Defense Health Care: Access to Care for Beneficiaries Who Have Not Enrolled in TRICARE's Managed Care Option
Released: 2006-12-22T00:00:00

Letter

Background

In fiscal year 2005, almost 10 million beneficiaries were eligible to receive health care under TRICARE, DOD’s regionally structured health care program. Under TRICARE, beneficiaries have choices among three different benefit options and may obtain care from either MTFs or civilian providers. The NDAA for fiscal year 2004 directed DOD to conduct a survey to monitor access to care for beneficiaries who chose not to use TRICARE’s managed care option and to appoint a senior official to take actions to ensure that these beneficiaries have adequate access to care.

Composition of TRICARE’s Beneficiary Population

TRICARE beneficiaries fall into various categories, including active duty personnel and their dependents and retirees and their dependents. Retirees and certain dependents and survivors who are entitled to Medicare Part A and enrolled in Part B, and who are generally age 65 and older, are eligible to obtain care under a separate program called TRICARE for Life (TFL). As shown in figure 1, active duty personnel and their dependents represent 42 percent of the beneficiary population. Retirees and their dependents who are not entitled to Medicare (generally under age 65) comprised 44 percent of the TRICARE beneficiary population while retirees and dependents over 65 represented 14 percent of the beneficiary population.

Network and Nonnetwork Civilian Providers Under TRICARE

TRICARE beneficiaries can choose to obtain health care through MTFs or through civilian providers, which includes providers who belong to the TRICARE provider network as well as nonnetwork providers who agree to accept TRICARE beneficiaries as patients. Individual civilian providers must be licensed by their state, accredited by a national organization, if one exists, and meet other standards of the medical community to be authorized to provide care under TRICARE. Individual TRICARE- authorized civilian providers can include attending physicians, certified nurse-practitioners, clinical nurse specialists, dentists, clinical psychologists, physician assistants, podiatrists, and optometrists, among others. There are two types of authorized civilian providers—network and nonnetwork providers. Network civilian providers are TRICARE- authorized providers who enter a contractual agreement with the regional MCSC to provide health care to TRICARE beneficiaries. By law, TRICARE maximum allowable reimbursement rates must generally mirror Medicare rates, but network providers may agree to accept lower reimbursements as a condition of network membership. In some cases, they agree to accept negotiated reimbursement rates, which are usually discounts off of the TRICARE reimbursement rates, as payment in full for medical care or services. Network civilian providers are reimbursed at their negotiated rate regardless of whether they are providing care to enrolled TRICARE beneficiaries under the Prime option or nonenrolled TRICARE beneficiaries under the Extra option. Network civilian providers file claim forms for TRICARE beneficiaries and follow other contractually required processes, such as those for obtaining referrals. However, network civilian providers are not obligated to accept all TRICARE beneficiaries seeking care. For example, a network civilian provider may decline to accept TRICARE beneficiaries as patients because the provider’s practice does not have sufficient capacity or for other reasons.

Nonnetwork civilian providers are TRICARE-authorized providers who do not have a contractual agreement with an MCSC to provide care to TRICARE beneficiaries. Nonnetwork civilian providers may accept TRICARE beneficiaries as patients on a case-by-case basis. These providers may choose to accept the TRICARE reimbursement rate as payment in full for their services on a case-by-case basis. This practice is referred to as “participating” or accepting assignment on a claim. Nonnetwork civilian providers also have the option of charging up to 15 percent more than the TRICARE reimbursement rate for their services on a case-by-case basis—a practice referred to as “non-participating.” However, when a nonnetwork civilian provider bills more than the TRICARE reimbursement rate, TRICARE beneficiaries are responsible for paying the extra amount billed in addition to their required copayments. TROs and MCSCs told us that this authority is infrequently used, in part, because when providers bill the additional 15 percent, they usually collect their total reimbursement from the TRICARE beneficiaries, who may not always pay promptly. When nonnetwork civilian providers “participate” on a claim and agree to accept the TRICARE reimbursement amount as payment in full, the MCSCs usually pay them directly, ensuring timely payment of the claim.

TRICARE’s Benefit Options

TRICARE provides its benefits through three main options for its non- Medicare eligible beneficiary population that vary according to TRICARE beneficiary enrollment requirements, the choices TRICARE beneficiaries have in selecting civilian and MTF providers, and the amount TRICARE beneficiaries must contribute towards the cost of their care. However, while there are three main options, there are only two types of TRICARE beneficiaries—enrolled and nonenrolled—and two types of civilian providers—network and nonnetwork. (See table 1.) All beneficiaries may also obtain care at MTFs although priority is given to active duty beneficiaries and Prime enrollees.

The three main options with their corresponding enrollment requirements and provider categories are as follows: TRICARE Prime: This managed care option is the only TRICARE option requiring enrollment. Active duty servicemembers are required to enroll in this option while other TRICARE beneficiaries may choose to enroll. Prime enrollees receive most of their care from providers at MTFs, augmented by network civilian providers who have agreed to meet specific access standards for appointment wait times among other requirements. Prime enrollees have a primary care manager who either provides care or authorizes referrals to specialists. Beneficiaries can be assigned to a primary care manager at the MTF or, if the MTF is at capacity or no MTF is available, Prime enrollees may select a civilian primary care manager. Prime offers lower out-of-pocket costs than the other TRICARE options. Active duty personnel and their dependents do not pay enrollment fees, annual deductibles, or copayments for care obtained from network civilian providers. Retirees and their dependents who are not entitled to Medicare pay an annual enrollment fee and small copayments for care obtained from network civilian providers.

TRICARE Standard: TRICARE beneficiaries who choose not to enroll in Prime may obtain health care using this fee-for-service option, which is designed to provide maximum flexibility in selecting providers. Under Standard, nonenrolled TRICARE beneficiaries may obtain care from TRICARE-authorized nonnetwork civilian providers of their choice. TRICARE beneficiaries using this option do not need a referral for most specialty care. Under Standard, all TRICARE beneficiaries must pay an annual deductible and copayments, which vary among active duty dependents and retirees and their dependents, and there is no annual enrollment fee. In addition, nonnetwork providers are not required to meet access standards, such as those for appointment wait times.

TRICARE Extra: Similar to a preferred-provider organization, nonenrolled TRICARE beneficiaries may also obtain health care from a TRICARE network civilian provider for lower copayments than they would have under the Standard option—about 5 percent less. TRICARE beneficiaries choosing to use Extra must pay towards the same annual deductible as Standard and are responsible for copayments. Similar to Standard, there is no annual enrollment fee. Additionally, network civilian providers caring for nonenrolled TRICARE beneficiaries must adhere to the same access standards for appointment wait times that they use for enrolled TRICARE beneficiaries under Prime.

Among TRICARE beneficiaries who were not Medicare eligible in fiscal year 2005, about 5.5 million or 65 percent of TRICARE’s beneficiaries were enrolled in Prime and thereby declared their intent to use their TRICARE benefit. In contrast, TMA does not know whether nonenrolled beneficiaries intend to use their TRICARE benefit. In fiscal year 2005, claims data showed that about 1.2 million or 14 percent of nonenrolled TRICARE beneficiaries obtained care with 66 percent of this care being delivered through the Standard option and 34 percent delivered through the Extra option. The remaining 1.8 million or 21 percent of nonenrolled beneficiaries were eligible for TRICARE benefits but did not use them during this time period. At any time, this population of eligible nonusers could elect to use Standard or Extra, and DOD would reimburse claims submitted for their health care after annual deductibles are met.

TRICARE Contracts and Regional Structure

TMA uses three MCSCs to provide civilian health care under the TRICARE program. Each MCSC is responsible for the delivery of care to TRICARE beneficiaries in one of three geographic regions—North, South, and West. The MCSCs are contractually required to establish and maintain networks of civilian providers in designated locations within these regions that are referred to as Prime Service Areas. (See fig. 2 for the location of Prime Service Areas in each of the three TRICARE regions.) Prime Service Areas include all MTF enrollment areas, Base Realignment and Closure sites, and additional areas where either TMA or the MCSC deems networks to be cost effective. As a result, each region may contain multiple 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. TMA contractually requires that MCSCs’ civilian provider networks meet specific access standards, such as travel times or wait times, for both primary and specialty care. For example, TRICARE beneficiaries seeking primary care should not have to drive more than 30 minutes to get to their appointment locations. In addition to contractual requirements, the MCSCs can add additional access standards that they strive to meet.

MCSCs are also responsible for performing other customer service functions, such as processing claims and helping TRICARE beneficiaries locate providers. They also are required to operate TRICARE Service Centers, which are frequently located within MTFs, to provide TRICARE beneficiaries with information on the different TRICARE options, information on benefit coverage, assistance with finding network and nonnetwork civilian providers, determining eligibility status, and other activities. MCSCs provide customer service to any TRICARE beneficiary who requests assistance, regardless of their enrollment status.

In each of the three regions, TMA uses a TRO to manage health care delivery. TRO directors are considered the health plan managers for the regions and are responsible for overseeing the MCSCs, including monitoring network quality and adequacy, monitoring customer satisfaction outcomes, and coordinating appointment and referral management policies. TRO directors and staff also provide customer service to all TRICARE beneficiaries who request assistance regardless of their enrollment status.

Although they vary in the size of the geographic area covered, each TRICARE region has approximately the same number of TRICARE beneficiaries. However, the number of nonenrolled TRICARE beneficiaries varies by region as does their access to network providers under the Extra option depending on their proximity to a Prime Service Area. (See fig. 3 for the number and distribution of nonenrolled beneficiaries by region.)

Throughout the three regions, about 16 percent of nonenrolled TRICARE beneficiaries reside outside of Prime Service Areas. In the North region, 23 percent of nonenrolled TRICARE beneficiaries live outside of Prime Service Areas, and in the West Region, 21 percent of nonenrolled TRICARE beneficiaries live outside of Prime Service areas. Because the South Region has extensive Prime Service Areas, no TRICARE beneficiaries live in locations without a civilian provider network.

Although most nonenrolled TRICARE beneficiaries nationwide live in a Prime Service Area, making Extra a readily available option, nonenrolled TRICARE beneficiaries have used Standard more frequently than Extra for each fiscal year from 2001 through 2005. (See fig. 4.)

Requirements in the NDAA for Fiscal Year 2004 Related to Nonenrolled TRICARE Beneficiaries

The NDAA for fiscal year 2004 directed DOD to monitor nonenrolled TRICARE beneficiaries’ access to care under the TRICARE Standard option and to designate a senior official to take the actions necessary to ensure access to care for nonenrolled TRICARE beneficiaries. Specifically, the NDAA required surveys to be done in 20 market areas each fiscal year until all markets were surveyed to determine how many civilian providers were accepting nonenrolled TRICARE beneficiaries as new patients. Although the law focused on Standard, TMA officials told us that since nonenrolled TRICARE beneficiaries can receive care through both the Standard and Extra options, they designed the survey to monitor access to care from both network and nonnetwork providers.

When developing the survey’s methodology, TMA defined market areas as individual states and determined that all states could be surveyed within a 3-year period. TMA implemented its survey in fiscal year 2005 for the first 20 states. The survey collected data from the billing and insurance specialists of selected civilian providers, both network and nonnetwork, to determine how many were accepting nonenrolled TRICARE beneficiaries as new patients and to identify the reasons providers cite for not accepting these TRICARE beneficiaries. About 17 percent of the providers in the sample belonged to a TRICARE network while the remaining 83 percent of providers in the sample were nonnetwork providers. Because about 14 percent of all civilian providers belong to the TRICARE network, TMA’s sample of civilian providers is fairly representative of the network and nonnetwork civilian provider population serving all TRICARE beneficiaries, including nonenrolled beneficiaries who can use the Standard and Extra options. TMA’s four-question survey focused on a given provider’s awareness of TRICARE, whether the provider was accepting nonenrolled beneficiaries as new patients, and if not, the reasons why they were not. (See app. II for a detailed discussion of the methodology used for this survey and app. III for the complete survey instrument.)

The NDAA for fiscal year 2004 also required DOD to designate a senior official to take actions necessary for achieving and maintaining the participation of nonnetwork civilian providers in a number adequate to ensure care for nonenrolled TRICARE beneficiaries in each market area. According to this legislation, the senior official would have the following responsibilities: educating nonnetwork civilian providers about TRICARE, encouraging nonnetwork civilian providers to accept nonenrolled TRICARE beneficiaries as patients, ensuring that nonenrolled TRICARE beneficiaries have the information necessary to locate nonnetwork civilian providers readily, and recommending adjustments in reimbursement rates that the official considers necessary to ensure adequate availability of nonnetwork civilian providers for nonenrolled TRICARE beneficiaries.

TMA and Its MCSCs Use Various Methods to Evaluate Access to Care That Indicate Sufficient Access for Nonenrolled TRICARE Beneficiaries

TMA and its MCSCs use various methods for evaluating access to care, and according to TMA and MCSC officials, the resulting measures indicate that access to care is generally sufficient for nonenrolled TRICARE beneficiaries. TMA is administering the civilian provider survey required by the NDAA for fiscal year 2004, which is designed to obtain information on network and nonnetwork civilian providers’ willingness to accept nonenrolled TRICARE beneficiaries as new patients. TMA also obtains information about access to care through its annual health care survey of all TRICARE beneficiaries and through the anecdotal beneficiary feedback they receive from the TROs, which monitor access in their respective regions. MCSCs also use a variety of approaches to evaluate access to care, including inquiries from beneficiaries, analyses of claims data, and monitoring of the capacity of civilian provider networks.

TMA Uses Various Methods for Evaluating Access to Care

TMA uses multiple methods of evaluating access to care for its nonenrolled TRICARE beneficiaries, including the recently implemented survey of civilian providers and its annual health care survey of TRICARE beneficiaries. In addition, TMA monitors centrally received beneficiary complaints and inquiries, and each TRO monitors access to care in its respective region.

TMA’s Survey of Civilian Providers

In fiscal year 2005, TMA completed the first phase of its mandated survey of civilian health care providers. (See app. II for discussion of technical aspects of this survey’s methodology.) Although the survey was designed to determine the extent to which providers were willing to accept nonenrolled TRICARE beneficiaries as new patients, it is premature to interpret the results because this is the first of three rounds of the survey, and TMA does not have an established benchmark for determining the number of civilian providers that are needed for nonenrolled beneficiaries. During this initial round, TMA randomly selected a representative sample of over 40,000 providers in 20 states. TMA found that the majority of the providers surveyed were accepting new patients, including nonenrolled TRICARE beneficiaries. Specifically, only 14 percent of providers reported that they were not accepting new patients, including TRICARE patients, privately insured patients, or patients who were paying for their own care. Of the remaining 86 percent accepting new patients, the percent that would accept nonenrolled TRICARE beneficiaries as new patients averaged 80 percent for all 20 states. (See table 2 for overall results by state.) An additional comparison of the acceptance rate for two categories of providers—primary care providers and specialists—in each of these 20 states revealed very little difference between the two categories. Of those accepting new patients, 78 percent of primary care providers and 81 percent of specialists would accept nonenrolled TRICARE beneficiaries as new patients.

In addition to the statewide sample, TMA also sampled civilian providers in several smaller geographic locations, defined as hospital service areas (HSA), in order to respond to concerns about access to care that were specific to certain locations. TMA selected 29 HSAs—12 that were randomly selected from within the 20 states evaluated for fiscal year 2005 and 17 based on beneficiary concerns about specific locations. As in the 20-state survey, TMA found that most providers in the selected HSAs were accepting new patients, including nonenrolled TRICARE beneficiaries. Specifically, only 13 percent of surveyed providers reported that they were not accepting new patients. Of the remaining 87 percent accepting new patients, 81 percent were accepting nonenrolled TRICARE beneficiaries as new patients. (See table 3.) An additional comparison of the acceptance rates for primary care providers and specialists who were accepting new patients revealed that 75 percent of the surveyed primary care providers and 85 percent of the surveyed specialists would accept nonenrolled TRICARE beneficiaries as new patients. A further comparison of providers accepting nonenrolled TRICARE beneficiaries as new patients between the HSAs selected based on TRICARE beneficiaries’ concerns and the HSAs randomly selected from the 20 surveyed states showed minimal difference in acceptance rates—80 percent and 83 percent, respectively.

In both the states and HSAs, civilian providers who indicated that they were not accepting nonenrolled TRICARE beneficiaries as new patients were asked to identify why they made this decision in their own words, and were permitted to provide as many reasons as they wanted. More than half of both network and nonnetwork respondents cited not having a provider available or reimbursement issues as reasons. For providers citing nonavailability as a reason, many explained that they were either in the process of retiring or were too busy to accept any new patients at this time. Providers citing reimbursement issues most often stated an opinion that TRICARE’s reimbursement rates were low and that claims payment was slow. (See app. IV for TMA’s summary of the aggregate results by category.)

Although there is no benchmark with which to compare the results of the initial civilian provider survey effort, TMA officials stated that their analysis of the 2005 survey results did not indicate widespread problems with nonenrolled TRICARE beneficiaries’ access to care. Nonetheless, TRO officials used the survey results to identify specific cities in their regions where civilian providers’ acceptance of nonenrolled TRICARE beneficiaries and knowledge about TRICARE were low in comparison to the other locations surveyed. To assist in this effort, the Assistant Secretary of Defense (ASD) for Health Affairs directed TMA’s Communications and Customer Service Directorate to work with the TROs and other TMA officials to develop a strategic marketing plan for these locations. The cities selected by the TROs are as follows: West region: Olympia, Washington (2,732 nonenrolled beneficiaries), Monterey, California (1,180 nonenrolled beneficiaries), Seattle, Washington ( 2,358 nonenrolled beneficiaries), and Anchorage, Alaska (3,381 nonenrolled beneficiaries); North region: Brooklyn, New York (4,276 nonenrolled beneficiaries) and Eau Claire, Wisconsin (902 nonenrolled beneficiaries); and South region: Arlington, Texas (3,025 nonenrolled beneficiaries), Houston, Texas (6,415 nonenrolled beneficiaries), and Boca Raton, Florida (447 nonenrolled beneficiaries).

TMA officials and TRICARE beneficiaries have stated that additional survey questions could have yielded useful information. For example, the survey did not ask providers whether they are accepting new Medicare patients—an important proxy because TRICARE reimbursement rates are established using Medicare reimbursement rates, and a comparison of the two programs could provide information on whether providers are more concerned with the amount of reimbursement or other issues. Furthermore, the survey did not ask providers how much of their current practice consists of TRICARE beneficiaries, to capture whether or not providers may already have TRICARE beneficiaries in their practices. However, a provision in the NDAA for fiscal year 2006 instructs TMA to add the following questions to its civilian provider survey: 1. What percentage of Dr. X’s current patient population uses any form of TRICARE? 2. Does Dr. X accept patients under the Medicare program? 3. Would Dr. X accept additional Medicare patients?

TMA’s Beneficiary Health Care Survey

In addition to its civilian provider survey that covered 20 states, TMA gathers worldwide information on nonenrolled TRICARE beneficiaries’ access to care through its annual Health Care Survey of DOD Beneficiaries, which covers all TRICARE beneficiaries and all TRICARE options. According to survey results from 2003 through 2005, about 77 percent of nonenrolled TRICARE beneficiaries who obtained care reported that “getting needed care” was not a problem for them. Similarly, over 80 percent of these TRICARE beneficiaries reported that they could “get care quickly.” For the same time period, TMA compared its survey results with the results of a civilian health plan survey, the Consumer Assessment of Healthcare Providers and Systems (CAHPS®), which asked participants the same questions on access to care under their plans. From this comparative analysis, TMA found that a similar percentage of civilian health plan participants—about 80 percent—responded that “getting needed care” was not a problem and that they could “get care quickly.” TMA uses this survey as a benchmark to compare TRICARE against civilian plans.

Beneficiary Feedback

Anecdotal information about access to care is available through TMA’s centralized Beneficiary and Provider Services office, which collects and monitors information on TRICARE beneficiaries’ complaints and general inquiries, including issues about access to care. TRICARE beneficiaries may contact this office by telephone, e-mail, written correspondence, or through their congressional representatives. TMA officials broadly categorize each contact by issue and use this information to monitor trends in the feedback they receive through these contacts. A TMA official stated that if the number of contacts they receive related to an issue rises, the appropriate program officials—such as the TROs—are notified and encouraged to investigate the issue. Furthermore, TMA maintains a record of TRICARE beneficiary and provider contacts that have been addressed and those that remain open and continue to require attention. Although the Beneficiary and Provider Services office does not specifically track access-to-care issues as a separate issue, one of the TMA officials responsible for tracking the contacts told us that TRICARE beneficiary complaints and inquiries relating to access issues have been minimal. Overall, concerns and inquiries for the “contractor service complaint” category, which could include access-to-care issues for both enrolled and nonenrolled TRICARE beneficiaries, represented about 1 percent of about 6,900 total contacts about the MCSCs for 2005.

In addition, on a regional level, the TROs collect and monitor TRICARE beneficiary feedback gathered from e-mails and phone calls, as well as correspondence they receive from TRICARE beneficiary groups. However, the TROs told us that detailed information on each of these contacts is not routinely maintained. For example, one TRO told us that when a TRICARE beneficiary contacts them for assistance in locating a provider, they track the general reason for the call, but do not document the specific concerns. TRO officials told us that they receive only a small number of contacts from nonenrolled TRICARE beneficiaries who are unable to obtain care from nonnetwork civilian providers. For example, one TRO told us that they received approximately 34 requests for assistance locating a provider in calendar year 2005 from the over 600,000 nonenrolled TRICARE beneficiaries in this region. TRO officials indicated that sometimes these requests are due to TRICARE beneficiaries’ inability to obtain care from a specific provider at a specific time and are not necessarily indicative of access problems because that provider may be available at another time or other providers may be available. The TROs told us that they also monitor nonenrolled TRICARE beneficiaries’ access to care retrospectively by evaluating claims data as a record of health care usage. For example, the TROs use these data to identify how many network and nonnetwork providers have accepted nonenrolled TRICARE beneficiaries as patients and to evaluate the use of the different TRICARE options.

Finally, the TROs and military services are in the process of implementing a new method of monitoring TRICARE beneficiary feedback. The Assistance Reporting Tool (ART) is a computer database that when fully operational will be used to archive and manage TRICARE beneficiary feedback on all aspects of health care. Currently each of the three TROs, all Army MTFs, and a portion of Navy and Air Force MTFs use this system as either their primary or one of several tools for managing and archiving TRICARE beneficiary feedback. Because ART is not mandatory for all MTFs, the TROs also rely on other feedback mechanisms to capture the most complete record of TRICARE beneficiary concerns and questions. These other mechanisms include e-mails from TRICARE beneficiaries to MTFs and data requests that the TROs periodically make to MTFs. In addition, while the MCSCs are not required to use ART because it was introduced after TRICARE’s current health care delivery contracts were awarded, one of the MCSCs is currently using it. In the next cycle of TRICARE contracts, TMA officials told us that they plan to require that all MCSCs use this system. TMA officials who have reviewed the preliminary information captured by ART told us that the tool has obtained very little feedback that would indicate nonenrolled TRICARE beneficiaries are having problems with access to care.

MCSCs Have Approaches for Monitoring Access to Care Though They Are Not Specific to Nonenrolled TRICARE Beneficiaries

Each of the three MCSCs has developed its own methods for monitoring whether TRICARE beneficiaries in its region have access to care both in Prime Service Areas and in areas where provider networks do not exist. According to the MCSCs, while their methods for evaluating access to care were not designed to evaluate access specifically for nonenrolled TRICARE beneficiaries, they do provide some information that they use to monitor the availability of both network and nonnetwork civilian providers for this population, which is one component of access to care.

The MCSCs also monitor access to care through beneficiary inquiries. Each maintains a data system to archive and tabulate anecdotal TRICARE beneficiary feedback received through some or all of the following methods: telephone, e-mail, congressional correspondence, or walk-in visits to a TRICARE Service Center. The MCSCs organize TRICARE beneficiary feedback into subject categories and then monitor changes in the frequency of contacts in these categories to identify trends and important issues. At our request, each of the MCSCs reviewed their most recent TRICARE beneficiary complaint data and found very small numbers of comments pertaining to health care access. The MCSCs told us this was an indication that TRICARE beneficiaries—both enrolled and nonenrolled—were not experiencing any widespread problems with access to care. For example, one MCSC identified fewer than 40 complaints related to access out of one million contacts with TRICARE beneficiaries in a 1-month period. The second MCSC reported that for the last two quarters of 2005 they received an average of 355 inquiries and complaints each month about access to care. Officials from this MCSC told us that while their TRICARE beneficiary feedback system could not quantify the total number of inquiries received, these 355 inquiries represented a small percentage of all contacts. The third MCSC reported that out of more than 250,000 phone calls and walk-in visits to TRICARE Service Centers during the month of December 2005, 71 contacts, or less than 1 percent of the total contacts, were related to access.

The MCSCs also determine how many civilian providers have accepted at least one TRICARE beneficiary by analyzing claims data to examine the extent to which both network and nonnetwork civilian providers are accepting TRICARE beneficiaries as patients. Each MCSC has concluded that more than half of all licensed civilian providers—both network and nonnetwork—in their respective regions have accepted at least one TRICARE beneficiary, regardless of enrollment status, as a patient in the last year. According to MCSCs, access to care appears to be generally sufficient because the percentage of all licensed civilian providers in each region who have submitted at least one TRICARE claim during the past year are as follows: 90 percent in the South region, where TRICARE beneficiaries represent 3.7 percent of the entire region’s population; 56 percent in the West region, where TRICARE beneficiaries represent 3.1 percent of the region’s population; and 52 percent in the North region, where all TRICARE beneficiaries represent an estimated 2.1 percent of the region’s population.

Each MCSC told us that one of the primary ways they ensure sufficient access to care for both enrolled and nonenrolled TRICARE beneficiaries is by monitoring whether their civilian provider networks have the capacity to provide care to all beneficiaries in their Prime Service Areas. Throughout the three regions, the majority of nonenrolled TRICARE beneficiaries—84 percent—live within Prime Service Areas, making the choice of using a civilian network provider through Extra a readily available option for them. In the South region, all TRICARE beneficiaries reside in Prime Services Areas. In this region, the MCSC monitors access to care through geographic analyses of provider and TRICARE beneficiary locations to determine whether its networks meet the needs of both enrolled and nonenrolled TRICARE beneficiaries using TRICARE’s access standards. In another region, where not all TRICARE beneficiaries live in Prime Service Areas, the MCSC will assist nonenrolled TRICARE beneficiaries in finding nonnetwork civilian providers on an as-needed basis. In the third region where the Prime Service Areas also do not encompass all TRICARE beneficiaries, the MCSC recruits and contracts with providers outside of Prime Service Areas who are available and willing to deliver care to nonenrolled TRICARE beneficiaries living there. Network providers who deliver care in locations outside of Prime Service Areas currently account for 25 percent of this MCSCs’ network providers.

Various Factors Impede Providers’ Acceptance of Nonenrolled TRICARE Beneficiaries, and TMA and MCSCs Have Different Ways to Address Them

TMA, MCSCs, and provider representatives have cited various factors as impediments to civilian providers’ willingness to accept nonenrolled TRICARE beneficiaries as patients, and TMA and its MCSCs have different ways to address them. Some impediments are specific to TRICARE, including concerns about reimbursement rates and administrative issues, and TMA and its MCSCs have specific ways to address these issues. For example, TMA has the authority to increase reimbursement rates in certain circumstances, and both TMA and MCSCs conduct outreach efforts targeted to assist civilian providers with administrative issues. Other impediments—such as providers’ practices being at maximum patient capacity and provider shortages in certain locations—are not specific to TRICARE and are therefore inherently more difficult for TMA and the MCSCs to address.

Providers Cite Concerns about TRICARE’s Reimbursement Rates as a Reason for Denying Nonenrolled TRICARE Beneficiaries’ Access to Care, but TMA Has Authority to Adjust Rates When Needed

Since TRICARE was implemented in 1995, some civilian providers—both network and nonnetwork—have complained that TRICARE’s reimbursement rates tend to be lower than those of other health plans, and as a result, some of these providers have been unwilling to accept nonenrolled TRICARE beneficiaries as patients. According to the results of the initial round of TMA’s civilian provider survey, concern about reimbursement amounts was one of the primary reasons that both network and nonnetwork civilian providers cited for not accepting nonenrolled TRICARE beneficiaries as new patients. In the 2005 civilian provider survey, of those who gave reasons for not accepting nonenrolled TRICARE beneficiaries as new patients, 20 percent of network providers and 25 percent of nonnetwork providers cited concerns about reimbursement amounts. However, TMA has the authority to adjust reimbursement rates in areas where it determines that reimbursement rate amounts have been negatively impacting TRICARE beneficiaries’ ability to obtain care.

Providers’ Concerns about TRICARE Reimbursement Rates

One of providers’ main reasons for not accepting nonenrolled TRICARE beneficiaries as patients is providers’ concern about low reimbursement amounts. TRICARE’s reimbursement rates generally mirror reimbursement rates paid by the Medicare program. Beginning in fiscal year 1991, in an effort to control escalating health care costs, Congress instructed DOD to gradually lower its reimbursement rates for individual civilian providers to mirror those paid by Medicare—an adjustment that has saved hundreds of millions of dollars since the conversion. As of January 2006, the transition to Medicare rates was nearly complete, and reimbursement rates for only 48 services remain higher than Medicare reimbursement rates. (See app. V for a list of these services.)

According to TMA and MCSC officials, civilian providers, including both network and nonnetwork, generally seek to develop a practice that includes patients with higher-paying private insurers to compensate for the acceptance of patients with lower-paying health plans, including Medicare, Medicaid, and TRICARE. However, according to TMA and MCSC officials, TRICARE generally has little leverage to encourage network and nonnetwork civilian provider acceptance of its patients because the TRICARE population is small and transient. Further, in locations where the demand for providers’ services exceeds the supply— such as in Alaska—providers can be selective about who they accept as patients.

TMA and MCSC officials have also cited providers’ concerns that TRICARE’s pediatric and obstetric rates are lower than Medicaid rates for these services. To investigate these concerns, TMA conducted a comparative analysis that found TRICARE’s reimbursement rates for selected pediatric and obstetric procedures were generally higher than Medicaid’s rates in many states for March 2006. TMA compared the TRICARE reimbursement rate for the service most commonly billed by pediatricians—an office visit for an established patient—with Medicaid rates for this service and found that in 41 of the 45 states for which Medicaid data were available, the TRICARE reimbursement rate exceeded Medicaid’s rate for this service. In addition, TMA compared its reimbursement rates for 14 commonly used maternity and delivery services with Medicaid rates and found that in 35 of the 45 states for which Medicaid data were available, TRICARE reimbursement rates for these services exceeded the Medicaid payment rates.

TMA also analyzed reimbursement rates for pediatric immunizations based on MCSCs’ concerns that providers viewed these rates as too low. However, when TMA compared TRICARE’s reimbursement rates with the cost of the vaccine for the 10 most frequently used pediatric vaccines and for the hepatitis A vaccine, TMA’s analysts concluded that the TRICARE reimbursement rates were generally reasonable and not undervalued in relation to what a provider might actually pay to obtain them. Only one vaccine—the pediatric hepatitis A vaccine—appeared to be priced lower than the reasonable cost of obtaining the vaccine. In this instance, the TRICARE reimbursement rate was $22.64, while pediatricians were paying between $27.41 and $30.37 for the vaccine. As a result of this discrepancy, TMA used its general authority to deviate from Medicare rates, and starting May 1, 2006, TMA instructed the MCSCs to reimburse pediatric hepatitis A vaccines nationally at a new reimbursement rate of $30.40.

TMA Has Authority to Use Waivers to Adjust Reimbursement Rates

TMA has the authority to increase TRICARE reimbursement rates for network and nonnetwork civilian providers to ensure that all beneficiaries, including nonenrolled beneficiaries, have adequate access to care. TMA’s authorities include (1) waiving reimbursement rate reductions for both network and nonnetwork providers that resulted when TRICARE reimbursement rates were lowered to Medicare levels, (2) issuing locality waivers that increase rates for specific procedures in specific localities, and (3) issuing network-based waivers that increase some network civilian providers’ reimbursements. Once implemented, waivers remain in effect indefinitely until TMA officials determine they are no longer needed. As of August 2006, TMA had approved 15 waivers in total—2 waiving reimbursement rates reductions that resulted when TRICARE reimbursement rates were lowered to Medicare levels, 7 locality waivers, and 6 network waivers.

TMA can use its authority to waive reimbursement rate reductions 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, 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. The use of these waivers resulted in an average reimbursement rate increase of 28 percent for all of Alaska. However, in 2001, we studied the effect of the 2000 waiver on access to care in rural Alaska and found that it did not increase TRICARE beneficiaries’ access to care.

Locality waivers may be used to increase rates for specific medical services in specific areas where access to care has been severely impaired. Reimbursement rate increases for this type of waiver can be established in one of three ways: by adding a percentage factor to the existing TRICARE reimbursement rate, by calculating a prevailing charge, or by using another government reimbursement rate, such as rates used by the Department of Veterans Affairs to purchase health care from civilian providers. 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 severely impaired. A total of nine applications for locality-based waivers have been submitted to TMA between January 2003 and August 2006. (See table 4.) Of these, seven locality waivers have been approved by TMA and two are still pending. Six of the approved locality waivers as well as one pending application are for locations in Alaska. This includes one approved waiver to adjust the reimbursement rates for obstetric services to match Medicaid rates in Alaska and nine additional states based on TMA’s comparative analysis of reimbursement rates for 14 obstetrical procedures.

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 for a specific location. Between January 2002 and August 2006, 10 applications for network waivers have been submitted to TMA. Of these, 6 network waivers have been approved by TMA and 4 have been denied. (See table 5.)

Providers, TRICARE beneficiaries, MCSCs, as well as TRO directors may apply for a reimbursement rate waiver by submitting written requests supporting the need for reimbursement rate increases on the grounds that access to health care services is impaired due to low reimbursement rates. These requests must contain specific justifications to support the claim that access problems are related to reimbursement rates and must include information such as the number of providers and TRICARE beneficiaries in a location, the availability of MTF providers, geographic characteristics, and cost effectiveness of granting the waiver. All waiver requests are submitted to the TRO directors, who review the application and make a decision whether to forward the request to the Director of TMA through TMA’s contracting officers, who are responsible for administering the MCSCs’ contracts. According to a TMA official, the contracting officers work with TMA analysts to review the submitted requests and verify whether there is an insufficient number of providers in the area and conduct a cost-benefit analysis before making a recommendation to the Director of TMA that the waiver be accepted or denied. Each analysis is tailored to the specific concerns outlined in the waiver requests. According to this official, TMA conducts these additional analyses to ensure that an increase in reimbursement rates would actually alleviate access problems and that access was not impaired due to such things as administrative problems or providers’ unhappiness with claims payment timeliness or accuracy.

Once a waiver is granted, there is no mechanism that automatically terminates it. According to a TMA official, there was an expectation within TMA that the continued need for existing waivers would be evaluated on an annual basis. However, waivers have been reviewed on a periodic, ad hoc basis rather than on an annual basis as expected. When TMA implemented new MCSC contracts in fiscal years 2004 and 2005, TMA and the MCSCs discussed existing waivers and mutually agreed to extend all of them because they continued to believe that these waivers were necessary to ensure access to care. However, without a formal analysis of how these waivers have impacted access in the areas in which they were implemented, the actual extent of their effect is unclear.

Providers Cite Concerns About TRICARE’s Administrative Issues as Reasons for Not Accepting Nonenrolled TRICARE Beneficiaries, but MCSCs Use Various Methods to Address These Concerns

Since the inception of TRICARE, both network and nonnetwork civilian providers have expressed concerns about administrative issues or “hassles” associated with the program, which, when combined with low reimbursement rates, make them less likely to accept nonenrolled TRICARE beneficiaries as patients. TMA and MCSC officials stated that because TRICARE beneficiaries usually represent only a small percentage of a provider’s practice, both network and nonnetwork civilian providers may not be as knowledgeable about the program and its unique administration requirements. Adding to the potential for confusion, while some administrative requirements apply to all TRICARE beneficiaries, the TRICARE program also has separate and distinct administrative requirements for enrolled and nonenrolled TRICARE beneficiaries. For example, network providers must meet specific time frame and documentation requirements when referring enrolled TRICARE beneficiaries for specialty care or when delivering specialty care to enrolled TRICARE beneficiaries. However, referral standards usually do not apply to nonenrolled TRICARE beneficiaries. Additionally, according to the initial round of TMA’s civilian provider survey, 15 percent of network respondents and 7 percent of nonnetwork respondents who gave explanations for why they were not accepting nonenrolled TRICARE beneficiaries as new patients cited administrative inconveniences as a reason. These administrative inconveniences included too much paperwork, problems understanding the benefits and policies, and a lengthy referral process.

MCSC and TMA officials also told us that providers’ past experiences with TRICARE administrative issues may have biased their opinion of the program, while, in some cases, there have been improvements. For example, according to MCSCs and TMA officials, some providers perceive that previously identified claims processing problems persist and cite problems with timeliness and claims payment decisions as reasons for not accepting TRICARE patients. While claims processing problems plagued the TRICARE program in its early years, we reported in 2003 that efforts had been made to improve claims processing efficiency, and as a result, claims were being processed in a more timely manner, though some inefficiencies remained. In addition, some TRO officials and providers said that TRICARE claims payment decisions sometimes are not always clear to providers and, as a result, they may believe problems with claims processing exist. This is due in part to the fact that TRICARE’s claims processing outcomes may differ from Medicare’s—despite the programs’ similarities in reimbursement rates—due to different benefit structures and different claims processing tools that are used to prevent overpayment. Furthermore, because they do not always understand the program, providers and TRICARE beneficiaries may complain about adjudication decisions on claims that have been processed correctly. Problems may also occur because providers and TRICARE beneficiaries may make mistakes when filing their claims.

In efforts to address problems related to administrative issues, MCSCs conduct a variety of outreach efforts to educate nonnetwork civilian providers on TRICARE requirements and assist with both actual and perceived administrative concerns. For example, MCSCs provide on-line tools and toll-free telephone support to mitigate administrative issues. Also, one MCSC works with state medical associations to address provider concerns and to ensure that information about TRICARE requirements is included in medical association newsletters. Each of the MCSCs has provider relations representatives located in areas throughout the region outside of their central office. These provider relations representatives schedule opportunities to meet with nonnetwork civilian providers that include booths or speaking engagements at health fairs, conferences, and other provider events and, when necessary, work one-on-one with network and nonnetwork civilian providers to provide instructions on ways to respond to TRICARE’s administrative requirements and to help eliminate the burden of unnecessary paperwork. According to MCSCs, these efforts have been helpful because they are not experiencing widespread problems with TRICARE beneficiaries’ access to care. However, similar to the use of waivers, the actual extent to which these efforts have improved access to care is unclear.

Though TMA and MCSCs Attempt to Address Impediments That Are Not Specific to TRICARE, These Issues Cannot Always be Resolved

TMA and MCSCs attempt to address impediments to network and nonnetwork provider acceptance of nonenrolled TRICARE beneficiaries that are not specific to the TRICARE program. However, TMA and MCSCs cannot always resolve access problems related to these impediments. Some network and nonnetwork civilian providers may be unwilling to accept TRICARE beneficiaries as patients because their practices are already at capacity. For example, the initial round of TMA’s civilian provider survey found that 14 percent of providers in the 20 states surveyed were not available to accept any new patients, including TRICARE patients, privately insured patients, or patients who were paying for their own care. According to the MCSCs, access problems related to practice capacity are more likely to occur in geographically remote areas that have few providers than in more densely populated areas with more providers. However, one MCSC stated that access problems related to practice capacity can also occur in urban areas where the medical needs of the population exceed the supply of specific specialties, such as dermatology.

TRICARE beneficiaries’ access to care is also impeded in areas where there are insufficient numbers and types of civilian providers, both network and nonnetwork, to cover the local demand for health care. In these locations, the entire community is impacted by provider shortages. Consequently, TRICARE beneficiaries, as well as all other local residents, must sometimes travel long distances to obtain health care. MCSC officials stated that each TRICARE region includes areas with civilian provider shortages. For example, in TRICARE’s North Region, Watertown, New York, has an insufficient number of certain specialty providers for its population, which includes TRICARE beneficiaries stationed at a nearby military installation whose MTF is too small to handle all of their health care needs. TRICARE’s South Region contains many rural areas with few providers, including multiple locations in Oklahoma and Texas. Likewise, in TRICARE’s West Region, MCSC officials stated that there are provider shortages in various locations, including Cheyenne, Wyoming, and Mountain Home, Idaho.

TMA and the MCSCs have limited means of responding to access-to-care impediments in areas with network and nonnetwork civilian provider shortages, although TMA has adopted two bonus payment systems that mirror those used by Medicare for these areas. In June 2003, TMA began paying providers a 10 percent bonus payment for the services rendered in Health Professional Shortage Areas, which the Department of Health and Human Services has identified as having a shortage of primary care, dental, or mental health providers. Also, in January 2005, TMA followed Medicare in initiating payment of a 5 percent bonus for services rendered by primary care providers in geographic areas designated by the Department of Health and Human Services as Physician Scarcity Areas, a program that is only operational through 2007. Providers who are eligible for and wish to receive either of these bonus payments must include a specific code on every claim they submit to obtain these additional payments. According to a TMA official, TMA does not know the extent to which these payments have been used and has not evaluated the effectiveness of these bonus payments on access to care.

TMA and the MCSCs have attempted to overcome obstacles related to practice capacity and provider shortages by using high-ranking military personnel and field provider relation representatives to make personal appeals to network and nonnetwork civilian providers. In August 2004, the ASD for Health Affairs wrote a letter to providers appealing to their patriotism and asking them to accept TRICARE beneficiaries as patients. One MCSC official claimed that this letter has resulted in additional providers accepting both enrolled and nonenrolled TRICARE beneficiaries as patients. In addition, in certain areas where access is problematic, MCSC provider relations representatives or TRO officials personally call on providers to solicit their support of military personnel through TRICARE.

NDAA Responsibilities for Nonenrolled TRICARE Beneficiaries’ Access to Care Are Being Carried Out by TMA and the MCSCs, but Were Not Formally Designated to a Senior Official

Various TMA offices, including the TROs, and the MCSCs are carrying out the responsibilities that are outlined in the NDAA for fiscal year 2004 to take actions to ensure nonenrolled beneficiaries’ access to care, such as educating civilian providers and recommending reimbursement rate adjustments—though these responsibilities were not formally designated to a single, senior official. For example, TMA’s Communications and Customer Service Directorate has primary responsibility for education and marketing activities for all civilian providers—including nonnetwork providers—although the TROs and MCSCs also share this responsibility. (See table 6.) This office oversees a national contract for marketing and education materials with input from the TROs and the MCSCs. As part of this responsibility, this office designs and prepares marketing and education materials in conjunction with its contractor. On a regional level, the TROs and MCSCs also have responsibilities for educating both network and nonnetwork civilian providers. As part of these efforts, each TRO works with its region’s MCSC to host town-hall meetings and to provide briefings for network and nonnetwork civilian providers. In addition, the MCSCs contact, support, educate, and market to both network and nonnetwork civilian providers. For example, one MCSC distributes its monthly provider newsletter or bulletin to nonnetwork civilian providers who submit 25 or more TRICARE claims in 1 year. MCSCs also provide educational materials to civilian providers, including nonnetwork providers, and, in some instances, schedule provider seminars for nonnetwork providers.

Actions to encourage both network and nonnetwork civilian providers to accept nonenrolled TRICARE beneficiaries as patients are currently being addressed by the MCSCs. First, in areas with network civilian providers, MCSCs are required by contract to ensure that the networks are robust enough to provide health care to both enrolled and nonenrolled TRICARE beneficiaries in that location. As a result, MCSCs strive to ensure adequate numbers of network civilian providers who could also provide care to nonenrolled TRICARE beneficiaries. In addition, when nonenrolled TRICARE beneficiaries request assistance with finding providers, MCSCs work to encourage civilian providers, who could be either network or nonnetwork, to accept these TRICARE beneficiaries as patients. In some instances when a provider cannot be easily identified for a TRICARE beneficiary, MCSCs told us their provider relations representatives, who are knowledgeable about providers in their regions, will call on individual providers to encourage them to accept these TRICARE beneficiaries as patients. Nonetheless, as contractually required, MCSCs are focused on recruiting civilian providers for their networks and do not proactively recruit nonnetwork civilian providers to accept TRICARE beneficiaries as patients. Efforts to obtain nonnetwork civilian providers for nonenrolled TRICARE beneficiaries using the Standard option are initiated on an as- needed basis.

Additionally, TMA, its TROs, and the MCSCs all have procedures and tools in place aimed at ensuring that nonenrolled TRICARE beneficiaries can readily locate both network and nonnetwork civilian providers. A central TMA office maintains an online directory of both network and nonnetwork civilian providers who have accepted TRICARE beneficiaries as patients in the last 2 years. MCSCs’ Web sites provide a link to this TMA directory and also provide a directory of network civilian providers in their regions. Also, the TROs provide services, including assistance with locating civilian providers, to any TRICARE beneficiary who contacts them. Among other services they provide, Beneficiary Service Representatives at MCSC- operated TRICARE Service Centers assist “walk-in” TRICARE beneficiaries—regardless of their enrollment status—to locate providers. In addition, all MCSCs are contractually required to have representatives available by phone 24 hours a day, 7 days a week to assist with locating a network provider. One MCSC told us that if a network provider is not available, the phone representatives will help locate nonnetwork providers in the area.

Finally, the TROs currently are responsible for recommending reimbursement rate adjustments—that have been initiated by their offices, MCSCs, providers, and TRICARE beneficiaries—to increase provider reimbursement rates in areas where access to care is impaired for both enrolled and nonenrolled TRICARE beneficiaries. Since the TROs were established in 2004, two of the three TROs have recommended such increases to provider reimbursement rates in their regions.

Nonetheless, TMA has not formally designated a senior official to take responsibilities for nonenrolled TRICARE beneficiaries and nonnetwork civilian providers as outlined in the NDAA for fiscal year 2004. According to TMA officials, this role was assumed by the ASD for Health Affairs, who is responsible for overseeing DOD’s health programs and resources, because these responsibilities are included in the official directive for this position. According to senior TMA officials, the ASD for Health Affairs intended to delegate these responsibilities to the TRO directors. However, while this intent was communicated verbally, the delegation was never formalized in writing. TRO officials told us that while they were aware of the ASD for Health Affairs’ intent, they never received official notification or designation outlining these responsibilities and expectations. As a result, at the time of our site visits, the TROs had not undertaken any efforts beyond the level of assistance they were already providing to nonenrolled TRICARE beneficiaries and nonnetwork civilian providers. Nonetheless, during the time of our review, each TRO was in the process of assigning responsibilities for nonenrolled beneficiaries to a specific staff member in accordance with the staffing plan TMA established for the TROs. Additionally, officials at each of the TROs told us that they provide services and assistance to all TRICARE beneficiaries regardless of enrollment status.

To more directly assign responsibilities for nonenrolled beneficiaries’ access to care to the TROs, the NDAA for fiscal year 2006 specifically instructs the TROs to (1) identify nonnetwork providers who will accept nonenrolled TRICARE beneficiaries as patients; (2) communicate with nonenrolled TRICARE beneficiaries; (3) conduct outreach to nonnetwork providers, encouraging their acceptance of TRICARE beneficiaries as patients; and (4) publicize which nonnetwork providers in each region accept nonenrolled TRICARE beneficiaries as patients. It also requires that DOD submit annual reports to Congress on efforts to implement these activities.

Agency Comments and Our Evaluation

We received comments on a draft of this report from DOD (see app. VI). In its comments DOD stated that it appreciated the collaborative, insightful, and thorough approach that was taken with this important issue. However, DOD disagreed with our finding that it had not formally designated a senior official to ensure nonenrolled beneficiaries’ access to care, including adequate participation by nonnetwork providers, as required by the NDAA for fiscal year 2004. DOD stated that DOD directive 5136.12 assigned these duties to the TMA director and the TROs by designating the TMA Director as the program manager for TRICARE health and medical resources and other responsibilities. DOD stated that this responsibility clearly encompasses provision of care to nonenrolled beneficiaries and therefore meets the NDAA requirement.

We continue to believe that DOD has not adequately addressed the requirement in the mandate. First, in multiple interviews and e-mail exchanges during our audit work, senior DOD officials told us that no specific actions had been taken to designate a senior official and that, by default, the duties fell to the ASD for Health Affairs who is responsible for overseeing DOD’s health programs and resources. Further, during our site visits, TRO officials told us they had never been officially notified of their responsibilities and expectations for nonenrolled beneficiaries and nonnetwork providers. As a result, at the time of our site visits the TROs told us they had not undertaken any efforts beyond the level of assistance they had already been providing to nonenrolled beneficiaries and nonnetwork civilian providers. Second, we do not agree with DOD that the terms of the pre-existing directive satisfy the requirements of the mandate. Contrary to the requirement in the law that one official be designated, the directive generally assigns responsibilities to TMA, as well as to multiple TROs on a geographic basis. While part of the TROs’ responsibilities include developing a plan for the delivery of healthcare within the geographic region, the mandate contemplated a more global approach to addressing provider participation, specifically requiring one senior official to ensure provider participation in each market area.

DOD also provided technical comments that we incorporated where appropriate.

We are sending copies of this report to the Secretary of Defense, appropriate congressional committees, and other interested parties. We will also make copies available to others upon request. In addition, the report is available at no charge on the GAO Web site at http://www.gao.gov. If you or your staff have questions about this report, please contact me at (202) 512-7119. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions are listed in appendix VII.

Appendix I: Scope and Methodology

The National Defense Authorization Act (NDAA) for fiscal year 2004 directed GAO to review the processes, procedures, and analysis used by the Department of Defense (DOD) to determine the adequacy of the number of network and nonnetwork civilian providers and the actions taken to ensure access to care for nonenrolled TRICARE beneficiaries. Specifically, this report describes (1) how TRICARE Management Activity (TMA) and its managed care support contractors (MCSC) evaluate nonenrolled TRICARE beneficiaries’ access to care and the results of these evaluations; (2) the impediments to civilian provider acceptance of nonenrolled TRICARE beneficiaries, and how they are being addressed; (3) how DOD has implemented the fiscal year 2004 NDAA requirements to take actions to ensure nonenrolled TRICARE beneficiaries’ access to care.

TMA and MCSCs’ Evaluation of Nonenrolled Beneficiaries’ Access to Care and the Status of Access

To describe how TMA evaluates nonenrolled TRICARE beneficiaries’ access to care, we interviewed and obtained documentation from officials in TMA’s Health Program Analysis and Evaluation Directorate about its civilian provider survey, called the Survey on Continued Viability of TRICARE Standard. Although DOD was required to conduct a survey to assess nonenrolled beneficiaries’ access to care under the Standard option, the survey was administered to both network and nonnetwork civilian providers since nonenrolled beneficiaries can receive care from these providers under both the Extra and Standard options. We reviewed the survey methodology, including the methods for selecting respondents, the survey’s response rate, the designation of TRICARE market areas, and the survey instrument itself. We also reviewed TMA’s methods for randomly sampling market areas and providers and their administration of the survey instrument and found these decisions methodologically sound and statistically valid. In addition, we reviewed the survey results, including the published results and analysis. While we did not independently validate the survey data, we did assess the reliability of the data by reviewing survey documentation and internal controls and by interviewing knowledgeable agency officials and found that the data were sufficiently reliable for our purposes. To obtain information on how the civilian provider survey was developed, we interviewed officials at the Office of Management and Budget (OMB) because the Paperwork Reduction Act required OMB approval before it could administered. We also interviewed TRICARE beneficiary group representatives who had recommended sites for inclusion in the survey where nonenrolled TRICARE beneficiaries’ access to health care may be impaired. To identify how the civilian provider survey results would be used to evaluate access to care, we met with officials of TMA’s Office of Health Plan Operations, the director of TMA’s Standard Programs Division, and officials from the three TRICARE Regional Offices (TROs).

We also reviewed TMA’s annual Health Care Survey of Defense Beneficiaries and compared it with a survey conducted by the Department of Health and Human Services’ Consumer Assessment of Health Care Providers and System of individuals who received health care through civilian health insurers. These surveys include identical questions on access-to-care issues that allowed for comparative analysis of the opinions expressed by TRICARE beneficiaries and civilian health plan users. Using data from the 2003-2005 surveys we analyzed nonenrolled TRICARE beneficiaries’ responses to access to care and compared them with results from the Consumer Assessment of Health Care Providers and Systems. We did not independently verify the data from each of these surveys; however, we did assess the reliability of these data by reviewing related documentation and interviewing knowledgeable agency officials and found that they were sufficiently reliable for our purposes.

To further identify and describe other methods TMA and MCSCs used to evaluate care access for nonenrolled TRICARE beneficiaries, we met with officials of TMA, the TROs, MCSCs, and each of the services’ Office of the Surgeon General to obtain information on the systems they use for monitoring TRICARE beneficiary feedback and conducting other types of analyses, such as monitoring health care claims. The TROs and military services provided information on the Assistance Reporting Tool, a system that is being developed to monitor and archive TRICARE beneficiary feedback. The MCSCs also shared information about their independent systems for maintaining TRICARE beneficiary feedback. TMA, MCSC, and military service officials provided us with examples of TRICARE beneficiary feedback reports and health care claims data for nonenrolled TRICARE beneficiaries that TMA uses to evaluate access to care for this population. We did not independently verify data from the MCSCs’ TRICARE beneficiary feedback systems and TMA’s claims data files; however, we did assess the reliability of these data by interviewing knowledgeable officials and reviewing previous GAO work using these data and found that they were sufficiently reliable for our purposes. To identify how the MCSCs monitor access to care both in Prime Service Areas and in areas where networks have not been established, we obtained information about their techniques for network development and for civilian provider recruitment.

Impediments to Provider Acceptance of Nonenrolled TRICARE Beneficiaries and How They Are Being Addressed

To identify and describe the impediments to providers’ acceptance of nonenrolled TRICARE beneficiaries, we obtained information from TMA Health Plan Operations, TMA Health Program Analysis and Evaluation Directorate, TRO, and MCSC officials on the possible reasons that providers were unwilling to accept nonenrolled TRICARE beneficiaries as patients. We also met with representatives of TRICARE beneficiary groups and the American Medical Association to obtain anecdotal information about impediments to health care access and to supplement our data on possible access-to-care problems.

To identify and describe how impediments, such as TRICARE reimbursement rates and administrative issues, are being addressed, we reviewed TRICARE’s reimbursement policies and authorities as well as provider outreach strategies and marketing and education efforts of TMA and its MCSCs. We also reviewed the procedures for issuing waivers used to increase reimbursement rates in areas where TMA determines that access to care is impaired, including the application, review, and decision process. We then obtained information from TMA’s Office of Medical Benefit and Reimbursement Systems on all of the completed and pending requests for reimbursement waivers. Finally, we interviewed MCSC and TRO officials to identify the administrative issues that impact provider acceptance of TRICARE beneficiaries and how they conduct outreach efforts to alleviate problems and/or educate providers about these issues. However, we did not assess the extent to which these efforts improved civilian providers’ acceptance of nonenrolled beneficiaries as patients.

DOD Implementation of NDAA Fiscal Year 2004 Requirements for Oversight of Nonenrolled Beneficiaries’ Access to Care

To examine how DOD has implemented the NDAA fiscal year 2004 requirements for oversight of nonenrolled TRICARE beneficiaries’ access to care, we reviewed pertinent sections of this legislation outlining the tasks that DOD must perform to comply with the law. We interviewed officials in TMA’s office of Health Plan Operations, the director of the TRICARE Standard Programs Division, and officials in each of the TROs. To identify whether and how the oversight responsibilities outlined in the NDAA were being managed, we obtained information from TRO and MCSC officials for each of the three regions and TMA’s Communications and Customer Service Directorate to identify activities in place to educate network and nonnetwork providers about TRICARE Standard, to encourage network and nonnetwork providers to treat nonenrolled TRICARE beneficiaries, and to ensure that nonenrolled TRICARE beneficiaries have the information necessary to locate providers readily.

We conducted our work from July 2005 through December 2006 in accordance with generally accepted government auditing standards.

Appendix II: Methodology Used for TMA’s Civilian Provider Survey

The National Defense Authorization Act (NDAA) for fiscal year 2004 required that the TRICARE Management Activity (TMA) conduct surveys in TRICARE market areas within the United States to determine how many health care providers are accepting new patients under TRICARE Standard in each market area. The NDAA did not stipulate how TMA should define a market area but specified that 20 market areas should be completed each fiscal year until all market areas in the United States have been surveyed. Although the mandate focused on Standard, TMA officials designed the survey to monitor access to care from both network and nonnetwork providers since nonenrolled TRICARE beneficiaries can receive care through both the Standard and Extra options.

Before TMA could begin administering the civilian provider survey, it required review and clearance from the Office of Management and Budget (OMB) under the Paperwork Reduction Act. Subsequent to this review, OMB approved a four-item questionnaire for the study administered in fiscal year 2005. (See app. III for the approved questionnaire.)

In designing the Survey on Continued Viability of TRICARE Standard (the civilian provider survey), TMA defined the individual states and the District of Columbia as 51 market areas—a definition that will allow TMA to complete the survey of all markets within a 3-year period and to develop estimates of access to health care at both the state and national levels. However, in order to provide information on smaller geographic areas where nonenrolled TRICARE beneficiaries may be having problems finding either network or nonnetwork providers, TMA supplemented the statewide samples by oversampling from submarkets within each state called Hospital Service Areas (HSA). The HSA geographic designation is derived from a Dartmouth University study that groups zip codes into distinct sets based on the analysis of patient travel patterns to the hospital or hospitals they use most often. TMA endorsed the HSA submarket methodology because these areas are nonoverlapping and encompass all of the United States. In addition, nonenrolled TRICARE beneficiaries reside in almost all of the 3,436 HSAs. TMA’s methodology asks for oversamples from HSAs in the 24 states where 80 percent of nonenrolled TRICARE beneficiaries reside. When the study is complete in fiscal year 2007, TMA will have survey data from 2 HSAs selected randomly from each of the 24 states where the majority of nonenrolled TRICARE beneficiaries live, as well as information from HSAs purposively selected because TRICARE beneficiaries or TROs were concerned with access in these areas.

To select the market areas that would be surveyed in fiscal year 2005, TMA randomly selected sites from the individual states and the District of Columbia and randomly selected 12 submarket HSAs within the 20 market areas. In addition, in order to be able to respond to TRICARE beneficiary concerns that access in some locations was impaired, TMA selected 17 additional submarket HSAs that TRICARE beneficiaries had identified as problem areas in terms of access to health care. Four of these 17 sites were outside the 20 selected state-wide market areas because TRICARE beneficiaries had raised concerns about access issues in these locations.

TMA selected its sample for the civilian provider survey from the American Medical Association Masterfile, a data set of U.S. providers that includes data on all providers who have the necessary educational and credentialing requirements. This Masterfile did not differentiate between TRICARE’s network and nonnetwork civilian providers. However, TMA selected this file because it is widely recognized as one the best commercially available lists of providers in the United States and contains over 600,000 active providers along with their addresses, phone numbers, and information on practice characteristics, such as their specialty. Although the Masterfile is considered to contain most providers, deficiencies in coverage and inaccuracies in detail remain. Therefore, TMA attempted to update providers’ addresses and phone numbers and to ensure that providers were eligible for the survey.

From this Masterfile, TMA expected to randomly sample about 1,000 providers from each market and submarket area—a sample size that would achieve TMA’s desired margin of error. However, in some instances, a sample of 1,000 exceeded the number of providers in the market or submarket area, in which case TMA attempted to contact all providers in that area. Overall, TMA initially sampled about 41,000 providers, including both network and nonnetwork civilian providers. After verifying phone numbers and eliminating ineligible providers, TMA attempted to contact about 33,000 office-based providers in the 20 states and 29 HSAs evaluated in fiscal year 2005. When analyzing provider responses, TMA weighted each response so that the sampled providers represented the population from which they were selected.

To administer the civilian provider survey TMA hired a contractor, who conducted the fieldwork for this project. The contractor mailed a combined cover letter and questionnaire to the billing managers for all providers in their sample. If the provider did not respond to the mailed questionnaire, TMA followed up with a second mailing 3 weeks later and conducted a telephone interview within 30 days of the first mailing for those who did not respond to the mailed survey. During the survey period, telephone interviewers called each provider’s office up to 10 times in an attempt to obtain a completed survey.

Because the overall response rate to the survey was 55 percent, TMA conducted an analysis of their findings to determine whether the results were biased by a high percentage of providers not responding. Although TMA officials told us that OMB’s approval for the fiscal year 2005 survey did not specify a required response rate, OMB’s public guidance specifies that if response rates are lower than 80 percent, agencies need to conduct a nonresponse analysis. Such an analysis is used to verify that nonrespondents to the survey would not answer differently from those who did respond and that the respondents are representative of the target population, thus ensuring that the data are statistically valid. When conducting this analysis, TMA interviewed a sample of providers who did not respond to the original survey and compared their responses and demographics with the original survey respondents. TMA also compared nonrespondents’ demographics with those of the target population of health care providers. The results of TMA’s nonresponse analysis indicate that the survey respondents are representative of the target population of providers.

The nonresponse analysis provided additional useful information for TMA. First, it did not show a difference in the rate that responding and nonresponding network civilian providers were aware of the TRICARE program. However, it did show a statistically significant difference in the rate of awareness between responding and nonresponding nonnetwork civilian providers. These results indicate that having a familiarity with TRICARE increases a provider’s incentive to respond to the survey. In order to adjust for this bias, TMA could have calculated an adjustment to the sampling weights—an adjustment that has not been applied to the survey results. As a result, the unweighted survey results tend to overstate civilian providers’ awareness and acceptance of TRICARE. Nonetheless, TMA’s survey contractor noted that the survey results are not problematic if the survey is used to compare changes in awareness and acceptance from year to year. Further, TMA’s use of the unadjusted results of the initial survey phase as indicators of areas in which to focus marketing and outreach efforts is appropriate because TMA is using it to make relative comparisons of the areas surveyed.

TMA’s survey of civilian providers continues, and their analysts expect to complete data collection for the nation over a 3-year period ending in fiscal year 2007. Although TMA’s efforts meet the mandate’s requirement of surveying 20 market areas each fiscal year until all market areas were surveyed, collecting survey results over this period may limit TMA’s stated goal of deriving an overall national estimate because the national estimate will combine data collected over several years rather than during one relatively short time period, as well as the likelihood different instruments will be used over time. For example, four additional questions may be added to the fiscal year 2006 survey. TMA officials told us that the time lag could potentially impact the results used to derive a national estimate, but that their limited resources for this study prevent them from conducting a nationwide survey under a shorter time frame.

Appendix III: Civilian Provider Survey Instrument

The National Defense Authorization Act (NDAA) for fiscal year 2004 directed the Department of Defense (DOD) to monitor nonenrolled TRICARE beneficiaries’ access to care under the TRICARE Standard option. Although the mandate focused on Standard, nonenrolled TRICARE beneficiaries can receive care from both nonnetwork civilian providers through the Standard option and from network civilian providers through the Extra option. Beneficiaries can move freely between these options depending on their choice of civilian provider each time they receive care. Therefore, DOD’s survey was designed to monitor nonenrolled beneficiaries’ access to care from both network and nonnetwork providers. As each cycle of the survey is completed, TMA will be able to project survey results to the sampled market areas. When all cycles of the survey are complete, TMA will be able to project the survey data at the national level.

Following is the actual survey instrument that was used to obtain information from civilian providers. The staff administering this survey were not aware of whether the civilian providers they contacted were network or nonnetwork, and the same survey questions, which specifically mentioned the Standard option, were asked of all respondents. Nonetheless, if network civilian providers were to deliver care to nonenrolled beneficiaries, the responding providers’ staff would likely understand that this care would be provided under the Extra option. Therefore, for the purposes of the survey, the term “Standard” referred to both the Standard and Extra option.

Appendix IV: Categorized Responses to the Civilian Provider Survey’s Open-ended Question

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

CPT codeProcedure or service performed Biopsy, vertebral body, open; thoracic Bone marrow or blood-derived peripheral stem cell transplantation; allogenic Bone marrow or blood-derived peripheral stem cell transplantation; autologous Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with resection of ureteral or renal pelvic tumor Litigation or transaction of fallopian tube(s), abdominal or vaginal approach, unilateral or bilateral Litigation or transaction of fallopian tube(s), abdominal or vaginal approach, postpartum, unlaterial or bilateral, during same hospitalization (separate procedure)

Occlusion of fallopian tube(s) by device (eg. Band, clip, Galope ring) vaginal or suprapubic approach Cordocentesis (intrauterine), any method Fetal monitoring during labor by consulting physician (ie, non-attending physician) with written report; supervision and interpretation Fetal monitoring during labor by consulting physician (ie, non-attending physician) with written report; interpretation only Surgical treatment of ectopic pregnancy; tubal or ovarian, requiring salpingectomy and/or oophorectomy, abdominal or vaginal approach Surgical treatment of ectopic pregnancy; interstitial, uterine pregnancy requiring total hysterectomy Surgical treatment of ectopic pregnancy; cervical, with evacuation Cerciage of cervix, during pregnancy; vaginal Cerciage of cervix, during pregnancy; abdominal Vaginal delivery only (with or without episiotomy and/or forceps)

Vaginal delivery only (with or without episiotomy and/or forceps); including postpartum car External cephalic version, with or without tocolysis Delivery of placenta (separate procedure)

Cesarean delivery only; including postpartum care Vaginal delivery only, after previous cesarean delivery (with or without episiotomy and/or forceps)

Cesarean delivery only, following attempted vaginal delivery after previous cesarean delivery Cesarean delivery only, following attempted vaginal delivery after previous cesarean delivery; including postpartum care Treatment of incomplete abortion, any trimester, completed surgically Induced abortion, by dilation and curettage Induced abortion, by one or more intra-amniotic injuctions (amniocentesis-injections), including hospital admission and visits, delivery of fetus and secundines Induced abortion, by one or more intra-amniotic injuctions (amniocentesis-injections), including hospital admission and visits, delivery of fetus and secundines; with dilation and curettage and/or evacuation Induced abortion, by one or more vaginal suppositories (eg, prostaglandin) with or without cervical dilation (eg, laminaria), including hospital admission and visits, delivery of fetus and secudines Induced abortion, by one or more vaginal suppositories (eg, prostaglandin) with or without cervical dilation (eg, laminaria), including hospital admission and visits, delivery of fetus and secudines; with dilation and curettage and/or evacuation Induced abortion, by one or more vaginal suppositories (eg, prostaglandin) with or without cervical dilation (eg, laminaria), including hospital admission and visits, delivery of fetus and secudines; with hysterotomy (failed medical evacuation)

Multifetal pregnancy reduction(s) (MPR)

Vertebral corpectomy (vertebral body resection), partial or complete, transperitoneal or retroperitoneal approach with decompression of spinal cord, cauda equine or nerve root(s), lower thoracic, lumbar, or sacral; each additional segment (List separately in addition to code for primary procedure)

Strabismus surgery by posterior fixation suture technique, with or without muscle recession (List separately in addition to code for primary procedure)

Injection procedure during cardiac catheterization; for pulmonary angiography Injection procedure during cardiac catheterization; for selective right ventricular or right atrial angiography (eg.internal mammary), whether native or used for bypass.

Injection procedure during cardiac catheterization; for selective left ventricular or left atrial angiography Injection procedure during cardiac catheterization; for aortography Injection procedure during cardiac catheterization; for selective coronary angiography (injection of radiopaque material may be by hand)

Appendix VI: Comments from the Department of Defense

Appendix VII: GAO Contacts and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the contact named above, Bonnie Anderson, Assistant Director, Kevin Dietz, Cathleen Hamann, Lois Shoemaker, Robert Suls, and Suzanne Worth made key contributions to this report.