A Cost Analysis Comparing CHAMPUS to Treatment Provided within Ireland Army Community Hospital

This Graduate Management Project identified high-cost CHAMPUS claims by diagnosis in the Fort Knox catchment area and calculated the cost of providing care to treat these same diagnoses within the medical treatment facility MTF. In order for Fort Knoxs Gateway to Care program to be successful and to negotiate fees with civilian providers, customary and reasonable charges within the catchment area must be known first. Once determined, these comparisons can serve as valuable tools in negotiating treatment fees with civilian providers. First, the project consisted of a thorough examination of the Civilian Health and Medical Program of the Uniformed Services CHAMPUS claims by diagnosis submitted to the government during FY90 in the Fort Knox catchment area. Six of the most expensive diagnoses that were reimbursed to civilian providers by the government were identified. Next, the costs of providing treatment at Ireland Army Community Hospital for these diagnoses were calculated through the use of the Medical Expense and Performance Reporting System MEPRS. By comparing the two cost amounts it could be determined which method of providing treatment was more economical for the government, treatment within the MTF or through CHAMPUS. This study also examined costs for treatment of the identified diagnoses at other civilian health care facilities within the catchment area. Hardin Memorial Hospital provides billed charges to the public. These charges per diagnosis were compared to MTF and CHAMPUS costs. Through this comparison, reasonable reimbursements rates in our catchment area were determined. Also, the data provided insight into the cost effectiveness and productivity of our MTF. As expected, it was found that treatment within the MTF was much cheaper to the government than providing treatment through CHAMPUS. Differences between CHAMPUS costs and costs for treatment within the MTF varied up to 500.