COMPTROLLER GENERAL STUDIES AND REPORT ON DIFFERENTIAL PAYMENTS TO CHILDREN’S HOSPITALS FOR HEALTH CARE FOR CHILDREN DEPENDENTS AND MAXIMUM ALLOWABLE CHARGE FOR OBSTETRICAL CARE SERVICES UNDER TRICARE.

SEC. 734. COMPTROLLER GENERAL STUDIES AND REPORT ON DIFFERENTIAL PAYMENTS TO CHILDREN’S HOSPITALS FOR HEALTH CARE FOR CHILDREN DEPENDENTS AND MAXIMUM ALLOWABLE CHARGE FOR OBSTETRICAL CARE SERVICES UNDER TRICARE.(a) Studies Required.—The Comptroller General of the United States shall conduct the following studies:(1) A study of the effectiveness of the current system of differential payments to children’s hospitals for health care services for dependent children of members of the uniformed services under the TRICARE program in achieving the objective of securing adequate health care services for such dependent children under that program.(2) A study of the effectiveness of the TRICARE program in achieving the objective of adequate access to high quality obstetrical care services for family members of members of the uniformed services. (b) Elements of Children’s Hospitals Study.—The study required by subsection (a)(1) shall include the following:(1) A description of the current participation of children’s hospitals in the TRICARE program.(2) An assessment of the current system of payments to children’s hospitals under the TRICARE program, including differential payments to such hospitals for health care services described in subsection (a)(1), including an assessment of—(A) the extent to which the calculation of such differential payments takes into account the complexity and extraordinary resources required for the provision of such health care services;(B) the extent to which TRICARE payment rates, including the children’s hospital differential, have kept pace with inflation in health care costs for children’s hospitals since the establishment of the differential in 1988; 119 STAT. 3354(C) the extent to which such differential payments provide appropriate compensation to such hospitals for the provision of such services; and(D) any obstacles or challenges to the development of future modifications to the system of differential payments.(3) An assessment of the adequacy of, including any barrier to, the access of dependent children described in subsection (a)(1) to specialized hospital services for their illnesses under the TRICARE program.(c) Elements of Obstetrical Care Services Study.—The study required by subsection (a)(2) shall include the following:(1) A description of the current participation of civilian providers of obstetrical care services in the TRICARE program.(2) An assessment of the current system of payments for obstetrical care services, including an assessment of—(A) the extent to which the calculation of such payments takes into account the complexity and resources required;(B) the extent to which TRICARE payment rates have kept pace with inflation in health care costs;(C) the extent to which such payments provide appropriate compensation to providers of such services; and(D) obstacles or challenges to the development of future improvements to access to high quality obstetrical services, including referral patterns and inclusion of all necessary services within the maximum allowable charge.(3) An assessment of the adequacy of the access of military family members to needed obstetrical care services.(d) Report.—Not later than May 1, 2006, the Comptroller General shall submit to the Secretary of Defense and the congressional defense committees a report on the studies required by subsection (a), together with such recommendations, if any, as the Comptroller General considers appropriate for modifications of the current system of differential payments to children’s hospitals and payments for obstetrical care services in order to achieve the objectives described in that subsection. (e) Transmittal to Congress.—(1) In general.—Not later than November 1, 2006, the Secretary of Defense shall transmit to the congressional defense committees the report submitted by the Comptroller General to the Secretary under subsection (d).(2) Implementation of modifications.—If the report under paragraph (1) includes recommendations of the Comptroller General for modifications of the current system of differential payments to children’s hospitals or of payments for obstetrical care services, the Secretary shall transmit with the report—(A) a proposal for such legislative or administration action as may be required to implement such modifications; and(B) an assessment and estimate of the costs associated with the implementation of such modifications.(f) Definitions.—In this section:(1) Differential payments to children’s hospitals.—The term “differential payments to children’s hospitals” means the additional amounts paid to children’s hospitals under the 119 STAT. 3355 TRICARE program for health care procedures for severely ill children in order to take into account the additional costs associated with such procedures for such children when compared with the costs associated with such procedures for adults and other children.(2) Payments for obstetrical care.—The term “payments for obstetrical care services” means the maximum allowable payment rates established by the Department of Defense under the TRICARE program for routine obstetrical care, including prenatal care, laboratory tests in accordance with accepted obstetrical practices standards, specialty care if needed, delivery, and post-partum maternal care. (3) Tricare program.—The term “TRICARE program” has the meaning given that term in section 1072(7) of title 10, United States Code.