DEMONSTRATION PROJECT ON MANAGEMENT OF HEALTH CARE IN CATCHMENT AREAS AND OTHER DEMONSTRATION PROJECTS

SEC. 731. DEMONSTRATION PROJECT ON MANAGEMENT OF HEALTH CARE IN CATCHMENT AREAS AND OTHER DEMONSTRATION PROJECTS (a) Demonstration Projects.—The Secretary of Defense shall conduct projects designed to demonstrate the alternative health care delivery system described in subsection (b). Each military department shall carry out at least one such project. The projects— (1) shall begin during fiscal year 1988, if feasible, and continue for not less than two years; (2) shall each include all covered beneficiaries within one catchment area of a medical facility of the uniformed services; and (3) shall be designed, with respect to the number and location of demonstration sites and otherwise, to ensure that the results of such projects will likely be representative of the results of a nationwide implementation. (b) Alternative Health Care Delivery System.—The alternative health care delivery system referred to in subsection (a) that the projects shall demonstrate is a system under which the commander of a medical facility of the uniformed services is responsible for all funding and all medical care of the covered beneficiaries in the catchment area of the facility. The commander may use any type of health care delivery system, for any scope of coverage, he considers appropriate. 101 STAT. 1118 (c) Additional Demonstration Projects Required.—(1) The Secretary of Defense also shall conduct the projects described in paragraph (2) for the purpose of demonstrating alternatives to providing health care under the military health care system. The demonstration projects shall be carried out in accordance with this subsection. (2) The demonstration projects are as follows: (A) The Tidewater mental health demonstration project (Solicitation No. MDA906-86-C-0001). (B) The Fort Drum demonstration project. (C) The civilian-run primary care clinics known as PRIMUS and NAVCARE. (D) The New Orleans demonstration project, if a contract is awarded as a result of the solicitation issued in fiscal year 1987 (Solicitation No. MDA903-87-R-0047). (E) A fiscal intermediary demonstration project, to be implemented by amending one or more existing Department of Defense contracts with fiscal intermediaries in a State or region to require the intermediary to demonstrate a managed health care network with cost-containment initiatives, such as utilization review, pre-admission screening, second surgical opinions, contracting for care on a discounted basis, and other methods. (F) Catchment area management demonstration projects described in subsection (a). (G) A demonstration project for non-active duty beneficiaries in the catchment area of the Philadelphia Naval Hospital that demonstrates a managed health care network. (3) Not later than 60 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report that provides an outline and discussion of the manner in which the Secretary intends to structure and conduct each demonstration project required under this subsection. (4) The Secretary of Defense shall develop a methodology to be used in evaluating the results of the demonstration projects required under this subsection. The Secretary shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on such methodology no later than 30 days after the development of the methodology is completed. (5) Each project required under this subsection shall begin during fiscal year 1988 (or shall continue in the case of a project begun before fiscal year 1988). (6) The Secretary of Defense shall evaluate the demonstration projects required under this subsection, using the methodology developed under paragraph (4), as alternatives to methods of providing health care under the military health care system. (d) Authority.—For purposes of carrying out this section, the Secretary of Defense may delegate the authority given in sections 1079, 1086, 1092, 1097, 1098, and 1099 of title 10, United States Code. (e) Reports.—(1) The Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives— (A) an interim report on each demonstration project described in this section after such project has been in effect for at least 12 months; and (B) a final report on each such project when each project is completed. (2) Each report shall include— 101 STAT. 1119 (1) a description of any results of the demonstration project; (2) a comparison of the costs of providing health care under the system used in the demonstration project with the costs of providing health care under CHAMPUS and under other alternative health care delivery systems; and (3) an analysis and evaluation of the benefits of incorporating the health care management techniques demonstrated by the project into the military health care system as it exists at the time of the report or into such health care system in conjunction with any other health care delivery systems which have been or are being studied under another demonstration project. (f) Definitions.—In this section: (1) The term “catchment area” means the area within approximately 40 miles of a medical facility of the uniformed services. (2) The term “CHAMPUS” has the meaning given such term by section 1072(4) of title 10, United States Code. (3) The term “covered beneficiary” means a beneficiary under chapter 55 of title 10, United States Code.