TRICARE has three options for its eligible beneficiaries: TRICARE Prime, a program in which beneficiaries enroll and receive care in a managed network similar to a health maintenance organization; TRICARE Extra, a program in which beneficiaries receive care from a network of preferred providers; and TRICARE Standard, a fee-for-service program that requires no network use. The programs vary according to the amount beneficiaries must contribute toward the cost of their care and according to the choices beneficiaries have in selecting providers. In TRICARE Prime, the program in which active duty personnel generally must participate, the beneficiaries must select a primary care manager (PCM) who either provides care or authorizes referrals to specialists. Most beneficiaries who enroll in TRICARE Prime select their PCMs from MTFs, while other enrollees select their PCMs from the civilian provider network. Regardless of their status—military or civilian—PCMs may refer Prime beneficiaries to providers in either MTFs or TRICARE’s civilian provider network. Both TRICARE Extra and TRICARE Standard require copayments, but beneficiaries do not enroll with or have their care managed by PCMs. Beneficiaries choosing TRICARE Extra use the same civilian provider network available to those in TRICARE Prime, and beneficiaries choosing TRICARE Standard are not required to use providers in any network. TRICARE Extra and Standard beneficiaries may receive care at an MTF when space is available. The Office of the Assistant Secretary of Defense for Health Affairs (Health Affairs) establishes TRICARE policy and has overall responsibility for the program. TMA, under Health Affairs, is responsible for awarding and monitoring the TRICARE contracts. DOD has delegated oversight of the civilian provider network to regional TRICARE lead agents. The lead agent for each region coordinates the services provided by MTFs and civilian network providers. The lead agents respond to direction from Health Affairs, but report directly to their respective Surgeons General. In overseeing the network, lead agents have staff assigned to MTFs to provide the local interaction with contractor representatives and respond to beneficiary complaints as needed and report back to the lead agent. Currently, DOD employs four civilian health care companies or contractors that are responsible for developing and maintaining the civilian provider network that complements the care delivered by MTFs. The contractors recruit civilian providers into a network of PCMs and specialists who provide care to beneficiaries enrolled in TRICARE Prime. Contractors are required to establish and maintain the network of civilian providers in the following locations: all catchment areas, base realignment and closure sites, other contract-specified areas, and noncatchment areas where a contractor deems it cost effective. These locations are called prime service areas. In the remaining areas, a network is not required. (See fig. 1.) This network of civilian providers also serves as the network of preferred providers for beneficiaries who use TRICARE Extra. In 2002, contractors reported that the civilian provider network included about 37,000 PCMs and 134,000 specialists. The contractors are also responsible for ensuring adequate access to health care, referring and authorizing beneficiaries for health care, educating providers and beneficiaries about TRICARE benefits, ensuring that providers are credentialed, and processing claims. In their network agreements with civilian providers, contractors establish reimbursement rates and certain requirements for submitting claims. Reimbursement rates cannot be greater than Medicare rates unless DOD authorizes a higher rate. DOD’s four contractors manage the delivery of care to beneficiaries in 11 TRICARE regions. DOD is currently analyzing proposals to award new civilian health care contracts, and when they are awarded in 2003, DOD will reorganize the 11 regions into 3—North, South, and West—with a single contract for each region. Contractors will be responsible for developing a new civilian provider network that will become operational in April 2004. Under these new contracts DOD will continue to emphasize maximizing the role of MTFs in providing care. See appendix II for maps depicting the current and future regions. DOD has standards intended to ensure that its civilian provider network enhances and supports the capabilities of the MTFs in providing care to millions of TRICARE Prime beneficiaries. DOD requires that contractors have a sufficient number and mix of providers, both primary care and specialists, to satisfy the needs of beneficiaries enrolled in the Prime option. Specifically, it is the responsibility of the contractors to ensure that each prime service area in the network has at least one full-time equivalent PCM for every 2,000 TRICARE Prime enrollees and one full-time equivalent provider (both PCMs and specialists) for every 1,200 TRICARE Prime enrollees. In addition, DOD has access-to-care standards that are designed to ensure that Prime beneficiaries receive timely care from providers. Under these standards appointment wait times shall not exceed 24 hours for urgent care, 1 week for routine care, or 4 weeks for well-patient and specialty care; office wait times shall not exceed 30 minutes for nonemergency care; and travel times shall not exceed 30 minutes for routine care and 1 hour for specialty care. Lead agents are responsible for ensuring that the civilian provider network meets these standards so that all TRICARE Prime beneficiaries in their region have adequate access to health care. To do so, lead agents told us they use network adequacy reports that contractors provide each quarter as the primary tool to oversee the network. According to DOD’s operations manual, these reports are to contain information on the status of the network, such as the number and type of specialists; data on adherence to the access standards; a list of civilian and military primary care managers; and the number of their enrollees. The reports may also contain information on steps contractors have taken to address any network inadequacies. However, because the reporting requirements do not specify a standard process for collecting information on network adequacy, contractors vary in how they obtain this information. For example, lead agents told us that one contractor conducts visits of providers’ offices to review appointment wait times, while another contractor uses an automated appointment tracking system to collect this information. Lead agents told us they also rely on beneficiary complaints to oversee the adequacy of the civilian provider network. Beneficiaries may complain directly to DOD, the contractor, lead agent, or MTF. DOD officials said that when they receive a beneficiary complaint, they direct the complaint to either the contractor, lead agent, or MTF, depending on the subject of the complaint. In addition to these tools, lead agents periodically monitor contractor compliance by reviewing performance related to specific contract requirements, including requirements related to network adequacy. Lead agents also told us they periodically schedule reviews of special issues related to network adequacy, such as conducting telephone surveys of providers to determine whether they are accepting TRICARE Prime patients. In addition, lead agents stated they meet regularly with MTF and contractor representatives to discuss network adequacy. If lead agents determine that the network is inadequate, the lead agents or TMA may issue enforcement actions to encourage contractors to address deficiencies in their region. However, lead agents told us that few enforcement actions have been issued. During our review, three enforcement actions related to network adequacy were open for the five regions we visited. Lead agents said they prefer to address deficiencies informally rather than take formal actions, particularly in areas where they do not believe the contractor can correct the deficiency because of local market conditions. For example, rather than taking a formal enforcement action, one lead agent worked with the contractor to arrange for a specialist from one area to travel to another area periodically. DOD’s ability to effectively oversee the TRICARE civilian provider network is hindered by (1) flaws in its required provider-to-beneficiary ratios, (2) incomplete reporting on beneficiaries’ access to providers, and (3) the absence of a systematic assessment of complaints. Although DOD has required the network to meet established ratios of providers to beneficiaries, the ratios may underestimate the number of providers needed in an area. Similarly, although DOD has certain requirements governing Prime beneficiary access to available providers, the information reported to DOD on this access is often incomplete—making it difficult to assess compliance with the requirements. Finally, when beneficiaries complain about availability or access in the network, these complaints can be directed to different DOD entities, with no guarantee that the complaints will be compiled and analyzed in the aggregate to identify possible trends or patterns and correct network problems. However, DOD has existing surveys and automated reporting systems that, while not designed specifically for monitoring the civilian provider network, could provide valuable information and potentially improve DOD’s ability to oversee the civilian provider network. The provider-to-beneficiary ratios contractors report to DOD for a prime service area do not always accurately reflect the potential health care workload for that area or the provider capability to deliver the care. In some cases, the provider-to-beneficiary ratios underestimate the number of providers, particularly specialists, needed in an area. This underestimation occurs because in calculating the ratios, some contractors do not include the total number of Prime enrollees within the area. Instead, in some areas contractors base their ratio calculations on the total number of beneficiaries enrolled with civilian PCMs and do not count beneficiaries enrolled with PCMs in MTFs. The ratio is most likely to result in an underestimation of the need for providers in areas in which the MTF is a clinic or small hospital with a limited availability of specialists. For example, the Air Force clinic at Grand Forks, N. Dak. has few specialists on staff and must rely on the civilian provider network for a large proportion of specialist care. In fiscal year 2002, 90 percent of its specialist appointments were referred to the network. In contrast, a large MTF, such as Wright Patterson Medical Center in Dayton, Ohio, has many specialist providers on staff and referred only 2 percent of its specialty appointments to the civilian provider network during fiscal year 2002.