Summary

Under the CHAMPUS Reform Initiative, private-sector contractors provide beneficiaries with managed health care services under regional, at-risk contracts that supplement the care provided in military hospitals and clinics. In a December 1993 letter, the Secretary of Defense told Congress that the Initiative, with some benefit revisions and managerial changes, would be the most cost-efficient way of providing health care to beneficiaries in Arkansas, Oklahoma, and parts of Louisiana and Texas--the Defense Department's (DOD) health service region 6. GAO found that the analyses supporting DOD's certification for expanding the CHAMPUS Reform Initiative into region 6 were done in a reasonable way. Moreover, the analyses fairly represent the likely impact of the modified CHAMPUS Reform Initiative on cost, quality, and access.

GAO found that: (1) DOD reasonably evaluated the costs of expanding the modified CRI program to DOD region 6 for fiscal years 1995 through 1999; (2) the analyses fairly represent the likely impact of the modified CRI program on health care cost, quality, and access; (3) military health care costs under the modified CRI program will be less expensive than standard CHAMPUS program costs; and (4) beneficiaries under the modified CRI program will have better access to quality care.