CHAMPUS and the Military Health Care Programs

ARC has had a long association with the Department of Defense health care programs, dating back to 1975 when Gordon Trapnell analyzed the cost of the mental health and substance abuse benefits and expenditure under CHAMPUS for the office of the Assistant Secretary for  Health Affairs. From 1978 to 1985, ARC was involved in a variety of OASD(HA) projects including: Data Management Information System (DMIS), Resource Analysis and Planning System (RAPS), UCA/USM System  Application Methodologies, Resource Requirements Forecasting System, and Physician Requirements Integrated Specialty Model (PRISM). ARC has also had extensive experience in working with the Biometrics data systems of the Army, Navy, and Air Force medical departments for analysis of health services utilization patterns, and with CHAMPUS utilization and cost data. In 1983, ARC assisted OCHAMPUS by negotiating a feasible "interface" between the DEERS and CHAMPUS fiscal intermediary claims processing systems that permitted the interface to be implemented.

During the last four years, ARC has assisted TRICARE/CHAMPUS in setting up an effective cost evaluation process for managed care proposals to assume responsibility for an expanded multiple choice TRICARE/CHAMPUS on an at-risk basis. The expanded TRICARE/CHAMPUS offers military beneficiaries a choice of an HMO, a PPO and the traditional FFS plan. ARC has contributed substantively to development of the cost evaluation  methodology now used by TRICARE/CHAMPUS to evaluate managed care proposals. During the last two years, ARC staff have served as members of the official cost evaluation team to determine the managed care  capacity of bidding organizations and the most likely effect they will have on the cost of each of the options offered.

Prior to being retained by TRICARE/CHAMPUS, ARC personnel gained considerable experience (through GRTCA) in assisting organizations that contract with DoD and TRICARE/CHAMPUS to provide health services. For example, ARC personnel assisted the Blue Cross and Blue Shield Plans of Florida and Georgia and of Louisiana in preparing bids for "TRICARE/CHAMPUS Reform Initiative" contracts. ARC personnel also have counseled HMOs and other managed care organizations in analyzing their experience, setting premium rates and negotiating provider contracts, experience which provides insights into the feasibility and probable effectiveness of proposed managed care arrangements in TRICARE/CHAMPUS.