[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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                   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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