dual-eligible retirees in the demonstration areas and that the Medicare
                                            payment reimburse DOD only for care above the LOE. As agreed by HCFA and

                                            Page 6                                              GAO/HEHS-99-39 DOD/Medicare Subvention

                         DOD, DOD  cannot receive any Medicare payments unless current DOD
                         expenses for the dual eligibles reach this baseline. Measurement of LOE is
                         sensitive to data quality and reliability. If costs are omitted from LOE, DOD
                         may be overpaid, but if LOE is inflated, Medicare will pay too little or
                         perhaps nothing.

                         Facility cost and workload data used to establish DOD’s LOE are drawn
                         primarily from DOD’s Medical Expense Performance Reporting System
                         (MEPRS). MEPRS data are used for many military health care services or
                         management purposes such as resource allocation determinations,
                         “make-versus-buy” decisions—such as whether to offer certain product
                         lines or purchase them as needed, setting third-party billing rates, and cost
                         comparisons of DOD’s health care delivery system with other alternatives.
                         Thus, LOE accuracy and key military health care system functions rely in
                         large measure on MEPRS and related data systems to provide accurate,
                         timely, and complete cost and workload information.

                         Portions of DOD’s LOE may be understated because of inaccuracies in its
LOE Source Data          source data, and as a result, Medicare overpayments may occur during the
Inaccuracies May         demonstration. DOD’s health care information systems are generally not
Result in Medicare       auditable and often cannot be reconciled with source data and documents.
                         Military and civilian pay and prescription drugs exemplify areas of
Overpayments             possible inaccuracy. These problems stem from a long-standing lack of
                         DOD and service oversight and incentives to ensure the data’s accuracy,
                         timeliness, and completeness. In response to our preliminary findings, DOD
                         recently developed a plan for improving MEPRS data and business practices
                         both during and after the demonstration. The effects of these efforts on
                         data quality and DOD’s ability to measure demonstration costs remain to be
                         seen. In addition, DOD officials told us that they are committed to making
                         any necessary changes to ensure that Medicare does not overpay DOD.

Uncertainty About Data   DOD has acknowledged concerns about MEPRS, its key system for estimating
Quality Reduces          costs for military health care. DOD officials described it as a “stepchild”
Confidence in LOE        system that has been underfunded and inconsistently used. As a result,
                         DOD and the services have not effectively monitored MEPRS to ensure data
Estimate                 quality. The MEPRS policy manual states that the Assistant Secretary of
                         Defense (Health Affairs) is responsible for MEPRS direction and
                         management; the DOD Comptroller is responsible for finance, budgeting,
                         and accounting guidance for all health care resources; and the services are
                         responsible for implementing MEPRS guidance and reporting uniform and

                         Page 7                                   GAO/HEHS-99-39 DOD/Medicare Subvention

                              comparable data. But at the three sites we visited, we found that MTF staff
                              did not fully audit MEPRS’ expense, workload, or manpower data for 1996
                              or later years. And recent DOD self-assessment surveys of MEPRS and other
                              workload data quality showed wide variances among facilities.

                              We and others have identified major concerns with MEPRS, including
                              inconsistent data collection and reporting, service differences in how
                              depreciation is recorded and what is counted as “readiness”7 (and thus
                              not counted as patient care), and the completeness of the accounting for
                              all relevant expenses. Responding to our questions and concerns, in 1998
                              DOD developed a MEPRS Management Improvement Plan. The plan focuses
                              first on the subvention sites and turns to improving the entire system later.
                              (See app. III.) The goal is for a working group composed of Army, Navy,
                              and Air Force officials to develop and initiate standard business rules for
                              recording, collecting, and reporting MEPRS data. The group is assessing the
                              feasibility of incorporating into MEPRS other DOD appropriations—such as
                              research, development, testing, and evaluation; military construction;
                              military pay; and civilian pay—to capture all MTF revenues and expenses.

                              Part of this plan calls for reconciliation of MEPRS data on finance,
                              manpower, and workload with source documents and with data systems
                              that provide information to MEPRS. However, DOD’s plan does not address
                              some aspects of data quality.8 For example, we found evidence that basic
                              data consistency checks had not been performed. Also, even when
                              improved, MEPRS will continue to provide costs by cost center, functional
                              area, and program, but not by individual patient or groups of patients.
                              Consequently, an improved MEPRS may still not be ideally suited to
                              identifying the costs of groups, such as the demonstration’s dual-eligible
                              retirees. A DOD official told us the agency is planning to award a contract
                              to determine how its systems compare with other health care cost
                              systems; whether changes are needed; and, if so, the extent and feasibility
                              of such changes.

Problems in Estimating        Our analysis showed that the demonstration may result in Medicare
Major Cost Components         overpayments. Two cases illustrate how data and related estimation
Point to Potential Medicare   problems may lead to a significant understatement of LOE.

                               Readiness is the capacity to engage in military action.
                               The plan also does not address how MEPRS should be used for financial reporting, which requires the
                              use of full cost accounting as defined by federal accounting standards.

                              Page 8                                                 GAO/HEHS-99-39 DOD/Medicare Subvention

The first concerns military and civilian pay. Military personnel account for
more than half of total military health care expenses. However, all DOD
activities, medical or otherwise, use service-specific composite pay
rates—rather than actual pay—for estimating labor costs. This approach
appears to understate actual pay at demonstration facilities. For example,
DOD applies the same pay rate to a hospital administrator who is a
lieutenant colonel and to an orthopedic surgeon of the same rank. This
method would understate actual pay because actual salaries for physicians
are generally higher than those for other personnel of the same rank. In
particular, physicians receive larger and more frequent special pay
allowances compared with nonphysicians.

A study of Air Force MTFs by the Institute for Defense Analysis found that
composite rates understated military physicians’ salaries but that these
understatements were offset by an overestimate for nonphysicians.9 At
large facilities, the understatement of physicians’ salaries would be
expected to be greater, because these MTFs have more specialists. In the
subvention demonstration, four of the MTFs, representing over 60 percent
of the demonstration’s planned enrollment, are major medical
centers—Madigan Army Medical Center (Wash.), Brooke Army Medical
Center (Tex.), Wilford Hall Medical Center (Tex.), and Naval Medical
Center San Diego (Calif.). In reviewing data from Wilford Hall Medical
Center, we compared the national composite pay rate used in calculating
LOE with another composite pay rate used locally and found a 6.8-percent
difference. (We also found a 5.3-percent difference in civilian pay.) Our
examination of the data did not provide grounds for choosing one rate
over the other, but differences of this magnitude are cause for concern.

DOD maintains that its composite pay rate approach is appropriate,
because it reflects the way that appropriations for pay are distributed to all
DOD facilities. Furthermore, DOD contends that collecting actual pay data
would be costly. We believe, however, that while DOD’s composite pay rate
approach may be accurate nationally and acceptable for other purposes,
because all facility differences average out, it appears to understate actual
pay at the subvention facilities by eliminating factors that make their
personnel and compensation mix unique and above average. The
treatment of physicians’ pay is the most pertinent, but other factors that
may differentiate these particular facilities from the average facility, such
as locality pay, are also omitted, except as they are reflected in national

 Institute for Defense Analysis, Cost Analysis of the Military Medical Care System: Final Report, P-2990
(Washington, D.C.: Institute for Defense Analysis, Sept. 1994).

Page 9                                                GAO/HEHS-99-39 DOD/Medicare Subvention

                             averages. DOD and HCFA have agreed to continue reviewing this issue and to
                             make any needed changes.

                             A second probable source of LOE understatement is the adjustment to
                             exclude prescription drug expenses. Medicare generally does not cover
                             outpatient prescription drugs, so the demonstration’s Memorandum of
                             Agreement excludes prescription drug costs from the LOE for the six sites.
                             However, DOD accounting systems often do not distinguish between
                             pharmaceutical supplies used in clinic operations, such as chemotherapy
                             drugs, and drugs that patients take home. This broad pharmaceutical
                             category amounts to about $17 million in LOE (according to the DOD
                             contractor responsible for estimating LOE). In removing all expenses in this
                             category, not just those for outpatient drugs, DOD appears to be
                             understating LOE. DOD has not offered a compelling reason for removing
                             the entire amount from LOE. DOD officials have said that they will study this
                             issue and make any necessary adjustments.

Recent Changes in Data       Improvements in DOD’s health care cost and information systems are likely
Systems and Choice of        to result in better measurement of current costs, but this may have a
1996 as Base Year Raise      perverse effect on Medicare payments. If certain omissions or inaccuracies
                             are left uncorrected in LOE but later corrected in current demonstration
Concerns                     costs, the more accurately measured current costs will be tallied against
                             the deficient baseline. This situation would make it easier for DOD to meet
                             its LOE thresholds and tests, and thus to get Medicare payments (see app.

                             Along with the health care cost data problems, we found that much of the
                             documentation supporting the base year (1996) calculations is no longer
                             available, hindering data verification. DOD and HCFA recently considered
                             changing the LOE base year to 1998 because the data would be more readily
                             available and auditable. However, DOD and HCFA have concluded thus far
                             that the 1996 data may be adequate for the demonstration purpose and
                             have not changed the demonstration baseline, although they continue to
                             analyze the issue.

HCFA Began Reviewing         Although HCFA officials were involved in designing the demonstration,
Baseline Data and            including the Medicare payment provisions, annual reconciliation, and
Methodology as a Result of   beneficiary marketing processes, they had not reviewed DOD’s baseline
                             data and methodology for compliance with the demonstration’s terms or
Our Early Findings           with Medicare reimbursement regulations until we disclosed our

                             Page 10                                 GAO/HEHS-99-39 DOD/Medicare Subvention

                           preliminary findings. HCFA officials told us that the limited number of HCFA
                           staff assigned to the demonstration have other responsibilities and thus
                           have been unable to devote full attention to the project.

                           In discussions with us, HCFA officials acknowledged that DOD’s LOE
                           methodology and supporting data are more complex and problematic than
                           they originally believed. They told us that they are assigning more staff to
                           review the methodology and data; are committed to working with DOD to
                           improve the LOE estimate; and are planning to award a contract to review
                           all the issues we identified. Furthermore, DOD and HCFA officials told us
                           they plan to continue meeting to clarify the Memorandum of Agreement’s
                           details so that misunderstandings between the two agencies are minimized
                           and the demonstration is implemented as efficiently as possible.

                           For DOD, the real challenge of subvention is to establish and run a managed
Data Weaknesses and        care system that meets the requirements of Medicare and its beneficiaries.
Payment Complexity         To meet its responsibilities, DOD must manage the subvention
Limit DOD in               demonstration and track its progress toward reaching the LOE target. In
                           addition, like other managed health care plans, DOD must manage costs
Managing the               and resources to maintain access to and quality of care. These are
Demonstration and Its      data-intensive tasks, and inadequate data systems will undermine a
                           managed care plan’s ability to compete effectively. In addition, the
Broader Health             demonstration’s complex payment arrangements, and the fact that HCFA
System                     and DOD have yet to specify a risk-adjustment method and how sites are to
                           be paid, add uncertainty for DOD managers. Consequently, the inadequacies
                           of DOD’s data systems limit its ability, at both the site and national levels, to
                           manage the demonstration and deliver health care.

Data Inaccuracies Hamper   In taking responsibility for all Medicare-covered care of its Senior Prime
DOD in Determining         enrollees, DOD needs to know whether Medicare reimbursement covers
                           DOD’s costs to deliver this care. DOD believes that its costs overall are less
Whether Medicare
                           than civilian costs, and an Institute for Defense Analysis study,10 which
Reimbursement Covers       compared peacetime military health care costs with civilian costs, partially
DOD Costs and in           supports that conclusion. However, the Institute for Defense Analysis
Assessing Make/Buy         study encountered considerable difficulties in using DOD data to determine
Choices                    costs and made major adjustments to compensate for data limitations. The
                           study found that DOD’s costs were about 6 percent less than the private
                           sector’s. However, this estimate was based largely on data for a nonelderly
                           population that would use fewer resources per person than retirees aged

                             Cost Analysis of the Military Medical Care System: Final Report (Sept. 1994).

                           Page 11                                               GAO/HEHS-99-39 DOD/Medicare Subvention

                       65 and over, and it did not include the costs of providing skilled nursing
                       facility and home health care. These two services account for about
                       one-seventh of Medicare’s cost per beneficiary. DOD will need accurate,
                       timely tracking of costs and utilization, particularly because 95 percent of
                       the modified Medicare+Choice rates does not appear to leave DOD a large
                       margin above cost.

                       Like other managed care organizations, DOD continually makes decisions
                       about whether to treat particular patients or send them to external
                       network providers and whether to offer certain services or product lines
                       or purchase them as needed. These decisions are usually made on the
                       basis of incremental or marginal cost and may vary over time, depending
                       on market conditions and other factors. It does not appear that MEPRS or
                       other data systems currently give DOD adequate or accurate cost
                       information on which to base these decisions. Some decisions are simple,
                       of course—if a patient needs a kidney transplant and an MTF cannot
                       provide it, the service must be purchased. But some represent choices
                       between providing care in the MTF or in the community, such as whether to
                       purchase some or all radiology services or provide them at the MTF.
                       Inadequate cost data may lead MTF managers to select the more costly

Payment Rules Create   The payment arrangements of the demonstration complicate its operation
Uncertainty for DOD    (see app. I). DOD will not know until reconciliation takes place—roughly 6
Managers               months after the year’s end—how much final payment it will receive. For
                       care delivered in 1999, the annual reconciliation may not be completed
                       until mid-2000. Adding to this uncertainty is that HCFA has not yet specified
                       the method and criteria for adjusting Medicare payments for differences in
                       enrollees’ health status. Furthermore, individual sites do not know,
                       because DOD has not indicated, how money from Medicare will be
                       distributed among the sites. In theory, DOD could give part of the final
                       payment to sites according to their success in meeting monthly thresholds,
                       or it could use the final payment to rescue less “successful” sites or to
                       compensate sites that have sicker-than-average patients.

                       Different payment scenarios will likely cause site managers to change their
                       decisions about enrollment and capacity. For example, if DOD allows sites
                       to spend all or part of interim (monthly) payments or allocates part of final
                       payments to sites, site managers are likely to increase capacity and try to
                       expand Senior Prime enrollment. This situation is less likely if DOD opts
                       not to use a site’s performance to determine its share of final payments but

                       Page 12                                 GAO/HEHS-99-39 DOD/Medicare Subvention

                             instead uses the payments to rescue less successful sites or for other

                             In view of this uncertainty, some sites may pay for dual eligibles’ care
                             exclusively from their site budgets, which draw on DOD’s appropriated
                             funds. Because final payments from HCFA are determined in the year after
                             care is delivered, Medicare funds cannot be relied on to pay for care. As a
                             result, a site manager faced with expenses that threaten to exceed the site
                             budget has three primary choices: reduce care for enrollees, reduce care
                             for nonenrollees 65 and over and for younger military beneficiaries, or
                             reduce enrollment through attrition. The extent to which such
                             uncertainties will affect sites’ management of Senior Prime will be clearer
                             after the sites have had more experience with subvention.

Long-Standing Data           DOD’s cost and workload reporting system weaknesses have effects that
Problems Raise Broader       reach beyond the Medicare subvention demonstration. These data are
Concerns About System        used throughout the military health care system by facility, service, and
                             headquarters managers to make policy decisions, evaluate program
Management                   effectiveness, and track expenditures against budgeted funds. But in
                             recent years, we and others have identified data weaknesses that indicate
                             limitations in DOD’s ability to, for example,

                         •   project accurate system costs for allocating resources;
                         •   establish accurate billing rates for third-party insurer collections that
                             provide millions of dollars of revenue each year; and
                         •   conduct make-versus-buy analyses for improving the quality, accessibility,
                             and cost-effectiveness of military health care—including weighing
                             alternatives for providing beneficiaries’ care such as the Federal
                             Employees Health Benefits Program.

                             In addition to the MEPRS management improvement plan, DOD established a
                             TRICARE data quality task force to address the broader system causes of
                             the data problems that we and others continually have identified.

                             DOD’s cost system problems are persistent and long-standing. In 1992, for
                             example, DOD’s Office of Inspector General (OIG) reported that MEPRS did
                             not track all costs associated with the delivery of peacetime health care,
                             thereby understating the actual costs of operating and supporting MTFs. In
                             addition, third-party billing rates did not reflect the total costs of the
                             health care provided, resulting in understated billings. Also, health care
                             cost information could not be easily retrieved and was not standardized,

                             Page 13                                GAO/HEHS-99-39 DOD/Medicare Subvention

and military composite rates did not reflect the actual labor costs of
medical professionals.11 In 1995, the OIG reported on problems with the
source systems underlying MEPRS. DOD’s general fund accounts, which are
drawn upon to pay health care expenses, were not auditable because
assets were not properly valued or reported in the accounts, contingent
liabilities were not properly recognized or disclosed, disbursements and
collections were not properly accounted for, and adequate accounting
systems generally were not in place.12 Furthermore, in 1998, the OIG
reported that data used to calculate the military retirement health benefits
liability were neither current nor complete.13 Other studies by the OIG,
contractors, and researchers during the period likewise identified and
documented many of the same data inaccuracies and omissions in DOD’s
health care information systems.14 Our review of the subvention baseline’s
data reliability, moreover, has served to affirm that the data system
problems identified over the years continue and thus affect all DOD health
care operations that rely on these systems.

DOD’s enrollment-based capitation program, for example, can be used to
allocate resources to MTFs on the basis of their TRICARE enrollment levels
and assign prices for an MTF’s services to be charged other MTFs when they
refer patients to that facility. This “transfer pricing” portion of the
enrollment-based capitation program relies heavily on cost data to
calculate the payment to MTFs for their services. If underpaid, MTFs may
experience funding shortfalls and be forced to restrict care. Thus, the
enrollment-based capitation program’s implementation guidance stressed
that MTF managers should make data quality a top priority if the program
was to succeed. Moreover, DOD recently sought to reconcile MEPRS
expenses with finance system obligations to correct data errors that would
affect transfer prices. DOD found incomplete MEPRS data and mismatches in

 DOD OIG, Peacetime Health Care Costs in the Military Health Services System, Report No. 92-PED-04
(Washington, D.C.: DOD OIG, Sept. 1992).
 DOD OIG, Major Deficiencies Preventing Auditors from Rendering Audit Opinions on DOD General
Fund Financial Statements, Report No. 95-301 (Washington, D.C.: DOD OIG, Aug. 1995).
 DOD OIG, DOD Military Retirement Health Benefits Liability for FY 1997, Report No. 99-010
(Washington, D.C.: DOD OIG, Oct. 1998).
  RAND National Defense Research Institute, Evaluation of the CHAMPUS Reform Initiative, Volumes
3 and 6, R-4244/3-HA and R-4244/6-HA (Santa Monica, Calif.: RAND, 1993 and 1994), and The Demand
for Military Health Care: Supporting Research for a Comprehensive Study of the Military Health Care
System, MR-407-1-OSD (Santa Monica, Calif.: Rand, 1995); DOD OIG, Review of Utilization
Management in the Military Health Services System (Washington, D.C.: DOD OIG, June 1995), and
Reporting Graduate Medical Education Costs, Report No. 97-147 (Washington, D.C.: DOD OIG,
May 1997); and Institute for Defense Analysis and CNA Corporation, Evaluation of the TRICARE
Program: FY 1998 Report to the Congress (Washington, D.C.: Institute for Defense Analysis and CNA
Corporation, 1998).

Page 14                                             GAO/HEHS-99-39 DOD/Medicare Subvention

facilities’ MEPRS and obligations data that would significantly understate
prices established for those facilities. As a result, DOD urged MTF
commanders to review and, to the extent possible, correct their MEPRS

MEPRS   data are also used to calculate MTFs’ third-party reimbursement
rates. Such reimbursements include MTF collections from beneficiaries’
non-DOD health insurance policies. In fiscal year 1997, DOD collected almost
$140 million in such reimbursements. These collections are projected to
decline because many beneficiaries drop their third-party insurance after
they enroll in TRICARE Prime. To ensure such collections are maximized,
it is important that MTF billing rates accurately reflect the facilities’ costs.

Weaknesses in DOD’s cost data can also impair the ability to evaluate
alternate approaches to providing care to military beneficiaries. MTF
commanders regularly confront make-versus-buy decisions and need
reliable data to decide when to provide care at the MTF and when to seek
private sector alternatives. Moreover, analyzing the cost-effectiveness and
feasibility of new approaches—such as Medicare subvention, a mail-order
pharmacy benefit for retirees, or Federal Employees Health Benefits
Program coverage for senior retirees—also requires data on military
facility care costs compared with these options. For example, the “733
Study,” DOD’s 1994 comprehensive study of military health care, drew
heavily upon MEPRS data to compare DOD facility care costs with care
provided under the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), the precursor to TRICARE.15 The study’s conclusion
that DOD’s facility costs generally were lower has been challenged and
today remains at issue. Therefore, DOD’s MEPRS cost and workload data
should be as accurate as possible to support day-to-day system
management and to provide the Congress with accurate assessments of
system alternatives.

As noted earlier, DOD established a high-level data quality task force to
begin addressing what officials now see as an urgent need for data quality
improvements. The task force’s mission statement reiterates that clinical
workload data are used by DOD’s medical departments in their budgetary
decisions, manpower justifications, program actions, and facility
“rightsizing” initiatives. In addition, data-dependent managed care support
contracts, enrollment-based capitation endeavors, and the Medicare
subvention demonstration accentuate DOD’s reliance on accurate data. The

 DOD, Office of Program Analysis and Evaluation, The Economics of Sizing the Military Medical
Establishment, Executive Report of the Comprehensive Study of the Military Medical Care System
(Washington, D.C.: DOD, Apr. 1994).

Page 15                                            GAO/HEHS-99-39 DOD/Medicare Subvention

                  statement points out that data systems such as MEPRS, the Composite
                  Health Care System, and the Ambulatory Data System, which support the
                  MTFs in their daily activities, were developed independently and are not
                  linked, leading to financial, workload, and data accuracy issues. Other
                  contributing factors cited include

              •   lack of consistent command emphasis to ensure that workload and other
                  data reports are complete, timely, and accurate;
              •   paucity of business rules, standardized training, and procedural guidelines
                  for clerical and professional staff;
              •   segmentation of functions and staffing as well as cultural and operational
                  differences among the services and their facilities; and
              •   conversion to a data-driven managed care environment involving new
                  management methods that require accurate, relevant data.

                  The mission statement establishes a December 2000 project completion
                  date but notes that the project’s complexity and magnitude may require an
                  extension. While this project is daunting, we agree it is critical that DOD
                  begin to take actions needed to improve its data quality and that it fully
                  commit itself to the project’s success. However, even if the target date is
                  met, the project can have only limited impact on the subvention
                  demonstration, which is scheduled to end at the same time.

                  The Medicare subvention demonstration provides DOD and HCFA a valuable
Conclusions       opportunity to gauge the effects of treating Medicare-eligible beneficiaries
                  in military facilities. However, the demonstration’s payment rules and
                  method of estimating LOE demand accurate, timely, and complete data, and
                  DOD’s ability to provide such information with its current systems is
                  questionable. These data problems also call into question DOD’s ability to
                  manage its overall health care system. In short, DOD lacks an information
                  system that can produce credible cost data on its individual beneficiaries
                  and beneficiary groups.

                  Yet, even with good information systems, DOD and the demonstration sites
                  face a considerable challenge in managing the demonstration. For
                  example, the demonstration sites will not know how much they will be
                  paid for a given year until well into the following year, and DOD has not yet
                  made other decisions regarding sites’ interim and final payments.
                  Nonetheless, the experience of the demonstration will provide valuable
                  information for developing a permanent reimbursement system, if the
                  demonstration is deemed to meet its cost, quality, and other goals.

                  Page 16                                 GAO/HEHS-99-39 DOD/Medicare Subvention

                       Beyond the demonstration, DOD’s many other needs for reliable cost data
                       warrant that it dedicate sufficient effort to improving the data’s accuracy
                       and reliability. In that regard, DOD’s new management improvement plan
                       and data quality task force are positive steps. We urge DOD’s continued
                       high-level attention to these issues.

                       We recommend that the Secretary of Defense direct the Assistant
Recommendations to     Secretary of Defense (Health Affairs), in collaboration with HCFA, to
the Secretary of       identify the baseline’s weaknesses and resulting errors in LOE and
Defense                determine a more reliable baseline. This effort should consider the merits
                       of using a more recent base year for the demonstration and weigh
                       alternatives to the current baseline method. Furthermore, to reduce
                       funding uncertainties for site managers, the Assistant Secretary should
                       state definitively how final Medicare payments will be allocated among the
                       demonstration sites, and working with HCFA, explain the method and
                       criteria for risk-adjusting sites’ Medicare payments.

                       We also recommend that the Secretary of Defense direct the Assistant
                       Secretary of Defense (Health Affairs) to improve cost and workload data
                       quality. This is especially important because DOD also uses these data in
                       managing its general health care operations. The effort should identify
                       specific actions needed by the Assistant Secretary and the services to
                       correct current cost and workload data collection and reporting problems.
                       It should also ensure, by maintaining all source data and documents, that
                       MEPRS can be audited. This effort may require actions by and coordination
                       with other DOD Assistant Secretaries, and the Secretary should direct their

                       We recommend that the Administrator of the Health Care Financing
Recommendation to      Administration, in collaboration with DOD, identify the baseline’s
the Administrator of   weaknesses and, as appropriate, determine a more reliable baseline. HCFA
HCFA                   efforts should include providing DOD specific guidance on baseline cost
                       components and assessing baseline source data and methods for reliability
                       and compliance with HCFA guidance and regulations. Also, working with
                       DOD, the Administrator should promptly specify the method and criteria for
                       risk-adjusting the Medicare payments.

                       DOD and HCFA commented on a draft of this report. DOD found the report
Agency Comments        valuable in raising issues deserving its immediate attention; agreed with
and Our Evaluation

                       Page 17                                 GAO/HEHS-99-39 DOD/Medicare Subvention

each recommendation for its action; and stated that it would continue
working with HCFA to improve the measurement of LOE and improve its
data systems. HCFA stated that after we made our preliminary findings
known last year, it began working closely with DOD on the LOE data
accuracy issues. HCFA stated that while both parties have agreed thus far to
keep the 1996 baseline, it was awarding a contract to review the
threshold’s weaknesses and identify needed improvements. Also, as we
recommended, HCFA stated that both parties now agree on a payment
reconciliation approach that will be made final shortly. Both parties also
suggested technical changes to the report, which we incorporated where
appropriate. DOD and HCFA comments appear in their entirety in
appendixes V and VI, respectively.

We are sending copies of this report to the Honorable William S. Cohen,
Secretary of Defense, and the Honorable Nancy-Ann Min DeParle,
Administrator of HCFA, and will make copies available to others upon

Please contact me at (202) 512-7111 or Dan Brier, Assistant Director, at
(202) 512-6803 if you or your staff have any questions about this report.
Other GAO staff who contributed to this report are Catherine O’Hara,
Evaluator-in-Charge; Linda Radey; Jonathan Ratner; Phyllis Thorburn; and
Sibyl Tilson.

Stephen P. Backhus
Director, Veterans’ Affairs and
  Military Health Care Issues

Page 18                                GAO/HEHS-99-39 DOD/Medicare Subvention

List of Addressees

The Honorable John W. Warner
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable William V. Roth, Jr.
The Honorable Daniel Patrick Moynihan
Ranking Minority Member
Committee on Finance
United States Senate

The Honorable Floyd D. Spence
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

The Honorable Tom Bliley
The Honorable John D. Dingell
Ranking Minority Member
Committee on Commerce
House of Representatives

The Honorable Bill Archer
The Honorable Charles B. Rangel
Ranking Minority Member
Committee on Ways and Means
House of Representatives

Page 19                             GAO/HEHS-99-39 DOD/Medicare Subvention

Letter                                                                                           1

Appendix I                                                                                      22

Process for
Determining Medicare
Appendix II                                                                                     24

Scope and
Appendix III                                                                                    25

Improvement Plan
Appendix IV                                                                                     28

Establishment of
Health Care Data
Quality Team
Appendix V                                                                                      33

Comments From the
Department of
Appendix VI                                                                                     35

Comments From the
Health Care Financing
Table                   Table 1: Demonstration Sites for Medicare Subvention                     6

                        Page 20                              GAO/HEHS-99-39 DOD/Medicare Subvention


BBA        Balanced Budget Act of 1997
CHAMPUS    Civilian Health and Medical Program of the Uniformed
DOD        Department of Defense
HCFA       Health Care Financing Administration
HMO        health maintenance organization
LOE        level of effort
MEPRS      Medical Expense Performance Reporting System
MTF        military treatment facility
OIG        Office of Inspector General

Page 21                            GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix I

Process for Determining Medicare Payments

              The process for determining whether and how much Medicare pays to DOD
              under the demonstration program begins with the estimation of DOD’s level
              of effort (LOE), or baseline costs. To derive LOE, DOD estimated its actual
              expenses in providing care to retirees during a base, or reference, year.
              Using 1996 as the base year, DOD currently estimates LOE for the six sites at
              $172 million. As agreed by HCFA and DOD, Medicare payment does not start
              until current expenses reach this baseline. Thus, to the extent DOD’s
              baseline expenses may be over- or understated, Medicare either will
              under- or overpay. And, if expenses are captured during the demonstration
              that were not included in the baseline, the baseline costs will be reached
              more easily, which will erroneously trigger payments.

              Medicare payments to DOD involve both interim reimbursement, which is
              monthly, and an annual reconciliation to determine final payment. DOD will
              receive interim payments from Medicare that are based on monthly site
              LOE thresholds. Only when a site’s enrollment in Senior Prime meets a
              specified threshold, which is a percentage of the site’s LOE, will interim
              payments be triggered.16 The site is not required to meet the annual
              threshold—a percentage of the annual LOE—before it is entitled to interim

              At the end of the year, two tests are applied to determine how much, if
              any, of the interim payments DOD can retain. First, expenses for all dual
              eligibles (enrollees and nonenrollees) at all sites must meet or exceed LOE
              ($172 million). Second, expenses for enrollees (as proxied by capitated
              payments for them) must reach or exceed fixed thresholds—30 percent of
              LOE in the first year, 40 percent in the next year, and 50 percent in the

              If DOD passes these two tests, two additional steps determine the final
              payment. First, Medicare’s capitated rate, which is a modified version of
              the Medicare+Choice rate,17 is based on the average cost for Medicare
              enrollees by county. HCFA will “risk adjust” this rate for Senior Prime
              enrollees, raising the rate if the enrollees were sicker than average and
              decreasing the rate if they were healthier. Enrollees’ rates are not changed
              if their health was average. The Memorandum of Agreement signed by
              HCFA and DOD for the demonstration states that risk adjustment will take

                Monthly interim payments are the capitated payments for all enrollees at a site minus the site’s
              monthly threshold. The threshold is the site’s monthly LOE multiplied by a stated percentage
              (30 percent in the first 10 months of the demonstration, 40 percent in the next 9, and 50 percent in the
              final 9 months).
               Medicare’s rate for Senior Prime enrollees is 95 percent of the Medicare+Choice rate, with certain
              exclusions as specified in the Balanced Budget Act and the Memorandum of Agreement.

              Page 22                                                GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix I
Process for Determining Medicare Payments

place only if the evidence of differences in health status is “compelling”;
neither the method of adjustment nor the criteria for distinguishing
compelling evidence from less convincing evidence are given. The second
step requires, for each site, an offset to interim payments to account for
any months in which enrollment fell short of the site’s threshold. Finally,
expenses for space-available care are added to the capitated payments and
baseline LOE is subtracted—the result is the final payment to DOD. The
Balanced Budget Act caps payments to DOD at $50 million in the
demonstration’s first year, $60 million in the second year, and $65 million
in the third year.

Page 23                                     GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix II

Scope and Methodology

              In conducting our evaluation, we reviewed the method for measuring DOD’s
              LOE and ongoing DOD health care costs for Medicare-eligible military
              retirees in the demonstration; we also reviewed key DOD information and
              accounting systems and the data drawn from these systems. We visited
              three MTFs—Brooke Army Medical Center and Wilford Hall Air Force
              Medical Center in San Antonio, Texas, and Naval Medical Center San
              Diego, California. These three centers are expected to account for more
              than half the workload in the six-site demonstration. While at these sites,
              we interviewed command, finance, and accounting staff, and reviewed
              cost and workload data. We also reviewed LOE cost calculations and
              interviewed DOD and HCFA officials responsible for the subvention
              demonstration. In addition, we visited Madigan Army Medical Center, Fort
              Lewis, Washington, shortly after it began delivering care under the
              demonstration. We also conducted an in-depth review of data system
              documentation and Office of Inspector General and other studies related
              to the quality of DOD data systems. The data system documentation we
              examined, our discussions with cognizant officials, and our review of
              other studies confirmed that the data systems used in estimating LOE and
              measuring ongoing DOD health care costs are also used to support DOD
              health budgetary and program decisions, manpower justifications, facility
              “rightsizing” initiatives, and managed care support contract payments. On
              this basis, we believe that our findings about DOD’s data are applicable

              Page 24                                GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix III

DOD’s MEPRS Management Improvement

               Page 25   GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix III
DOD’s MEPRS Management Improvement

Page 26                              GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix III
DOD’s MEPRS Management Improvement

Page 27                              GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix IV

Establishment of Health Care Data Quality

               Page 28        GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix IV
Establishment of Health Care Data Quality

Page 29                                     GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix IV
Establishment of Health Care Data Quality

Page 30                                     GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix IV
Establishment of Health Care Data Quality

Page 31                                     GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix IV
Establishment of Health Care Data Quality

Page 32                                     GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix V

Comments From the Department of Defense

             Page 33       GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix V
Comments From the Department of Defense

Page 34                                   GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix VI

Comments From the Health Care Financing

              Page 35       GAO/HEHS-99-39 DOD/Medicare Subvention
Appendix VI
Comments From the Health Care Financing

Page 36                                   GAO/HEHS-99-39 DOD/Medicare Subvention
                     Appendix VI
                     Comments From the Health Care Financing

Now on p. 4.

Now on p. 5.

Now on p. 9.

Paragraph deleted.

Paragraph deleted.

Now on p. 10.

Now on p. 10.

                     Page 37                                   GAO/HEHS-99-39 DOD/Medicare Subvention
           Appendix VI
           Comments From the Health Care Financing

(101607)   Page 38                                   GAO/HEHS-99-39 DOD/Medicare Subvention
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