Defense Health Care
Status of Fiscal Year 2004 Requirements for Reservists' Benefits and Monitoring Beneficiaries' Access to Care Gao ID: GAO-04-563R March 17, 2004Since September 2001, about 360,000 reservists have been called to active duty to support the war on terrorism, conflicts in Afghanistan and Iraq, and other operations. Some reservists have been on active duty for a year or more, and the pace of reserve operations is expected to remain high for the foreseeable future. When mobilized for active duty under federal authorities, reservists are eligible to receive health care benefits through DOD's military health care system, TRICARE. When reservists are ordered to active duty for more than 30 days, their families are also eligible for health benefits. DOD supplements its military health care facilities with civilian health care providers through its triple-option TRICARE program. DOD's beneficiaries may enroll in TRICARE's Prime option and go to a network provider to receive care; without enrolling, they can see a network provider through the preferred provider option, Extra; or they may elect to use Standard, the fee-for-service option. Some beneficiaries have raised concerns about difficulties in finding civilian providers--particularly Standard, non-network providers--who will accept TRICARE beneficiaries as patients. The National Defense Authorization Act (NDAA) for Fiscal Year 2004, enacted on November 24, 2003, required the Department of Defense (DOD) to make changes in its delivery and monitoring of health benefits. In addition, the law directed us to review and report on aspects of these requirements. As agreed with the committees of jurisdiction, we are providing the status of DOD's progress in implementing five requirements--three related to health benefits for reservists and two related to monitoring beneficiaries' access to care under TRICARE Standard.
In summary, DOD is in various stages of implementing the three requirements related to health care coverage for reservists. DOD has implemented the requirement extending the time reservists and their families can use TRICARE and is in the process of implementing the other two requirements. DOD has not implemented the two requirements directed at enhanced monitoring of beneficiaries' access to care under TRICARE Standard. We will report further on these requirements as DOD makes progress.
GAO-04-563R, Defense Health Care: Status of Fiscal Year 2004 Requirements for Reservists' Benefits and Monitoring Beneficiaries' Access to Care
This is the accessible text file for GAO report number GAO-04-563R
entitled 'Defense Health Care: Status of Fiscal Year 2004 Requirements
for Reservists' Benefits and Monitoring Beneficiaries' Access to Care'
which was released on March 17, 2004.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
March 17, 2004:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Duncan Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
Subject: Defense Health Care: Status of Fiscal Year 2004 Requirements
for Reservists' Benefits and Monitoring Beneficiaries' Access to Care:
Since September 2001, about 360,000 reservists have been called to
active duty to support the war on terrorism, conflicts in Afghanistan
and Iraq, and other operations. Some reservists have been on active
duty for a year or more, and the pace of reserve operations is expected
to remain high for the foreseeable future. When mobilized for active
duty under federal authorities, reservists are eligible to receive
health care benefits through DOD's military health care system,
TRICARE. When reservists are ordered to active duty for more than 30
days, their families are also eligible for health benefits.
DOD supplements its military health care facilities with civilian
health care providers through its triple-option TRICARE program. DOD's
beneficiaries may enroll in TRICARE's Prime option and go to a network
provider to receive care; without enrolling, they can see a network
provider through the preferred provider option, Extra; or they may
elect to use Standard, the fee-for-service option.[Footnote 1] Some
beneficiaries have raised concerns about difficulties in finding
civilian providers--particularly Standard, non-network providers--who
will accept TRICARE beneficiaries as patients.
The National Defense Authorization Act (NDAA) for Fiscal Year 2004,
enacted on November 24, 2003, required the Department of Defense (DOD)
to make changes in its delivery and monitoring of health benefits. In
addition, the law directed us to review and report on aspects of these
requirements.[Footnote 2] As agreed with the committees of
jurisdiction, we are providing the status of DOD's progress in
implementing five requirements--three related to health benefits for
reservists and two related to monitoring beneficiaries' access to care
under TRICARE Standard.
To obtain information about DOD's progress in implementing these
requirements, we reviewed relevant documentation from DOD and
applicable laws. We also interviewed the DOD officials responsible for
implementing them. Our work was conducted in March 2004 in accordance
with generally accepted government auditing standards.
In summary, DOD is in various stages of implementing the three
requirements related to health care coverage for reservists. DOD has
implemented the requirement extending the time reservists and their
families can use TRICARE and is in the process of implementing the
other two requirements. DOD has not implemented the two requirements
directed at enhanced monitoring of beneficiaries' access to care under
TRICARE Standard. We will report further on these requirements as DOD
makes progress.
Background:
The NDAA 2004 required DOD to temporarily extend the period of TRICARE
coverage for reservists and their families and provided the option for
some reservists to buy into the TRICARE program. Specifically, the NDAA
2004 provisions required DOD to:
* extend the Transitional Assistance Medical Program (TAMP) to allow
recently demobilized reservists and their families to retain TRICARE
benefits up to 180 days;[Footnote 3]
* make reservists and their families eligible for TRICARE benefits as
soon as they receive a delayed-effective-date order for activation or
90 days before activation--whichever is later; and:
* allow certain reserve members, who are not mobilized, and their
families who do not have any other health care benefits to enroll in
TRICARE by paying 28 percent of program costs.[Footnote 4]
DOD decided that the TAMP benefit and the provision of benefits upon
activation would be retroactive to November 6, 2003. The provision
allowing qualified reservists and their families to enroll in TRICARE
requires DOD to issue regulations to administer the program. Congress
limited expenditures for these three provisions to a combined total of
$400 million for fiscal year 2004. All of the provisions are temporary,
expiring December 31, 2004.
In addition, the NDAA 2004 required DOD to enhance its monitoring of
beneficiaries' access to care for TRICARE Standard including:
* designating an official to ensure the adequacy of provider
participation in the Standard option in each of TRICARE's market
areas;[Footnote 5] and:
* conducting surveys in 20 market areas every fiscal year until all
markets have been surveyed to determine how many providers are
accepting new patients under TRICARE Standard.
Status of Implementation of NDAA 2004 Requirements:
DOD is in varying stages of implementing the provisions for reservists'
health care under NDAA 2004. First, in order to extend the TAMP benefit
period to 180 days as required by law, DOD modified its Defense
Enrollment Eligibility Reporting System (DEERS), the database that
maintains information about TRICARE eligibility. This modification,
which also included changes that allowed DOD to track expenditures for
the benefit, was completed in January 2004. According to DOD,
reservists who separated prior to that period will be retroactively
reimbursed for their own or family members' medical expenses that were
incurred on or after November 6, 2003.
Second, DOD has not completed all of the changes that will allow it to
make reservists and their families eligible for TRICARE benefits as
soon as they receive delayed-effective-date orders for activation or 90
days before activation--whichever is later. This benefit could not be
immediately implemented because it also required DEERS modifications to
record eligibility and track benefit expenditures. In addition,
according to DOD officials, it required other complicated changes,
including changes to TRICARE's contracts that are used to deliver
health care through civilian providers. Further, each of the seven
components that constitute the reserves had to change the process for
ordering reservists to active duty, ensuring that DEERS receives
mobilized reservists' eligibility information.[Footnote 6] According
to a DOD official, the department expects to implement this benefit
this month, and reservists with qualifying orders issued on or after
November 6, 2003 will receive retroactive payments for these benefits.
Third, DOD has not completed drafting the regulations to implement the
provisions allowing certain reservists and their families who do not
have other health insurance to enroll in TRICARE by paying 28 percent
of program costs. According to a DOD official, regulations that involve
new populations and new benefits generally take 12 to 18 months to
develop. Further, according to DOD officials, this benefit must have a
reliable cost estimate before regulations are finalized, and to date,
estimates from the Office of Management and Budget (OMB) and the
Congressional Budget Office (CBO) differ widely. According to DOD,
CBO's estimated costs for this provision were about $70 million for
fiscal year 2004 while OMB estimated that these costs would be $1
billion. Further, DOD officials anticipate that TAMP and the expanded
period of eligibility for benefits could cost up to the $400 million
allocated to cover the three provisions and little would subsequently
be available to fund the enrollment benefit.
Furthermore, DOD has not implemented the requirements in NDAA 2004
regarding monitoring of the TRICARE Standard benefit. First, DOD has
not designated the official responsible for ensuring adequate
participation of Standard providers. According to a DOD official, it is
likely that this responsibility will be assigned to the Assistant
Secretary of Defense for Health Affairs, who will delegate the
responsibility to the three TRICARE Regional Directors. These Directors
will oversee the new TRICARE support contracts, which are scheduled to
begin implementation in June 2004.
Finally, according to a DOD official, the department has not received
the approval from OMB required by the Paperwork Reduction Act to
conduct its initial market survey.[Footnote 7] DOD has requested
emergency approval from OMB. Based on an anticipated approval in April
2004, the first surveys are expected to be sent out May 31, 2004. DOD
officials are uncertain when the analysis of the first set of surveys
will be complete. Meanwhile, DOD has a Standard Directory feature on
its Web page to help beneficiaries identify potential providers. The
Web page explains that managed care support contractors will also help
beneficiaries locate Standard providers.
We will continue to monitor and report on DOD's progress in
implementing these requirements.
Agency Comments:
DOD officials reviewed a draft of this report and provided technical
comments, which we incorporated where appropriate.
We are sending copies of this report to the Secretary of Defense and
other interested parties. We will provide copies of this report to
others upon request. In addition, the report is available at no charge
on the GAO Web site at http://www.gao.gov. If you or your staffs have
any questions, please contact me at (202) 512-7119 or Bonnie W.
Anderson at (404) 679-1900. Lois Shoemaker and Allan Richardson made
key contributions to this report.
Signed by:
Marcia Crosse:
Director, Health Care--Public Health and Military Health Care Issues:
(290364):
FOOTNOTES
[1] All beneficiaries may receive care at military treatment facilities
(MTF) as space and capabilities are available. TRICARE Prime enrollees
have priority for care in MTFs.
[2] See Pub. L. No. 180-136, tit. VII, subtit. A, 117 Stat. 1392, 1524
(2003).
[3] Under TAMP, DOD provides a transitional period of benefits that
allows reservists and their families to retain TRICARE benefits for a
period following demobilization. The NDAA for Fiscal Year 2002
previously extended the transition period from 30 days to 60 or 120
days depending on the members' accrued total active federal military
service. Pub. L. No. 107-107, § 736, 115 Stat. 1012, 1172 (2001)
(codified at 10 U.S.C. §1145(a)(3) (2000)).
[4] This enrollment would allow them to receive TRICARE benefits for
any period that the member is an eligible unemployment compensation
recipient or is not eligible for health care benefits under an
employer-sponsored health benefit plan.
[5] DOD has identified 182 TRICARE market areas across the United
States where there are large numbers of beneficiaries. The market areas
were identified as part of DOD's awarding of new TRICARE support
contracts that are scheduled to be implemented in June 2004.
[6] The armed forces reserve components consist of the Air Force
Reserve, the Air National Guard, the Army Reserve, the Army National
Guard, the Navy Reserve, the Marine Corps Reserve, and the Coast Guard
Reserve.
[7] 44 U.S.C. §3501 et seq. (2000).
