    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                             [H.A.S.C. No. 114-39]

                        THE DEPARTMENT OF DEFENSE VIEWS

                          ON THE MILITARY COMPENSATION

                          AND RETIREMENT MODERNIZATION

                          COMMISSION'S RECOMMENDATIONS

                        FOR MILITARY HEALTH CARE REFORM

                                   __________

                                    HEARING

                                   BEFORE THE

                       SUBCOMMITTEE ON MILITARY PERSONNEL

                                     OF THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD

                                 JUNE 11, 2015

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                                  ___________

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                       SUBCOMMITTEE ON MILITARY PERSONNEL

                        JOSEPH J. HECK, Nevada, Chairman

    WALTER B. JONES, North Carolina      SUSAN A. DAVIS, California
    JOHN KLINE, Minnesota                ROBERT A. BRADY, Pennsylvania
    MIKE COFFMAN, Colorado               NIKI TSONGAS, Massachusetts
    THOMAS MacARTHUR, New Jersey, Vice   JACKIE SPEIER, California
        Chair                            TIMOTHY J. WALZ, Minnesota
    ELISE M. STEFANIK, New York          BETO O'ROURKE, Texas
    PAUL COOK, California
    STEPHEN KNIGHT, California
                   Jeanette James, Professional Staff Member
                    Craig Greene, Professional Staff Member
                               Colin Bosse, Clerk

                                C O N T E N T S

                                  ----------
                                                                       Page

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Davis, Hon. Susan A., a Representative from California, Ranking
      Member, Subcommittee on Military Personnel.....................     2
    Heck, Hon. Joseph J., a Representative from Nevada, Chairman,
      Subcommittee on Military Personnel.............................     1

                                   WITNESSES

    Ediger, Lt Gen Mark A., USAF, Surgeon General, United States Air
      Force..........................................................     6
    Faison, RADM C. Forrest, III, MC, USN, Deputy Surgeon General,
      United States Navy.............................................     7
    Horoho, LTG Patricia D., USA, Surgeon General, United States Army     5
    Woodson, Dr. Jonathan, Assistant Secretary of Defense for Health
      Affairs, Department of Defense.................................     3

                                    APPENDIX

    Prepared Statements:

        Heck, Hon. Joseph J..........................................    29
        Woodson, Dr. Jonathan, joint with Surgeons General of the
          Military Departments.......................................    30

    Documents Submitted for the Record:

        Statement of the National Association of Chain Drug Stores...    53

    Witness Responses to Questions Asked During the Hearing:

        [There were no Questions submitted during the hearing.]

    Questions Submitted by Members Post Hearing:

        Mr. Jones....................................................    65
        Mr. Walz.....................................................    66
          33

                    THE DEPARTMENT OF DEFENSE VIEWS ON THE
                      MILITARY COMPENSATION AND RETIREMENT
                   MODERNIZATION COMMISSION'S RECOMMENDATIONS
                        FOR MILITARY HEALTH CARE REFORM

          House of Representatives,
            Committee on Armed Services,
              Subcommittee on Military Personnel,
                Washington, DC, Thursday, June 11, 2015.
    The subcommittee met, pursuant to call, at 3:00 p.m., in room
      2212, Rayburn House Office Building, Hon. Joseph J. Heck
      (chairman of the subcommittee) presiding.......................
                    OPENING STATEMENT OF HON. JOSEPH J. HECK, A
                      REPRESENTATIVE FROM NEVADA, CHAIRMAN,
                      SUBCOMMITTEE ON MILITARY PERSONNEL
    Dr. Heck. Good afternoon.........................................
    I want to welcome everyone to this hearing to discuss the
      Department's views on the Military Compensation and Retirement
      Modernization Commission's recommendations for reforming the
      military healthcare system.....................................
    I apologize for our tardiness. We understand there will be
      another vote coming up somewhere between 3:30 and 4:00. So we
      will try to get through as much as practically possible........
    We ask the witnesses to bring their statements down to 3 minutes
      so that we can get to questions. And then, once the vote is
      called, we will determine whether or not we need to come back.
      It is only one vote. So it should take no more than walking
      time there and back if we need to continue.....................
    As we studied the Commission's recommendations over the past 5
      months, we considered the views of our current and retired
      service members through the organizations that represent them..
    We heard mixed reviews about TRICARE and the military health
      system. However, the consistent viewpoint is that TRICARE can
      and should be improved. We take their concerns seriously and
      will consider all views before undertaking any changes to the
      military healthcare system.....................................
    That being said, I do believe that we can all agree that the work
      conducted by the Commission identified weaknesses in the
      current system that give us an opportunity to focus our efforts
      as we discuss reforming the Military Health System.............
    It is our duty, as the Military Personnel Subcommittee, to get to
      the root cause of the issues and help determine the best course
      of action to fix them. Today is the first hearing where we will
      receive specific testimony from the Department of Defense [DOD]
      on their reaction to the Commission's recommendations to
      improve health benefits for our service members and their
      families.......................................................
    I am interested in hearing from our distinguished panel if they
      agree or disagree with the Commission's recommendations or if
      they have alternative suggestions for addressing the perceived
      shortfalls identified by the Commission........................
    In addition, I am interested in hearing the Surgeons General's
      views on how the recommendations would specifically affect the
      future of the military treatment facilities and the direct care
      system.........................................................
    As I said before, guiding consideration for our work is to ensure
      that we can continue to recruit and retain the best and
      brightest in order to maintain the viability of the All-
      Volunteer Force and ensuring that we do not break faith with
      our service members, retirees, and their family members........
    [The prepared statement of Dr. Heck can be found in the Appendix
      on page 29.]...................................................
    Dr. Heck. I would like to take this opportunity to ask unanimous
      consent to enter a statement from the National Association of
      Chain Drug Stores into the record..............................
    Without objection, so ordered....................................
    [The information referred to can be found in the Appendix on page
      53.]...........................................................
    Dr. Heck. And before I introduce the panel, let me offer the
      ranking member, the distinguished woman from California,
      Congresswoman Davis, an opportunity to make her opening
      remarks........................................................
                    STATEMENT OF HON. SUSAN A. DAVIS, A
                      REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER,
                      SUBCOMMITTEE ON MILITARY PERSONNEL
    Mrs. Davis. Thank you very much. Thank you, Mr. Chairman.........
    And welcome to all of you, all of our witnesses, particularly
      those who I have known from San Diego..........................
    And it is great to see you here, Admiral Faison..................
    This topic, as we all know, is very important. It is very
      important to the committee. It is very important to the men and
      women and their families who serve our country. So as we move
      forward toward reforming TRICARE, we have to really hold on to
      this, I think, and really explore it well......................
    We have a responsibility to ensure that we provide a cost-
      effective world-class healthcare system for our military. And
      while we have had several hearings and briefings on the
      Commission's recommendations, this is really the first time
      that we have had to hear from the Department of Defense with
      their thoughts on the healthcare piece.........................
    And, more importantly, this is an opportunity to begin discussing
      the best way to improve TRICARE and military readiness. The
      Department obviously has to balance medical readiness with the
      rising cost of health care while at the very same time
      improving access, improving choice, and quality care for
      beneficiaries. We know that this is no easy task...............
    I look forward to hearing from the witnesses on how they propose
      that we move forward...........................................
    Thank you, Mr. Chairman..........................................
    Dr. Heck. Thank you, Mrs. Davis..................................
    We are joined by a distinguished panel representing the offices
      of the Secretary of Defense in the military departments. We
      will give each witness the opportunity to present his or her
      testimony and each member an opportunity to question the
      witness........................................................
    Again, we would ask the witnesses to keep their spoken testimony
      down to 3 minutes. Your entire written testimony will be made
      part of the hearing record.....................................
    Now let me welcome our panel:....................................
    Dr. Jonathan Woodson, Assistant Secretary of Defense for Health
      Affairs and my former senior rater.............................
    Lieutenant General Patricia D. Horoho, Surgeon General of the
      United States Army.............................................
    And I understand this is probably the last time that you will be
      appearing before our subcommittee..............................
    General Horoho. I hope so........................................
    Dr. Heck. I want to say thank you for your lifetime of service
      and looking out for the men and women in uniform and for your
      passion and leadership on championing the Performance Triad....
    General Horoho. Thank you very much..............................
    Dr. Heck. Lieutenant General Mark A. Ediger, Surgeon General of
      the United States Air Force, newly appointed...................
    Congratulations and welcome......................................
    And Rear Admiral C. Forrest Faison III, Deputy Surgeon General of
      the United States Navy.........................................
    Welcome, sir.....................................................
    With that, I turn the floor over to you, Secretary Woodson.......
                    STATEMENT OF DR. JONATHAN WOODSON, ASSISTANT
                      SECRETARY OF DEFENSE FOR HEALTH AFFAIRS,
                      DEPARTMENT OF DEFENSE
    Dr. Woodson. Thank you very much. Chairman Heck, Ranking Member
      Davis, members of the committee, thank you for the opportunity
      to appear before you today.....................................
    The Military Compensation and Retirement Modernization Commission
      has performed a valuable service to the Department and the
      Nation. We agree with their overarching findings regarding
      challenges facing military medicine. We concur with many
      recommendations and have already moved to implementation.......
    In fact, some members of this committee may recall that, when I
      testified in this room in February of last year, I talked about
      the need to ensure an agile, relevant, and forward-leaning
      Military Health System [MHS]. I stated that, to meet our
      mission in these changing times, I had outlined for the MHS six
      strategic lines of effort......................................
    These include modernize the Military Health System management
      with an enterprise focus, the successful establishment of the
      Defense Health Agency and the development of enhanced multi-
      service market represent signature initiatives; two, define and
      deliver the medical capabilities needed in the 21st century;
      three, invest and expand the strategic partnerships; four,
      assess and refine the balance and needs of our medical force;
      five, modernize TRICARE health program; and, six, define the
      MHS's requirements in terms of global health engagement........
    These strategic lines of effort will help us deliver on our
      overarching quadruple aim of readiness, improving the health of
      the population we serve, improving the experience of care in
      our system, and responsibly managing our costs. Our written
      testimony provides a more comprehensive summary of our
      positions on the Commission's recommendations..................
    For my remarks today, I would like to focus on all of the
      strategic efforts underway to make the Military Health System
      stronger, better, and more relevant for the future.............
    Here is what we have been working on to address the readiness
      requirements, ensure quality, and serve as effective stewards
      of the resources you have provided us:.........................
    Over the last 2 years, we have undertaken a comprehensive review
      of our medical infrastructure and resources and presented a
      modernization plan that proposes to place our most skilled
      professionals in the military communities where they are likely
      to keep those skills sharpest..................................
    We have reformed governance and established the Defense Health
      Agency and have provided a collaborative and affordable way for
      the Department to leverage economies of scale for those
      functions that are common among the service medical
      departments....................................................
    And, third, our system is implementing recommendations that
      emerged from the Secretary's review of the Military Health
      System and culminated in the Secretary's action plan of 1
      October 2014. We are making it easier for access to care in our
      system. We are focusing on key measures of quality and safety
      and participating in national quality improvement initiatives,
      such as the Partnership for Patients. And we are making our
      performance data more transparent for our beneficiaries and the
      public to see..................................................
    Similar to achieving historical survival rates on the
      battlefield, our leadership team will be relentless in our
      efforts to be a national leader in quality and safety in all
      that we do.....................................................
    And, finally, we are reforming our health benefit. TRICARE is an
      exceptional health benefit tailored to meet the unique needs of
      military families. Elements of TRICARE can be improved and must
      be improved, and that work is underway.........................
    We have released an RFP [request for proposal] to recompete the
      national TRICARE contracts, and we have included provisions
      that reward innovation and simplify administration of the
      contracts......................................................
    In summary, the Military Health System is a unique and
      indispensable instrument of national security. Our mission is
      supported by some of the most respected medical professionals
      in the world and attracts an extraordinary pool of young
      medical professionals who understand how compelling and vital
      this system is to others.......................................
    We are fortunate to be entrusted with serving as stewards of this
      system, and we take this seriously. So I am grateful for this
      opportunity to be here today and to answer your questions......
    [The joint prepared statement of Dr. Woodson and the Surgeons
      General can be found in the Appendix on page 30.]..............
    Dr. Heck. Thank you..............................................
    General Horoho...................................................
                    STATEMENT OF LTG PATRICIA D. HOROHO, USA, SURGEON
                      GENERAL, UNITED STATES ARMY
    General Horoho. Chairman Heck, Ranking Member Davis, and
      distinguished members of this subcommittee, thank you for this
      opportunity to provide the Army and Army Medicine's perspective
      on the healthcare forum recommendations........................
    After 13 years of war, the Army remains globally engaged. Any
      changes to the compensation and benefits must not only honor
      their sacrifices, but preserve the long-term viability of an
      All-Volunteer Force. The Army supports the underlying
      objectives of the Commission's health-related recommendations.
      However, we do have concerns regarding certain elements that
      threaten readiness and our medical skills......................
    It is critical to understand that our direct healthcare system
      connects with the battlefield and exists to provide health
      readiness to our soldiers and their families. This is what
      separates us from the civilian healthcare system. Our hospitals
      are our readiness training platforms which produce a ready
      medical force and a medically ready force. It is a system that
      performed so well over the last 13 years of war................
    We concur that a comprehensive list of essential medical
      capabilities, or EMCs, should drive our training and
      resourcing. However, those EMCs must address the whole spectrum
      of health rather than focusing solely on combat trauma and
      surgical capabilities..........................................
    For instance, less than one out of every five service members
      evacuated from Iraq and Afghanistan were injured in battle.
      During Operation United Assistance, the major threats to our
      soldiers were endemic infectious diseases. The Army already
      utilizes joint structures and mechanisms to identify, monitor,
      and report on medical readiness. We are working to integrate
      EMCs into these processes; therefore, the Army does not support
      establishing a four-star readiness command.....................
    The Army supports the Commission's objectives of affordable
      health care and increased choice for our beneficiaries.
      However, the Commission's recommendation to establish TRICARE
      Choice would negatively impact our readiness of our entire
      healthcare team and present financial challenges to both Active
      Duty families and retirees.....................................
    Currently, non-Active-Duty beneficiaries comprise 67 percent of
      our total beneficiary population, 83 percent of our inpatient
      care, and 79 percent of our high-acuity inpatient workload.
      These patients are vital to the sustainment of our 148 graduate
      medical and health professional education programs. The loss of
      these beneficiaries from our direct system would pose
      tremendous risk to our training programs and negatively impact
      our medical force's readiness posture..........................
    The Army sees financial risk to soldiers and to families and
      injured in the Commission's recommendation to offset TRICARE
      Choice costs through a basic allowance for health care. Year-
      to-year healthcare expenses are unpredictable, and many areas
      of our country are medically underserved.......................
    In conclusion, the Army needs a medically ready force. When the
      gate on the Stryker opens, commanders need to know that it will
      be full of soldiers that are ready to deploy. And the Army
      needs a ready medical force. When the wounded soldiers hear the
      rotor blades of a medevac [medical evacuation] helicopter, they
      need to continue to have confidence that our providers are
      trained and ready. Any radical departure presents significant
      risk to a system that has produced record levels of both combat
      casualty survival and readiness................................
    I would like to thank the Congress for your continued support.
      Army Medicine team is proudly serving to heal and honored to
      serve..........................................................
    Dr. Heck. Thank you..............................................
    General Ediger...................................................
                    STATEMENT OF LT GEN MARK A. EDIGER, USAF, SURGEON
                      GENERAL, UNITED STATES AIR FORCE
    General Ediger. Chairman Heck, Ranking Member Davis, and
      distinguished members of the subcommittee, thank you for
      inviting us to appear before you today.........................
    The Air Force is truly grateful for the hard work of the Military
      Compensation and Retirement Modernization Commission. Many
      parts of the Commission's recommendations will enhance and
      facilitate programs that serve our airmen, their families, and
      our veterans...................................................
    Today I will speak to impacts in two areas of primary importance
      for the Air Force based upon our analysis of the Commission's
      recommendations. I will begin with the impacts on the readiness
      of our medical force...........................................
    We appreciate the Commission's focus on the linkage between care
      provided in our hospitals and the readiness of our medical
      force. We found their proposal to identify and quantify
      readiness-related essential medical capabilities helpful to
      focus efforts on the capture of specialty care for our
      hospitals. That concept builds upon the Readiness Skills
      Verification Program we have utilized in the Air Force for over
      15 years to set clinical standards for the readiness of our
      medical force..................................................
    However, we do not see the need for a joint readiness command, as
      existing processes jointly utilized by the services enable us
      to measure and assess the readiness of our force...............
    We have significant concern about the impact the Commission's
      health plan recommendations would have on the readiness of our
      force. We believe the proposal would shift family member and
      retiree care significantly to the private sector and thereby
      move care essential to our readiness out of our medical
      facilities.....................................................
    We also believe the proposal to place our medical facilities into
      competition with the private sector would drive up
      administrative costs and significantly detract from the focus
      on the operational mission in our medical facilities...........
    The second area of primary concern centers on our support to
      Active Duty families. We believe resilient families with
      excellent health service support greatly enhance the resilience
      of all of our airmen. We support changes in the President's
      budget to improve TRICARE while enhancing our readiness........
    Additionally, significant progress in the strategic line of
      efforts referenced by Dr. Woodson has occurred, and we are a
      progressive system of health and readiness as a result.........
    We are concerned that the Commission's proposed change to the
      health plan would increase stress on airmen and families by
      requiring them to navigate a complex insurance marketplace on a
      recurring basis. We are concerned that the Commission's
      proposal would shift family care significantly into the private
      sector, thereby creating a hole in the safety net commanders
      depend upon for Active Duty families under stress..............
    Proper balance in the mix of our medical force is important to
      maintaining a ready medical force while providing safe and
      high-quality health services. The National Defense
      Authorization Act of 2010 permanently prohibited the services
      from converting non-military essential Active Duty medical
      positions to civilian positions. Relief from this prohibition
      would enable the Air Force to judiciously increase the
      proportion of civilians in its force mix.......................
    I thank the committee for your continued support for Air Force
      medicine and the opportunity to answer your questions today....
    Dr. Heck. Thank you..............................................
    Admiral Faison...................................................
                    STATEMENT OF RADM C. FORREST FAISON III, MC, USN,
                      DEPUTY SURGEON GENERAL, UNITED STATES NAVY
    Admiral Faison. Chairman Heck, Ranking Member Davis,
      distinguished members of the subcommittee, thank you for the
      opportunity to appear before you today.........................
    The Navy appreciates your leadership in establishing the
      Commission and commends the Commission for their thorough and
      independent assessments. We remain guided by our Navy
      Medicine's strategic priorities of readiness, value, and
      jointness......................................................
    We note that the Commission recognized the importance of these
      imperatives and many of their overarching objectives are
      largely aligned with our strategic priorities..................
    Following the release of the Commission's final report in
      January, Navy Medicine participated in the DOD-led rapid and
      comprehensive review of the healthcare recommendations. While
      there is general support for the underlying objectives of the
      recommendations, I will briefly highlight some of our
      perspectives and concerns regarding them.......................
    In relation to medical readiness, we do support establishing
      common and service-specific essential medical capabilities, or
      EMCs, as they could be an effective means to monitor readiness
      and guide resourcing decisions.................................
    We note, however, that EMCs must be developed for more than just
      surgical trauma skills. Military medicine supports a wide range
      of operations, including treating disease and non-battle
      injuries during military operations as well as providing
      humanitarian assistance and disaster relief when called upon in
      crisis.........................................................
    While there is general agreement to the Commission's objective to
      provide an affordable health benefit with additional choice, we
      must recognize that our medical centers, hospitals, and clinics
      are our most important readiness training platforms for our
      military medical personnel and critical to sustaining vital
      skills and clinical competencies of them. The availability of
      case mix, volume, complexity, and diversity is vital to having
      a trained and ready medical force..............................
    In this regard, care of our beneficiaries is inextricably linked
      to our readiness mission. Patient enrollment is fundamental to
      our approach to maintaining the health of our patients. The
      Military Health System is working hard to recapture workload
      into our direct care system and leveraging initiatives like our
      Patient Centered Medical Home program to improve access and
      care...........................................................
    Navy Medicine is leading forward in these areas as they continue
      to show progress. We believe that the Commission's approach to
      offer greater choice through the use of commercial insurance
      plans presents risk by reducing patient volume and case mix in
      our system and positioning MTFs [military treatment facilities]
      at a significant disadvantage in attracting patients when
      competing against commercial insurance plans...................
    The careful assessment of the recommendations for exceptional
      family members requires additional time. We agree with the
      objective of expanding services to help family members with
      specific needs, but more work is needed to identify which
      specific services among the many State Medicare waiver programs
      most meet their needs..........................................
    Regarding the DOD and VA [Department of Veterans Affairs]
      recommendations, we support the goals of the Commission, but we
      believe that the current joint executive committee has
      sufficient authorities to realize the outcomes desired by the
      Commission.....................................................
    Throughout Navy Medicine, we work closely with the VA in
      assessing opportunities to collaborate and cost effectively
      share services to meet the needs of service members and our
      veterans, and we have several unique collaborations, sharing
      agreements, and partnerships already in existence that benefit
      both Department beneficiaries..................................
    We are working with the Assistant Secretary of Defense for Health
      Affairs, the Defense Health Agency, as well as our sister
      services to incorporate many of these opportunities in the MHS.
      Some changes can be accomplished within existing policy, while
      others may require legislative changes for which we would
      appreciate the Commission's and the committee's support........
    In summary, we recognize we need to recognize what sets us apart
      from civilian medicine, that we are a truly rapidly deployable,
      fully integrated medical system. This capability allows us to
      support combat casualty care with unprecedented battlefield
      survival rates, to meet global health threats as we recently
      did in deploying labs and personnel to Liberia in response to
      the global Ebola crisis, and to our hospital ships, Comfort and
      Mercy, deployed today and underway supporting missions around
      the world......................................................
    We must also understand that our readiness mission is directly
      linked to the training and skill sustainment our personnel do
      every day in our hospitals, in our clinics, in our labs, and in
      our classrooms. We cannot expose our direct care system to risk
      that could negatively impact our readiness posture. Thank you
      very much......................................................
    Dr. Heck. Thank you all for your testimony.......................
    We will now begin a 5-minute round of questioning from each
      member. I will defer my questions to the end and recognize the
      junior member of the subcommittee, the gentlelady from New
      York, Ms. Stefanik, for 5 minutes..............................
    Ms. Stefanik. Thank you, Mr. Chair...............................
    And thank you to all of our witnesses here today.................
    I wanted to focus and address my question to General Horoho. I
      represent New York's 21st District, which is home to Fort Drum,
      and part of the 10th Mountain Division is based at Fort Drum...
    Later this summer I plan on hosting a listening session with
      various service members and their families to hear their
      feedback on the Commission's reports and healthcare plans going
      forward........................................................
    And Fort Drum is unique, as you know. There is no hospital on
      post and we have a very strong partnership with civilian
      hospitals like Samaritan and River Hospital. I think you
      visited Fort Drum recently to assess----.......................
    General Horoho. Yes, ma'am.......................................
    Ms. Stefanik [continuing]. That partnership......................
    Could you talk about whether there will be an impact for Active
      Duty service members because of that unique relationship,
      because there is no on-post hospital...........................
    General Horoho. Thank you, ma'am.................................
    If I understand the question correctly, are you asking whether or
      not there would be an impact if we move towards the
      Commission's recommendation on Fort Drum?......................
    Ms. Stefanik. Correct............................................
    General Horoho. Okay. I do believe there will. And the reason why
      I say that is that right now many of the readiness skill sets
      even though we have a unique capability there with the clinic
      and then we have a strong partnership with the civilian
      facilities, we still rely on a large family member and retiree
      population getting their care at Fort Drum proper..............
    That allows us to enhance our readiness skills of our medics as
      well as our clinicians, our orthopaedic surgeons, and the
      entire healthcare team. If that population goes out to one of
      the 11 different plans that are out there, then we become
      competition with the healthcare plans and it is an
      unpredictable population that we would be able to treat........
    Ms. Stefanik. Great. Thank you very much.........................
    And then I just wanted to ask broadly: Can each of you talk about
      the kind of listening sessions that DOD has done to understand
      the concerns directly from the service members. I know this is
      a large question. Just broadly, if you can answer that.........
    Dr. Woodson. Sure. Let me start, and I will let the Surgeons
      General follow on..............................................
    Just, you know, briefly, coming out of the MHS review, we
      conducted town halls. Of course, we routinely, in fact, use
      survey techniques to find out what is going on.................
    And for the sake of brevity, I would just say that the Evaluation
      of the TRICARE Program: Access, Cost, and Quality, the 2015
      report to Congress, contains a lot of good information about
      what we do to survey our population to adjust the program and
      understand where we are at and where the improvements are
      needed. And I would just recommend that to you.................
    General Ediger. Yes. In addition to what Dr. Woodson referenced
      from the MHS review, which was very valuable and helpful, each
      of our medical group commanders has a panel in which they
      conduct regular listening sessions of people who consume their
      health services in the local community.........................
    We have a process by which the findings and the trends from those
      sessions are fed up and centrally analyzed for trends, and we
      found that to be a very helpful process........................
    In addition, each of our medical groups uses social media to
      solicit input and feedback from the people that consume their
      health services, and we also use social media centrally for
      that purpose...................................................
    Ms. Stefanik. Great. Thank you very much.........................
    Did you want to add?.............................................
    Admiral Faison. Yes, ma'am.......................................
    Same in the Navy. We conduct regular town hall meetings. We have
      an expectation that all of our COs [commanding officers] will
      regularly attend the healthcare consumer councils at each of
      our bases. And whenever we travel, we make a point of meeting
      with every line commander to solicit their input. We also are
      very active on social media to get feedback in.................
    General Horoho. If we are going to go all the way, I will do the
      same thing, then, because we are very similar in our
      approaches.....................................................
    The other is are virtual town halls that actually are conducted
      from the Chief of Staff of the Army on down to get the feedback
      from our beneficiaries and being able to hear their voices and
      the concerns...................................................
    We have also had high-reliability summits to be able to educate
      our Active Duty professionals in the healthcare business. And
      then we take that back to the commands and then they share
      information with the beneficiaries as well.....................
    Ms. Stefanik. Great. Thank you very much.........................
    I yield back.....................................................
    Dr. Heck. Thank you..............................................
    Mrs. Davis.......................................................
    Mrs. Davis. Thank you, Mr. Chairman..............................
    And I appreciate, again, all of you being here...................
    I am not sure if my questions are related. Probably are..........
    But, first, you did talk a little bit about the loss to the
      beneficiary because, if--in the Commission's recommendations,
      we had a different system, and training of medical personnel
      was critical to that...........................................
    So I wanted to ask about that, but also about the fact that the
      Commission determined that EMCs, the essential medical
      capabilities, are not clearly defined and they suggested that
      the DOD had not established the clinical proficiency standards
      for military medical personnel in facilities based on widely
      accepted metrics...............................................
    So, you know, you may not agree with that assessment, but I
      wanted to know how you see that assessment and what you would
      propose. And if you can attach it to training, that would be
      great, but maybe that is a totally different question. So----..
    Dr. Woodson. Yeah. Maybe I can start and, again, the Surgeons
      General can add on.............................................
    From a context point of view, one of the things we have to
      understand is that medicine really has evolved. So four decades
      ago a doc [doctor] may have been a doc and a nurse may have
      been a nurse and today, with sub-specialization, the idea of
      what the competency is and how to maintain that competency is
      radically different............................................
    And so the issue, really, that we got to, again, as part of the
      modernization study and some of the self-analysis we were doing
      is identifying what the specifics of the skill set should be by
      specialty and military occupational skill set. And this is a
      really big work, but important work to do so...................
    We self-identified, prior to the Commission, that we needed to
      focus on this issue of better defining readiness, competency,
      and being able to measure that. I think the Surgeons General
      have done a great job, and the Air Force, I think, has a great
      matrix that they use. And the other services have their metrics
      as well........................................................
    General Horoho. Thank you, ma'am.................................
    We have looked at this over the last 3 years--this has been a
      culture shift across Army Medicine--and really looked at our
      hospitals as being our readiness training platforms because
      that is where we house our graduate medical education programs
      and our health professional education programs.................
    So we rely on a constant beneficiary population that gives us the
      complexity and the case mix. We evaluated where we had our
      Active Duty, that there was a mismatch a couple of years ago
      where our green-suiters were. They were in more of the smaller
      areas, and then we had contract personnel and civilians more in
      the medical centers............................................
    Those medical centers are where we need that complex capability
      and readiness skill set training. So we have started migrating
      and shifting where our Active Duty population is...............
    We have also looked at it from not just combat casualty care, but
      actually the readiness skill sets that are needed for every
      single one of our service members that are part of the medical
      team. And so I will give a good example. We looked at
      substitutability...............................................
    So we may have rheumatologists that we need for our day-to-day
      healthcare beneficiaries, but for deployability, we are
      identifying what are the wartime skill sets that are needed for
      that specialty so that they can be substituted for a surgeon on
      the battlefield. And so we are now down to that level of detail
      of really looking at it........................................
    And, in addition to that, we now have standards in place where I
      can assess the readiness of my military treatment facilities, I
      can assess the individuals. And now we have just rolled out,
      with all three services using it together, a surgical tool that
      allows us to look at every one of our operating rooms, the
      number of cases that are needed, the complexity, and then being
      able to look at that in addition to assessing our surgeons.....
    Mrs. Davis. Thank you............................................
    I think I will go ahead and have the Surgeons respond............
    And I think part of my question around this, too, and the whole
      issue I know Admiral Faison will and I talked about this a lot
      in San Diego because, you know, there is this concern--and it
      is partly why the Commission addressed this--in the mix in
      terms of the patient population and the ability of medical
      professionals to have access to be able to help those and treat
      those who are coming from a more diverse and a larger
      population.....................................................
    And so I guess I am just trying to get at that as well in terms
      of whether the mix that you have is adequate to do that, since
      we also are looking at the general public to help with that. We
      know that military medicine is not going to be able to support
      that always and----............................................
    General Ediger. Yes. An important point is that, when we talk
      about essential medical capabilities and clinical currency, we
      are talking about that within the context of readiness, the
      clinical skills that are needed in a deployed environment,
      which don't always exactly match up with our day-to-day
      practices at home station......................................
    And so, in the Air Force, we have had a process that, by
      specialty, we actually define case volume and mix and skills
      that actually translate into the deployed environment, and then
      we keep records and we track the extent to which we are able to
      meet those requirements and keep clinicians ready..............
    In some cases--you are right--our population doesn't really have
      the demand in certain procedures that would support our
      readiness requirements. And so, in the Air Force, we have used
      strategic partnerships in some cases--and the other services
      have as well--to send selected clinicians to other places under
      training agreements to make sure they are current in those
      types of skills................................................
    I think what we have all decided to do together is to actually
      incorporate these standards for clinical readiness into the
      measurement of the preparation and readiness of our forces and
      present that jointly the same way our combatant partners in the
      line present the readiness of their forces.....................
    Mrs. Davis. Thank you............................................
    I know my time is up. Thank you, Mr. Chairman, for those
      additional minutes. Thank you. We will get it later............
    Mr. Jones. Mr. Chairman, thank you very much.....................
    And, Dr. Woodson, I read your letter on May 19th, and I would
      like to make reference to that.................................
    First, I would like to share with you and the panel an email from
      a marine's wife down at Camp Lejeune, which is in my district,
      and I will start with this from her email. ``2 weeks ago, on
      April 13 of 2015, he attempted suicide. He has severe PTSD
      [post traumatic stress disorder], a TBI [traumatic brain
      injury] because of an IED [improvised explosive device]
      explosion, and has severe physical ailments associated with the
      blast. He was placed on a ventilator for about 12 hours as a
      precautionary while the pills he had overdosed on worked their
      way through his body while he was sedated and unresponsive.''..
    The reason I wanted to bring that forward is because many of us,
      not all, but in Congress, including Senator Vitter, have been
      very supportive of an option that we would hope that the
      Department of Defense would give to the medical doctors in all
      services, should the doctor decide that maybe hyperbaric oxygen
      treatment [HBOT] might be a way to treat PTSD and TBI..........
    I asked in the letter I wrote you that you respond and not
      Admiral Wagner. We had written Admiral Wagner and asked that
      the hyperbaric oxygen treatment--that Admiral Mullins himself
      go to Camp Lejeune, remain there and be put in the Intrepid
      Spirit Concussion Recovery Center at Camp Lejeune. Obviously,
      his response back was not very encouraging. So let me go to
      this paragraph.................................................
    ``How much money was expended by DOD on medication in 2014 to
      treat PTSD and TBI for Active Duty military? As we note,
      certain medications have been implicated in the suicidal
      epidemic in our veterans. Are you aware that Dr. Harch
      published a statistical significant reduction in suicidal
      ideation in the HBOT-treated veterans and this was accomplished
      in veterans with the combined diagnosis of TBI and PTSD? Do you
      have any DOD studies showing the same with any other therapy?''
    I don't expect you to answer that today, but I am looking forward
      to your answer.................................................
    What is so ironic to marines down at Camp Lejeune is that, in
      this Intrepid Center, they can be treated with yoga and
      acupuncture, but they can't be treated with hyperbaric oxygen..
    To many of us in both parties, House and Senate, we just don't
      understand why and how that the Department of Defense in their
      studies say that they do not see where hyperbaric oxygen
      treatment would be a positive..................................
    And, yet, Dr. Harch, who is a foremost expert at LSU [Louisiana
      State University] on this treatment, has even offered--and I
      have written to Secretary Mabus--that he will take 12 marines
      from Camp Lejeune at no charge to DOD and LSU will absorb it to
      treat them for 8 weeks. And I hope that you will take the time
      to read carefully what we are asking you.......................
    As you know, Senators Vitter and Landrieu asked on Inspector
      Jones' investigation as to how the Department of Defense--the
      different studies have studied hyperbaric oxygen and why they
      do not think this would be helpful to those with PTSD and TBI..
    So I hope that you will answer this letter. Again, it was May the
      19th. And I want to give you, as I would anybody, 6 to 7 weeks
      to respond back................................................
    But when you read--I have never heard of any, any, soldier or
      marine or anyone that had the treatment of hyperbaric oxygen
      that committed suicide. Yet, when they are medicated, we are
      averaging maybe 20 or 21 a day committing suicide..............
    I don't understand, sir, why this treatment will do no damage--if
      it doesn't do any good, it doesn't do any damage. I guarantee
      you it will do more good than yoga or acupuncture..............
    Will you promise me today and this committee that you will
      respond back to this letter that we have written here?.........
    Dr. Woodson. Absolutely..........................................
    Mr. Jones. Thank you, Mr. Chairman...............................
    Dr. Heck. Mr. MacArthur..........................................
    Mr. MacArthur. I pass............................................
    Dr. Heck. Okay. So we had a briefing from the current TRICARE
      administrative service organizations [ASOs] on how they viewed
      the Commission's recommendations. Obviously, they all have a
      non-military health insurance option that they also provide,
      and they stated that they felt that there would be opportunity
      for them to address some of the shortfalls or deficiencies
      identified by the Commission if they were just allowed to
      utilize some of the best practices that they have on their non-
      military side on the military side. This is moving away from
      fee-for-service to value-based care............................
    So, Dr. Woodson, I know we have had this discussion a little bit
      offline. You know, as the TRICARE 2017 contracts, RFP, is out,
      what would be the pathway to be able to, one, provide the
      authorities necessary to allow some of what is being done on
      the civilian side to come into the military side as far as
      managing health care?..........................................
    And how would that happen if the TRICARE 2017 contracts are let
      prior to those changes being made? Would it be a mod? Is there
      a benefit to just extending current contracts till we figure
      this out? What do you believe is the best way forward?.........
    Dr. Woodson. So thank you very much for that question. And we
      fully endorse moving toward utilizing value-based care in the
      management of both the TRICARE contracts and our patients to
      their betterment...............................................
    As we move to 2017, again, we have approached it in a more
      disciplined way. And, in fact, we are looking for the authority
      to use value-based care........................................
    Now, as it relates to the flexibility, remember, there is a
      common misperception about the contracts that they are kind of
      5-year locked-in entities. They are not. In fact, they are 1
      year with yearly options. And we modify contracts all the time.
    Continuing the extension of current contracts is costly and, in
      fact, it just maintains sort of antiquated systems. And so, as
      we move more to trying to use utilization management tools, big
      data to better define and manage our populations, it is very
      important that we modernize the contracts. But we can
      incorporate all those things and fully anticipate incorporating
      all of those issues into the 2017..............................
    And, lastly, we have already moved out in terms of value-based
      care. We have a demonstration project right now in Maryland in
      which we have a pay-for-performance model......................
    And, lastly, we are working very closely with Medicare on their
      work group, but to define particularly those outcome parameters
      that are important in making sure you have success with value-
      based care.....................................................
    Dr. Heck. Great. That is very encouraging........................
    I look forward to continuing to work with you to make sure that
      DOD has all the authority it needs to be able to capitalize on
      some of these proven strategies that are currently forbidden or
      prohibited from being utilized in the military healthcare
      system.........................................................
    One of the other areas that was brought up is, of course, the
      importance of patient data and data analytics. And, you know,
      it seemed like there was a disconnect in being able to have all
      the data to adequately manage a patient's care when the
      prescription part of TRICARE is not part of any one of the
      ASO's service lines............................................
    And it was brought forward that perhaps and, as I understand it,
      prior to my arrival here, it was Congress that said, ``Go ahead
      and go out and get us a separate PBM [pharmacy benefit
      manager].''....................................................
    But the idea of bringing prescription service back within the ASO
      contracts, thoughts on that?...................................
    Dr. Woodson. Well, I think it is very important, I guess, to
      address the central point of making sure there is single point
      of accountability for the coordination of all of the benefits
      and care, and that is one of the issues that concerns me about
      the Commission recommendation..................................
    So if you look at what would have to happen, we would have to
      disestablish the DHP [Defense Health Program], disestablish
      TRICARE. We would have to have OPM [Office of Personnel
      Management] establish this choice network with navigators
      because it would be very important. They would have 250
      programs which the service members and beneficiaries would have
      to negotiate...................................................
    We would have to expand the MERHCF [Medicare-Eligible Retiree
      Health Care Fund] fund to cover the healthcare and pharmacy
      programs for non-Medicare-eligible retirees. Funds from the
      services' MILPERS [Military Personnel] would have to be
      transferred to the employees' health benefit fund managed by
      OPM for Active Duty family members, Reserve Component and
      family members.................................................
    For gray-area retirees that is non-Medicare, funds should also be
      transferred from MERHCF to the employee health benefits fund
      managed by OPM. We would have to establish a new trust fund
      which would be managed by DOD to finance existing pharmacy and
      dental programs for Active Duty family members and Reserve
      Components.....................................................
    MTFs would be funded through a revolving fund and using
      reimbursements that they receive for care. And the services'
      O&M [Operations and Maintenance] accounts would be at risk for
      shortfalls, and we estimate that would be about $2.4 billion a
      year. And we would have to establish a catastrophic fund for
      Active Duty family members.....................................
    Now, the key here, though--and then DOD would still be
      responsible for pharmacy, dental, vision, the basic allowance
      for healthcare, the networks for Active Duty service members,
      the networks for overseas Active Duty service members, which
      there is no mention of how we would handle that in the
      Commission report, ECHO [Extended Care Health Option]..........
    And so the important issue here is that, if you take it from the
      point of view of the beneficiary--and let's just say, for
      example, we take an Active Duty family with an exceptional
      family member, a child with autism, let's say..................
    They are going to have to deal with these private insurers for
      the health care and then they are going to have to deal with us
      for other things. And if they have cost overruns, then they are
      going to have to try and get into this catastrophic fund.......
    That is a lot of touchpoints. And then, if you add to that the
      highly mobile population we have, I think that there is
      substantial risk when you don't have a single point of
      accountability for the entire health benefit, substantial
      education for retirees, substantial education for
      beneficiaries..................................................
    So I think there are some risks, and I think there are easier
      approaches to reforming TRICARE to make it exceptional. And I
      think that is where we would love to work with Congress........
    Dr. Heck. Great..................................................
    We will go for a continued round until we get called for votes...
    Mrs. Davis.......................................................
    Mrs. Davis. Thank you, Mr. Chairman..............................
    And perhaps, Dr. Woodson, I can pick up on that. And I hope the
      others will join in, too.......................................
    One of the things that we heard with the Commission was I think
      they were a little displeased, actually, when they heard that
      there was a kind of protectionism coming through, that surely
      our military families might not be able to navigate on multiple
      systems like this. And I think you all said as well that, you
      know, it is harder to navigate a more complex system...........
    So I wonder if you could respond to that a little bit because I
      understand exactly what you are saying, how important it would
      be to have a point of accountability. But at the same time
      there was a sense that somehow we couldn't provide the support
      system to enable families to be able to utilize that to the
      best of--you know, to serve their needs........................
    And if you can expand on having more options for families, more
      choices, as they talked about, that seems to be a good thing,
      and maybe we shouldn't get caught up in whether or not they can
      navigate it....................................................
    So help me out with this a little bit because I don't think that
      is really the reason to not do this, of course, but----........
    Dr. Woodson. I am sure the Surgeons General will have--that is a
      great question, and the Surgeons General will certainly want to
      say something about this.......................................
    But let me just say this, that when I go out and talk to folks
      and when I look at surveys, choice is not about wanting to
      navigate through 250 health plans..............................
    Choice, as expressed to me, is ensuring that I have a robust
      health benefit that will take care of my health needs when I
      want it, and then the real choice is about being able to see
      the provider that I want when and where I want them............
    And so if you look at PB [President's budget] 2016 and 2015
      proposal, it was about giving more choice to the family member
      so that they wouldn't have the hassle of authorizations and
      referrals and they could choose when and where they wanted to
      see, you know, the doc or the provider. That is, I think, the
      choice that they want, not necessarily a lot of programs.......
    By the way, when you boil it down and you go into the commercial
      market, you really find three types of programs. Right? You
      find health maintenance organizations, which is similar to our
      Prime. You find fee-for-service programs of two types. One is
      preferred provider and one is, again, more open fee-for-
      service. We have those, basically..............................
    So they are not going to have really different choices in terms
      of types of plans. They are just going to have to navigate
      through more insurance programs and not have a single point of
      accountability.................................................
    Admiral Faison. Ma'am............................................
    General Horoho. Yeah. Go ahead. And we will go backward..........
    Admiral Faison. I will address the most difficult case for the
      Navy. Thirty-five percent of the Navy is deployed in any given
      day, and 75 percent of our sailors were born after 1986. They
      are very young.................................................
    And so the typical sailor is married with two children. So they
      are stationed, let's say, in San Diego. The ship is out at sea.
      Right now, if that family member has a problem with their
      health care, they call the CO [commanding officer] of the
      hospital. It is one point of contact...........................
    So I want to distinguish between navigate versus advocate. And
      so, if there is an issue, they call one person. If we allow
      them the choice, they are navigating several hundred health
      plans, as a CO of a hospital, having just been one, I have no
      leverage over those plans. So how do I advocate for that mom
      and her children?..............................................
    And if one of those children is a special needs, she is dealing
      with the health plan for part of her healthcare needs, she is
      dealing with DOD for the special needs part, she is dealing
      with DOD somewhere else for pharmacy. It is overwhelming while
      you are trying to balance two kids as a single parent and your
      grandparents are back in Texas, as an example..................
    So we are worried that we are adding to the plate of our service
      members to get a benefit where right now they have got kind of
      a single point of contact to pick up the phone and help them...
    Mrs. Davis. And, of course, we know a lot of those are ombudsman
      as well----....................................................
    Admiral Faison. Yes, ma'am. Absolutely...........................
    Mrs. Davis [continuing]. That single point of contact. And it is
      wonderful in San Diego.........................................
    Sir..............................................................
    General Ediger. I would agree with that completely. It is not
      that we think the families are incapable of navigating. We just
      see the complexity of it as another source of stress for
      families that we know are already under stress by virtue of the
      service and the OPSTEMPO [operations tempo] that they are a
      part of........................................................
    I think the other thing that would be challenging in that venue
      is that, if we have families who have a variety of different
      health plans that they have chosen on the marketplace, those
      plans come at different prices. They will have different ranges
      of benefits....................................................
    And so we have a remarkable system between all three services of
      employing the medical home concept in the way we provide
      primary care. And so with that comes timely prevention in a
      coordinated team-based approach to care........................
    That becomes more difficult to apply if you are dealing with a
      patient population that has got a variety of different types of
      health coverage................................................
    And so we think we can do a better job of providing continuous
      support to their health and performance over the time of their
      service to the Nation if they are getting their care
      continuously in our MTFs.......................................
    General Horoho. And, ma'am, in addition to that--because we are
      pretty similar in all of our responses--I think the importance
      of the care coordination can't be understated, especially when
      service members are deployed...................................
    And when we looked at the area with behavior health, one of the
      things that we realized is we had to be very unique in the way
      that we supported families or children that had stressors due
      to the deployment. So we took our behavior health and we are
      able to embed them into the school-based programs..............
    When they are out into the civilian sector, those types of unique
      options are not going to be available to respond to really
      timely needs...................................................
    And I think the other piece of it is, as we realize when health
      care is changing or opportunities to be able to be much more
      responsive in the area of health, that allows us to employ all
      of our capabilities together using tele-capabilities to really
      reach our patients where they need their care..................
    Mrs. Davis. Yeah. Thank you......................................
    Thank you, Mr. Chairman..........................................
    Dr. Heck. Mr. MacArthur..........................................
    Mr. MacArthur. Thank you, Mr. Chairman...........................
    I am sorry I missed your opening remarks. I would have been very
      interested in hearing them. But a lot of the discussion on this
      part of the Commission's recommendations has been around the
      quality of health care to our military families, and rightfully
      so. And that is why the four of you are here with that focus...
    But some of the Commission's focus was on the financing of health
      care, and that has given rise, I think, to a lot of the
      recommendations................................................
    And as I think about that, the financing of it, the creation of a
      structure, and they have gone down the private route, and I
      think there are other views that fixes to TRICARE would be a
      better approach to that, I worry about the next iteration......
    So we make fixes now and then the broader marketplace continues
      to evolve and new programs allow the non-military healthcare
      world to make changes and get efficiencies and TRICARE is stuck
      in whatever new model we create. And so my question has to do
      with how we create a self-evolving TRICARE.....................
    Let me explain what I mean with that. Something that doesn't
      require an act of Congress every time we want the program to be
      able to keep pace with what is going on in the marketplace. And
      I think this concept is essential, and this is why I have been
      somewhat supportive of the private market idea, although I
      think there is problems with it................................
    And so I am now back in my thinking to what do we do to TRICARE
      so it can evolve. Without you coming and getting 435 members,
      you know, half plus 1, to agree to that, I would be interested
      in your insights on that.......................................
    Dr. Woodson. So let me start again, and the Surgeons General can
      follow on......................................................
    That is an excellent question. That really is the heart. So one
      of the things I think we all need to consciously understand is
      that TRICARE is not an insurance program. It is a defined
      Federal benefit program in which it is guided by laws and
      statutes and the like. And that was probably very appropriate
      two decades ago................................................
    What we need to, again, I think partner on is giving the
      flexibility to the administrators of the program to evolve the
      program in real time to take advantage of what's occurring in
      medicine.......................................................
    So I was very thankful to Congress when last year they gave me
      the ability to look at evolving medical technologies and
      implement them without coming to Congress right away, and that
      was just new. That is new. But it is that kind of thinking.....
    You know, I had this discussion with some folks, and it had to do
      with something we wanted to do with TRICARE. And the lawyers at
      the time were telling me, ``No. You can't do that. No. You
      can't do that.'' And they were well meaning--don't get me
      wrong--about this..............................................
    But I said to them, you know, ``Someone once said that the law
      should be stable, but never static. But medicine is neither
      stable nor static. And so we have to understand that and build
      in the flexibility.''..........................................
    Now, you, as Congress, in your rightful authorities and position,
      should have oversight. And so what we owe to you is a mechanism
      for bringing to you what we have done and being accountable for
      what we have done, but we need to have the flexibility to
      modify and approve the program to make it, again, the
      exceptional program that the beneficiaries deserve.............
    Mr. MacArthur. If any of you know, how many lives are covered by
      TRICARE today?.................................................
    Dr. Woodson. 9.5 million.........................................
    Mr. MacArthur. I mean, that is bigger than many, many health
      insurers. That is a lot of lives. One would think that we
      should be able to create a form of TRICARE that is competitive
      with anything----..............................................
    Dr. Woodson. You bet.............................................
    Mr. MacArthur [continuing]. That the private market can offer and
      that can evolve just like the private markets evolve...........
    And I would encourage a continued dialogue because I think there
      is the potential for that that could possibly overcome some of
      these hurdles that--and, as I said, I started as--we have had
      these discussions--I started as an advocate for change, but
      sometimes the--you know, sometimes the cure can be worse than
      the illness. And so I think maybe we need to explore this more.
    I yield back. Thank you..........................................
    Dr. Heck. Thank you..............................................
    And I want to go back. Dr. Woodson, thanks for, you know,
      pointing out all the things that the Commission would require
      you to do to set up this new program...........................
    And as we move towards the idea of value-based care and having
      that single point of accountability and contact for a patient
      in a medical home, it goes back to the previous question that I
      had, which is: Is there, you know, benefit in looking at--do we
      bring pharmacy benefits back in-house to the TRICARE ASOs, the
      nurse advice lines, which right now don't go to the ASOs, so
      you have somebody calling for nurse line advice that is
      unrelated to the actual healthcare provider they are going to
      wind up seeing?................................................
    So I think, as my colleague said, as we evolve and try to
      maximize the benefits of what has happened on the outside of
      the military healthcare system, again, we need to come up with
      how do we give you the authority to be as flexible and agile as
      you need to be. Right?.........................................
    And to the Surgeons General, a topic we haven't discussed yet:
      Your opinions on the idea of a unified medical command. What do
      you think are pros versus cons, in 3 minutes 58 seconds?.......
    General Horoho. Let me go quick..................................
    The Commission actually recommended a joint readiness----........
    Dr. Heck. We have taken that one off the table...................
    General Horoho. You have taken that off. Okay....................
    Dr. Heck. We are just taking about specifically--kind of like a
      TRANSCOM [Transportation Command] for medicine.................
    General Horoho. You know, I think right now we have spent so much
      time and energy and we are starting to see some progress in the
      10 shared services.............................................
    I think we need to allow that to continue to progress. We have
      really worked with standardizing our capabilities and looking
      where we need to be more interoperable.........................
    And so I think there is some goodness in cost savings and, also,
      just standards that will be common across the board to decrease
      unwarranted variance...........................................
    So I support the direction of refinement of where we have been
      going with the Defense Health Agency and then common business
      processes across the board.....................................
    General Edinger. Yes, sir. I agree...............................
    I think, if you look at what has happened over the past 3 years,
      there have been substantive change in the Military Health
      System. We have worked together jointly under a new governance
      process........................................................
    We have stood up the 10 shared services with the Defense Health
      Agency to gain efficiencies and effectiveness in what we do in
      common. We train our enlisted out of a joint platform. We have
      a medical school where our physicians train together. And we
      have a lot of our hospitals now, more than ever, that are
      jointly staffed................................................
    So I think what you are seeing is a significant evolution in the
      way we work together jointly in our home station medical
      support........................................................
    Admiral Faison. Sir, I would agree with that.....................
    You know, we have been doing this for a long time. All our IT
      [information technology] systems are architected jointly so
      that, no matter where you go and what facility you are in, your
      healthcare record is available.................................
    We deploy our staffs together. You know, when I was deployed in
      theater running a combat hospital, I was commander of a joint
      task force. I had Army and subordinate Air Force units working
      for me. We worked together side by side........................
    In San Diego, when I was in garrison, all the wounded warrior
      care physical medicine rehabilitation was provided by Army
      physicians. We trained Air Force pediatricians.................
    We have been doing this. And now we have evolved to these shared
      services. I would recommend we give these an opportunity to
      mature and then step back and say, ``What problem are we
      solving?''.....................................................
    Dr. Heck. And, General Edinger, thanks for putting out a plug for
      Uniformed Services University, one of the finest medical
      schools in the country and no better military medicine school
      in the world. I was on faculty there for 4 years...............
    Mrs. Davis.......................................................
    Mrs. Davis. Thank you, Mr. Chairman..............................
    I might just ask if you are seeing any outstanding cultural
      issues in that integration as you move forward with jointness..
    Admiral Faison. Ma'am, I will address that.......................
    I had the privilege of visiting San Antonio for our combined
      enlisted training program that we run for all our ``A'' school
      corpsmen, our medics, our technicians, and they all get their
      training together now. And although we preserve our service
      cultures, we teach our corpsmen how to salute and the different
      signal flags and things like that..............................
    What really impressed me the most was, when I looked down into
      the courtyard, I saw Army, Navy, and Air Force young, junior
      enlisted folks working together, making friendships and bonds
      that were going to carry them throughout their careers. I have
      not seen service cultures, you know, we have the banter that
      goes back and forth where I am trying to learn how to say
      ``Hooyah'' and at the same time how to teach my Army colleagues
      how to say ``Ooh Rah.'' But when push comes to shove, when we
      are at the bedside, we are taking care of the patient as one
      team. I haven't seen cultural issues...........................
    General Horoho. If I could just give an example, when the issue
      came up with the capabilities that needed to deploy in support
      of the Ebola mission, it was all three services coming together
      and saying, ``Let's look at how do we do this jointly.''.......
    We looked across our facilities, as Surgeons General, and
      identified the capabilities that were needed. It was a tri-
      service effort. We went down to San Antonio. It was all
      services coming together, developing the training plan.........
    And then they were ready to support that mission. That is a whole
      different way in which we have approached those types of
      missions.......................................................
    General Edinger. I agree.........................................
    We have learned that culture is important because we are part of
      a mission. And so, when we deploy our medical folks out to work
      within our missions, they need to be able to work within the
      culture of our service.........................................
    But at the same time we have learned that culture should not and
      does not get in the way of the way we take care of our
      patients. And so I think we have learned how to strike that
      balance appropriately..........................................
    Mrs. Davis. Thank you............................................
    Dr. Heck. Mr. MacArthur..........................................
    Mr. MacArthur. I would like to continue that discussion that I
      suggested a few moments ago, and it is how can we give you more
      flexibility today..............................................
    In broad strokes, are there two or three things that we could do
      now structurally that would give you the flexibility not to
      propose programs that we then approve, but give you the freedom
      to explore, to act, to try things without an act of Congress,
      you know, those broad changes? Are there things we could do
      today that would allow you to change the current program?......
    Dr. Woodson. So thank you again for what I think is an
      extraordinarily important question.............................
    So in the spirit of, again, medicine isn't stable, we need to
      develop legislation that gives authority, I think, to the
      Assistant Secretary of Defense to define a process for
      evaluation involving medical technologies for inclusion in the
      program and then include them, even if it requires subsequent
      follow-up evaluation of their efficacy at some point in time in
      the future.....................................................
    And that ought to be broad. I think that is really very important
      because, again, medicine isn't stable. New ways of treatment
      evolve every day. And the way the language reads now, it is
      pretty rigid about the requirements for evidence, and that sort
      of stalls us a little bit......................................
    I think there are some other things that we need to deal with to
      synchronize our efforts. One of the things that the Surgeons
      General and my office have come together on is looking at new
      models in which we can manage markets, optimize the use of the
      military treatment facilities, and optimize the use of the
      purchase care market...........................................
    And so there are going to be some new, I think, authorities that
      we'll need to allow patients to flow from the market to the
      MTFs to ensure we have the proper case mix, this to include new
      ways of attracting Medicare-eligible or -aged patients, whether
      or not we actually define and establish a sort of Medicare
      Advantage within the MTFs......................................
    We need to be given broader authorities, I think, that relate to
      taking care of veterans. I think, in fact, there is even an
      opportunity for us to take care of DOD civilians. And, in fact,
      you know, we have a lot of dual-eligible folks who, in fact,
      work for the Federal Government and they have TRICARE benefits.
      Well, why not allow them to use the TRICARE benefits within the
      MTFs?..........................................................
    See, I think this would lead to proper utilization of the MTFs,
      proper market management, meet the case mix-skill mix issue and
      actually allow us to deliver extraordinary service to the
      beneficiary population.........................................
    So those are some of the things. There are other things that we
      could talk about, but off the top of my head, that would be
      some of the things we would look forward to....................
    Mr. MacArthur. Let me explore one other. And I am happy to have
      any of you answer..............................................
    In the private sector, you have a constant dynamic interaction
      between the provider of health care and the financier of health
      care. It is largely how the private sector healthcare system
      has evolved, that tension between high quality of care and
      affordability. And everyone hates it, but it works well. You
      don't have that................................................
    As you observed earlier, TRICARE is not insurance. We are the
      financier of health care on behalf of the American taxpayer,
      and you don't have that same daily dynamic interchange.........
    Can you achieve what I am talking about, what we have been
      talking about--can you achieve that without this two-party
      negotiation going on a day-to-day basis?.......................
    General Horoho. I will take that one and share it down the road..
    Each of us have to be fiscally solvent to be able to manage and
      run our healthcare facilities. And so we have very well-defined
      business plans. We have incentives where we incentivize our
      providers and clinicians for patient satisfaction for their
      care experience, for health outcomes, and then we also
      incentivize them for readiness.................................
    So we have moved as we improve readiness. That is something that
      they get incentivized and financial rewards for that and moving
      even more so in a complicated system of looking at how do we
      really move towards outcomes and functional health.............
    So this movement from health care to a system for health is a
      huge culture change that your financial system has to be able
      to drive it and support it.....................................
    General Edinger. Yes. I think really the answer to the question
      you pose is really the value-based approach to providing health
      care. And I think to do that we have got to define and consider
      and measure and manage the performance and value in all of its
      aspects. And so that is quality, that is safety, that is
      patient experience, but it is also cost and efficiency.........
    The performance management system that we built in the direct
      care system and the action plans that followed up the MHS
      review last summer are really focused on all the aspects of
      value, including cost and per-member per-month cost, those kind
      of things. We are now managing to that as a metric. So I think
      really the answer is value-based approach to providing care....
    Admiral Faison. And, sir, also adding into that flexibility,
      flexibility, as we had talked about earlier, and agility.
      Health care is dramatically changing and it is impacting the
      military because, as I shared earlier, 75 percent of our
      uniformed force were born after 1986...........................
    How they make their healthcare decisions and what influences
      those decisions is fundamentally different than what influences
      us, as Baby Boomers. And so they pursue convenience and the
      experience of care and increasingly technology, having the
      agility to pursue value-based options..........................
    Using those things without requiring them to come to a hospital
      for their care is fundamental to our success and really an
      operational imperative. So the things that you could do to help
      to give us that agility is where success is going to lie.......
    Mr. MacArthur. Thank you, Mr. Chairman. I appreciate your
      indulgence. I was making up for lost time earlier..............
    Dr. Heck. I appreciate your very informed questions..............
    So I agree with Secretary Woodson's comments about trying to
      attract more consumers of health care into our MTFs to provide
      a better training platform for our military healthcare
      providers to be better ready...................................
    And I think that was really one of the places where the
      Commission missed the mark. Certainly, when they presented to
      us, they seemed to be focused on the idea of the MTFs being
      training platforms solely for combat casualty care, not
      realizing, as you well pointed out, General Horoho, that the
      vast majority of folks we treat are not traumatic injuries.....
    So the question is: If you get the authorities and the
      flexibility and the marketing campaign is successful to bring
      more lives into the MTFs, is there capacity within the MTFs to
      be able to absorb a higher patient volume, whether it is the
      may we go to a Medicare Advantage-type TFL [TRICARE for Life]
      product or we go out and try to allow DOD civilians to
      participate and receive care at the MTFs? Are you going to be
      able to absorb that increased patient volume? And will the cost
      associated with caring for those new patients keep your
      business plan in the black?....................................
    Dr. Woodson. So let me start again. I think the Surgeons General
      really need to weigh in on this................................
    So, first of all, within the MTFs, we have fixed cost. So if we
      take care of one patient, the cost of care for that patient is
      extraordinarily high. If we take care of more patients, of
      course, the costs go down. And there are some built-in costs of
      readiness, which is the issue we are talking about in terms of
      maintaining skill and the graduate medical education program...
    So the bottom line for me is that there is capacity. I think what
      we have been working on is retooling how we are thinking and
      how we are managing to make the system clearly more efficient
      and to make us a preferred provider. And I will stop there and
      let the Surgeons General talk..................................
    General Horoho. And, sir, just in two areas with that, it would
      be very helpful to be able to have a diverse population that we
      could care for, but it is going to have to be tied to our
      readiness: What is the complex cases that we need to really to
      support our training programs and increase our medical
      readiness of our providers and the support staff?..............
    With that, though, it is going to require a commercial financial
      system and a business intelligence system because both of those
      are capabilities that we don't have right now and we would need
      to be able do that so that we could bill for certain services..
    General Edinger. So the care that is needed to help enhance and
      support our readiness is specialty and inpatient care. And in
      Air Force hospitals, yes, sir, we do have capacity.............
    I think, as we potentially gain the ability to more effectively
      capture care, that is the kind of care we would want to
      capture. And so I think we would need to go about it in a way
      using the business intelligence systems where we were capturing
      the kind of care that is most relevant to our readiness........
    And that is the kind of care where we have capacity. Our
      hospitals are fully enrolled and growing. Our primary care
      workforce is really not what we need so much on the readiness
      side as it is to pull in specialty and inpatient care..........
    Admiral Faison. Sir, I would agree with the other panel members.
      We not only see unit costs go down as you see more patients,
      but there is an inherent efficiency in the staff so that you
      see more patients much more efficiently and you get better
      outcomes.......................................................
    And so long-term costs are down because you are getting better
      outcomes and keeping people healthy. Short-term costs are down
      because you are not using as many things to take care of them
      in the short term. So I think there are inherent efficiencies
      to that........................................................
    We have capacity to do that. But, as General Edinger and General
      Horoho said, we have to be selective. So we don't want to
      recapture all of one thing. We only need to look at what
      exactly do we need for our mission and then go after those.....
    Business intelligence is critical for that, and we don't have
      that right now. And so I think that will be an important tool
      that we will need in our toolkit to go after those things......
    Dr. Heck. Perfect timing.........................................
    Well, I want to thank all of you, one, for staying with us even
      though we started late, and for your answers to the questions
      here today. Obviously, we look forward to continuing to work
      with all of you to make TRICARE the premier healthcare provider
      in the Nation..................................................
    I want to again hail Lieutenant General Edinger to our group.....
    And farewell to General Horoho. It has been a pleasure working
      with you, and I am sure we will be talking to you soon.........
    This hearing is adjourned........................................
    [Whereupon, at 4:16 p.m., the subcommittee was adjourned.].......

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                               A P P E N D I X

                                 June 11, 2015

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                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                 June 11, 2015

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                       DOCUMENTS SUBMITTED FOR THE RECORD

                                 June 11, 2015

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                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 June 11, 2015

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                        QUESTIONS SUBMITTED BY MR. JONES

        Mr. Jones. In response to a congressional inquiry addressed to you,
    the Army reported that, in May 2014, General Horoho's office approved a
    business case analysis (BCA) submitted by HDRL to take all HIV testing
    services ``in-house.'' In the months following this decision key
    assumptions of the BCA have proven to be incorrect. Current facilities
    have proven to be inadequate, test equipment, supplies and Army
    resources unavailable. These significant lapses led to the Army's delay
    in pursuing this for up to 3 years. It's also seems that the Army's
    effort to do this would result in sole sourcing with a company that has
    been heavily fined by the Justice Department, for bribing foreign
    government officials in order to obtain government business, in
    violation of the Foreign Corrupt Practices Act. (That company is Bio-
    Rad.) Bottom line, fundamental assumptions of the BCA have proven to be
    incorrect and the decision to take testing ``in-house'' needs to be
    reviewed as the evidence appears to indicate increased costs. Just as
    troubling the inferior performance of the proposed equipment, HDRL's
    track record on shipment and turn around and the inevitable
    uncertainties and inefficiencies associated with transition are cause
    for serious concern.
        Secretary Woodson, General Horoho; are you reviewing this decision
    and if not, why not; and will you provide the committee with a copy of
    the original BCA, along with analysis addressing those areas mentioned
    above and any other areas where the BCA's assumptions have proven to be
    incorrect, as well as, provide details of the estimated costs
    associated with those changes. Thank you
        Dr. Woodson. The basic requirements of HDRL's BCA, which support
    the change in the Army's acquisition strategy for HIV testing, have not
    been significantly altered. Delays to date have been due to ensuring
    compliance with applicable policies and regulatory guidance, adherence
    to current contractual requirements, and addressing solicitation
    protests by the current contractor. The Army's current acquisition
    strategy is resourced, and is proceeding according to schedule barring
    any additional solicitation protests. HDRL's final costs within the BCA
    are currently under revision due to several procurement actions that
    are still out for bid. The Government's final cost for 4th Generation
    HIV testing is projected to be lower than the current contracted cost
    per test, which is based on a sole-source procurement to the incumbent
    contractor. All Army Procurements are done in accordance with the
    Federal Acquisition Regulations (FAR) and the Defense Federal
    Acquisition Regulation Supplement (DFARS). This includes ensuring that
    contract awardees are not currently suspended, debarred or otherwise
    ineligible from receiving any Government contracts.
        HDRL is fully accredited by the College of American Pathologists
    (CAP), and has served as the DOD/HA HIV reference lab since 1987. HDRL
    performs all OCONUS HIV testing (60K HIV screen tests/year), 6K HIV
    viral loads/year of USA/USN infected personnel for confirmatory testing
    and clinical monitoring, and 1.2K HIV resistance genotypes/year for all
    DOD HIV infected Soldiers and beneficiaries. Under the current contract
    all CONUS HIV testing that screens POSITIVE must be shipped to HDRL for
    supplemental, confirmatory testing.
        Under HDRL's BCA, greater efficiencies would be achieved with the
    Army's HIV testing algorithm through performance of both screening and
    confirmatory testing at a single location. This would facilitate a
    quicker turnaround time for the Government for confirmed results as
    HDRL would not have to wait for a contractor to ship samples that
    screen positive to HDRL for confirmation. There are no known systemic
    issues with quality or performance of either Bio-Rad or Abbott's 4th
    Generation HIV testing method. A review of the Safety and Effectiveness
    data submitted to the US Food and Drug Administration by Bio-Rad and
    Abbott for their 4th Generation HIV test methods demonstrates
    comparable analytic performance for both manufacturers that meets or
    exceeds the FDA's sensitivity (>99%) and specificity requirements
    (>99%) for HIV assays.
        Currently, there are four open procurements actions. As the BCA
    contains contractor bid and proposal information, commercial vendor
    sensitive information, and source selection information related to
    these ongoing procurement actions, the release of the full BCA prior to
    final award would violate the Procurement Integrity Act (PL 111-350,
    Section 2102 and FAR 3.104). Final award of the open actions is
    anticipated in mid-August 2015, and the BCA will be releasable at that
    time.
                                     ______

                        QUESTIONS SUBMITTED BY MR. WALZ
        Mr. Walz. Dr. Woodson, do you agree with the MCRMC Conclusion that
    ``As evidenced by the similarity in benefits authorized under the HCBS
    and ECHO programs, as well as the directive to use state and local
    services before accessing ECHO, the Congress intended ECHO as an
    alternative to unavailable waiver benefits. Yet ECHO benefits, as
    currently implemented, are not robust enough to replace state waiver
    programs when those programs are inaccessible to Service members and
    their EFMs. With the exception of home health care services and ABA
    therapy services, the ECHO program is not highly utilized. This is due
    to a lack of needed services.''?
        Dr. Woodson. The ECHO program, as currently implemented, offers a
    robust range of integrated services and supplies beyond those offered
    by the basic TRICARE health benefit program. These services and
    supplies include, but are not limited to, assistive services (e.g.,
    from a qualified interpreter or translator), durable equipment
    (including adaptation and maintenance equipment), expanded in-home
    medical services (through ECHO Home Health Care (EHHC), rehabilitative
    services, respite care, training to use special education and assistive
    technology devices, limited transportation services to and from
    institutions or facilities, etc. The ECHO program was not designed to
    serve as a full replacement to state waiver programs, and as a result,
    there are significant differences between benefits authorized under the
    HCBS and ECHO programs. To assist DHA in better aligning ECHO services
    with HCBS, DHA has initiated an analysis of HCBS waivers and
    eligibility criteria, and is in the process of designing a beneficiary
    survey to identify current gaps in ECHO services and to evaluate which
    HCBS services should be added to the ECHO program to better support our
    military families.
        Mr. Walz. Dr. Woodson, do you agree with the MCRMC's recommendation
    that ``Services covered through ECHO should be increased to more
    closely align with state Medicaid waiver programs, to include allowing
    for consumer-directed care.''? If so, what is the implementation plan
    and timeline? If not, what alternative would you propose?
        Dr. Woodson. DHA is currently developing a beneficiary survey to
    identify current gaps in ECHO services and to evaluate which state
    Medicaid waiver services should be added to the ECHO program to better
    support our military families. Consumer-directed care (which is legally
    limited to respite and attendant care) is one avenue of service
    delivery that will be considered after the survey has been completed
    and the needs have been identified. To better understand how consumer-
    directed care might be effectively implemented under the ECHO program,
    DHA has met with the MCRMC research group to review the process for,
    and the impact of, the implementation of consumer-directed care in
    several states. Additional research in this area will occur over the
    next 4-6 weeks.
        Mr. Walz. Dr. Woodson, how can DOD in the immediate term, address
    the underlying objectives of increasing access, choice and value in
    military health care, specifically for families and children under
    TRICARE? Do the steps require legislation or does DOD already have the
    authority?
        Dr. Woodson. The Military Health System (MHS) is addressing access,
    choice and value in military health care through initiatives in primary
    and specialty care. The Patient Centered Medical Home (PCMH) model of
    primary care is our foundation for enhancing access, improving health
    and increasing quality. Currently, over 310 of our primary care clinics
    are recognized by the National Committee for Quality Assurance (NCQA)
    as meeting the highest PCMH standards. The PCMH model of evidence-based
    care supports the patient's continuous relationship with his or her
    primary care manager (PCM) and healthcare team, who coordinates and
    integrates the patient's care needs. PCMH also enhances access to care
    by offering alternatives to face-to-face medical appointments including
    walk-in clinics for common acute conditions, a Nurse Advice Line
    available 24 hours a day and secure messaging, which allows patients to
    email their PCM and healthcare team. To further improve access to care,
    the MHS has embedded specialty providers for commonly occurring medical
    issues directly in the PCMHs; these providers include behavioral health
    specialists, clinical pharmacists and physical therapist. PCMH is
    supported by two new access initiatives to ensure patient medical needs
    are addressed in a timely manner.
        First, MHS is implementing policies, which identify standard
    processes for patients calling for appointments to ensure patients'
    needs are resolved on the first phone call. The MHS also is
    implementing Simplified Appointing Guidance, which will better match
    primary care appointment supply by patient demand, especially for
    appointments available within 24-hours. Simplified Appointing guidance
    also identifies processes to appoint patients based on their preference
    for when they want to be seen rather than on the acuity of their
    medical condition. Simplified Appointing is based on best practices
    recognized by the Institute of Medicine. By leveraging the success of
    the Tri-Service PCMH program, the MHS is now developing standard
    processes and goal to improve access to specialty care in the direct
    care system. Finally, to expedite our patients' access to specialty
    care in the direct care system or in the TRICARE network, the MHS is
    now developing a streamlined specialty appointing process. DOD has the
    authority to accomplish required actions and steps do not require
    legislation.
        Mr. Walz. Dr. Woodson, one of the key recommendations in the MHS
    Review that was completed last summer stated ``The Department will
    expand its collaboration with external health care organizations to
    improve as a learning organization''. It is my understanding that
    senior leadership within the Defense Health Agency will be meeting with
    pediatric stakeholders, including the TRICARE for Kids Coalition, which
    includes, among others, the American Academy of Pediatrics and the
    Children's Hospital Association on the 24th of June. Using that meeting
    as an example, can you explain how you intend to take their input as it
    relates to pediatrics to improve ``as a learning organization''? I
    would appreciate an out brief after the meeting, helping the committee
    understand what their recommendations are, and how you plan to
    incorporate their suggestions into ensuring we are providing excellent
    medical care for our military connected children.
        Dr. Woodson. The June 24, 2015, meeting did occur and we had great
    attendance with representation from about 10 different groups, to
    include the American Academy of Pediatrics, National Military Family
    Association, and the National Association for Children's Behavioral
    Health. Attendees were provided information on: (1) compound drugs, and
    informed that TRICARE is dedicated to getting safe, effective, and
    appropriate compound drugs to all beneficiaries, to include our
    pediatric population. (2) Pediatric Program Updates (e.g. changes
    planned for the Extended Care Health Option (ECHO) program (e.g.
    respite care and adult diapers for incontinence, breastfeeding supplies
    and services), and (3) TRICARE's benefits regarding mental health care
    for children.
        We are committed to hosting two meetings a year with the group and
    will work to address their recommendations as they arise. We trust this
    will ensure we continue to provide excellent medical care to our
    military children.
        Mr. Walz. Dr. Woodson, similarly, when it comes to children, we
    hear that Medicaid and CHIP are the gold standard, in terms of the
    comprehensive coverage and the attention to pediatric health and
    development. What can you learn or adopt from those programs that will
    enhance and protect children's health coverage, particularly in order
    to create a program that responds to and develops in alignment with
    best practices and technology and treatment options as they are
    emerging and developing, so that the DHA is not always playing catch up
    in the children's health care arena. Do the steps require legislation
    or does DOD already have the authority?
        Dr. Woodson. Medicare and CHIP are not designed as specific uniform
    standards but rather are health insurance plans underwritten by the
    states for children in families with income up to 200 percent of the
    federal poverty level ($48,500 per year for a family of four). Eligible
    children and teens can receive regular check-ups, immunizations, doctor
    and dentist visits, vision care, hospital care, mental health services
    and medications. These services are different in each state with
    different requirements of income and necessity. All the medical
    services in Medicaid and CHIP are available and some more robust within
    the TRICARE entitlement programs. The alignment with emerging best
    practices, technology and treatment options require evaluation of the
    cost and legislative authority (Well Child Care defined up to age 5).
    With the statutory permission received from Section 704 from NDAA 2015,
    the DHA has been able to begin to design an enhanced approach to adopt
    and review emerging and developing technologies. This will continue to
    be strengthened through use of the governance system to review,
    evaluate and recommend benefit changes to address evolving beneficiary
    needs.
        Mr. Walz. Dr. Woodson, has the DOD calculated any comprehensive
    comparison of benefits and costs, including cost-shares and
    catastrophic caps, between the recommended TRICARE Choice plans and the
    current TRICARE plans? This is a big concern for families with special
    healthcare needs, active duty and retired. Does DOD have a plan to
    ensure that it can provide benefits (comparable to private plans and
    MA/CHIP as they relate to pediatrics) without increased or variable
    cost shares and catastrophic caps?
        Dr. Woodson. The current TRICARE Prime and TRICARE Prime Remote
    plans for Active Duty family members involve very minimal out of pocket
    costs (primarily for prescriptions which would be unaffected by the
    Commission's recommendation). Our analysis indicates that while the
    proposed Basic Allowance for Health Care (BAHC) equals or exceeds the
    average out-of-pocket costs, the financial risk for active duty family
    members varies considerably by eligibility status, family size, choice
    of plan selected, and health status (including for families with
    special health care needs). According to the Commission's report,
    nearly 1 in 6 Service member families will be negatively impacted
    financially. 50,000-100,000 families will experience unreimbursed out-
    of-pocket expenses of more than $1,000 above the BAHC,
    disproportionately affecting those paid the least. In addition, unlike
    housing expenses covered by BAH, health care expenses are unpredictable
    and highly variable. Without controls to ensure BAHC is saved for
    health care-related costs (deductibles, co-insurance, premium cost-
    shares, etc.), it is highly likely that some members will face
    significant financial hardships without the resources to meet them. As
    for non-Medicare eligible retirees, the Department estimates that in
    the steady state (20% of premiums) the average retiree family of three
    will experience an increase of $3,600 (FY 2014 dollars) in out-of-
    pocket expenses, significantly more than current out-of-pocket and much
    more than Department proposals that have been rejected in the past. The
    Department's proposals for PB 2016 allowed active duty family members
    to continue with an MTF managed option with the same low out-of-pocket
    costs as today. In addition, the proposal for retiree health care was
    estimated to increase the out-of- pocket cost for a family of 3 by less
    than $300 per year.
        Mr. Walz. How does DHA intend to monitor the ECHO plan to ensure it
    maintains this alignment with state Medicaid waiver programs as
    technology and best practices change in the future?
        Dr. Woodson. DHA already has expertise in the area of medical
    benefit policy development, which includes a well-established process
    for continually monitoring reliable evidence for evolving medical
    benefits and technology. DHA will establish a similar process to
    continually monitor future changes to state Medicaid waiver programs
    and to assess whether ECHO policy or benefit revisions are indicated.
        Mr. Walz. A recent study by DOD stated ``Overall, 37% of military
    families with a special needs child reported they had heard of the
    TRICARE ECHO program.'' Why is reaching these families difficult and
    what are you doing to improve your outreach to these families?
        Dr. Woodson. DHA currently utilizes a wide range of contemporary
    communication techniques to inform beneficiaries and providers about
    all aspects of the TRICARE program. However, this study suggests a need
    for additional emphasis on the TRICARE ECHO program to ensure that
    military families are fully informed of the process for participating
    in the ECHO program so that a family member with special needs can
    receive integrated services and supplies beyond those offered by the
    basic TRICARE health benefit program. DHA will explore options for
    providing focused ECHO messages under the current and future TRICARE
    contracts. These outreach efforts will include military families,
    primary care managers and other providers in the Military Treatment
    Facilities (MTFs), and network providers participating in TRICARE
    Managed Care Support Contracts. Additionally, DHA will reach out to the
    Services to ensure that Exceptional Family Member Program (EFMP)
    program coordinators are familiar with the ECHO program and can advise
    military families accordingly.
        Mr. Walz. The same report noted ``72% of military families whose
    child was enrolled in TRICARE ECHO were satisfied or very satisfied
    with the program''. What is the trend in satisfaction since the ECHO
    program was created? Is this a high number or a low number? Do you
    think the MCRMC recommendation would improve satisfaction with the ECHO
    program?
        Dr. Woodson. DHA regularly conducts various inpatient and
    outpatient beneficiary satisfaction surveys; however, ECHO program
    satisfaction is not routinely tracked by the agency. Therefore, DHA is
    unable to provide information on ECHO program satisfaction trends, nor
    can DHA state with certainty whether 72% represents a high number or a
    low number. However, Gallup researchers conduct annual surveys on a
    wide range of health care satisfaction metrics, including overall
    patient satisfaction with their health care coverage. Based on survey
    results from 2001 through 2012, between 63% and 72% of patients who
    were surveyed rated their overall satisfaction with their health care
    coverage as ``excellent'' or ``good'' (the other rating options were
    ``fair'' and ``poor''). Although these surveys are not limited to
    patients with special needs, as an indicator of overall program
    satisfaction, it would appear that a 72% ECHO program satisfaction
    rating is consistent with the upper range of overall patient
    satisfaction with their health care coverage. DHA is committed to
    quality improvement and is currently developing a beneficiary survey to
    identify gaps in ECHO services. The results of this survey will be used
    to evaluate which HCBS services from the MCRMC recommendation should be
    added to the ECHO program to better support our military families. This
    identification of coverage gaps and the subsequent implementation of
    necessary policy and program changes to better align the ECHO program
    with the MCRMC recommendation should lead to improved beneficiary
    satisfaction.
        Mr. Walz. What actions is DOD taking or contemplating to increase
    access to specialty care--which the MCRMC identified as a big challenge
    for families? Do the steps require legislation or does DOD already have
    the authority?
        Dr. Woodson. The Military Health System (MHS) is improving access
    to specialty care in both our direct care system and in our TRICARE
    network. The MHS Review of Access, Quality and Safety recommended
    leveraging the success of the Tri-Service Patient Centered Medical Home
    (PCMH) program to develop standard processes and goals to improve
    access to specialty care in the direct care system. Recapturing
    specialty care to the direct care system supports our goals of
    maintaining a ready military medical force, which is able to respond
    quickly and effectively in support of National Strategy. Our direct
    care PCMHs using evidence-based clinical practice guidelines (CPGs) to
    deliver more comprehensive, coordinated care in primary care without
    having to refer the patient to specialty care, which frees up specialty
    care access. In addition, the MHS has embedded specialty providers in
    PCMHs for commonly occurring medical issues directly so patients can be
    seen quickly without a referral; these providers include behavioral
    health specialists, clinical pharmacists and physical therapists. Our
    telehealth program also is expanding the reach of direct care
    specialists by providing tele-consultations to remote PCMHs, which do
    not have in-house specialty care capabilities.
        To achieve the goal of improving access to specialty care and in
    support of our integrated delivery system, the MHS has developed a new
    Tri-Service Specialty Care Advisory Board. Our direct care specialties
    are increasing the number of available appointments as well as
    maximizing the availability of operating rooms and other support
    services. If specialty care is not available in the direct care system,
    patients will be referred to high quality specialty care in our TRICARE
    network. Our specialty care access standard is for patients to be seen
    for an appointment within 28 days and care in most specialties is
    available well within this access standard in both the direct care
    system and in the TRICARE network. Some specialties are in short supply
    nation-wide; however, the MHS ensures patients needing care are seen as
    quickly as possible. Finally, to expedite our patients' access to
    specialty care and in response to patient feedback, the MHS is now
    developing a streamlined specialty appointing process so patients know
    when and where they will be seen more quickly. DOD has the authority to
    accomplish required actions and steps do not require legislation.
        Mr. Walz. Children's behavioral health care seemed to be a
    particularly difficult area, due to the unavailability of outpatient
    providers, the obsolete model of residential treatment that TRICARE
    imposes, and the lack of some intermediate service levels. How is DOD
    addressing this shortfall? Do the steps require legislation or does DOD
    already have the authority?
        Dr. Woodson. Many of the challenges TRICARE faces regarding
    behavioral health care for children parallel the nationwide problem of
    appropriate care for this population, to include the shortage of
    outpatient providers, child psychiatrists and psychologists; access to
    residential treatment and partial hospital programs for substance use
    disorders; and appropriate services in between the two levels of care.
    TRICARE has several efforts underway to improve behavioral health care
    for our beneficiaries. In 2014, TRICARE regulations were finalized to
    add TRICARE-Certified Mental Health Counselors as authorized
    independent providers of mental health care. Also in 2014, the
    Department sought legislative relief to remove statutory quantitative
    limits on inpatient psychiatric and residential treatment center care
    for children in the TRICARE program. As a result, the National Defense
    Authorization Act for Fiscal Year 2015, Section 703 ``Elimination of
    inpatient day limits and other limits in provision of mental health
    services'' amended section 1079 of Title 10 United States Code to
    remove these quantitative limits, and we are currently revising our
    TRICARE program manuals to implement these changes. Additionally, the
    Defense Health Agency is in the process of drafting proposed regulatory
    changes to ensure our mental health benefit has parity with the
    benefits for medical/surgical procedures, is consistent with current
    industry standards of care, and facilitates access to qualified
    institutional and professional providers of mental health services. We
    anticipate that a proposed rule outlining these changes will be
    published in the Federal Register in the near future, and we will
    encourage stakeholders to provide feedback during the public comment
    period.
        In addition to medical services, non-medical services continue to
    be available to all TRICARE eligible beneficiaries. Non-clinical
    counseling programs and resources are sponsored by the Services (such
    as the Army's Strong Bonds program and the Navy's Project Focus) and by
    Deputy Assistant Secretary of Defense for Military Community and Family
    Policy (such as Military Family Life Consultants, Military OneSource
    Programs, and the Joint Family Support Assistance Program). These
    adjunct programs, in addition to Military Health System behavioral
    health care, help ensure that children and families have access to a
    broad range of psychological services.
        Mr. Walz. If DOD does not agree with the MCRMC recommendations,
    what are some of the elements of private health plan design and
    administration that can be adopted to address the concerns so
    compellingly set forth in the MCRMC report? Do the steps require
    legislation or does DOD already have the authority?
        Dr. Woodson. The Department believes that adopting the proposal set
    forth in the 2016 President's Budget has many of the elements of most
    private health plans. That proposal would replace the two TRICARE plans
    (PRIME, Standard/Extra) with a simplified Preferred Provider
    Organization (PPO) plan. In 2014, 58% of beneficiaries covered by
    employer-sponsored insurance were enrolled in a PPO. In a PPO,
    beneficiaries have the choice to choose their providers. There are no
    requirements for referrals and authorizations, which is a source of
    many access-related complaints associated with TRICARE. Also, co-pays
    will differ to steer patients to the lower cost providers. In the PB
    2016 proposal, co-pays were lowest for military treatment facilities
    (where patients are needed for our active duty providers), low for
    network providers (where the Department has lower costs) and highest
    for out-of-network care. Furthermore, copays are zero for preventive
    services, lowest for primary care, higher for specialty care and
    highest for emergency room visits.
        While the PB 2106 proposal does require legislation, we are looking
    at options to address other aspects of the MCRMC report that will not
    require legislation, including implementing value based purchasing. The
    Department is reviewing those options now.
        Mr. Walz. The 2013 NDAA, Sec 735 directed ``The Secretary of
    Defense shall conduct a study on the health care and related support
    provided by the Secretary to dependent children.'' The report was to
    include the (1) the findings of the study; (2) a plan to improve and
    continuously monitor the access of dependent children to quality health
    care; and (3) any recommendations for legislation that the Secretary
    considers necessary to maintain the highest quality of health care for
    dependent children. The findings of the study were published almost a
    year ago, in July 2014, but we still don't have a plan or
    recommendations for legislation. When do you anticipate providing this
    information?
        Dr. Woodson. Defense Health Agency began a Pediatric Integrated
    Project Team (IPT) in March to address the gaps and areas of
    consideration in the 2013 NDAA, Sec 735. This team is addressing each
    of the areas in the nine original elements in a multidisciplinary
    collaborative group from direct care, purchased care and other
    Department of Defense Agencies. The group is reviewing advocacy group
    responses to the 2013 NDAA Sec 735 for additional input and
    recommendations. The report from this group is anticipated to be
    reported to DHA governance in December 2015.
        Mr. Walz. General Horoho, one of the reasons the commission
    recommended changing the Military Health Care system is because
    military families and retirees told them they wanted choices. If your
    members do want more choice, is the Commission's recommendation what
    the members of your organization want? Do they believe choice will
    improve medical care? What are your concerns with the recommended
    change? Are there ways to improve the TRICARE program instead? If so
    how?
        General Horoho. The Army supports the Commission's objectives to
    increase choice for beneficiaries; however, we believe the DOD
    proposals in the 2016 President's Budget will achieve these goals
    without jeopardizing the ability to maintain a ready and deployable
    medical force and a medically deployable force. We are concerned that
    the Commission's proposal to establish a Federal Employee Health
    Benefit type program for beneficiaries risks loss of beneficiaries from
    the direct care system that provide the volume and complexity to
    sustain the skills of our military healthcare providers. The PB16
    proposal offer Active Duty Family Members and Retirees the choice of
    using Military Treatment Facilities or network providers and
    incentivizes use of the direct care system. This creates choice as
    recommended by the Commission while preserving the case load required
    to sustain skills for our military providers. Additionally, Army
    Medicine must maintain the ability to provide critical healthcare
    services not available to our beneficiary population in the civilian
    market, for example, School-based Behavioral Health Care. Many of the
    Commission's goals are currently being achieved through initiatives
    such as patient-centered medical home, nurse advice line, shared
    services, Defense Health Agency, and MHS governance. In order to
    improve the TRICARE program, the Army recommends expanding authorities
    to increase patient populations and therefore the case mix to keep
    military providers ready to deploy; seeking cost effective solutions to
    improve healthcare coverage of Reserve Component Families impacted
    during activation of Reserve Component Soldiers; and exploring
    strategies to transition from a fee-based health plan to a value-based
    health plan that incentivizes preventive care, improves health
    outcomes, and encourages healthy behaviors.

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