[Congressional Record Volume 142, Number 40 (Thursday, March 21, 1996)]
[Senate]
[Pages S2657-S2658]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOLE (for himself, Mr. Thurmond, Mr. Warner, and Mr. 
        Gramm):
  S. 1639. A bill to require the Secretary of Defense and the Secretary 
of Health and Human Services to carry out a demonstration project to 
provide the Department of Defense with reimbursement from the Medicare 
Program for health care services provided to Medicare-eligible 
beneficiaries under TRICARE; to the Committee on Finance.


                    medicare subvention legislation

  Mr. DOLE. Mr. President, today I am pleased to introduce legislation 
which will demonstrate the cost effectiveness of Medicare reimbursement 
to the Department of Defense [DOD] for treatment of military 
beneficiaries age 65 and older. This bill will enable these individuals 
to enroll in Tricare Prime and be treated in military hospitals.


                        current system is flawed

  As I am sure my colleagues know, Tricare is DOD's new managed health 
care program. While Tricare has merit, it also has flaws: It bars all 
Medicare-eligible retirees and family members from enrolling in Tricare 
Prime. In fact, all career military members and their families 
eventually will be affected, because even those who enroll now will be 
dropped from Tricare at age 65, when they become eligible for

[[Page S2658]]

Medicare. In my view, this breaks long standing health care commitments 
to retirees, may increase costs, and affect military readiness.


                        identifying the problem

  Current law inadvertently encourages DOD and Medicare to work against 
each other. As the defense budget tightens, DOD has a strong incentive 
to push older retirees and families out of the military medical system 
and back into Medicare, although Medicare probably costs both the 
Government and retirees more money than care under the military system. 
Theoretically, Medicare-eligible retirees may still use military 
hospitals on a space-available basis. However, space-available care is 
rapidly becoming nonexistent as military facilities downsize and 
Tricare expands across the country.


                  medicare subvention is the solution

  It seems to me, the solution to this problem is to change the law to 
allow Medicare subvention, allowing Medicare to reimburse DOD for care 
provided to older beneficiaries enrolling in Tricare Prime or otherwise 
using military hospitals.


               demonstration test of medicare subvention

  We need to demonstrate to the interested parties, Department of 
Health and Human Services, and Department of Defense, that subvention 
is indeed a feasible and cost-effective program. Therefore I am 
introducing the legislation which gives those agencies the authority to 
conduct such a test. I believe this test will justify implementing 
subvention and allow those eligible military retirees over 65 to 
participate in Tricare Prime and receive care in military hospitals.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1639

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DEMONSTRATION PROJECT FOR MEDICARE REIMBURSEMENT 
                   OF DEPARTMENT OF DEFENSE FOR HEALTH CARE 
                   PROVIDED TO MEDICARE-ELIGIBLE BENEFICIARIES 
                   UNDER TRICARE.

       (a) In General.--Notwithstanding any other provision of law 
     and subject to subsection (b), the Secretary of Defense and 
     the Secretary of Health and Human Services shall enter into 
     an agreement in order to carry out a demonstration project 
     under which the Secretary of Health and Human Services 
     reimburses the Secretary of Defense, on a capitated basis, 
     from the medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) for certain health care 
     services provided by the Secretary of Defense to medicare-
     eligible military beneficiaries through the TRICARE program.
       (b) Project Requirements.--(1)(A) The Secretary of Defense 
     shall budget for and expend on health care services in each 
     region in which the demonstration project is carried out an 
     amount equal to the amount that the Secretary would otherwise 
     budget for and expend on such services in the absence of the 
     project.
       (B) The Secretary may not be reimbursed under the project 
     for health care services provided to medicare-eligible 
     military beneficiaries in a region until the amount expended 
     by the Secretary to provide health care services in that 
     region exceeds the amount budgeted for health care services 
     in that region under subparagraph (A).
       (2) The agreement between the Secretary of Defense and the 
     Secretary of Health and Human Services shall provide that the 
     cost to the medicare program of providing services under the 
     project does not exceed the cost that the medicare program 
     would otherwise incur in providing such services in the 
     absence of the project.
       (3) The authority of the Secretary of Defense to carry out 
     the project shall expire 3 years after the date of the 
     commencement of the project.
       (c) Reports.--Not later than 14 months after the 
     commencement of the demonstration project under subsection 
     (a), and annually thereafter until the year following the 
     year in which the project is terminated, the Secretary of 
     Defense and the Secretary of Health and Human Services shall 
     jointly submit to Congress a report on the demonstration 
     project. The report shall include the following:
       (1) The number of medicare-eligible military beneficiaries 
     provided health care services under the project during the 
     previous year.
       (2) An assessment of the benefits to such beneficiaries of 
     receiving health care services under the project.
       (3) A description of the cost-shifting, if any, among 
     medical care programs of the Department of Defense that 
     results from the project.
       (4) A description of the cost-shifting, if any, from the 
     Department to the medicare program that results from the 
     project.
       (5) An analysis of the effect of the project on the 
     following:
       (A) Access to the military medical treatment system, 
     including access to military medical treatment facilities.
       (B) The availability of space and facilities and the 
     capabilities of medical staff to provide fee-for-service 
     medical care.
       (C) Established priorities for treatment of beneficiaries 
     under chapter 55 of title 10, United States Code.
       (D) The cost to the Department of providing prescription 
     drugs to the beneficiaries described in subparagraph (C).
       (E) The quality of health care provided by the Department.
       (F) Health care providers and medicare-eligible military 
     beneficiaries in the communities in which the project is 
     carried out.
       (6) An assessment of the effects of continuing the project 
     on the overall budget of the Department for health care and 
     on the budget of each military medical treatment facility.
       (7) An assessment of the effects of continuing the project 
     on expenditures from the medicare trust funds under title 
     XVIII of the Social Security Act.
       (8) An analysis of the lessons learned by the Department as 
     a result of the project.
       (9) Any other information that the Secretary of Defense and 
     the Secretary of Health and Human Services jointly consider 
     appropriate.
       (d) Review by Comptroller General.--Not later than December 
     31 each year in which the demonstration project is carried 
     out under this section, the Comptroller General shall 
     determine and submit to Congress a report on the extent, if 
     any, to which the costs of the Secretary of Defense under the 
     TRICARE program and the costs of the Secretary of Health and 
     Human Services under the medicare program have increased as a 
     result of the project.
       (e) Definitions.--For purposes of this section:
       (1) The term ``medicare-eligible military beneficiary'' 
     means a beneficiary under chapter 55 of title 10, United 
     States Code, who is entitled to benefits under part A of 
     title XVIII of the Social Security Act.
       (2) The term ``TRICARE program'' means the managed health 
     care program that is established by the Secretary of Defense 
     under the authority of chapter 55 of title 10, United States 
     Code, principally section 1097 of that title, and includes 
     the competitive selection of contractors to financially 
     underwrite the delivery of health care services under the 
     Civilian Health and Medical Program of the Uniformed 
     Services.

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