Military Health Care

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) managed care program, TRICARE, focusing on: (1) DOD's requirements for and oversight of network adequacy; (2) the content and methodology of DOD's July 1999 report to Congress on network adequacy; and (3) the changes to network adequacy requirements that DOD anticipates under its next round of TRICARE contracts, referred to as managed care support 3.0.

GAO noted that: (1) DOD's network adequacy requirements are based on California's Knox-Keene Act, which provides guidelines for health maintenance organizations on numerous aspects of access to care, including network adequacy ratios and the amount of time it takes to drive to a provider's office; (2) in addition to following these standards, most of DOD's managed care support contractors that administer the program have elected to use more stringent guidelines for certain types of specialty care; (3) to determine whether its standards are being met, DOD requires the contractors to oversee the adequacy of their networks, including the submission of quarterly reports that DOD uses to monitor the contractors' performance; (4) some monitoring is also performed in response to beneficiaries' complaints; (5) in reviewing DOD's report, GAO determined that its methodology was sound and the information was sufficient to describe how well the contractors are meeting standards as well as any weaknesses and their underlying causes; (6) while the overall network is generally adequate, DOD reported some "spotty" deficiencies in rural areas--particularly those that are considered medically underserved and those with low managed care penetration; (7) these conditions are not unique to TRICARE--they also exist in the Medicare program; (8) so far, the contractors have addressed network adequacy issues through various means, such as bringing in nonlocal providers on a temporary basis to treat beneficiaries; (9) although the civilian provider networks are generally adequate, DOD plans to modify its current network adequacy requirements in its next round of contracts in order to focus more on beneficiaries' satisfaction; (10) DOD officials stated that, rather than achieving specified quantitative standards, the key to an adequate network lies with the beneficiaries' ability to obtain care from a qualified provider within DOD's established appointment time and distance standards; and (11) its changes include instituting an on-line directory to help ensure that beneficiaries have access to an accurate up-to-date list of network providers, providing contractors with cash incentives to ensure beneficiaries' satisfaction with health care, and imposing financial penalties on contractors for not meeting standards.