Defense Health: Action Needed to Improve Civilian Emergency Billing and Debt Collection

What the GAO found

Department of Defense (DOD) documentation and officials have identified several benefits of providing care to civilian emergency patients at DOD medical facilities (MTFs). For example, providing such care can promote the readiness of military health care providers because it increases the volume of patients they treat and allows them to treat a wider range of cases, including complex cases. However, the Department of Defense has not assessed and monitored the extent to which the provision of emergency medical care to civilians offers the appropriate case mix and volume required to maintain readiness. This would allow the Department of Defense to determine whether continuing or expanding this care supports readiness.

The Department of Defense has limited oversight of billing and debt collection for emergency civilian patients. GAO found that MTFs did not always update DOD’s billing system to reflect payments collected while the debt was with the Treasury Department (see figure) because DOD has not issued guidance that clarifies the extent to which MTFs must to do this. Without guidance to ensure accurate reporting of billing and collection efforts, DOD leaders risk being unable to account for potentially millions of dollars collected each year. The Department of Defense also risks making civilian care decisions using incomplete information.

Extent to which medical treatment facilities have updated the DoD billing system to reflect payments collected while the debt was owed to the Treasury Department

The Department of Defense does not consistently use or report financial relief options for civilian emergency patients, according to GAO’s analysis of data from the Department of Defense and the Treasury Department. Specifically, the DOD

rarely uses certain options for financial relief – including a medical debt waiver or settlement for less than the full amount owed. For example, only the Navy has confirmed approval of waivers from fiscal years 2016 through 2021, and

fails to consistently inform civilian emergency patients of options for requesting financial relief, including medical debt discharge or settlement.

By systematically tracking and monitoring the use of waivers, the Department of Defense can better understand the number of waiver requests it receives, the amount of debt being waived, and the circumstances under which it grants them to ensure timeliness and consistency . Additionally, by clearly communicating financial relief options, DoD can help civilian emergency patients better understand these options and pursue them in a timely manner.

Why did the GAO do this study?

DOD primarily provides medical care to service members, their dependents, and retirees. In 2010, DOD was authorized to provide emergency assistance to civilians at MTFs. DOD is generally required to bill civilians for care provided at MTFs, but the cost of such care can create financial hardship for these civilian patients. When the debt becomes delinquent, DOD turns it over to the Treasury Department for collection.

The National Defense Authorization Act for Fiscal Year 2021 contains a provision for GAO to evaluate the Department of Defense’s efforts to bill and collect debts for civilian emergency assistance in the MTF, among other things. This report assesses the extent to which the Department of Defense has (1) identified the benefits of providing emergency assistance to civilians, (2) monitored billing and debt collection for emergency assistance provided to civilians, and (3) used and reported financial relief options to reduce the impact of the cost of care for civilian emergency patients.

GAO analyzed DOD and Treasury billing data for services provided from fiscal years 2016 through 2021; reviewed information related to the benefits of providing care to civilians; and interviewed DOD and Treasury officials.

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