Military Health Care: Recovery of Medical Costs From Liable Third Parties Can Be Improved
NSIAD-90-49
Published: Apr 19, 1990. Publicly Released: May 04, 1990.
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Highlights
Pursuant to a congressional request, GAO evaluated the effectiveness of the Department of Defense's (DOD) medical cost recovery in third-party liability cases.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should enact legislation to allow DOD to retain a portion of the recovered medical care costs. This should both provide DOD with the incentive and funding to increase recoveries and result in increased Treasury receipts. However, these funds should be restricted to supporting third party liability activities at military medical facilities and Judge Advocates General claims offices. |
Closed – Implemented
|
Title 10, U.S. Code, section 1095, was revised by Congress during 1990 so as to allow military treatment facilities to retain some collections to fund recovery efforts. |
| Congress should enact legislation to enable recovery by the government in states with no-fault automobile insurance laws. |
Closed – Implemented
|
Title 10, U.S. Code, section 1095, was modified by Congress in October 1990 to enable cost recovery in states with no-fault automobile insurance laws. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Air Force | The Secretaries of the Army, the Navy, and the Air Force should modify military service regulations to set a consistent, cost-effective minimum cost threshold for reporting outpatient cases with potential third-party liability to the Judge Advocates General (JAG). |
Closed – Implemented
Air Force regulations now require medical treatment facilities to report all outpatient cases with potential for third-party liability to JAG regardless of the cost involved.
|
| Department of the Navy | The Secretaries of the Army, the Navy, and the Air Force should modify military service regulations to set a consistent, cost-effective minimum cost threshold for reporting outpatient cases with potential third-party liability to the Judge Advocates General (JAG). |
Closed – Implemented
The Navy has issued instructions requiring the reporting of all outpatient cases to JAG regardless of cost. These instructions will be finalized in regulation revisions, expected to have been completed by the end of 1993. The services and DOD are still holding discussions regarding a consistent standard. Guidance on this issue was published in BUMED instruction 7000.7, dated October 1993.
|
| Department of the Army | The Secretaries of the Army, the Navy, and the Air Force should modify military service regulations to set a consistent, cost-effective minimum cost threshold for reporting outpatient cases with potential third-party liability to the Judge Advocates General (JAG). |
Closed – Implemented
U.S. Army Regulation 27-20 has been modified so as to remove any minimum cost for reporting potential third-party claims, whether inpatient or outpatient. A pilot program has also been established for determining the best methods for identifying outpatient cases with third-party liability potential.
|
| Department of the Air Force | The Secretaries of the Army, the Navy, and the Air Force should instruct medical treatment facilities to make maximum use of computerized patient information systems to help identify potential third-party cases and to ensure that these cases are reported to JAG. The Automated Quality of Care and Evaluation Support System could be used for this purpose for inpatient motor-vehicle accidents until better systems become available. |
Closed – Implemented
A checklist is now being used with this system so as to validate the accuracy and completeness of potential third-party liability cases reported on Air Force Form 1488.
|
| Department of the Navy | The Secretaries of the Army, the Navy, and the Air Force should instruct medical treatment facilities to make maximum use of computerized patient information systems to help identify potential third-party cases and to ensure that these cases are reported to JAG. The Automated Quality of Care and Evaluation Support System could be used for this purpose for inpatient motor-vehicle accidents until better systems become available. |
Closed – Implemented
Navy efforts to better apply third-party liability identification to Automated Quality of Care and Evaluation Support System (AQCESS) software are still under way, and additional funding has been requested to support this effort. Specific guidance will be included in a pending revision of NAVMEDCOMINST 6320.3B, which should be completed by the end of 1993. This guidance was instead published in BUMED Instruction 7000.7, dated October 1993.
|
| Department of the Army | The Secretaries of the Army, the Navy, and the Air Force should instruct medical treatment facilities to make maximum use of computerized patient information systems to help identify potential third-party cases and to ensure that these cases are reported to JAG. The Automated Quality of Care and Evaluation Support System could be used for this purpose for inpatient motor-vehicle accidents until better systems become available. |
Closed – Implemented
The Army Health Services Command has modified AQCESS to identify third-party cases until such time as CHCS is funded and put in service.
|
| Department of the Navy | The Secretary of the Navy should instruct the Naval Medical Command to develop and implement procedures for medical facilities to identify and report potential third-party cases. These procedures should require hospital clinic participation in the identification process. |
Closed – Implemented
Such procedures have been established by the Bureau of Medical Affairs Notice 6320.
|
| Department of the Navy | The Secretary of the Navy should instruct the Naval Medical Command to review the adequacy of Office of Medical Affairs questionnaires and encourage service members to submit them to the Office of Medical Affairs at the same time that they request payment of civilian health care provider charges. |
Closed – Implemented
Bureau of Medical Affairs Form 6320/10 has been revised so as to obtain the needed data. Submission of this form is now required at the time claims are submitted for Navy consideration.
|
| Department of the Air Force | The Secretary of the Air Force should ensure that regulations are followed regarding the reporting to JAG of injury cases involving payment for treatment in civilian health care facilities. |
Closed – Implemented
Air Force Headquarters has ensured this by sending all commands a checklist addressing this problem and instructing military medical treatment facilities of their responsibilities regarding the submission of these cases.
|
| Department of the Army | The Secretary of the Army should direct the Health Services Command (HSC) to develop and implement procedures for medical facilities to use in identifying and reporting potential third-party liability cases. These procedures should require hospital clinic participation in the identification process. |
Closed – Implemented
The Army HSC issued third-party collection guidance to commanders in August 1991.
|
| Department of Defense | The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to determine at what cost CHAMPUS outpatient cases are economical for the government to recover and reach an agreement with JAG regarding the minimum cost of outpatient cases that CHAMPUS fiscal intermediaries should be required to report to JAG claims offices. |
Closed – Not Implemented
The Office of CHAMPUS has determined that a minimum cost level of $200 is economical for reporting outpatient cases for recovery action. Further CHAMPUS and military service action to implement a consistent standard for reporting these cases is awaiting the completion of a contracted study regarding fiscal intermediary costs to implement this effort. A contracted study regarding fiscal intermediary costs to implement a minimum economic level for reporting CHAMPUS third-party outpatient cases did not resolve this issue. The Office of CHAMPUS therefore intends to meet with the services to determine a minimum economical cost level for reporting these cases. DOD General Counsel, OCHAMPUS OGC, and the services evaluated this issue and concluded the current $500 threshold would be maintained because it was determined that administrative costs associated with lowering the threshold would likely not be justified by expected collections.
|
| Department of Defense | The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to determine which diagnostic codes fiscal intermediaries should be allowed to exclude in determining which claims should be reviewed for third-party potential. |
Closed – Implemented
The Office of CHAMPUS has modified its Operating Manual and contracts with fiscal intermediaries to prevent the exclusion of any diagnostic codes as part of the process for identifying potential third-party liability cases.
|
| Department of the Air Force | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to modify JAG regulations governing third-party recovery so as to establish consistent and cost-effective minimum amounts for claims assertions. |
Closed – Implemented
The Air Force JAG has set a minimum claims assertion level at $150, but allows claims assertion for lesser amounts if they are immediately collectible.
|
| Department of the Navy | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to modify JAG regulations governing third-party recovery so as to establish consistent and cost-effective minimum amounts for claims assertions. |
Closed – Implemented
Navy JAG has revised its regulation by memo to establish a minimum claims assertion amount of $200, but JAG offices are encouraged to assert for lesser amounts if these claims appear collectible.
|
| Department of the Army | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to modify JAG regulations governing third-party recovery so as to establish consistent and cost-effective minimum amounts for claims assertions. |
Closed – Implemented
The U.S. Army Claims Service (JAG) has eliminated all minimum thresholds for reporting and asserting third-party liability claims.
|
| Department of Defense | The Secretary of Defense should either direct the military services to increase the resources assigned to conducting third-party liability recovery activities at military medical facilities and JAG offices, or explore the feasibility of contracting out third-party liability recovery activities. |
Closed – Implemented
The military services have requested additional funding to increase recovery activities. Recent changes to title 10, U.S. Code, will also result in the additional funds and incentives needed to increase third-party recovery activities.
|
| Department of the Army | The Secretary of the Army should instruct the Health Services Command to establish effective internal controls for monitoring the identification and timely reporting of potential third-party liability cases. These controls should include a requirement for medical treatment facilities, including civilian payment offices, to keep standardized logs of all cases identified and reported to JAG. |
Closed – Implemented
The Army has established appropriate standardized logs and now requires a well-documented audit trail for potential third-party recovery actions.
|
| Department of the Navy | The Secretary of the Navy should instruct the Navy Medical Command to establish similar internal controls for third-party liability identification and reporting to JAG by Navy medical activities. |
Closed – Implemented
As a result of the Navy Medical Command evaluation of internal controls, the Navy Bureau of Medical Affairs has issued draft guidance requiring medical treatment facilities to use a daily log system for identifying third-party liability cases. Final revision of Navy Medical Command Instruction 6320.3B is expected by the end of 1993. These instructions were issued instead in BUMED Instruction 7000.7, dated October 1993.
|
| Department of Defense | The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to require that CHAMPUS fiscal intermediaries maintain logs of potential third-party liability cases actually reported to JAG. |
Closed – Implemented
The Office of CHAMPUS has modified the CHAMPUS Operations Manual and fiscal intermediary contracts to require these logs.
|
| Department of the Air Force | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to establish better internal controls for the evaluation of claims resolution effectiveness. Specifically, JAG claims offices need to record the potential third-party liability cases they receive, the cases they discard, and the reasons for discarding them. |
Closed – Implemented
The requirement for Air Force bases to maintain third-party liability case disposition logs will become formal guidance through Air Force Instruction 51-502, which is expected to be issued in early 1994. This requirement was contained in Air Force Instruction 51-502, dated July 20, 1994, taking effect in September 1994.
|
| Department of the Navy | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to establish better internal controls for the evaluation of claims resolution effectiveness. Specifically, JAG claims offices need to record the potential third-party liability cases they receive, the cases they discard, and the reasons for discarding them. |
Closed – Implemented
The Navy Judge Advocate issued a memorandum in July 1990 requiring the establishment and maintenance of such records.
|
| Department of the Army | The Secretaries of the Army, the Navy, and the Air Force should direct service JAG to establish better internal controls for the evaluation of claims resolution effectiveness. Specifically, JAG claims offices need to record the potential third-party liability cases they receive, the cases they discard, and the reasons for discarding them. |
Closed – Implemented
The Army JAG now requires all offices to keep and maintain such records.
|
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Topics
Billing proceduresCollection proceduresDefense cost controlHealth care cost controlHealth insuranceLiability (legal)Medical expense claimsMedical information systemsMilitary hospitalsReimbursements to government