Evaluation of the Medicare-DoD Subvention Demonstration: Final Report

The Centers for Medicare and Medicaid Services (CMS, formerly the Health Care Financing Administration) and the Department of Defense (DoD) have been testing the feasibility of making Medicare-covered health care services available to Medicare-eligible DoD beneficiaries through the TRICARE program (the managed care program of the Military Health Service) and military treatment facilities (MTFs). The vehicle used was the Medicare-DoD Subvention Demonstration, which was established by the Balanced Budget Act of 1997 (BBA). The goal of the demonstration was to implement cost-effective alternatives for care for this dually eligible population while ensuring budget neutrality, that is, neither CMS's nor DoD's total costs increase. The Secretaries of the Department of Health and Human Services and of the Department of Defense executed a Memorandum of Agreement that specified how the subvention demonstration was to be designed and operated. The Memorandum provided for an independent evaluation of the demonstration, which RAND conducted. This report describes the final results of the RAND evaluation.