Defense Health Care: TRICARE Select Implementation Plan Included Mandated Elements, but Access Standards Should Be Clarified
Released: 2018-04-13T00:00:00

Letter

Background

TRICARE Regional Structure and Contracts

Under TRICARE, beneficiaries may obtain health care through DOD’s system of military hospitals and clinics, referred to as military treatment facilities (MTF), or from civilian providers. DHA uses managed care support contractors to develop networks of civilian providers, referred to as network providers, to serve all TRICARE beneficiaries in geographic areas called Prime Service Areas. The contractors also perform other customer service functions, such as processing claims and assisting beneficiaries with finding providers. Each TRICARE region within the United States has a managed care support contractor. In July 2016, DOD awarded its fourth generation of TRICARE managed care support contracts. The new contracts reduced the number of TRICARE regions from three (North, South, and West) to two (East and West). On January 1, 2018, the TRICARE program began health care delivery under these contracts.

TRICARE’s Health Plan Options

Prior to January 1, 2018, TRICARE’s non-Medicare-eligible beneficiary population could obtain care through three basic health plan options— TRICARE Prime (managed care), TRICARE Standard (fee-for-service), and TRICARE Extra (preferred provider organization)—that varied by enrollment requirements, choices in civilian providers, and whether there were established access standards. Beginning January 1, 2018, the TRICARE Standard and Extra options were terminated and TRICARE Select, a self-managed, preferred provider option, was established. (See table 1.)

Beneficiaries using the TRICARE Standard and Extra options as of December 31, 2017, were automatically enrolled in TRICARE Select on January 1, 2018. Beneficiaries are allowed to change their plan at any time prior to January 1, 2019, after which they will only be able to change plans during an annual open enrollment season or within a certain time period following a qualifying life event. In August 2017, DOD estimated that over 2 million beneficiaries will be enrolled in TRICARE Select, which is approximately the same number of beneficiaries who used the TRICARE Standard option. According to DOD, approximately 66 percent of these beneficiaries resided in a Prime Service Area—where networks of civilian providers have been established.

TRICARE Select Implementation Plan

In addition to establishing the TRICARE Select option and making other TRICARE program changes, the NDAA 2017 required DOD to develop an implementation plan for TRICARE Select that includes seven specific elements. These elements are, in part, intended to ensure beneficiaries’ access to care under the TRICARE Select option, and they require DOD to ensure that at least 85 percent of the beneficiary population under TRICARE Select is covered by the network by January 1, 2018 (Element A); ensure access standards for appointments for health care that meet or exceed those of high-performing health care systems in the United States, as determined by the Secretary (Element B); establish mechanisms for monitoring compliance with access standards (Element C); establish health care provider-to-beneficiary ratios (Element D); monitor on a monthly basis complaints by beneficiaries with respect to network adequacy and the availability of health care providers (Element E); establish requirements for mechanisms to monitor the responses to complaints by beneficiaries (Element F); and establish mechanisms to evaluate the quality metrics of the network providers established under section 728 (of the NDAA 2017) (Element G).

DOD’s TRICARE Select Implementation Plan Included the Mandated Elements and Addressed Most Leading Planning Practices, but Does Not Reflect Current Approach for Access Standards

DOD’s Implementation Plan Included the Mandated Elements and Addressed Most Leading Practices for Strategic Management Planning

The TRICARE Select implementation plan DOD submitted to Congress included the seven specific elements mandated by the NDAA 2017. Specifically, the implementation plan described the upcoming changes to the TRICARE benefit and included individual sections outlining DOD’s approach for implementing each of the required elements. For example, for element A—ensure that at least 85 percent of the beneficiary population under TRICARE Select is covered by the network by January 1, 2018—DOD described, among other things, how the regional contractors will identify geographic areas with concentrations of TRICARE Select beneficiaries and how they will establish a sufficient provider network to serve that population.

We also found that the implementation plan reflected most of the leading practices for sound strategic management planning as identified by our prior work. (See table 2.) These leading practices suggest that strategic planning documents include the following: (1) a mission statement, (2) goals, (3) strategies to achieve goals, (4) plans to assess progress, and (5) identification of challenges and risks. For example, DOD’s implementation plan clearly articulated a mission statement, which is “to ensure beneficiaries receive the right level of care, at the right time, delivered by the right provider.” Additionally, for six of the mandated elements, DOD’s implementation plan outlined the goal, strategies to achieve the goal, and how DOD will assess progress. (See elements A, B, C, D, E, and F in table 2.) This information is supplemented by contract documents that require specific plans and data reports from the managed care support contractors. For example, for element A—ensure that at least 85 percent of the beneficiary population is covered by the network— each managed care support contractor is required to submit monthly performance reports that show that a sufficient number of providers in primary and specialty care are available to meet access requirements. While DOD’s implementation plan addressed many of our leading practices, there were instances where some of the leading practices were only partially addressed or not addressed at all. For example, none of the mandated elements incorporated the leading practice related to identifying the challenges and risks that could affect the success of the element.

Element G, Evaluation of Quality Metrics, Remains under Development We also found that the implementation plan partially addressed or did not address the leading practices related to strategies or plans to assess progress for element G—establish mechanisms to evaluate the quality metrics of the network providers. The plan stated that DOD is reviewing the required set of core quality performance metrics and will implement a subset of these performance measures that can be used in future contracts. However, the plan did not include several strategic details such as (1) the process that DOD will use to determine the metrics, (2) the criteria and resources that are needed to select the subset of these performance measures, and (3) how DOD will assess progress and evaluate future metrics. DOD officials told us that a workgroup of departmental officials—including those from DHA and the TRICARE Regional Offices and representatives of the military service branches— with expertise in health care quality are evaluating the metrics for inclusion in the subset of measures based on criteria such as availability of data, the size of the population affected, and resources needed; developing a work plan and time frames to analyze the metrics that are (1) already being reported, (2) not being reported but data are available, and (3) not being reported and require data solutions in order to track information; and making preliminary recommendations on which measures to adopt and which to consider for future adoption.

DOD officials explained that some of the details of their approach to the mandated elements had not been finalized when they were completing the implementation plan, including some of the details for element G, which continues to be a work in progress. They added that they were under tight time constraints with competing priorities. They explained that they had to plan for the implementation of TRICARE Select while concurrently transitioning to new managed care support contracts, which had to be modified to incorporate this new health plan option. Therefore, while DOD officials were developing the TRICARE Select implementation plan, they had to determine the specific program requirements for this option and modify the contracts to account for these changes.

Leading Practice on Challenges and Risks May Be Captured through Contract Oversight Mechanisms We also found that DOD’s implementation plan did not address the leading practice related to recognizing the challenges or risks to success for any of the seven elements. This practice ensures that an organization considers any external factors that could significantly affect the achievement of its goal. For example, for element A—ensure that at least 85 percent of the beneficiary population is covered by the network—the implementation plan did not address what challenges and risks the contractors might experience in establishing this network. For example, one of the two managed care support contractors stated that it did not have data on the beneficiaries who had sought coverage under TRICARE Standard and Extra as these beneficiaries did not have to enroll in these health plan options. Thus, the contractor explained that it was difficult to establish a baseline for calculating the 85 percent network coverage required for TRICARE Select. The other managed care support contractor told us that specific challenges included negotiating provider discounts in certain areas, identifying which providers participated in the past, and balancing the composition of the network between primary and specialty care. However, DOD officials told us that they considered and planned for the challenges and risks associated with certain elements—including establishing a monitoring and remediation process to help ensure contractors meet the 85 percent network coverage requirement—even though this was not described in the plan.

DOD officials explained that their approach to the implementation plan was to create a strategic overview rather than a detailed work plan. These officials also told us that details and time frames related to the mandated elements are captured in contract documents, such as those that establish the managed care support contractors’ reporting and planning requirements. Although these contract documents do not specifically address challenges and risks for each element, officials stated that they have oversight mechanisms in place that allow them to address any challenges faced by these contractors, thereby mitigating any potential risks. For example, DHA officials told us that the managed care support contractors provide status updates on their network expansion progress at weekly transition meetings with DHA and at biweekly meetings with the TRICARE Regional Offices. DHA officials told us that the TRICARE contracts have specific expansion goals and deadlines, such as requiring that 50 percent of network providers are in the system 120 days prior to the start of health care delivery. Given that both TRICARE Select and the new TRICARE contracts were implemented on January 1, 2018, it is too early to determine whether this approach will be sufficient to deal with any upcoming challenges and risks.

Implementation Plan Does Not Reflect Current Approach for Establishing Access Standards

Our review of element B—ensure access standards for appointments for health care that meet or exceed those of high-performing health care systems in the United States, as determined by the Secretary—noted that the approach described in the implementation plan differs from the approach that DOD intends to use. The implementation plan states that the access standards for TRICARE Select will mirror those of TRICARE Prime, DOD’s managed care option, and that DOD will continue to compare these standards with those of high-performing U.S. health care systems. However, DOD officials told us in interviews that the access standards for TRICARE Select will be developed by each managed care support contractor and approved by DOD. This approach is outlined in contract documents, which state that the contractors are required to develop access-to-care plans that detail how they will ensure access standards that meet or exceed those of high-performing health care systems in the United States.

DOD officials told us that they did not intend to suggest in the plan that the TRICARE Prime access standards would be applied to TRICARE Select. Instead, these officials explained that they meant that the access standards for TRICARE Select would be evaluated with the same tools as the access standards for TRICARE Prime. DOD officials further stated that they did not include information about the managed care support contractors proposing their own access standards because they were still developing the approach to this element when the implementation plan was submitted. DOD officials told us they decided on this approach because there is no national model for preferred provider organization access standards, and therefore they did not want to be prescriptive about the access standards for this option. However, as a result of this approach, there is the potential that the managed care support contractors for the East and West regions could be using two different sets of access standards for TRICARE Select.

Standards for internal control in the federal government state that management should externally communicate the necessary information to achieve the entity’s objectives. Because the implementation plan does not reflect DOD’s current approach, Congress may be lacking important information, including what responsibilities the contractors have in terms of providing access to care, impeding its ability to provide oversight.

Conclusions

On January 1, 2018, DOD implemented significant changes to the TRICARE program, which provides health care to millions of beneficiaries worldwide. One of these changes is the establishment of a new preferred provider option—TRICARE Select—intended to modernize the TRICARE benefit and improve beneficiaries’ access to care. While DOD’s implementation plan for this new option addressed all of the elements that were required, time constraints along with competing priorities impeded DOD’s ability to fully develop its approach for some elements, which are being addressed through other oversight efforts. Furthermore, although one of TRICARE Select’s primary goals is to improve access to care, DOD’s implementation plan does not reflect how access standards will be established. Without the most current information, it will be difficult for Congress to determine whether the department is achieving its mission of ensuring that beneficiaries receive the right level of care, at the right time, delivered by the right provider.

Recommendation for Executive Action

We recommend that the Secretary of Defense direct the Assistant Secretary of Defense (Health Affairs) to provide written documentation of DOD’s approach to developing and approving the TRICARE Select access standards, as well as the final access standards, to Congress. (Recommendation 1)

Agency Comments

We provided a draft of this report to DOD for comment. In its written comments, which are reproduced in Appendix II, DOD concurred with our recommendation. DOD stated that it will provide written documentation about the TRICARE Select access standards to Congress by June 30, 2018. DOD did not provide technical comments.

We are sending copies of this report to the Secretary of Defense and appropriate congressional committees. In addition, the report will be available at no charge on GAO’s website at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact me at (202) 512-7114 or at draperd@gao.gov. Contact points for our Office of Congressional Relations and Office of Public Affairs can be found on the last page of this report. Other major contributors to this report are listed in appendix II.

Appendix I: Leading Practices for Strategic Management Planning as Identified by GAO’s Prior Work

This appendix provides additional information regarding six elements identified by our prior work as leading practices for strategic management planning to establish a comprehensive, results-oriented framework. (See table 3.)

Appendix II: Comments from the Department of Defense

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Bonnie Anderson (Assistant Director), Daniel Klabunde (Analyst-in-Charge), and Karen Belli made key contributions to this report. Also contributing were Jacquelyn Hamilton and Elizabeth T. Morrison.