Summary

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), focusing on: (1) the extent of its funding shortfalls; (2) reasons for its funding shortfalls; and (3) DOD plans to reduce CHAMPUS costs in fiscal year (FY) 1990 and FY 1991.

GAO found that: (1) from FY 1985 to FY 1989, CHAMPUS funding shortfalls totalled $1.8 billion; (2) in FY 1990, DOD expected an additional $441-million funding shortfall; (3) in FY 1991, DOD believed that there would be no funding shortfalls, because of its actions to reduce CHAMPUS costs; (4) low DOD budget requests were a major contributor to CHAMPUS funding shortfalls; (5) unexpected start-up costs and congressional direction were also contributors to yearly funding shortfalls; (6) DOD financed the shortfalls by reprogramming funds, supplementing appropriations, or carrying over claims to subsequent years; (7) to reduce CHAMPUS costs, DOD initiated efforts aimed at accommodating more of the CHAMPUS work load in the direct care system; and (8) DOD efforts to reduce CHAMPUS costs should bring about substantial savings, but if the efforts fail, DOD may continue to experience substantial shortfalls.