Defense Health Care: Access to Civilian Providers under TRICARE Standard and Extra
Published: 2011-06-02T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) provides health care through its TRICARE program, which is managed by the TRICARE Management Activity (TMA). TRICARE offers three basic options. Beneficiaries who choose TRICARE Prime, an option that uses civilian provider networks, must enroll. TRICARE beneficiaries who do not enroll in this option may obtain care from nonnetwork providers under TRICARE Standard or from network providers under TRICARE Extra. The National Defense Authorization Act for Fiscal Year 2008 directed GAO to evaluate various aspects of beneficiaries' access to care under the TRICARE Standard and Extra options. This report examines (1) impediments to TRICARE Standard and Extra beneficiaries' access to civilian health care and mental health care providers and TMA's actions to address the impediments; (2) TMA's efforts to monitor access to civilian providers for TRICARE Standard and Extra beneficiaries; (3) how TMA informs network and nonnetwork civilian providers about TRICARE Standard and Extra; and (4) how TMA informs TRICARE Standard and Extra beneficiaries about their options. To address these objectives, GAO reviewed and analyzed TMA and TRICARE contractor data and documents. GAO also interviewed TMA officials, including those in its regional offices, as well as its contractors.
section_title: What GAO Found
paragraphs: Reimbursement rates and provider shortages have been cited as the main impediments that hinder TRICARE Standard and Extra beneficiaries' access to civilian health care and mental health care providers. Providers' concern about TRICARE's reimbursement rates--which are generally set at Medicare rates--has been a long-standing issue and has more recently been cited as the primary reason civilian providers will not accept TRICARE Standard and Extra beneficiaries as patients, according to TMA's surveys of civilian providers. TMA can increase reimbursement rates in certain instances, such as when it determines that access to care is being affected by the level of reimbursement. Shortages of certain provider specialties, such as mental health care providers, at the national and local levels may also impede access, but these shortages are not specific to the TRICARE program and also affect the general population. As a result, there are limitations as to what TMA can do to address them. TMA has primarily used feedback mechanisms, including surveys of beneficiaries and civilian providers, to gauge TRICARE Standard and Extra beneficiaries' access to civilian providers. More recently, in February 2010, in recognition that TRICARE has had no established measures for monitoring the availability of civilian network and nonnetwork providers for these beneficiaries, TMA directed the TRICARE Regional Offices to develop a model to help identify geographic areas where they may experience access problems. GAO's review of the initial models found their methodology to be reasonable. However, because the regional models were recently developed, it is too early to determine their effectiveness. TMA's contractors educate civilian providers about TRICARE program requirements, policies, and procedures. Contractors also conduct outreach to increase providers' awareness of the program, and while TMA's provider survey results indicate that civilian providers are generally aware of the program, this does not necessarily signify that providers have an accurate understanding of the TRICARE program and its options. Similarly, TMA's contractors educate beneficiaries on all of the TRICARE options and maintain directories of network providers to facilitate beneficiaries' access to care. When the new TRICARE contracts are implemented, TMA will also require its contractors to include information on nonnetwork providers in their provider directories. In commenting on a draft of this report, DOD concurred with GAO's overall findings.

section_title: Letter
paragraphs: In fiscal year 2010, the Department of Defense (DOD) offered health care  to almost 9.7 million eligible beneficiaries through its TRICARE program.   Under TRICARE, beneficiaries may choose among three basic options— TRICARE Prime (a managed care option), TRICARE Extra (a preferred  provider organization option), and TRICARE Standard (a fee-for-service  option). TRICARE is different from other health care plans because not  all of the options require eligible beneficiaries to enroll to use their  benefits. Beneficiaries who choose TRICARE Prime are required to enroll  in this option. Beneficiaries who decide not to use TRICARE Prime may  still obtain health care through the TRICARE program by using either the  TRICARE Standard or Extra options, or they may choose not to use their  TRICARE benefits at all. Consequently, DOD does not have complete  information on which beneficiaries intend to use their benefits, and it  cannot accurately predict the health care demands of beneficiaries who  have not enrolled, including how to ensure adequate access to care.
Under TRICARE, beneficiaries can obtain care either from providers at  military hospitals and clinics, referred to as military treatment facilities, or  from civilian providers. DOD’s TRICARE Management Activity (TMA),  which oversees the program, contracts with managed care support  contractors (contractors) to develop networks of civilian providers and to  perform other customer service functions, such as processing claims and  assisting beneficiaries with finding providers. Contractors are required to  establish adequate networks of civilian providers to serve all TRICARE  beneficiaries regardless of enrollment status in geographic areas called  Prime Service Areas. Contractors use estimates of the number of  TRICARE users, among other factors, to develop provider networks and  ensure adequate access to care for beneficiaries. Although some network  providers may be located outside of Prime Service Areas, contractors are  not required to develop networks in these areas (which we refer to as non- Prime Service Areas).
All beneficiaries may obtain care at military treatment facilities, although  priority is given to active duty personnel and then to beneficiaries enrolled  in TRICARE Prime. Beneficiaries who enroll in TRICARE Prime can also  obtain care from the civilian providers who have joined the provider  network established by the TRICARE contractors—referred to as network  providers. Beneficiaries who do not enroll in TRICARE Prime may receive  care either from network providers, in which case they are considered to  be using TRICARE Extra, or from nonnetwork providers (those outside  the network), in which case they are considered to be using TRICARE  Standard. The choices that beneficiaries have in selecting TRICARE  options and providers vary depending on their location. Beneficiaries  living in Prime Service Areas can choose between TRICARE Prime,  TRICARE Standard, and TRICARE Extra. Beneficiaries living in non-Prime  Service Areas can choose between TRICARE Standard and TRICARE  Extra. According to a TMA official, about 19 percent of beneficiaries  eligible for TRICARE Standard and Extra resided in non-Prime Service  Areas in fiscal year 2010.
Since TRICARE’s inception in 1995, beneficiaries using the TRICARE  Standard and Extra options have reported difficulties finding civilian  providers who will accept them as patients. In response to these concerns,  the National Defense Authorization Act (NDAA) for Fiscal Year 2004  directed DOD to monitor access to care for TRICARE beneficiaries who  were not enrolled in TRICARE Prime through a multiyear survey of  civilian providers. According to TMA, which administered the survey,  results indicated that nationally, about 81 percent of physicians who were  accepting new patients would accept TRICARE beneficiaries as patients,  although the results varied by state and by provider specialty. The act also  directed us to review the processes, procedures, and analysis used by  DOD to determine the adequacy of the number of network and  nonnetwork civilian providers and the actions DOD has taken to ensure  access to care for beneficiaries who were not enrolled in TRICARE Prime.  In December 2006, we reported that TMA and its contractors used various  methods to monitor access to care, and these methods indicated that  access was generally sufficient for users of TRICARE Standard and Extra.
Nonetheless, beneficiaries using the TRICARE Standard and Extra options  have continued to express concerns about access to civilian providers. To  better understand the adequacy of access to care for this population, the  NDAA for Fiscal Year 2008 directed DOD to conduct two surveys— another multiyear survey of civilian providers as well as a multiyear survey  of beneficiaries, which includes nonenrolled beneficiaries who were  eligible to use the TRICARE Standard and TRICARE Extra options as well  as TRICARE Reserve Select—an option similar to TRICARE Standard and  Extra that is available to certain members of the Reserves and National  Guard. The NDAA for Fiscal Year 2008 directed us to review these surveys,  and in March 2010, we reported that the methodology for DOD’s surveys of  civilian providers and nonenrolled beneficiaries was sound, and we  provided an analysis of the first year’s results for each of the surveys.
Furthermore, access to mental health care providers is of particular  concern for all TRICARE beneficiaries, including those who use TRICARE  Standard and Extra, because the exposure to combat and the stress of  deployment and redeployment have increased beneficiaries’ demand for  mental health services. From fiscal year 2006 through 2010, TRICARE  Standard and Extra beneficiaries’ visits to civilian mental health care  providers increased over 27 percent. A June 2007 report by DOD’s Task  Force on Mental Health stated that TRICARE’s provider networks have  been tasked with providing an increasing volume and proportion of mental  health services for families and retirees. In assessing the oversight of the  mental health network at one location, the task force discovered that out  of 100 network mental health providers contacted from a list on the  contractor’s Web site, only 3 would accept new TRICARE patients.
The NDAA for Fiscal Year 2008 directed us to evaluate issues related to  TRICARE Standard and Extra beneficiaries’ access to health care and  mental health care, including the identification of access impediments and  education and outreach efforts directed at civilian providers and these  beneficiaries. This report identifies and examines: (1) the impediments to  TRICARE Standard and Extra beneficiaries’ access to civilian health care  and mental health care providers and TMA’s actions to address the  impediments; (2) TMA’s efforts to monitor access to civilian providers for  TRICARE Standard and Extra beneficiaries; (3) how TMA informs  network and nonnetwork civilian providers about TRICARE Standard and  Extra; and (4) how TMA informs TRICARE Standard and Extra  beneficiaries about their options and facilitates their access to network  and nonnetwork civilian providers.
To address these objectives, we met with officials in each of the three  TRICARE Regional Offices (North, South, and West) and with officials for  each of the three contractors to discuss access impediments in their  respective regions, how access to network and nonnetwork providers is  monitored, and their efforts to educate civilian providers and TRICARE  Standard and Extra beneficiaries. We also interviewed TMA officials  responsible for program operations, medical benefits and reimbursement,  contract performance evaluation, contract management, data quality,  communication and customer service, and program analysis and  evaluation. We also obtained documentation on the contractors’  performance in meeting network adequacy and education related  requirements. Lastly, we met with representatives of military beneficiary  organizations as well as two national provider organizations to obtain their  perspectives about access to civilian providers for TRICARE Standard and  Extra beneficiaries.
To identify and examine impediments to TRICARE Standard and Extra  beneficiaries’ access to civilian health care and mental health care  providers and TMA’s actions to address them, we obtained and reviewed  relevant reports and studies. Specifically, we reviewed TMA’s reported  results from its multiyear survey of civilian providers, conducted from  2005 through 2007, as well as the first 2 years of its subsequent surveys of  these providers during fiscal years 2008 and 2009. We assessed the  reliability of these data by speaking with knowledgeable officials and  reviewing related documentation, and we determined that the survey  results were sufficiently reliable for the purposes of this report. We also  reviewed a 2008 report prepared by CNA on the current participation of  civilian providers in the TRICARE program. To examine how TMA  addresses access impediments, we reviewed TMA’s reimbursement  policies, studies that assessed TRICARE’s reimbursement rates, TMA’s  procedures for increasing reimbursement rates, and TMA’s procedures for  offering bonus payments to physicians in areas identified as having  physician shortages. We obtained TMA’s reported data on adjustments to  reimbursement rates that it issued between January 2002 and January  2011. However, we did not assess the appropriateness of TMA’s decision  to make these adjustments or the extent to which these adjustments  improved civilian providers’ acceptance of TRICARE beneficiaries as  patients. Additionally, we reviewed DOD’s 2009 Report to Congress:  Access to Mental Health Services, and spoke with TMA and contractor  officials about access to mental health care and actions to improve access.
To identify and examine the mechanisms that TMA uses to monitor  TRICARE Standard and Extra beneficiaries’ access to civilian providers,  we reviewed various efforts, including feedback mechanisms, that TMA  and its contractors use to solicit and gauge beneficiaries’ concerns,  including difficulties with access to civilian providers. These feedback  mechanisms included TMA’s surveys of civilian providers and nonenrolled  beneficiaries (TRICARE Standard, TRICARE Extra, and TRICARE Reserve  Select), as well as data collected on beneficiaries’ inquiries and complaints  by TMA and its contractors during either fiscal or calendar years 2008  through 2010. We spoke with TMA officials and obtained information from  its contractors about the reliability of their data on beneficiaries’ inquiries  and determined them to be sufficiently reliable for the purpose of our  report, but we did not independently verify these data. We also reviewed  TMA’s 2010 memorandum that directed the TRICARE Regional Offices to  implement a new approach for monitoring access to civilian providers  under the TRICARE Standard and Extra options, and we obtained and  reviewed information about each regional office’s monitoring  methodology.
To identify and examine how TMA informs network and nonnetwork  civilian providers and beneficiaries about TRICARE Standard and Extra  and how it facilitates access to civilian providers, we reviewed TMA’s  requirements of its contractors as related to educating providers and  beneficiaries in each TRICARE region under the second generation of  TRICARE managed care support contracts (contracts). We also reviewed  each contractor’s marketing and education plans to identify their specific  education efforts. Additionally, we obtained and reviewed TRICARE  provider and beneficiary educational materials to gain an understanding of  the information that TMA and the contractors use to educate providers  and beneficiaries. However, we did not assess the quality and effectiveness  of TMA’s or the contractors’ education efforts and materials. Finally, we  reviewed TMA’s 2010 memorandum and related documentation regarding  TMA’s effort to facilitate access to care through provider directories for  TRICARE Standard and Extra beneficiaries.
We conducted this performance audit from July 2010 through June 2011 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings based  on our audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our audit  objectives.
subsections: section_title: Background
paragraphs: In fiscal year 2010, DOD offered health care to almost 9.7 million eligible  beneficiaries through its TRICARE program. TRICARE is organized into  three regions, and within these regions, beneficiaries may obtain health  care from either providers at military treatment facilities or civilian  providers.
subsections: section_title: TRICARE’s Benefit Options
paragraphs: TRICARE provides three basic options for its non-Medicare-eligible  beneficiary population. These options vary according to TRICARE  beneficiary enrollment requirements, the choices TRICARE beneficiaries  have in selecting civilian and military treatment facility providers and the  amount TRICARE beneficiaries must contribute towards the cost of their  care. (See table 1.)
TRICARE also offers other options, including TRICARE Reserve Select, a  premium-based health plan that certain Reserve and National Guard  servicemembers may purchase. Under TRICARE Reserve Select,  beneficiaries may obtain health care from either nonnetwork or network  providers, similar to beneficiaries using TRICARE Standard or Extra,  respectively, and pay lower cost-shares for using network providers.
section_title: TRICARE Regional Structure and Contracts
paragraphs: TRICARE is a regionally structured program that is organized into three  main regions—North, South, and West. (See fig. 1 for the location of the  three regions.) TMA manages civilian health care in each of these regions  through contractors. As of March 2011, the second generation of TRICARE  contracts were in operation, and TMA was in the process of awarding the  third generation of contracts.
The contractors are required to establish and maintain adequate networks  of civilian providers within designated locations referred to as Prime  Service Areas. In these areas, civilian provider networks are required to be  large enough to provide access for all TRICARE beneficiaries, regardless  of enrollment status or Medicare eligibility. These civilian provider  networks are also required to meet specific access standards for TRICARE  Prime beneficiaries—such as for travel times or wait times. However the  access standards do not apply to beneficiaries using options other than  TRICARE Prime, such as TRICARE Standard or Extra. The contractors are  also responsible for helping TRICARE beneficiaries locate providers and  for informing and educating TRICARE beneficiaries and providers on all  aspects of the TRICARE program. In addition, they provide customer  service to any TRICARE beneficiary who requests assistance, regardless of  their enrollment status.
TMA has a TRICARE Regional Office in each region that helps to manage  health care delivery. These offices are responsible for overseeing the  contractors, including monitoring network quality and adequacy and  customer-satisfaction outcomes. Similar to the contractors’ efforts, these  offices provide customer service to all TRICARE beneficiaries who request  assistance, regardless of their enrollment status.
section_title: TRICARE Network and Nonnetwork Civilian Providers
paragraphs: Civilian providers must be TRICARE-authorized to be reimbursed for care  under the program. Such authorization requires a provider to be licensed  by their state, accredited by a national organization, if one exists, and meet  other standards of the medical community. There are two types of  authorized civilian providers—network and nonnetwork providers, and  both types of providers may accept TRICARE beneficiaries as patients on  a case-by-case basis, regardless of enrollment status.
Network providers are TRICARE-authorized providers who enter into a  contract with the regional contractor to provide care to TRICARE  beneficiaries and agree to accept TRICARE reimbursement rates as  payment in full. By law, TRICARE reimbursement rates for civilian  providers are generally limited to Medicare rates, but network providers  may agree to accept lower reimbursements as a condition of network  membership. Network providers are not obligated to accept all TRICARE  beneficiaries seeking care. For example, network providers may decline to  accept TRICARE beneficiaries as patients because their practices do not  have sufficient capacity or for other reasons.
Nonnetwork providers are TRICARE-authorized providers who have not  entered into a contractual agreement with a contractor to provide care to  TRICARE beneficiaries. Nonnetwork providers may accept the TRICARE  reimbursement rate as payment in full or they may charge up to 15 percent  above the reimbursement amount. The beneficiary is responsible for  paying the extra amount billed in addition to the required cost-shares.
section_title: Beneficiaries’ Use of TRICARE
paragraphs: Claims data from fiscal years 2006 through 2010 show that overall  TRICARE claims paid to civilian providers have increased by more than   50 percent, even though the eligible population increased by less than   6 percent. (See table 2.)
Between fiscal years 2006 through 2010, TRICARE Standard and Extra  beneficiaries’ use of network providers—as measured by the number of  claims paid to network providers—has increased significantly, while their  use of nonnetwork providers—as measured by the number of claims paid  to nonnetwork providers—has slightly decreased. (See fig. 2.) Specifically,  their use of network providers has increased more than 66 percent  between fiscal years 2006 and 2010, compared to about a 10 percent  decrease in the use of nonnetwork providers over the same time period.
section_title: Reimbursement Rates and Provider Shortages Hinder Access to Civilian Providers; TMA Can Increase Reimbursement Rates When Needed, but Has Only Limited Means to Address Shortages
paragraphs: Reimbursement rates have been cited as the primary impediment that  hinders beneficiaries’ access to civilian health care and mental health care  providers under TRICARE Standard and Extra. TMA can increase  reimbursement rates in certain circumstances when a need has been  demonstrated. Although national and local shortages of certain types of  providers have also been cited as an impediment to TRICARE Standard  and Extra beneficiaries’ access to civilian providers, TMA is limited in its  ability to address this impediment as it affects the general population and  not just TRICARE beneficiaries. Additionally, beneficiaries’ access to  mental health care is affected by provider shortages and other issues and  is of particular concern because the stress of deployment and  redeployment has increased the demand for these services.
subsections: section_title: Reimbursement Rates Have Been Cited as the Primary Impediment to Beneficiaries’ Access to Civilian Providers under TRICARE Standard and Extra, and TMA Can Adjust Them When a Need is Demonstrated
paragraphs: Since TRICARE was implemented in 1995, some civilian providers—both  network and nonnetwork—have expressed concerns about TRICARE’s  reimbursement rates. For example, in 2006, we reported that both network  and nonnetwork civilian providers said that TRICARE’s reimbursement  rates tended to be lower than those of other health plans, and as a result,  some of these providers had been unwilling to accept TRICARE Standard  and Extra beneficiaries as patients. More recent studies by TMA and  others have cited TRICARE’s reimbursement rates as the primary reason  civilian providers may be unwilling to accept these beneficiaries as  patients, for example:    TMA’s first multiyear survey of civilian providers (2005 through 2007)  showed that TRICARE’s reimbursement rates were the primary reason  cited by providers for not accepting TRICARE Standard and Extra  beneficiaries as new patients.
Similarly, results from the first 2 years (2008 and 2009) of TMA’s second  multiyear provider survey showed that the responding providers cited  TRICARE’s reimbursement rates as one of the primary reasons that they  would not accept new TRICARE patients even though they would accept  new Medicare patients.
In a 2008 study on civilian providers’ acceptance of TRICARE Standard  and Extra beneficiaries, CNA reported that the medical society officials  and physicians they interviewed cited low reimbursement as the primary  reason for limiting their acceptance of TRICARE beneficiaries as  patients. The providers who were interviewed as part of this study noted  that while they could accept more TRICARE beneficiaries as patients,  there are services for which the reimbursement was so low that accepting  more TRICARE beneficiaries as patients hurt rather than helped them.
In addition to these studies, officials from each of the TRICARE Regional  Offices and two of the contractors, as well as a national provider  organization, told us that reimbursement rates were civilian providers’  primary concern about TRICARE.
Concerns about TRICARE’s reimbursement rates—which generally mirror  the Medicare program’s physician fee schedule—have increased by the  uncertainty surrounding the annual update to these Medicare fees. All of  the contractors expressed concerns about the proposed decreases to  Medicare rates and how that would affect providers’ acceptance of  TRICARE patients. One contractor told us that providers already were  expressing concerns about the Medicare rate decreases and that some  providers said they would no longer accept TRICARE beneficiaries as  patients if the rates were reduced. Furthermore, as of September 2010, this  contractor noted that one provider had stopped accepting TRICARE  beneficiaries as patients because of concerns about potential Medicare  reimbursement reductions.
TMA has the authority to adjust TRICARE reimbursement rates under  certain conditions to increase beneficiaries’ access to civilian providers,  and has done so in some instances. In response to various concerns about  providers’ willingness to accept TRICARE patients, TMA contracted with a  consulting firm to conduct a number of studies about TRICARE  reimbursement rates, and some of these studies have resulted in increases  to reimbursement amounts for certain procedures. (See app. II for a  summary of the studies.) For example, in response to civilian obstetric  providers’ concerns about TRICARE reimbursement rates, TMA  conducted an analysis of historical TRICARE claims data and made  nationwide changes to its physician payment rates for obstetric care in  2006. These changes included an additional payment for ultrasounds for  uncomplicated pregnancies that is likely to result in overall higher  payments for civilian physicians who perform one or more ultrasounds  during the course of pregnancy.
TMA also has the authority to adjust reimbursement rates through the use  of waivers in areas where it determines that the rates have had a negative  impact on TRICARE beneficiaries’ access to civilian providers. TMA can  issue three types of reimbursement waivers, depending on the type of  adjustment that is needed:    Locality waivers may be used to increase rates for specific medical  services in specific areas where access to civilian providers has been  severely impaired and are applicable to both network and nonnetwork  providers.
Network waivers may be used to increase reimbursement rates for  network providers up to 15 percent above the TRICARE reimbursement  rate in an effort to ensure an adequate number and mix of primary and  specialty care network civilian providers in a specific location.
TMA can restore TRICARE reimbursement rates in specific localities to  the levels that existed before a reduction was made to align TRICARE  reimbursement rates with Medicare rates for both network and  nonnetwork providers.
Waivers can be requested by providers, beneficiaries, contractors, military  treatment facilities, or TRICARE Regional Office directors, although all  requests must be submitted through the TRICARE Regional Office  directors. Individuals may apply for waivers by submitting written requests  to the TRICARE Regional Offices. These requests must contain specific  justifications to support the claim that access problems are related to low  reimbursement rates and must include information such as the number of  providers and TRICARE-eligible beneficiaries in a location, the availability  of military treatment facility providers, geographic characteristics, and the  cost-effectiveness of granting the waiver. Ultimately, the TRICARE  Regional Office director reviews and analyzes the requests. If the  TRICARE Regional Office director agrees with the request, they make a  recommendation to the Director of TMA that the waiver request be  approved. Each analysis is tailored to the specific concerns outlined in the  waiver requests. Once implemented, waivers remain in effect indefinitely  or until TMA officials determine they are no longer needed.
As shown in table 3, the total number of waivers has increased from 15 to  24 since we last reported on TMA’s use of waivers in 2006. (See app. III for  more details about the waivers.) Additionally, 13 of the 24 waivers are for  locations in Alaska. (See app. IV for more information about access-to- care issues in Alaska.)
Other than assessing the effectiveness of a specific rate adjustment in  Alaska, TMA has not conducted analyses to determine if its rate  adjustments or the use of waivers have increased beneficiaries’ access to  civilian providers. Nonetheless, officials told us that using the waivers has  proved to be successful by maintaining the stability of the provider  networks and by increasing the size of the networks in some areas.
section_title: National and Local Shortages of Certain Provider Specialties Impede Beneficiaries’ Access to Civilian Providers, and TMA Is Limited in Its Ability to Address Them
paragraphs: Another main impediment to TRICARE beneficiaries’ access to civilian  providers is a shortage of certain provider specialties, both at the national  and local levels. However, TMA is limited in its ability to address provider  shortages because this impediment affects the entire health care delivery  system and is not specific to the TRICARE program.
subsections: section_title: National and Local Shortages of Certain Provider Specialties Impede Access
paragraphs: Although the number of civilian providers accepting TRICARE has  increased over the years, access to civilian providers remains a concern  due to national and local shortages of certain provider specialties. These  shortages limit access for the general population, including all TRICARE  beneficiaries regardless of enrollment status. Several organizations have  reported on national provider work-force shortages in primary care as well  as in a number of specialties. For example, the Association of American  Medical Colleges reported national shortages in provider specialties such  as anesthesiology, dermatology, and psychiatry. Additionally, the  contractors and regional office officials we met with told us that they were  particularly concerned about the national shortage of child psychiatrists.
In addition to national shortages, TRICARE beneficiaries’ access to  civilian providers also may be impeded in certain locations where there  are insufficient numbers and types of civilian providers to cover the local  demand for health care. According to the contractors, each TRICARE  region had areas with civilian provider shortages, for example:  In TRICARE’s West region, a Prime Service Area in northern California  had provider shortages in 21 different provider specialties, including  allergists and obstetricians as well as psychologists and psychiatrists.  According to this region’s contractor, either there were no providers  located in the area or the providers located in the area were already  contracted as TRICARE network providers.
In TRICARE’s South region, the contractor identified locations in Texas,  Louisiana, and Florida in which there were limited numbers of specialists  and mental health providers. For example, according to this contractor,  Del Rio, Texas has no providers in several specialties including  dermatology, allergy, and psychiatry.
Likewise, in TRICARE’s North region, the contractor stated that there are  mountainous areas, such as parts of West Virginia, and remote areas, such  as western North Carolina, in which there are provider shortages.
Consequently, the general population, including TRICARE beneficiaries,  has to drive longer distances to obtain certain types of specialty care.
section_title: TMA is Limited in How it Can Address Provider Shortages
paragraphs: TMA has attempted to address civilian provider shortages, but because  these shortages are not specific to the TRICARE program, there are  limitations in what TMA can do. One step TMA has taken is the adoption  of a bonus payment system that mirrors the one used by Medicare for  certain provider shortage areas. Under Medicare, providers who provide  services to beneficiaries located in Health Professional Shortage Areas— geographic areas that the Department of Health and Human Services has  identified as having shortages of primary health, dental, or mental health  care providers—receive 10 percent bonus payments. Beginning in June  2003, TMA began offering providers a 10 percent bonus payment for  services rendered in these same locations. TMA estimated that from fiscal  year 2007 through the third quarter of fiscal year 2010, more than 20,000  individual providers received these payments.
Currently, civilian providers must include a specific code on every  TRICARE claim they submit to obtain the additional payment. However,  TMA officials noted that some providers may not be receiving this bonus  because they do not include the specific code on their claims. TMA  officials noted the process will become easier once the third generation of  managed care support contracts is implemented. Once this occurs, the  contractors will rely on the Centers for Medicare & Medicaid Services’  public database of zip codes to determine a provider’s eligibility for these  bonus payments instead of requiring the provider to include a code on  each claim. TMA officials estimated that this change will result in an  additional $150,000 in bonus payments each year for TRICARE claims.
section_title: TRICARE Beneficiaries’ Access to Mental Health Care Is Affected by Provider Shortages and Other Issues
paragraphs: Access to mental health care is a concern for all TRICARE beneficiaries,  and it has been affected by provider shortages and other issues, including  providers’ lack of knowledge about combat related issues, providers’  concerns about reimbursement rates, and providers’ lack of awareness  about TRICARE. A 2007 report by the American Psychological Association  noted that shortages of mental health providers specifically trained in  military issues and the challenge associated with modifying the military  culture so that mental health services are less stigmatized are impediments  to TRICARE beneficiaries’ access to mental health care. Furthermore, the  report discusses that even where mental health providers are available, it  can be difficult to find psychiatrists and other mental health providers  with specific familiarity of TRICARE beneficiaries’ mental health  conditions such as post-traumatic stress disorder and deployment issues.  This can be frustrating for TRICARE beneficiaries who seek mental health  care only to discover that providers cannot relate to their specific  concerns.
Over the years, Congress has required DOD to report on TRICARE  beneficiaries’ access to mental health care providers. Specifically, the  NDAA for Fiscal Year 2008 required DOD to report on the adequacy of  access to mental health services under the TRICARE program. In 2009,  DOD reported that it believed access to mental health care providers for  TRICARE beneficiaries was adequate due to a dramatic increase in both  inpatient and outpatient mental health care provided in 2008. DOD also  cited increases in the numbers of mental health providers from May 2007  to May 2009 in both the direct care system of military treatment facilities  (1,952) and in the civilian provider network (10,220), while acknowledging  that there may still be some areas where access to mental health care  providers is inadequate. However, in the same report, DOD noted that  TRICARE Standard and Extra beneficiaries reported more problems  finding civilian mental health care providers than beneficiaries who use  other health care coverage, and that psychiatrists have the lowest  acceptance rates of new TRICARE Standard and Extra beneficiaries  compared with other providers.
In its 2009 Access to Mental Health Services report, DOD noted that two  reasons most cited by civilian mental health providers, including  psychiatrists, for not accepting new TRICARE patients were “not aware of  TRICARE” and “reimbursement.” DOD also reported that TMA would  increase outreach to mental health providers in selected locations to  improve awareness of the program. In addition to the increased outreach,  DOD also reported two initiatives designed to enhance beneficiaries’  access to mental health care—the Telemental Health Program and the  TRICARE Assistance Program. The Telemental Health Program connects  TRICARE beneficiaries in one office to civilian mental health providers in  another medical office through an audiovisual link. The TRICARE  Assistance Program is a Web-based program that enables certain  beneficiaries to contact licensed civilian counselors 24 hours a day for  short-term, nonmedical issues. Also, in recognition that mental health is  an issue of concern for its beneficiaries, each of the TRICARE Regional  Offices and contractors has established staff positions that focus  specifically on mental health issues, including access to care.
More recently, the NDAA for fiscal year 2010 required DOD to report on  the appropriate number of personnel to meet the mental health care needs  of servicemembers, retired members, and dependents and to develop and  implement a plan to significantly increase the number of DOD military and  civilian mental health personnel, among other requirements. In response  to this requirement, DOD reported in February 2011 that it has identified  criteria for the military services to use in determining the appropriate  number of mental health personnel needed to meet the needs of their  beneficiaries. However, DOD also noted that the military services are still  testing and validating these criteria to determine how effective they would  be in gauging adequate mental health staffing numbers. Therefore,  although DOD reported increases in the number of mental health  providers employed at military treatment facilities or contracted to join  TRICARE’s network of providers, it did not specifically estimate the  appropriate number of mental health care providers needed. DOD also  reported that initiatives are under way to increase the number of mental  health providers in military treatment facilities, including increasing the  number of Public Health Service providers serving in military treatment  facilities as well as recruitment and retention incentives. These initiatives,  if successfully implemented, could reduce the demand for civilian mental  health providers in those locations.
section_title: Although TMA Has Typically Used Feedback Mechanisms to Gauge TRICARE Standard and Extra Beneficiaries’ Access to Civilian Providers, It Is Developing a New Method for Monitoring Access
paragraphs: TMA and its contractors have used various feedback mechanisms, such as  surveys, to gauge beneficiaries’ access to care under TRICARE Standard  and Extra. More recently, TMA officials have taken steps to develop a  model to help identify geographic areas where beneficiaries that use  TRICARE Standard and Extra may experience access problems. However,  because this initiative is still evolving, it is too early to determine its  effectiveness.
subsections: section_title: TMA Has Primarily Relied on Feedback Mechanisms to Gauge Beneficiaries’ Access to Civilian Providers under TRICARE Standard and Extra
paragraphs: TMA has primarily relied on feedback to gauge beneficiaries’ access to  civilian providers under TRICARE Standard and Extra, as historically,  access to care has only been routinely monitored for beneficiaries enrolled  in TRICARE Prime, the only option with access standards. These  feedback mechanisms have included surveys of civilian health care  (including mental health care) providers as well as surveys of nonenrolled  beneficiaries who are eligible to use the TRICARE Standard and Extra  options as well as TRICARE Reserve Select. Additionally, TMA and its  contractors use feedback from beneficiaries’ inquiries and complaints to  help identify problems with access, among other issues.
In fiscal year 2005, TMA implemented its first multiyear survey of civilian  providers (network and nonnetwork) as required by the NDAA 2004.  TMA’s survey was supposed to assess beneficiaries’ access to civilian  providers under the TRICARE Standard and Extra options by determining  whether civilian providers would accept these beneficiaries as new  patients. In 2006, we reported on TMA’s survey methodology, among other  issues, and reported that it was sound and statistically valid. TMA’s results  for this first multiyear survey of civilian providers, which was fielded  through 2007, showed that about 8 of 10 physicians and behavioral health  providers accepted TRICARE beneficiaries as new patients, if they  accepted any patients at all. However, while these results appear  favorable, as we reported in 2006, there is no benchmark with which to  compare them.
Subsequently, the NDAA 2008 required TMA to conduct two multiyear  surveys—one of civilian providers and one of nonenrolled beneficiaries— to determine the adequacy of access to health care and mental health care  for these beneficiaries. In March 2010, we reported that the methodology  for both of TMA’s surveys was sound and generally addressed the  methodological requirements outlined in the law. TMA has completed the  first 2 years (2008 and 2009) of these surveys.
TMA and its contractors also use feedback collected from beneficiaries’  inquiries and complaints to identify and gauge potential problem areas,  including issues with access to care. However, this type of feedback is not  representative because not every beneficiary who has a question or  complaint will contact TMA or its contractors. TMA uses its Assistance  Reporting Tool to collect and analyze information on the beneficiary  inquiries that it receives, including inquiries on access to care from  beneficiaries who use TRICARE Standard and Extra. During fiscal years  2008 through 2010, data from the Assistance Reporting Tool showed that  only about 5 percent of closed cases on all TRICARE-related beneficiary  inquiries and complaints were from TRICARE Standard and Extra  beneficiaries. Further, of the total inquiries and complaints received from  these beneficiaries, TMA reported that 313 cases were access-to-care  related (2 percent).
The contractors separately receive feedback from beneficiaries through  some or all of the following methods: (1) telephone, (2) e-mail, (3) in- person at a TRICARE Service Center, or (4) in writing. Each contractor  collects and reports information on their beneficiary feedback differently.  In reviewing contractors’ data on beneficiary inquiries or complaints  received, we found:    During fiscal year 2009, TMA’s contractor in the North region reported  receiving 11,176 (less than 1 percent) access-to-care inquiries out of a total  of more than 5 million inquiries. This contractor does not categorize its  inquiries by TRICARE option, but does collect and categorize inquiries  specific to access-to-care concerns. In fiscal year 2010, the contractor  received 3,642 access-to-care inquiries (less than 1 percent) out of a total  of more than 5 million inquiries.
TMA’s contractor in the South region reported that during calendar year  2009, it received a total of 7,785 complaints. Of these, 175 (2 percent) were  submitted by TRICARE Standard and Extra beneficiaries. While access to  care did not represent a top reason for their complaints in 2009, this  contractor reported that 15 of the complaints received were related to  beneficiary appointment and wait times. This contractor also reported that  it received a total of 7,927 complaints in calendar year 2010. Of these, 134  (about 2 percent) were submitted by TRICARE Standard and Extra  beneficiaries, and only 14 of the 134 complaints were specific to  beneficiary appointment and wait times.
Finally, data submitted to us by TMA’s contractor in the West region  showed that it received a total of 809 grievances from TRICARE  beneficiaries between January 2008 and December 2010. Of these,  TRICARE Standard and Extra beneficiaries submitted 83 inquiries (about  10 percent), and about 2 percent of the 83 inquiries were specific to  provider appointment wait times.
section_title: TMA Has Initiated Steps to Establish a Method for Routinely Monitoring Access to Civilian Providers for TRICARE Standard and Extra Beneficiaries
paragraphs: TMA has recently initiated steps to establish an approach to routinely  monitor beneficiaries’ access to both network and nonnetwork providers  under the TRICARE Standard and Extra options. (The new approach will  also apply to beneficiaries using the TRICARE Reserve Select option.) In  recognition that the military health system had no established measures  for determining the adequacy of network and nonnetwork providers for  these beneficiaries, in February 2010, TMA’s Office of Policy and  Operations directed the TRICARE Regional Offices to develop a model to  identify geographic areas where they may experience access problems as  well as areas of provider shortages for the general population. The model  is intended to help the TRICARE Regional Offices and their contractors  identify geographic areas where additional efforts to increase access to  civilian providers may be warranted.
To implement this approach, TMA recommended that each regional office  adapt and standardize the model that had originally been developed by its  West regional office in 2008. This model applies a specific provider-to- beneficiary ratio based on the Graduate Medical Education National  Advisory Committee’s recommended standards for health care services  to different provider specialties to determine whether there are sufficient  numbers and types of providers for the nonenrolled beneficiary population  in certain locations. To identify locations for analysis, West regional office  officials used zip codes to identify locations with populations of 500 or  more nonenrolled beneficiaries. According to officials in the West regional  office, they then identified the network and nonnetwork providers who  practiced and had previously accepted a TRICARE patient in these same  locations and applied a specific provider-to-beneficiary ratio against each  provider specialty included in the model for the locations assessed. Each  regional office has developed a model that generally follows the same  methodology and includes similar data as the West regional office’s model,  although variations exist. For example, while one regional office includes  provider data that represents 15 provider specialties, another regional  office includes 40 provider specialties in its model. Officials at one  regional office told us they have plans to update their model to reflect  changes in the beneficiary population, and an official at another regional  office said that staff were already in the process of updating their model,  which may include additional provider demographic factors.
TMA directed each TRICARE Regional Office to apply the model at least  semiannually beginning on May 1, 2010. According to officials in TMA’s  South region, they plan to apply the model semi-annually as directed while  TMA’s regional offices in the North and West apply the model as needed.  More specifically, since TMA’s office in the North region implemented the  model, it has assessed 20 locations, and now applies the model as needed  in response to specific concerns. Meanwhile, officials from TMA’s office in  the West region told us that they initially applied the model to over 50  locations and that they now apply the model as needed, such as in  response to a specific inquiry about access to care in a particular location.  Officials in the North regional office noted that their model’s data are used  in conjunction with other indicators to assess if further analysis of civilian  provider availability is needed. Officials in the West region said that they  plan to reach out to providers in the community or use the contractor to  help recruit additional providers to the TRICARE network if the model  identifies an area that is short of their targeted number of providers in a  given specialty.
Based on our review of each regional office’s initial approach, we found  this methodology to be reasonable. However, because the regional models  were recently developed, it is too early to determine their effectiveness.  And, while the regional offices provided us with examples of their models,  they did not provide documentation of how they applied a provider-to- beneficiary ratio as criteria to determine the adequacy of access in these  locations or any documentation of their results, although they told us that  they did not identify any access problems.
section_title: TMA’s Contractors Educate Civilian Providers about TRICARE and Surveys Indicate That Providers Are Generally Aware of the Program
paragraphs: TMA’s contractors educate civilian providers about TRICARE program  requirements, policies, and procedures. Contractors also conduct outreach  to increase providers’ awareness of TRICARE, and TMA’s provider survey  results indicate providers are generally aware of the program. However,  providers’ awareness of TRICARE does not necessarily signify that they  have an accurate understanding of it.
subsections: section_title: TMA’s Contractors Inform Network and Nonnetwork Providers about TRICARE
paragraphs: Under the second generation of TRICARE contracts, TMA’s contractors  are required to conduct activities to help ensure that providers—both  network and nonnetwork—are aware of TRICARE program requirements,  policies, and procedures in their respective regions. To accomplish this,  the contractors are required to have active provider education programs.  In addition, each contractor must submit an annual marketing and  education plan to TMA’s Communications and Customer Service office  that outlines its methods for educating providers based on contractual  requirements. All contractors include details in these plans about their  efforts to satisfy requirements to distribute regular bulletins and  newsletters as well as educate new network providers, such as through  orientation sessions or with a Welcome Tool Kit.
The contractors’ marketing and education plans also identify provider  education efforts that vary across the regions. These efforts vary because  contractors have some flexibility in how they achieve outcomes and  because the contractors may include additional performance standards in  their contracts. Under the second generation of TRICARE contracts,  contractors have added performance standards related to provider  education. For example, one contractor must visit high-volume network  and nonnetwork providers in its region annually, while another contractor  must conduct annual seminars for the network and nonnetwork providers  in its Prime Service Areas. TMA reported that each contractor had  fulfilled its provider education requirements as of December 2010.
All of the contractors also make TRICARE education resources available  to providers. Many of these resources are available on the contractors’  Web sites and include the TRICARE Provider Handbook as well as quick  reference charts that include information on provider resources and  TRICARE covered benefits and services, among other topics. One  contractor hosts electronic seminars on its Web site that allow providers  to learn about the TRICARE program at their convenience. Another  contractor has developed a reference chart that details the Prime,  Standard, and Extra benefit options and has mailed it to both network and  nonnetwork providers in its region who have accepted TRICARE  beneficiaries as patients.
In addition, all of the contractors have conducted outreach activities to  promote or increase providers’ awareness of TRICARE. This has included  participating in provider events with local, state, or national groups,  including physician associations, medical societies, military treatment  facilities, and military associations. Contractors told us that while at these  events, they answer providers’ questions about the program, distribute  TRICARE materials, and encourage providers to join the regional  TRICARE network. All of the contractors have also participated in events  specific to behavioral health care. Contractors said that these events allow  them the opportunity to discuss behavioral health issues that may  particularly affect military servicemembers and their families, such as  suicide and post-traumatic stress disorder, with providers. The contractors  also use social media to highlight TRICARE information for providers,  including resources and program news and changes. For example, one  contractor used its Twitter account to provide a link to information on  how to become a network or TRICARE-authorized provider in its region.  Additionally, two of the TRICARE Regional Offices as well as two  contractors have specifically conducted outreach related to either  encouraging network and nonnetwork providers to accept TRICARE  beneficiaries as patients or thanking them for doing so. For example, in  January 2011, one contractor mailed letters to nonnetwork providers,  encouraging them to support TRICARE beneficiaries by joining the  network.
section_title: Results of TMA’s Provider Surveys Indicate a General Awareness of TRICARE, but May Not Necessarily Signify an Accurate Understanding of the Program
paragraphs: Although TMA’s provider surveys indicate a general awareness of the  program, these results may not signify an accurate understanding of  TRICARE. Survey results from TMA’s first multiyear survey (2005 through  2007) of civilian providers (network and nonnetwork) indicated that   87 percent of providers on average were aware of TRICARE. TMA’s  second multiyear survey of civilian providers (network and nonnetwork),  which has completed 2 years (2008 and 2009) of its 4-year cycle, similarly  asked whether providers were aware of the TRICARE program. Although  the results of this survey are not generalizeable, TMA’s results show that,  of those providers who responded, 87 percent on average were aware of  the program.
Although TMA’s survey results indicate that providers were generally  aware of TRICARE, this does not necessarily mean that providers had an  accurate understanding of the program’s options and its requirements. For  example, representatives of an association representing current and  former servicemembers told us that providers do not always understand  the differences between the TRICARE Standard and TRICARE Prime  options. Similarly, in a November 2008 report, CNA stated that the  providers they interviewed were often confused about the differences  between TRICARE Standard and TRICARE Prime. One provider, a  former president of a local medical society, said many providers are under  the misconception that TRICARE Standard is the same as TRICARE Prime  and that when providers have had bad experiences with TRICARE Prime,  which generally pays network providers less than Medicare, they end up  refusing to accept any TRICARE patients because they “don’t want to deal  with” a health maintenance organization. This lack of understanding is not  always easy to remedy. According to the contractors, because many  providers have relatively low volumes of TRICARE patients, it can be  challenging to encourage them to take advantage of the available  TRICARE education resources or to remain current on updates and  changes to the program. In 2009, the average percentage of Prime Service  Areas civilian providers’ and non-Prime Service Areas civilian providers’  TRICARE patient population (under any option) was 5.14 percent and 3.  42 percent, respectively.
section_title: TMA’s Contractors Educate Beneficiaries on All TRICARE Options and Provide Information on Network Providers; New Contracts Will Also Require Information about Nonnetwork Providers
paragraphs: Under the second generation of TRICARE contracts, TMA’s contractors  have beneficiary education programs that contain information on all of the  TRICARE options; contractors also maintain directories of network  providers. Under its third generation of contracts, TMA will also require  contractors to include information on nonnetwork providers in their  directories.
subsections: section_title: TMA’s Contractors Educate Beneficiaries on all TRICARE Options
paragraphs: Under the second generation of TRICARE contracts, TMA’s contractors  have established beneficiary education programs that contain information  on all of the TRICARE options, including Standard and Extra. To meet its  beneficiary education requirements, each contractor must submit an  annual marketing and education plan to TMA’s Communications and  Customer Service office that outlines the contractor’s methods for  educating beneficiaries based on its contractual requirements. For  example, the contractor may include details in its marketing and education  plan about intentions to distribute required beneficiary newsletters and  handbooks, which include information on TRICARE’s options and covered  services. These plans also specify how the contractors are to provide  required weekly one-hour TRICARE briefings to audiences specified by  the commanders of their regional military treatment facilities. TMA  reported that each of the contractors had fulfilled its beneficiary education  requirements as of December 2010.
TMA has only one beneficiary education requirement targeted to TRICARE  Standard and Extra beneficiaries: contractors must provide these  beneficiaries with the annual TRICARE Standard Health Matters  newsletter. The 2010 TRICARE Standard Health Matters newsletter  included articles on topics such as waiving cost-sharing for certain  preventive services under TRICARE Standard and Extra. In 2010, the  contractors mailed this newsletter to approximately 1.1 million TRICARE  Standard and Extra households and made it available electronically  through e-mail and their Web sites. Additionally, for the first time, in  summer 2010 TMA developed a second TRICARE Standard Health  Matters newsletter for TRICARE Standard and Extra beneficiaries in an  electronic format as an additional resource to fill any possible information  gaps to beneficiaries. The contractors then e-mailed the electronic  newsletter to beneficiaries and posted it to their Web sites. This  electronic newsletter included articles on topics such as how beneficiaries  may save money by using TRICARE Extra and how they can stay informed  about TRICARE. Two of the contractors told us that it is difficult to  communicate with TRICARE Standard and Extra beneficiaries because  they do not necessarily have ready access to the beneficiaries’ residential  or e-mail addresses as these beneficiaries are not required to enroll. This  lack of information can make communicating with these beneficiaries  challenging, and as a result, TRICARE Standard and Extra beneficiaries  may not receive all the available information on their TRICARE benefit. A  TMA official noted that TMA is not considering making the additional  electronic newsletter a requirement of the third generation of TRICARE  contracts, although the contractors may use it to communicate with  beneficiaries.
All of the contractors also make additional TRICARE education resources  available to beneficiaries. Many of these resources are available on their  Web sites, and may include the TRICARE Standard Handbook and  brochures that explain the different TRICARE options and costs to  beneficiaries, among other topics. For example, one contractor makes  games available on its Web site, which enables beneficiaries to  interactively learn about the TRICARE program. Another contractor posts  its own monthly newsletter to its Web site, through which beneficiaries  receive information about TRICARE, including its different options, and  activities specific to its region. Meanwhile, the third contractor has  developed several different fact sheets for beneficiaries that summarize  key TRICARE program elements in short, easy-to-read formats.
Each of the three contractors also conducts outreach to enhance  beneficiaries’ awareness of TRICARE. For example, each of the  contractors has attended events hosted by organizations such as the  Military Officers Association of America, the Enlisted Association of the  National Guard of the United States, the National Military Family  Association, the Military Health System, and the Adjutants General  Association of the United States. Contractors stated that while at these  events they can share TRICARE information with attendees. One  contractor also noted that while at these events it addresses beneficiaries’  concerns and directs them to further resources. Contractors also use  social media to communicate with beneficiaries and provide information  on different TRICARE topics, including (1) benefits, (2) resources, and (3)  health campaigns. For instance, one contractor used its Facebook page to  clarify whether TRICARE Standard beneficiaries needed primary care  managers to coordinate their referrals. Another contractor included  information on Facebook about how beneficiaries could access  information about their TRICARE benefit.
section_title: Contractors Provide Directories of Network Providers to Facilitate Access to Care; New Contracts Will Also Require Information on Nonnetwork Providers
paragraphs: To facilitate beneficiaries’ access to care, TMA requires its contractors to  maintain directories of TRICARE-authorized network providers. These  directories are to include current information (updated within 30 days)  about each network provider, including specialty, address, and telephone  number. The contractors are required to make their directories readily  accessible to all beneficiaries, and as a result, all of the contractors’ Web  sites have online provider directories. Under the second generation of  TRICARE contracts, TMA does not require its contractors to provide  similar information on nonnetwork providers. However, beneficiaries may  contact the TRICARE Regional Offices or the contractors for assistance in  locating a network or nonnetwork provider. Two of the contractors said  they currently collect information on nonnetwork providers who have  accepted TRICARE beneficiaries and can use this information to assist  beneficiaries in locating a nonnetwork provider. Beneficiaries can also use  TMA’s TRICARE Web site, which refers beneficiaries to the American  Medical Association’s provider directory and the Yellow Pages, to find a  nonnetwork provider. However, these online resources do not indicate  whether a provider is TRICARE-authorized or has accepted TRICARE  patients in the past.
TMA recognized that its Web site asked beneficiaries to “start from square  one” to identify a TRICARE-authorized nonnetwork provider. Although it  is not a routine practice for insurance companies to identify nonnetwork  providers in their online directories, in February 2010, TMA’s Deputy Chief  of TRICARE Policy and Operations recommended (through a memo) that  TMA establish an online search tool on its Web site to enable beneficiaries  to identify both network and nonnetwork providers no later than May 1,  2010. However, TMA noted that it did not have sufficient data to develop  this online search tool. Instead, TMA officials decided that under the third  generation of TRICARE contracts, each contractor would be responsible  for creating an online provider directory for its region that would include  information for beneficiaries on TRICARE-authorized providers, both  network and nonnetwork.
section_title: Agency Comments
paragraphs: We received comments on a draft of this report from DOD. (See app. VI.)  DOD concurred with our overall findings and provided technical  comments, which we incorporated where appropriate.
We are sending copies of this report to the Secretary of Defense and  appropriate congressional committees. The report is also available at no  charge on GAO’s Web site at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-7114 or williamsonr@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix VII.
section_title: Appendix I: TRICARE Reimbursement Rates That Remain Higher than Medicare Reimbursement Rates
paragraphs: Beginning in fiscal year 1991, in an effort to control escalating costs,  Congress instructed the Department of Defense (DOD) to gradually lower  its reimbursement rates for individual civilian providers to mirror those  paid by Medicare. Congress specified that reductions were not to exceed  15 percent in a given year. As of March 2011, there were seven  nonmaternity procedures or services for which reimbursement remains  higher under TRICARE than Medicare. (See table 4.)
Additionally, beginning in 1998, the TRICARE Management Activity (TMA)  established a policy that its reimbursement rates for some maternity  services and procedures must be set at the higher of the current Medicare  fee or the 1997 Medicare fee. As a result, the TRICARE reimbursement  rates for 36 maternity services and procedures are higher than Medicare.  (See table 5.)
section_title: Appendix II: TMA’s Studies on TRICARE Reimbursement Rates
paragraphs: TMA contracted with a health-policy research and consulting firm to  conduct a number of studies about specific TRICARE reimbursement  rates. Some of these studies resulted in changes to the TRICARE  reimbursement rates for certain procedures. A brief description of these  studies is provided below.
Studies of Reimbursement Rates for Specific Maternity/Delivery  Procedures, 2006 through 2011  Starting in 2006, TMA’s consultant has conducted annual comparisons of  TRICARE’s reimbursement rates for certain maternity/delivery procedures  with Medicaid reimbursement rates on a state-by-state basis. Any  reimbursement rates that were found to be below the Medicaid level of  payment have been increased.
For 2006, TMA found that for at least one procedure, the Medicaid rates in  12 states were higher than TRICARE reimbursement rates.
For 2007, TMA found that for at least one procedure, the Medicaid rates in  11 states were higher than TRICARE reimbursement rates.
For 2008, TMA found that for at least one procedure, the Medicaid rates in  18 states were higher than TRICARE reimbursement rates.
For 2009, TMA found that for at least one procedure, the Medicaid rates in  19 states were higher than TRICARE reimbursement rates.
For 2010, TMA found that for at least one procedure, the Medicaid rates in  the same 19 states were higher than TRICARE reimbursement rates.
For 2011, TMA found that 3 of the 19 states from 2010 no longer met the  criteria of having at least one maternity/delivery procedure with TRICARE  reimbursement rates lower than Medicaid. As a result, for at least one  procedure, the Medicaid rates in 16 states were higher than TRICARE  reimbursement rates.
Comparison of Commercial, Medicaid, and TRICARE  Reimbursement Rates for Selected Medical Specialties, April 2009  TMA’s consultant compared specific TRICARE reimbursement rates with  reimbursement rates from Medicaid and commercial insurers. For the  comparison with Medicaid rates, it identified commonly used procedures  for 13 medical specialties and compared TRICARE’s reimbursement rates  for these procedures with Medicaid’s fee-for-service rates in 49 states.  Overall, the median value of the 2009 Medicaid rates in the 49 states was  about 18 percent lower than TRICARE’s reimbursement rates. In 24 states,  the TRICARE reimbursement rates exceeded the state Medicaid program  rates for the 13 medical specialties reviewed. Conversely, the study found  that in 3 states—New Mexico, Arizona, and Wyoming—Medicaid rates, on  average, exceeded the TRICARE reimbursement rates for these 13  specialties. For the comparison with commercial rates, TMA’s consultant  analyzed reimbursement amounts for 12 medical specialties in 15  geographic market areas and found that commercial rates were higher  than TRICARE reimbursement rates for these 12 specialties in almost all  of the geographic market areas analyzed.
Review of TRICARE Reimbursement Rates for Pediatric Vaccines  and Immunizations, January 2009  TMA’s consultant studied TRICARE’s reimbursement rates for selected  pediatric immunizations and vaccines to determine whether TRICARE’s  reimbursement amounts were below the cost that pediatricians must pay  to acquire these vaccines. It analyzed 15 vaccines codes (which often  have more than one type of vaccine product associated with them) and  found that for each of the vaccine codes, TRICARE’s reimbursement rates  exceeded the average acquisition cost paid by pediatric providers for at  least one of the vaccine products. Overall, in 2007 TRICARE’s  reimbursement rates exceeded the average acquisition cost for the 15  vaccine codes by 30 percent (when weighted by volume). The study also  noted that some pediatricians may pay more than the average acquisition  price, and some network pediatricians may receive TRICARE  reimbursement rates below the average acquisition cost if they have  agreed to reimbursement discounts as a condition of belonging to the  TRICARE provider network. The study also compared TRICARE’s  reimbursement rates to those of Medicare and Medicaid. The study noted  that TRICARE uses the same vaccine prices and administration prices as  Medicare for vaccine codes for which Medicare sets a price (which is  mostly at 106 percent of the average sales price of the vaccine as of 2005— determined by the Centers for Medicare & Medicaid Services). For those  vaccines for which Medicare does not have a set price, TRICARE  reimbursement rates are set at 95 percent of average wholesale price— which is essentially a “list price” set by the manufacturer. When compared  to Medicaid’s rates, TRICARE’s reimbursement rate for the administration  of a vaccine or immunization was higher than Medicaid’s in every state in  2008.
Analysis of TRICARE Payment Rates for Maternity/Delivery  Services, Evaluation and Management Services, and Pediatric  Immunizations, March 2006  TMA’s consultant compared TRICARE’s reimbursement rates for 14  specific maternity/delivery services and a pediatrician office visit with  Medicaid and commercial payment rates. It found the following:    For these specific maternity/delivery services, TRICARE’s reimbursement  rates were higher than Medicaid rates in 35 of the 45 states reviewed.  Additionally, in 27 of the 35 states, the Medicaid payment rate for  deliveries was less than 90 percent of TRICARE’s reimbursement rates.  TRICARE’s reimbursement rates for deliveries were less than the median  commercial rates in all but one of the 50 markets studied (they were  equivalent in the remaining market). Overall, the median commercial rates  for deliveries were 24 percent higher than TRICARE’s reimbursement  rates in 2005.
For pediatric care, TRICARE’s reimbursement rate for a mid-level office  visit for an established patient (the most commonly billed code by  pediatricians) was higher than the state Medicaid reimbursement rate in 41  of the 45 states in 2005. However, the median commercial reimbursement  rates were 10 percent higher than TRICARE’s reimbursement rates in the  50 TRICARE markets examined.
TRICARE’s reimbursement for pediatric vaccines and injectable drugs  generally appeared to be reasonable when derived from Medicare pricing,  based on an analysis of private sector costs, average wholesale prices, and  average sales prices for top volume CPT codes. However, TRICARE’s  reimbursement rate for the pediatric and adolescent dose of the hepatitis  A vaccine was found to be 22 percent lower than estimated private sector  costs to obtain the vaccine in 2005. Specifically, the TRICARE  reimbursement rate for this vaccine dose was $22.64, while pediatricians  were paying between $27.41 and $30.37 for the vaccine. Based on the  results of this study, TMA used its general authority to deviate from  Medicare rates (upon which TRICARE rates are based), and starting May  1, 2006, TMA instructed the contractors to reimburse pediatric hepatitis A  vaccines nationally at a new reimbursement rate of $30.40.
section_title: Appendix III: TMA’s Use of Waivers
paragraphs: TMA has the authority to increase TRICARE reimbursement rates for  network and nonnetwork civilian providers to ensure that all beneficiaries,  including TRICARE Standard and Extra beneficiaries, have adequate  access to civilian providers. TMA’s authorities include: (1) issuing locality  waivers that increase rates for specific procedures in specific localities,  (2) issuing network waivers that increase some network civilian providers’  reimbursements, and (3) restoring TRICARE reimbursement rates in  specific localities to the levels that existed before a reduction was made to  align TRICARE reimbursement rates with Medicare rates for both network  and nonnetwork providers.
Locality waivers may be used to increase rates for specific medical  services in specific areas where access to civilian providers has been  severely impaired. The resulting rate increase would be applied to both  network and nonnetwork civilian providers for the medical services  identified in the areas where access is impaired. A total of 17 applications  for locality waivers have been submitted to TMA between January 2002  and January 2011. TMA approved 16 of these waivers. (See table 6.)
Network waivers are used to increase reimbursement rates for network  providers up to 15 percent above the TRICARE reimbursement rate in an  effort to ensure an adequate number and mix of primary and specialty care  network civilian providers in a specific location. Between January 2002  and January 2011, 13 applications for network waivers have been  submitted to TMA. Of these, eight network waivers have been approved by  TMA and five have been denied. (See table 7.)
TMA can also use its authority to restore TRICARE reimbursement rates in  specific localities to the levels that existed before a reduction was made to  align TRICARE rates with Medicare rates. On two occasions previously,  TMA has used this authority in Alaska to encourage both network and  nonnetwork civilian providers to accept TRICARE beneficiaries as  patients in an effort to ensure adequate access to care. In 2000, TMA used  this waiver authority to uniformly increase reimbursement rates for  network and nonnetwork civilian providers in rural Alaska, and in 2002,  TMA implemented this same waiver for network and nonnetwork civilian  providers in Anchorage. However, in 2007 TMA implemented a  demonstration project in Alaska that increased reimbursement rates to  match those of the Department of Veterans Affairs. As a result, the waivers  implemented under this authority were ended. As of January 2011, TMA  did not have any waivers of reimbursement rate reductions in place.
section_title: Appendix IV: Access-to-Care Concerns in Alaska
paragraphs: Access to health care in Alaska is hindered by unique impediments due to  its geographically remote location and small population base, which has  resulted in some of the highest costs for providing services in the country.  To identify and examine the unique access concerns for Alaska, we  reviewed the Interagency Access to Health Care in Alaska Task Force  Report to Congress. We also spoke with TMA officials and a representative  of the Alaska State Medical Association to obtain their views on the unique  access challenges in this state.
Federal health programs are the leading payer of health care services to  Alaska citizens, constituting approximately 31 percent of total health care  expenditures in the state in 2006. In 2010, the Department of Health and  Human Services reported that about 14 percent of the population in Alaska  had received health care from either DOD’s TRICARE program or from the  Veterans Health Administration. According to a 2009 study by the Alaska  Center for Rural Health, Alaska has a shortage of providers that has been  further impacted by its remoteness, harsh climate, and scarce training  resources. Workforce shortages in urban areas range from a complete  lack of certain specialists in Fairbanks and other towns, to a relative  shortage of primary care providers and many specialists in Anchorage.  Moreover, rural areas have far more difficulty attracting qualified  candidates than more heavily populated areas, such as Anchorage or  Fairbanks. TRICARE officials have identified this overall shortage of  providers and providers’ reluctance to accept TRICARE reimbursement  rates as the main impediments to TRICARE beneficiaries’ access to  civilian providers in Alaska—regardless of which option they use.
Alaska is part of TRICARE’s West region, and until recently, Alaska was  the only state for which TMA administered and managed TRICARE  directly as well as being the only state that did not have Prime Service  Areas with networks of civilian providers. In a November 2010 Federal  Register notice, DOD announced that the responsibility for administering  and managing TRICARE in Alaska would transfer from TMA to the  contractor for the West region. Additionally, the notice required the  contractor to develop networks of civilian providers in two Prime Service  Areas to be established around the military treatment facilities located at  Fort Wainwright and Eielson Air Force Base, near Fairbanks, Alaska. This  transition of responsibility took place in January 2011, and TMA expects  these Prime Service Areas to be developed by July 2011. Additionally, the  West region contractor noted that it expects to receive authorization to  develop a third Prime Service Area around Elmendorf Air Force Base in  Anchorage in late summer 2011.
TMA has taken actions to address TRICARE beneficiaries’ access to  civilian providers in Alaska by (1) increasing TRICARE’s reimbursement  rates through the use of waivers and a demonstration project and   (2) participating in a federal task force on the delivery of health care in  Alaska. Specifically, in areas where access is impaired, TMA has increased  reimbursement rates to encourage civilian providers to accept TRICARE  beneficiaries through TMA’s reimbursement waivers. Of the 24 waivers in  place as of January 2011, 13 are for locations in Alaska.
In addition, TMA began a demonstration project in Alaska in February  2007—originally expected to end in December 2009—that raised  reimbursement rates for physicians and other noninstitutional  professional providers so that on average, they matched those of the  Department of Veterans Affairs. Specifically, TRICARE’s 2007  reimbursement rates were increased approximately 35 percent. In July  2009, TMA conducted a preliminary assessment of the demonstration  project and found mixed results. Specifically, TMA’s analysis determined  that three of seven measures of access to care indicated that access had  improved since the beginning of the project, while the other four measures  did not show an improvement in access. Despite this inconclusive  assessment, TMA officials in the West region said that the demonstration  project and the use of waivers have increased access to care, as the  number of providers accepting TRICARE’s reimbursement rates increased.  According to these officials, the number of providers that have accepted  TRICARE’s reimbursement rate went from under 300 before the  demonstration project to almost 800, as of July 2010. Although DOD has  recognized that there have been mixed results on the effectiveness of the  demonstration project, it extended the demonstration project through  December 31, 2012.
Finally, in recognition that Alaska has unique health care challenges,  Congress established the Interagency Access to Care in Alaska Task Force  to review how federal agencies with responsibility for health care services  in Alaska are meeting the needs of Alaskans. The Task Force consisted of  members from the following: DOD (including TMA), the Department of  Veterans Affairs and its Veterans Health Administration, the Department of  Health and Human Services and its Centers for Medicare & Medicaid  Services and Indian Health Service, and the U.S. Coast Guard. In  September 2010, the Task Force issued its report recommending that,  among other things, federal agencies providing health care reimbursement  in Alaska should support current projects to develop a budget-neutral,  uniform provider reimbursement rate for similar services for Medicare,  TRICARE, and the Veterans Health Administration. According to TMA  officials, TMA is currently reviewing the Task Force’s recommendations to  develop options within the framework of current law and regulations.  However, the full implementation of the recommendations will be under  the direction of the Secretary of Health and Human Services.
section_title: Appendix V: Network Adequacy Reporting Requirement of Contractors under the Second Generation of TRICARE Contracts
paragraphs: Under the second generation of contracts, TMA’s contractors have been  required to develop and maintain adequate networks of providers, which  are to meet the needs of all TRICARE beneficiaries within Prime Service  Areas. In doing so, each contractor uses a different methodology for  determining the number of providers needed. Contractors are also  required to develop their own systems to continuously monitor and  evaluate network adequacy and to submit routine reports to TMA on the  status of their provider networks in accordance with contract  requirements. Specifically, TMA requires its contractors to submit monthly  and quarterly reports on network inadequacy and network adequacy,  respectively, and to submit corrective action plans for each instance of  network inadequacy.
The monthly report on network inadequacy must include information on  each instance in which a beneficiary enrolled in TRICARE Prime is being  referred to: (1) a provider outside of TMA’s time or distance standards or  (2) a nonnetwork provider. According to TMA officials, network  inadequacies may occur because of provider shortages; in such instances,  contractors are not held accountable for not meeting access standards.  However, other network inadequacies, particularly referrals to  nonnetwork providers, may also be due to other factors, such as network  providers not accepting new patients or beneficiaries’ not wanting to wait  for available appointments with network providers who are unable to  provide an appointment within TMA’s access standards. According to a  TMA official, none of the contractors have been cited for not meeting  TMA’s time and distance standards or for referrals to nonnetwork  providers under the second generation of TRICARE contracts.
Contractors’ quarterly reports include: (1) the total number of network  providers by specialty, (2) the number of additions and deletions to the  network by specialty, and (3) actions to contract with additional providers  in areas lacking networks to meet access standards, among other things.
section_title: Appendix VI: Comments from the Department of Defense
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Bonnie Anderson, Assistant  Director; Jennie F. Apter; Kaitlin Coffey; Jeff Mayhew; Lisa Motley; C.  Jenna Sondhelm; and Suzanne Worth made major contributions to this  report.
section_title: Related GAO Products
paragraphs: Defense Health Care: 2008 Access to Care Surveys Indicate Some  Problems, but Beneficiary Satisfaction Is Similar to Other Health Plans.  GAO-10-402. Washington, D.C.: March 31, 2010.
TRICARE: Changes to Access Policies and Payment Rates for Services  Provided by Civilian Obstetricians. GAO-07-941R. Washington, D.C.:   July 31, 2007.
Defense Health Care: Access to Care for Beneficiaries Who Have Not  Enrolled in TRICARE’s Managed Care Option. GAO-07-48. Washington,  D.C.: December 22, 2006.
Defense Health Care: Oversight of the TRICARE Civilian Provider  Network Should Be Improved. GAO-03-928. Washington, D.C.: July 31,  2003.
Defense Health Care: Oversight of the Adequacy of TRICARE’s Civilian  Provider Network Has Weaknesses. GAO-03-592T. Washington, D.C.:  March 27, 2003.
Defense Health Care: Across-the-Board Physician Rate Increase Would be  Costly and Unnecessary. GAO-01-620. Washington, D.C.: May 24, 2001.