Defense Department hospital commanders have been slow to apply their authority to use resource-sharing agreements to cut costs, according to a General Accounting Office report.
Under such arrangements, military healthcare programs pay veterans hospitals to treat military beneficiaries.
Congress passed legislation in 1989 and 1992 that authorizes the use of funds of the Civilian Health and Military Program of the Uniformed Services to reimburse Department of Veterans Affairs hospitals for treating CHAMPUS beneficiaries.
By sharing resources, military and VA hospitals can treat patients more efficiently. CHAMPUS also can save money because the military program would pay the VA less than private-sector providers.
But so far, only the VA hospital in Asheville, N.C., has begun receiving reimbursement for treating CHAMPUS patients. It started treating CHAMPUS beneficiaries in February in a pilot project that's aimed more at retired CHAMPUS beneficiaries than at current military families.
That sharing agreement was delayed nearly four years by disagreements that ranged from the use of CHAMPUS diagnosis-related groups to standards for utilization review and quality assurance, the report said.
The Asheville VA facility is outside the 40-mile radius of a military hospital, known as a "catchment area."
Within such areas CHAMPUS beneficiaries must first find out if the military hospital can treat them before they're allowed to go elsewhere.
For VA hospitals outside of catchment areas, neither the Defense Department nor VA has searched its system to find opportunities for such sharing agreements, the report said.
Inside catchment areas, the report said, military hospital commanders have not proposed using part of their CHAMPUS money to pay for beneficiaries' care in VA hospitals.
Army, Navy and Air Force hospitals were allocated nearly $1.4 billion in CHAMPUS funds in fiscal year 1994.
The report said military medical officials typically are unclear about their authority to establish such sharing arrangements and recommends that the Defense Department offer a better explanation that identifies opportunities for sharing agreements.