The six sites we studied can support operational findings about the demonstration as a whole. Several complex issues had to be resolved along the way. However, because of the time required to develop the MOA and complete the application and review process, the demonstration will cover 24 to 28 months of service rather than 3 years. The first site certified, Madigan, began service September 1, 1998, and all of the sites had begun delivering services by January 1, 1999. The demand for enrollment appeared to reflect both the temporary nature of the demonstration and site-specific factors. The fact that the temporary nature of this demonstration reduced enrollment numbers to an unknown degree argues that the demonstration may not be an accurate indicator of the number of people who would enroll in a permanent program. Various Site Factors Also Made a Difference

Our interviews indicated that there were also variables at each site that affected enrollment, such as the breadth of services available at the MTF, amount of space-available care at the MTF, health care environment in the area, and maturity of the TRICARE program. But in other respects, preparing for the implementation of the Senior Prime demonstration brought useful new practices to the MTFs. Preparing for Service Delivery Also Revealed Operational Difficulties

Sites’ experiences during marketing, enrollment, and the first weeks of service delivery revealed several operational difficulties. Operating in a dual- systems environment has created some points of strain for the test sites. Experience in the Start-up Phase Raises Issues for the Future

Experience in the start-up phase raises issues for the later years of this demonstration program, as well as for any future subvention program. Conclusions

A demonstration is intended to produce useful evidence of the feasibility or effectiveness of a new approach, and the start-up period of the Medicare Subvention Demonstration has done so. This demonstration provides evidence that it is feasible for DOD-designed plans to meet HCFA requirements for Medicare managed care plans and begin delivering health care to seniors, building on the TRICARE Prime framework but adapting it to the needs of this older population. The start-up period also offered lessons regarding coordination within and between DOD and HCFA. Recommendations to the Secretary of Defense

We recommend that the Secretary of Defense direct the Assistant Secretary of Defense (Health Affairs) to work with HCFA to examine Medicare and DOD procedures, measurement, and reporting systems with an eye toward seeking waivers (where warranted) and eliminating duplication to the extent possible; work with HCFA to determine conditions for transitioning out of the demonstration into other coverage (including Medicare options, access to Medigap insurance, and care at the MTF) and to notify enrollees of these conditions as soon as possible; determine (in advance, whenever possible) which HCFA directives and operational matters will be handled centrally and will be uniform across the Senior Prime program and which matters will be handled at the site level; and review plans for the provision of health care to seniors during times of military deployment and either (1) ensure that staffing at participating MTFs is sufficient to provide seniors with primary care or (2) provide for primary care to be delivered through some other means. Preparing for HCFA Approval

This site’s primary source of information on Medicare requirements was a local independent consultant who had worked with Health Care Financing Administration’s (HCFA) regional office staff in Denver. Information from other Department of Defense (DOD) demonstration sites about their experiences was also useful. 13, 1999). 12, 1999).
Why GAO Did This Study

Pursuant to a legislative requirement, GAO provided information on the Department of Defense's (DOD) implementation of its Medicare Subvention Demonstration program, focusing on: (1) progress in establishing the ground rules for program operation, receiving Health Care Financing Administration (HCFA) approval, attracting enrollment, and starting to deliver health services; (2) the useful practices and operational difficulties that emerged during program start-up; and (3) issues for the future.

What GAO Found

GAO noted that: (1) the start-up period of the Medicare Subvention demonstration was successful; (2) despite unanticipated delays, the six demonstration sites met the requirements for Medicare managed care plans, enrolled substantial numbers of beneficiaries, and began delivery of health care services by January 1, 1999; (3) the sites' experience in dealing with the difficulties that arose along the way has yielded valuable lessons and has also pinpointed issues that remain to be resolved; (4) while the successful start-up of the demonstration is encouraging, it will be some time before the results of its mature operation can be assessed; (5) establishing the ground rules for the demonstration took longer and HCFA approval process was more demanding than anticipated; (6) as a result, the demonstration will cover 24 to 28 months of service rather than 3 years; (7) the initial demand for enrollment overall was not as great as expected, in part because retirees were wary of a temporary program and feared that they might be unable to obtain affordable supplementary insurance at the demonstration's end; (8) enrollment also reflected site-specific factors, such as prospects for getting space-available care at a military treatment facility (MTF) without joining Senior Prime, the breadth of services available at the MTF, and options for care elsewhere in the community; (9) preparing for the start-up of the demonstration brought some useful new senior health care and management practices to the MTFs, but also revealed operational difficulties; (10) the fact that this demonstration program operates within two bureacracies--DOD and HCFA--caused some points of strain; (11) being new to Medicare, demonstration sites had to devote substantial DOD staff and consultant time learning HCFA requirements; (12) the dual organizational structures within DOD carry with them the potential for conflict; (13) additionally, dual DOD and HCFA procedures may result in duplication of effort; (14) experience in the start-up phase of this demonstration raises issues for the future of this or other similar demonstrations; and (15) enrollees will need to know several months in advance of the end of this demonstration whether service will continue so that they can plan for their continued health care.