Defense Health Care
Oversight of the Adequacy of TRICARE's Civilian Provider Network Has Weaknesses Gao ID: GAO-03-592T March 27, 2003During 2002, in testimony to the House Armed Services Committee, Subcommittee on Personnel, beneficiary groups described problems with access to care from TRICARE's civilian providers, and providers testified about their dissatisfaction with the TRICARE program, specifying low reimbursement rates and administrative burdens. The Bob Stump National Defense Authorization Act of 2003 required that GAO review DOD's oversight of TRICARE's network adequacy. In response, GAO is (1) describing how DOD oversees the adequacy of the civilian provider network, (2) assessing DOD's oversight of the adequacy of the civilian provider network, (3) describing the factors that may contribute to potential network inadequacy or instability, and (4) describing how the new contracts, expected to be awarded in June 2003, might affect network adequacy. GAO's analysis focused on TRICARE Prime--the managed care component of the TRICARE health care delivery system. This testimony summarizes GAO's findings to date. A full report will be issued later this year.
To oversee the adequacy of the civilian network, DOD has established standards that are designed to ensure that its network has a sufficient number and mix of providers, both primary care and specialists, necessary to satisfy TRICARE Prime beneficiaries' needs. In addition, DOD has standards for appointment wait, office wait, and travel times that are designed to ensure that TRICARE Prime beneficiaries have adequate access to care. DOD has delegated oversight of the civilian provider network to lead agents, who are responsible for ensuring that these standards have been met. DOD's ability to effectively oversee--and thus guarantee the adequacy of--the TRICARE civilian provider network is hindered in several ways. First, the measurement used to determine if there is a sufficient number of providers for the beneficiaries in an area does not account for the actual number of beneficiaries who may seek care or the availability of providers. In some cases, this may result in an underestimation of the number of providers needed in an area. Second, incomplete contractor reporting on access to care makes it difficult for DOD to assess compliance with this standard. Finally, DOD does not systematically collect and analyze beneficiary complaints, which might assist in identifying inadequacies in the TRICARE civilian provider network. DOD and its contractors have reported three factors that may contribute to potential network inadequacy: geographic location, low reimbursement rates, and administrative requirements. However, the information the contractors provide to DOD is not sufficient to measure the extent to which the TRICARE civilian provider network is inadequate. While reimbursement rates and administrative requirements may have created dissatisfaction among providers, it is not clear that these factors have resulted in insufficient numbers of providers in the network. The new contracts, which are expected to be awarded in June 2003, may result in improved network participation by addressing some network providers' concerns about administrative requirements. For example, the new contracts may simplify requirements for provider credentialing and referrals, two administrative procedures providers have complained about. However, according to contractors, the new contracts may also create requirements that could discourage provider participation, such as the new requirement that 100 percent of network claims submitted by providers be filed electronically. Currently, only about 25 percent of such claims are submitted electronically.
GAO-03-592T, Defense Health Care: Oversight of the Adequacy of TRICARE's Civilian Provider Network Has Weaknesses
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Testimony:
Before the Subcommittee on Total Force, Committee on Armed Services,
House of Representatives:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 1:30 p.m.
Thursday, March 27, 2003:
DEFENSE HEALTH CARE:
Oversight of the Adequacy of TRICARE‘s Civilian Provider Network Has
Weaknesses:
Statement of Marjorie Kanof:
Director, Health Care--Clinical and Military Health Care Issues:
GAO-03-592T:
GAO Highlights:
Highlights of GAO-03-592T, a report to a testimony before the
Subcommittee on Total Force, Committee on Armed Services, House of
Representatives
Why GAO Did This Study:
During 2002, in testimony to the House Armed Services Committee,
Subcommittee on Personnel, beneficiary groups described problems with
access to care from TRICARE‘s civilian providers, and providers
testified about their dissatisfaction with the TRICARE program,
specifying low reimbursement rates and administrative burdens.
The Bob Stump National Defense Authorization Act of 2003 required that
GAO review DOD‘s oversight of TRICARE‘s network adequacy. In response,
GAO is (1) describing how DOD oversees the adequacy of the civilian
provider network, (2) assessing DOD‘s oversight of the adequacy of the
civilian provider network, (3) describing the factors that may
contribute to potential network inadequacy or instability, and (4)
describing how the new contracts, expected to be awarded in June 2003,
might affect network adequacy.
GAO‘s analysis focused on TRICARE Prime”the managed care component of
the TRICARE health care delivery system. This testimony summarizes
GAO‘s findings to date. A full report will be issued later this year.
What GAO Found:
To oversee the adequacy of the civilian network, DOD has established
standards that are designed to ensure that its network has a
sufficient number and mix of providers, both primary care and
specialists, necessary to satisfy TRICARE Prime beneficiaries‘ needs.
In addition, DOD has standards for appointment wait, office wait, and
travel times that are designed to ensure that TRICARE Prime
beneficiaries have adequate access to care. DOD has delegated
oversight of the civilian provider network to lead agents, who are
responsible for ensuring that these standards have been met.
DOD‘s ability to effectively oversee”and thus guarantee the adequacy
of”the TRICARE civilian provider network is hindered in several ways.
First, the measurement used to determine if there is a sufficient
number of providers for the beneficiaries in an area does not account
for the actual number of beneficiaries who may seek care or the
availability of providers. In some cases, this may result in an
underestimation of the number of providers needed in an area. Second,
incomplete contractor reporting on access to care makes it difficult
for DOD to assess compliance with this standard. Finally, DOD does not
systematically collect and analyze beneficiary complaints, which might
assist in identifying inadequacies in the TRICARE civilian provider
network.
DOD and its contractors have reported three factors that may
contribute to potential network inadequacy: geographic location, low
reimbursement rates, and administrative requirements. However, the
information the contractors provide to DOD is not sufficient to
measure the extent to which the TRICARE civilian provider network is
inadequate. While reimbursement rates and administrative requirements
may have created dissatisfaction among providers, it is not clear that
these factors have resulted in insufficient numbers of providers in
the network.
The new contracts, which are expected to be awarded in June 2003, may
result in improved network participation by addressing some network
providers‘ concerns about administrative requirements. For example,
the new contracts may simplify requirements for provider credentialing
and referrals, two administrative procedures providers have complained
about. However, according to contractors, the new contracts may also
create requirements that could discourage provider participation, such
as the new requirement that 100 percent of network claims submitted by
providers be filed electronically. Currently, only about 25 percent of
such claims are submitted electronically.
www.gao.gov/cgi-bin/getrpt?GAO-03-592T.
To view the full report, including the scope and methodology, click on
the link above. For more information, contact Marjorie Kanof at (202)
512-7114.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss issues related to the
Department of Defense‘s (DOD) healthcare system, TRICARE. TRICARE‘s
primary mission is to provide care for its eligible beneficiaries;
currently, more than 8.7 million active duty personnel, retirees, and
dependents are eligible to receive care through TRICARE. These
beneficiaries receive their care through Military Treatment Facilities
(MTFs) or through TRICARE‘s civilian provider network, which is
designed to complement the availability of care offered by MTFs. MTFs
supply most of the health care services TRICARE beneficiaries
receive.[Footnote 1]
TRICARE faces new challenges in ensuring that its civilian network can
provide adequate access to care that complements the capabilities of
MTFs. In 2003, DOD will award new contracts for the delivery of care in
the civilian network. As a result, the providers who choose to
participate may change, while those who remain will operate under new
policies and procedures. During this time, TRICARE is still responsible
for ensuring that its civilian network provides adequate access to
care, even if the provider for some beneficiaries‘ care is changed.
TRICARE also faces beneficiary and provider dissatisfaction with its
existing civilian network. During April 2002, testimony before the
House Armed Services Committee, Subcommittee on Personnel, beneficiary
groups described problems with access to care from TRICARE‘s civilian
providers. Also, providers testified about their dissatisfaction with
the TRICARE program, specifying low reimbursement rates and
administrative burdens.
In response to these concerns, the Bob Stump National Defense
Authorization Act of 2003 (NDAA 2003) required that we review DOD‘s
oversight of the adequacy of the TRICARE civilian network.[Footnote 2]
My remarks will summarize the findings of our analysis to date, and we
will issue a full report later this year. Our analysis, including our
testimony today, focuses on TRICARE‘s civilian provider network.
Specifically, I will discuss (1) how DOD oversees the adequacy of the
civilian provider network, (2) an assessment of DOD‘s oversight of the
adequacy of the civilian provider network, (3) the factors that may
contribute to potential network inadequacy or instability, and (4) how
the new contracts might affect network adequacy.
To examine how DOD oversees the civilian provider network and interacts
with the contractors, we interviewed officials at TRICARE Management
Activity (TMA) in Washington D.C., the office that ensures that DOD
health policy is implemented, and officials at TMA-West, the office
that carries out contracting functions, including administering the
civilian contracts and writing the Requests for Proposals for the
future contracts. To assess DOD‘s oversight of the TRICARE network, we
reviewed and analyzed extensive information from network adequacy
reports from each of the contractors. We also interviewed DOD regional
officials, known as lead agents, and MTF officials from 5 of 11 TRICARE
regions. In addition, we interviewed officials from each of the four
managed care support contractors who develop and maintain the network
of providers to augment the care provided by MTFs. We visited and
discussed network management and provider complaints with
representatives of each contractor. We focused our work on TRICARE
Prime--the managed care component of the TRICARE health care delivery
system. We conducted our work from June 2002 through March 2003 in
accordance with generally accepted government auditing standards.
In summary, to oversee the adequacy of the civilian network, DOD has
established standards that are designed to ensure that its network has
a sufficient number and mix of providers, both primary care and
specialists, necessary to satisfy TRICARE Prime beneficiaries‘ needs.
In addition, DOD has standards for appointment wait, office wait, and
travel times that are designed to ensure that TRICARE Prime
beneficiaries have adequate access to care. DOD has delegated oversight
of the civilian provider network to lead agents, who are responsible
for ensuring that these standards have been met.
DOD‘s ability to effectively oversee--and thus guarantee the adequacy
of--the TRICARE civilian provider network is hindered in several ways.
First, the measurement used to determine if there is a sufficient
number of providers for the beneficiaries in an area does not account
for the actual number of beneficiaries who may seek care or the
availability of providers. In some cases, this may result in an
underestimation of the number of providers needed in an area. Second,
incomplete contractor reporting on access to care makes it difficult
for DOD to assess compliance with this standard. Finally, DOD does not
systematically collect and analyze beneficiary complaints, which might
assist in identifying inadequacies in the TRICARE civilian provider
network.
DOD and its contractors have reported three factors that may contribute
to potential network inadequacy: geographic location, low reimbursement
rates, and administrative requirements. However, the information the
contractors provide to DOD is not sufficient to measure the extent to
which the TRICARE civilian provider network is inadequate. While
reimbursement rates and administrative requirements may have created
dissatisfaction among providers, it is not clear that these factors
have resulted in insufficient numbers of providers in the network.
The new contracts, which are expected to be awarded in June 2003, may
result in improved network participation by addressing some network
providers‘ concerns about administrative requirements. For example, the
new contracts may simplify requirements for provider credentialing and
referrals, two administrative procedures providers have complained
about. However, according to contractors, the new contracts may also
create requirements that could discourage provider participation, such
as the new requirement that 100 percent of network claims submitted by
providers be filed electronically. Currently, only about 25 percent of
such claims are submitted electronically.
Background:
TRICARE has three options for its eligible beneficiaries:
* TRICARE Prime, a program in which beneficiaries enroll and receive
care in a managed network similar to a health maintenance organization
(HMO);
* TRICARE Extra, a program in which beneficiaries receive care from a
network of preferred providers; and:
* TRICARE Standard, a fee-for-service program that requires no network
use.
The programs vary according to the amount beneficiaries must contribute
towards the cost of their care and according to the choices
beneficiaries have in selecting providers. In TRICARE Prime,[Footnote
3] the program in which active duty personnel must enroll, the
beneficiaries must select a primary care manager (PCM)[Footnote 4] who
either provides care or authorizes referrals to specialists. Most
beneficiaries who enroll in TRICARE Prime select their primary care
providers from MTFs, while other enrollees select their PCMs from the
civilian network. Regardless of their status--military or civilian--
PCMs may refer Prime beneficiaries to providers in either MTFs or
TRICARE‘s civilian provider network.[Footnote 5]
Both TRICARE Extra and TRICARE Standard require co-payments, but
beneficiaries do not enroll with or have their care managed by PCMs.
Beneficiaries choosing TRICARE Extra use the same civilian provider
network available to those in TRICARE Prime, and beneficiaries choosing
TRICARE Standard are not required to use providers in any network. For
these beneficiaries, care can be provided at an MTF when space is
available.
DOD employs four civilian health care companies or managed care support
contractors (contractors) that are responsible for developing and
maintaining the civilian provider network that complements the care
delivered by MTFs. The contractors recruit civilian providers into a
network of PCMs and specialists who provide care to beneficiaries
enrolled in TRICARE Prime. This network also serves as the network of
preferred providers for beneficiaries who use TRICARE Extra. In 2002,
contractors reported that the civilian network included about 37,000
PCMs and 134,000 specialists. The contractors are also responsible for
ensuring adequate access to health care, referring and authorizing
beneficiaries for health care, educating providers and beneficiaries
about TRICARE benefits, ensuring providers are credentialed, and
processing claims. In their network agreements with civilian providers,
contractors establish reimbursement rates and certain requirements for
submitting claims. Reimbursement rates cannot be greater than Medicare
rates unless DOD authorizes a higher rate.
DOD‘s four contractors manage the delivery of care to beneficiaries in
11 TRICARE regions. DOD is currently analyzing proposals to award new
civilian health care contracts, and when they are awarded in 2003, DOD
will reorganize the 11 regions into 3--North, South, and West--with a
single contract for each region. Contractors will be responsible for
developing a new civilian provider network that will become operational
in April 2004. Under these new contracts DOD will continue to emphasize
maximizing the role of MTFs in providing care.
The Office of the Assistant Secretary of Defense for Health Affairs
(Health Affairs) establishes TRICARE policy and has overall
responsibility for the program. The TRICARE Management Activity (TMA),
under Health Affairs, is responsible for awarding and administering the
TRICARE contracts. DOD has delegated oversight of the provider network
to the local level through the regional TRICARE lead agent. The lead
agent for each region coordinates the services provided by MTFs and
civilian network providers. The lead agents respond to direction from
Health Affairs, but report directly to their respective Surgeons
General. In overseeing the network, lead agents have staff assigned to
MTFs to provide the local interaction with contractor representatives
and respond to beneficiary complaints as needed and report back to the
lead agent.
DOD Has Standards for Network Adequacy and Requires Contractors‘
Compliance:
DOD‘s contracts for civilian health care are intended to enhance and
support MTF capabilities in providing care to millions of TRICARE
beneficiaries. Contractors are required to establish and maintain the
network of civilian providers in the following locations: for all
catchment areas,[Footnote 6] base realignment and closure
sites,[Footnote 7] in other contract-specified areas, and in
noncatchment areas where a contractor deems it cost-effective. In the
remaining areas, a network is not required.
DOD requires that contractors have a sufficient number and mix of
providers, both primary care and specialists, necessary to satisfy the
needs of beneficiaries enrolled in the Prime option. Specifically, it
is the responsibility of the contractors to ensure that the network has
at least one full-time equivalent PCM for every 2,000 TRICARE Prime
enrollees and one full-time equivalent provider (both PCMs and
specialists) for every 1,200 TRICARE Prime enrollees.[Footnote 8]
In addition, DOD has access-to-care standards that are designed to
ensure that Prime beneficiaries receive timely care. The access
standards[Footnote 9] require the following:
* appointment wait times shall not exceed 24 hours for urgent care, 1
week for routine care, or 4 weeks for well-patient and specialty care;
* office wait times shall not exceed 30 minutes for nonemergency care;
and:
* travel times shall not exceed 30 minutes for routine care and 1 hour
for specialty care.
DOD does not specify access standards for eligible beneficiaries who do
not enroll in TRICARE Prime. However, DOD requires that contractors
provide information and/or assist all beneficiaries--regardless of
which option they choose--in finding a participating provider in their
area.
DOD has delegated oversight of the civilian provider network to the
regional TRICARE lead agents. The lead agents told us they use the
following tools and information to oversee the network.
* Network Adequacy Reporting--Contractors are required to provide
reports quarterly to the lead agents. The reports contain information
on the status of the network--such as the number and type of
specialists, a list of primary care managers, and data on adherence to
the access standards. The reports may also contain information on steps
the contractors have taken to address any network inadequacies.
* Beneficiary Complaints--The complaints come directly from
beneficiaries and through other sources, such as the contractor or
MTFs.
In addition to these tools, lead agents periodically monitor contractor
compliance by reviewing performance related to specific contract
requirements, including requirements related to network adequacy. Lead
agents also told us they periodically schedule reviews of special
issues related to network adequacy, such as conducting telephone
surveys of providers to determine whether they are accepting TRICARE
patients. In addition, lead agents stated they meet regularly with MTF
and contractor representatives to discuss network adequacy and access
to care.
If the lead agents determine that a network is inadequate, they have
formal enforcement actions they may use to correct deficiencies.
However, lead agents told us that few of the actions have been issued.
They said they prefer to address deficiencies informally rather than
take formal actions, particularly in areas where they do not believe
the contractor can correct the deficiency because of local market
conditions. For example, rather than taking a formal enforcement
action, one lead agent worked with the contractor to arrange for a
specialist from one area to travel to another area periodically.
DOD‘s Civilian Provider Network Oversight Has Weaknesses:
DOD‘s ability to effectively oversee--and thus guarantee the adequacy
of--the TRICARE civilian provider network is hindered by (1) flaws in
its required provider-to-beneficiary ratios, (2) incomplete reporting
on beneficiaries‘ access to providers, and (3) the absence of a
systematic assessment of complaints. Although DOD has required its
network to meet established ratios of providers to beneficiaries, the
ratios may underestimate the number of providers needed in an area.
Similarly, although DOD has certain requirements governing beneficiary
access to available providers, the information reported to DOD on this
access is often incomplete--making it difficult to assess compliance
with the requirements. Finally, when beneficiaries complain about
availability or access in their network, these complaints can be
directed to different DOD entities, with no guarantee that the
complaints will be compiled and analyzed in the aggregate to identify
possible trends or patterns and correct network problems.
Required Provider-to-Beneficiary Ratios May Not Account for Actual
Number of Beneficiaries or Availability of Providers:
In some cases, the provider-to-beneficiary ratios underestimate the
number of providers, particularly specialists, needed in an area. This
underestimation occurs because in calculating the ratios, the
contractors do not always include the total number of Prime enrollees
within the area. Instead, they base their ratio calculations on the
total number of beneficiaries enrolled with civilian PCMs and do not
count beneficiaries enrolled with PCMs in MTFs. The ratio is most
likely to result in an underestimation of the need for providers in
areas in which the MTF is a clinic or small hospital with a limited
availability of specialists.
Moreover, in reporting whether their network meets the established
ratios, different contractors make assumptions about the level of
participation on the part of civilian network providers. These
assumptions may or may not be accurate, and the assumptions have a
significant effect on the number of providers required in the network.
Contractors generally assume that between 10 to 20 percent of their
providers‘ practices are dedicated to TRICARE Prime beneficiaries.
Therefore, if a contractor assumes 20 percent of all providers‘
practices are dedicated to TRICARE Prime rather than 10 percent, the
contractor will need half as many providers in the network in order to
meet the prescribed ratio standard.
Information Reported on Access Standards Was Incomplete:
In the network adequacy reports we reviewed, managed care support
contractors did not always report all the information required by DOD
to assess compliance with the access standards. Specifically, for the
network adequacy reports we reviewed from 5 of the 11 TRICARE regions,
we found that contractors reported less than half of the required
information on access standards for appointment wait, office wait, and
travel times. Some contractors reported more information than others,
but none reported all the required access information. Contractors said
they had difficulties in capturing and reporting information to
demonstrate compliance with the access standards. Additionally, two
contractors collected some access information, but the lead agents
chose not to use it.
Beneficiary Complaints Are Not Systematically Collected and Evaluated:
Most of the DOD lead agents we interviewed told us that because
information on access standards is not fully reported, they monitor
compliance with the access standards by reviewing beneficiary
complaints. Beneficiaries can complain about access to care either
orally or in writing to the relevant contractor, their local MTF, or
the regional lead agent. Because beneficiary complaints are received
through numerous venues, often handled informally on a case-by-case
basis, and not centrally evaluated, it is difficult for DOD to assess
the extent of any systemic access problems. TMA has a central database
of complaints it has received, but complaints directed to MTFs, lead
agents, or contractors may not be directed to this database.
While contractor and lead agent officials told us they have received
few complaints about network problems, this small number of complaints
could indicate either an overall satisfaction with care or a general
lack of knowledge about how or to whom to complain. Additionally, a
small number of complaints, particularly when spread among many
sources, limits DOD‘s ability to identify any specific trends of
systemic problems related to network adequacy within TRICARE.
DOD and Contractors Report Three Factors That May Contribute to Network
Inadequacies:
DOD and contractors have reported three factors that may contribute to
network inadequacy: geographic location, low reimbursement rates, and
administrative requirements. While reimbursement rates and
administrative requirements may have created dissatisfaction among
providers, it is not clear how much these factors have affected network
adequacy because the information the contractors provide to DOD is not
sufficient to reliably measure network adequacy.
DOD and contractors have reported regional shortages for certain types
of specialists in rural areas. For example, they reported shortages for
endocrinology in the Upper Peninsula of Michigan and dermatology in New
Mexico. Additionally, in some instances, TRICARE officials and
contractors have reported difficulties in recruiting providers into the
TRICARE Prime network because in some areas providers will not join
managed care programs. For example, contractor network data indicate
that there have been long-standing provider shortages in TRICARE in
areas such as eastern New Mexico, where the lead agent stated that the
providers in that area have repeatedly refused to join any network.
According to contractor officials, TRICARE Prime providers have
expressed concerns about decreasing reimbursement rates. In addition,
there have been reported instances in which groups of providers have
banded together and refused to accept TRICARE patients due to their
concerns with low reimbursement rates. One contractor identified low
reimbursement rates as the most frequent cause of provider
dissatisfaction. In addition to provider complaints, beneficiary
advocacy groups, such as the Military Officers Association of America
(MOAA), have cited numerous instances of providers refusing care to
beneficiaries because of low reimbursement rates.
By statute, DOD cannot generally pay TRICARE providers more than they
would be paid under the Medicare fee schedule. In certain situations,
DOD has the authority to pay up to 115 percent of the Medicare fee to
network providers.[Footnote 10] DOD‘s authority is limited to instances
in which it has determined that access to health care is severely
impaired within a locality. In 2000, DOD increased reimbursement rates
in rural Alaska in an attempt to entice more providers to join the
network, but the new rates did not increase provider
participation.[Footnote 11] In 2002, DOD increased reimbursement rates
to 115 percent of the Medicare rate for the rest of Alaska. In 2003,
DOD increased the rates for selected specialists in Idaho to address
documented network shortcomings. In 1997, DOD also increased
reimbursement rates for obstetrical care. These cases represent the
only instances in which DOD has used its authority to pay above the
Medicare rate.[Footnote 12] Because Medicare fees declined in 2002, and
there is a potential for future reductions, some contractors are
concerned that reimbursement rates may undermine the TRICARE network.
Contractors also report that providers have expressed dissatisfaction
with some TRICARE administrative requirements, such as credentialing
and preauthorizations and referrals. For example, many providers have
complained about TRICARE‘s credentialing requirements. In TRICARE, a
provider must get recredentialed every 2 years, compared to every 3
years for the private sector. Providers have said that this places
cumbersome administrative requirements on them.
Another widely reported concern about TRICARE administrative
requirements relates to preauthorization and referral requirements.
Civilian PCM providers are required to get preauthorizations from MTFs
before referring patients for specialized care. While preauthorization
is a standard managed care practice, providers complain that obtaining
preauthorization adversely affects the quality of care provided to
beneficiaries because it takes too much time. In addition, civilian
PCMs have expressed concern that they cannot refer beneficiaries to the
specialist of their choice because of MTFs‘ ’right of first refusal“
that gives an MTF discretion to care for the beneficiary or refer the
care to a civilian provider.
Nevertheless, there are not direct data confirming that low
reimbursement rates or administrative burdens translate into widespread
network inadequacies. We found that out of the 2,156 providers who left
one contractor‘s network during a 1-year period, 900 providers cited
reasons for leaving. Only 10 percent of these providers identified low
reimbursement rates as a factor and only 1 percent cited administrative
burdens.
New Contracts May Address Some Network Concerns, but May Create Others:
DOD‘s new contracts for providing civilian health care, called TNEX,
may address some network concerns raised by providers and
beneficiaries, but may create other areas of concern. Because the new
contracts are not expected to be finalized until June 2003, the
specific mechanisms DOD and the contractors will use to ensure network
adequacy are not known. DOD plans to retain the access standards for
appointment and office wait times, as well as travel-time standards.
However, instead of using provider-to-beneficiary ratios to measure
network adequacy, TNEX requires that the network complement the
clinical services provided by MTFs and promote access, quality,
beneficiary satisfaction, and best value health care for the
government.[Footnote 13] However, TNEX does not specify how this will
be measured.
TNEX may reduce administrative burden related to provider credentialing
and patient referrals. Currently, TRICARE providers must follow
TRICARE-specific requirements for credentialing. In contrast, TNEX will
allow for network providers to be credentialed through a nationally
recognized accrediting organization. DOD officials stated this approach
is more in line with industry practices. Patient referral procedures
will also change under TNEX. Referral requirements will be reduced, but
the MTFs will still retain the ’right of first refusal.“:
On the other hand, TNEX may be creating a new administrative concern
for contractors and providers by requiring that 100 percent of network
claims submitted by providers be filed electronically. In fiscal year
2002, only 25 percent of processed claims were submitted
electronically.[Footnote 14] Contractors stated that such a requirement
could discourage providers from joining or staying in their network.
However, DOD states that electronic filing will cut claims-processing
costs and save money.
Another concern that has been raised by beneficiary groups extends
beyond the network and potentially impacts beneficiaries who use
TRICARE Standard. TNEX will no longer require contractors to provide
information to all beneficiaries, including Standard beneficiaries,
about providers participating in their area and to assist them in
accessing care. Under the existing contracts, contractors are required
to provide beneficiaries with the name of at least one participating
provider, offer to contact the provider on behalf of the beneficiary,
and offer to contact at least three local providers if a participating
provider is not available locally. In contrast, TNEX does not include
these requirements. MOAA and other beneficiary groups are concerned
about this omission because they have received an increasing number of
complaints from their constituents related to difficulties in finding
providers who accept TRICARE Standard beneficiaries.
Mr. Chairman, this concludes my prepared statement. I would be happy to
answer any questions you or other Members of the Subcommittee may have.
Contacts and Acknowledgments:
For more information regarding this testimony, please contact me at
(202) 512-7101. Kristi Peterson, Allan Richardson, Louise Duhamel, Marc
Feuerberg, Krister Friday, Gay Hee Lee, and John Oh also made key
contributions to this statement.
FOOTNOTES
[1] The military health system was funded at about $26.4 billion for
fiscal year 2003. Approximately 20 percent of this amount, $5.2
billion, was budgeted for the TRICARE civilian provider network.
[2] Pub. L. No. 107-314, .§712,116 Stat. 2458, 2588 (2002).
[3] Out of more than 8.7 million eligible beneficiaries, nearly half
are enrolled in TRICARE Prime.
[4] A primary care manager is a provider or team of providers at an MTF
or a provider in the civilian network to whom a beneficiary is assigned
for primary care services when he or she enrolls in TRICARE Prime.
Enrolled beneficiaries agree to initially seek all nonemergency,
nonmental health care services from these providers.
[5] DOD‘s policy is to optimize the use of the MTF. Accordingly, when a
referral for specialty care is made by a civilian PCM, the MTF retains
the ’right of first refusal“ to accommodate the beneficiary within the
MTF or refer the beneficiary to the civilian provider network for the
needed medical care.
[6] Catchment areas are geographic areas determined by the Assistant
Secretary of Defense for Health Affairs that are defined by five-digit
zip codes, usually within an approximate 40-mile radius of inpatient
MTFs.
[7] Base realignment and closure (BRAC) sites are military
installations that have been closed or realigned as the result of
decisions made by the Commissions on Base Realignment and Closure.
[8] In addition, all four contractors chose to closely follow the
Graduate Medical Education National Advisory Committee (GMENAC)
recommendation for determining the specialty mix requirements for their
network.
[9] 32 C.F.R. §199.17(p)(5)(2002).
[10] See 32 C.F.R. §199.14(h)(1)(iv)(D),(E)(2002).
[11] U.S. General Accounting Office, Defense Health Care: Across-the-
Board Physician Rate Increase Would Be Costly and Unnecessary,
GAO-01-620 (Washington, D.C.: May 24, 2002).
[12] Similarly in April 2002, DOD adopted a policy that will authorize
a 10 percent bonus payment to select TRICARE providers working in
medically underserved areas as defined by Health Resources and Services
Administration, consistent with Medicare payment policy. DOD plans to
implement the bonus payment in July 2003.
[13] DOD defines best value health care as high quality care delivered
in the most economical manner for the military health system that
optimizes the MTF system while delivering the highest level of customer
service.
[14] This percentage does not include pharmacy claims or claims for
care provided to Medicare-eligible beneficiaries under TRICARE For
Life.
