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

Letter

Background

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.

TRICARE’s Benefit Options

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.

TRICARE Regional Structure and Contracts

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.

TRICARE Network and Nonnetwork Civilian Providers

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.

Beneficiaries’ Use of TRICARE

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.

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

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.

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

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.

National and Local Shortages of Certain Provider Specialties Impede Beneficiaries’ Access to Civilian Providers, and TMA Is Limited in Its Ability to Address Them

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.

National and Local Shortages of Certain Provider Specialties Impede Access

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.

TMA is Limited in How it Can Address Provider Shortages

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.

TRICARE Beneficiaries’ Access to Mental Health Care Is Affected by Provider Shortages and Other Issues

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.

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

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.

TMA Has Primarily Relied on Feedback Mechanisms to Gauge Beneficiaries’ Access to Civilian Providers under TRICARE Standard and Extra

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.

TMA Has Initiated Steps to Establish a Method for Routinely Monitoring Access to Civilian Providers for TRICARE Standard and Extra Beneficiaries

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.

TMA’s Contractors Educate Civilian Providers about TRICARE and Surveys Indicate That Providers Are Generally Aware of the Program

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.

TMA’s Contractors Inform Network and Nonnetwork Providers about TRICARE

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.

Results of TMA’s Provider Surveys Indicate a General Awareness of TRICARE, but May Not Necessarily Signify an Accurate Understanding of the Program

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.

TMA’s Contractors Educate Beneficiaries on All TRICARE Options and Provide Information on Network Providers; New Contracts Will Also Require Information about Nonnetwork Providers

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.

TMA’s Contractors Educate Beneficiaries on all TRICARE Options

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.

Contractors Provide Directories of Network Providers to Facilitate Access to Care; New Contracts Will Also Require Information on Nonnetwork Providers

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.

Agency Comments

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.

Appendix I: TRICARE Reimbursement Rates That Remain Higher than Medicare Reimbursement Rates

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.)

Appendix II: TMA’s Studies on TRICARE Reimbursement Rates

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.

Appendix III: TMA’s Use of Waivers

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.

Appendix IV: Access-to-Care Concerns in Alaska

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.

Appendix V: Network Adequacy Reporting Requirement of Contractors under the Second Generation of TRICARE Contracts

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.

Appendix VI: Comments from the Department of Defense

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

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.

Related GAO Products

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.