The Medicare-DoD Subvention Demonstration tested the feasibility of making cost-effective, Medicare-covered health care services available to Medicare-eligible Department of Defense (DoD) beneficiaries through the military TRICARE health insurance program and military medical treatment facilities (MTFs). The Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA), and the DoD implemented the demonstration at six sites in response to the Balanced Budget Act of 1997 (BBA).

The Secretaries of the Department of Health and Human Services (DHHS) and DoD executed a memorandum of agreement (MOA) in 1998 that specified how to establish and operate the Medicare-DoD Subvention Demonstration,...

In this section, we describe the general approach used for the evaluation, data requirements and limitations, choices for MTFs to serve as control sites for evaluating the demonstration’s effects, and methods used for analyses.

We used a combination of process and outcome evaluation methods to develop a comprehensive picture of the experiences and effects for CMS, DoD, and the individual demonstration sites in implementing TSP. The process evaluation gathered and analyzed information on the implementation activities and behavioral interactions among demonstration participants during implementation and operation of Senior Prime. The quantitative evaluation was designed to assess effects of subvention on...

The first tasks undertaken by TMA and the demonstration sites were the design of the Senior Prime program, at both the corporate and site levels, and the preparation of written applications for certification as Medicare managed care plans. After the Medicare application for each Senior Prime plan had been submitted, and CMS had deemed it complete, CMS conducted a certification site visit to review the application and related documents. As CMS approved each application, it sent a contract letter to DoD confirming the establishment of the Senior Prime plan. The contract defined the plan’s service area by county and zip...

Military retirees and dependents have long been seeking initiatives like Senior Prime with the hope of regaining access to the military health care system. There is strong sentiment among this population that the military has broken its promise to provide them health care coverage for life. After a series of military installation closures and introduction of TRICARE, older beneficiaries found they were last in line for MTF services on a space-available basis. Retiree associations had been pushing DoD hard to fulfill that promise, and they lobbied Congress for legislation to create programs they feel are their due. These associations supported...

The introduction of TSP in the demonstration sites stimulated a migration of Medicare-eligible DoD beneficiaries. Many chose to enroll in the new program, while others remained with their existing coverage arrangements. In the previous section we described enrollment trends and estimated models to examine which factors contributed to demand for Senior Prime. In this section we examine changes in aggregate costs, per-capita costs, and service utilization by dually eligible beneficiaries resulting from the introduction of Senior Prime.

We describe the effects of Senior Prime in the Medicare fee-for-service sector and the DoD sector. For the DoD sector, this includes MTF...

Senior Prime plans were discontinued on the December 2001 end date for the demonstration. DoD has been considering an alternative MTF-based model for former Senior Prime enrollees and perhaps for other enrollees. Because many findings from the Senior Prime evaluation are relevant for similar managed care models, we assess the implications of our findings with respect to Senior Prime specifically, as well as to other DoD-based models.

As we noted in Section 1, CMS and DoD share a commitment to the welfare of dually eligible beneficiaries and to the pursuit of ways to provide them cost-effective health benefits. Historically, DoD...