Defense Health Care: Oversight of the TRICARE Civilian Provider
Network Should Be Improved (31-JUL-03, GAO-03-928).
Testifying before Congress in 2002, military beneficiary groups
described problems accessing care from TRICARE's civilian medical
providers. Providers also testified on their dissatisfaction with
the TRICARE program, specifying low reimbursement rates and
administrative burdens. The Bob Stump National Defense
Authorization Act of 2003 required GAO to review the oversight of
the TRICARE network of civilian providers. Specifically, GAO
describes how the Department of Defense (DOD) oversees the
adequacy of the civilian provider network, evaluates DOD's
oversight of the civilian provider network, and describes the
factors that have been reported to contribute to network
inadequacy. GAO analyzed TRICARE Prime--the managed care
component of TRICARE. To describe and evaluate DOD's oversight,
GAO reviewed and analyzed information from reports on network
adequacy and interviewed DOD and contractor officials in 5 of 11
TRICARE regions.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-928
ACCNO: A07802
TITLE: Defense Health Care: Oversight of the TRICARE Civilian
Provider Network Should Be Improved
DATE: 07/31/2003
SUBJECT: Civilian employees
Health care facilities
Health care programs
Health care services
Managed health care
Reporting requirements
Performance measures
DOD TRICARE Program
******************************************************************
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GAO-03-928
Report to Congressional Committees
United States General Accounting Office
GAO
July 2003 DEFENSE HEALTH CARE
Oversight of the TRICARE Civilian Provider Network Should Be Improved
GAO- 03- 928
For the 8.7 million TRICARE beneficiaries, DOD relies on the civilian
provider network to supplement health care delivered by its military
treatment facilities. To ensure the adequacy of the civilian provider
network, DOD has standards for the number and mix of providers, both
primary care and specialists, necessary to satisfy TRICARE Prime
beneficiaries* needs. In addition, DOD has standards for appointment wait,
office wait, and travel times to ensure that TRICARE Prime beneficiaries
have timely access to care. DOD has delegated oversight of the civilian
provider network to the local level through regional TRICARE lead agents.
DOD*s ability to effectively oversee the TRICARE civilian provider network
is hindered in several ways. First, the measurement used to determine if
there is a sufficient number and mix of providers in a geographic area
does not always account for the total number of beneficiaries who may seek
care or the availability of providers. This may result in an
underestimation of the number of providers needed in an area. Second,
incomplete contractor reporting on access to care makes it difficult for
DOD to assess compliance with these standards. Finally, DOD does not
systematically collect and analyze beneficiary complaints, which might
assist in identifying inadequacies in the civilian provider network.
However, DOD has tools, such as surveys of network providers and automated
reporting systems which, while not designed specifically for monitoring
the civilian provider network, could, if modified, improve DOD*s ability
to oversee the network.
DOD and its contractors have reported that a lack of providers in certain
geographic locations, low reimbursement rates, and administrative
requirements contribute to potential civilian provider network inadequacy.
DOD and contractors have reported long- standing provider shortages in
some geographic areas. In areas where DOD determines that access to care
is severely impaired, DOD has the authority to increase reimbursement
rates. Since 2002, DOD has used its reimbursement authority to increase
rates in Alaska and Idaho in an attempt to entice more providers to join
the network. DOD officials told us that the contractors have achieved some
success in recruiting additional providers by using this authority.
Additionally, civilian providers have expressed concerns that TRICARE*s
reimbursement rates are generally too low and administrative requirements
too cumbersome. However, while reimbursement rates and administrative
requirements may have created provider dissatisfaction, it is not clear
how much this has affected civilian provider network adequacy except in
limited geographic locations, because the information contractors provide
to DOD is not sufficient to measure network adequacy. Testifying before
Congress in 2002,
military beneficiary groups described problems accessing care from
TRICARE*s civilian medical
providers. Providers also testified on their dissatisfaction with the
TRICARE program, specifying low reimbursement rates and administrative
burdens. The Bob Stump National Defense
Authorization Act of 2003 required GAO to review the oversight of the
TRICARE network of civilian providers. Specifically, GAO describes how the
Department of Defense (DOD) oversees the
adequacy of the civilian provider network, evaluates DOD*s oversight of
the civilian provider network, and describes the factors that have been
reported to contribute to network inadequacy.
GAO analyzed TRICARE Prime* the managed care component of TRICARE. To
describe and
evaluate DOD*s oversight, GAO reviewed and analyzed information from
reports on network adequacy and interviewed DOD and contractor officials
in 5 of 11 TRICARE regions.
GAO recommends that DOD improve its oversight of the civilian provider
network by ensuring sufficient information is reported and by exploring
options for evaluating beneficiary complaints and improving provider
survey data. DOD concurred with the
recommendations.
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 928. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Marjorie Kanof at (202) 512- 7101. Highlights of GAO-
03- 928, a report to
congressional committees
July 2003
DEFENSE HEALTH CARE
Oversight of the TRICARE Civilian Provider Network Should Be Improved
Page i GAO- 03- 928 TRICARE Civilian Provider Network Letter 1 Results in
Brief 3 Background 4 DOD Has Standards for Network Adequacy and Requires
Contractors* Compliance 8 DOD*s Oversight of the Civilian Provider Network
Has
Weaknesses, But Additional Tools May Help 10 DOD and Contractors Report
Three Factors That May Contribute to Civilian Provider Network Inadequacy
14 New Contracts May Address Some Network Concerns, But May Create Others
17 Conclusions 18 Recommendations for Executive Action 19 Agency Comments
and Our Evaluation 19 Appendix I Scope and Methodology 21
Appendix II Comparison of Current and Future TRICARE Regions 23
Appendix III Comments from the Department of Defense 25
Appendix IV GAO Contacts and Staff Acknowledgments 29 GAO Contacts 29
Acknowledgments 29 Figures
Figure 1: Areas of the United States with a TRICARE Network of Civilian
Providers 7 Figure 2: Current TRICARE Regions 23 Figure 3: Future TRICARE
Regions After TNEX Implementation 24 Contents
Page ii GAO- 03- 928 TRICARE Civilian Provider Network Abbreviations
ATC Access To Care Project DOD Department of Defense EWRAS Enterprise Wide
Referral and Authorization System HCSDB Health Care Survey of DOD
Beneficiaries JCAHO Joint Commission on Accreditation of Healthcare
Organizations MOAA Military Officers Association of America MTF military
treatment facility NCQA National Committee for Quality Assurance PCM
primary care manager TMA TRICARE Management Activity
This is a work of the U. S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
Page 1 GAO- 03- 928 TRICARE Civilian Provider Network July 31, 2003 The
Honorable John Warner Chairman
The Honorable Carl Levin Ranking Minority Member Committee on Armed
Services United States Senate
The Honorable Duncan L. Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives
The primary mission of TRICARE, the Department of Defense*s (DOD) health
care system, is to provide care for eligible active duty personnel,
retirees, and dependents. These beneficiaries, currently numbering more
than 8.7 million, can receive their care through military hospitals and
clinics called military treatment facilities (MTFs) or through TRICARE*s
civilian provider network. The civilian provider network is developed by
managed care support contractors and is designed to complement the
availability of care offered by MTFs. 1 DOD faces new challenges in
ensuring that the TRICARE civilian provider
network can provide adequate access to care that complements the
capabilities of MTFs. In 2003, DOD intends to award new contracts for the
delivery of care in the civilian provider network because the current
contracts will expire. As a result, the providers who choose to
participate in the network may change, while those who remain will operate
under new policies and procedures. During this transition, DOD is still
responsible for ensuring that the civilian provider network provides
adequate access to care, even if beneficiaries must change providers.
1 MTFs supply most of the health care services TRICARE beneficiaries
receive. The military health system was funded at about $26.4 billion for
fiscal year 2003. Approximately 20 percent of this amount, $5. 2 billion,
was budgeted for the TRICARE civilian provider network. United States
General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 928 TRICARE Civilian Provider Network TRICARE also faces
beneficiary and provider dissatisfaction with the existing civilian
provider network. During April 2002 testimony before the
Subcommittee on Personnel of the House Armed Services Committee,
beneficiary groups described problems with access to care from TRICARE*s
civilian providers. Also, providers testified about their dissatisfaction
with the TRICARE program, specifying low reimbursement rates and
administrative burdens.
In response to these concerns, the Bob Stump National Defense
Authorization Act of 2003 required that we review DOD*s oversight of the
adequacy of the TRICARE civilian provider network. 2 As agreed with the
committees of jurisdiction we focused on DOD*s oversight and did not
assess the adequacy of the network. Also, we analyzed TRICARE Prime, the
managed care component of the TRICARE health delivery system.
Specifically, we agreed to (1) describe how DOD oversees the adequacy of
the civilian provider network, (2) evaluate DOD*s oversight of the
adequacy of the civilian provider network, (3) describe the factors that
have been reported to contribute to network inadequacy, and (4) describe
how the new contracts might affect network adequacy. We testified before
the Subcommittee on Total Force of the House Committee on Armed Services
on March 27, 2003, about our findings at that time. 3 To describe and
evaluate DOD*s oversight of the TRICARE civilian
provider network, we reviewed and analyzed information from five network
adequacy reports submitted between June and October of 2002. We reviewed
at least one report from each of the contractors who develop and maintain
the network of providers to augment the care provided by MTFs. We also
interviewed DOD regional officials, known as lead agents, and MTF
officials from 5 of 11 TRICARE regions. In addition, we interviewed
officials from each of the four contractors. As part of our assessment of
DOD*s oversight, we reviewed surveys of beneficiaries and providers, as
well as DOD data collection initiatives that could be used by
DOD to oversee its civilian provider network. We did not validate the data
in the surveys or collection initiatives. We also interviewed officials at
TRICARE Management Activity (TMA) in Falls Church, Va., the office with
responsibility for ensuring that DOD health policy is implemented, and
2 Pub. L. No. 107- 314, S: 712, 116 Stat. 2458, 2588 (2002). See also, H.
R. Rep. No. 107- 436. 3 U. S. General Accounting Office, Defense Health
Care: Oversight of the Adequacy of TRICARE*s Civilian Provider Network Has
Weaknesses, GAO- 03- 592T (Washington, D. C.: Mar. 27, 2003).
Page 3 GAO- 03- 928 TRICARE Civilian Provider Network officials at TMA-
West, the office that carries out contracting functions, including
monitoring the civilian contracts and writing the requests for
proposals for the future contracts. To describe factors that may
contribute to network inadequacy, we interviewed DOD, contractor, and
professional health association officials. In addition, we met with groups
representing TRICARE beneficiaries to discuss their concerns. Finally, we
reviewed DOD*s request for proposals for the new health care contracts and
interviewed DOD and contractor officials to determine how the new
contracts might affect network adequacy. Appendix I contains more details
about our scope and methodology. We conducted our work from June 2002
through July 2003 in accordance with generally accepted
government auditing standards. To oversee the adequacy of the civilian
provider network, DOD has standards that are designed to ensure that the
network has a sufficient number and mix of providers, both primary care
and specialists, to satisfy TRICARE Prime beneficiaries* needs. In
addition, DOD has standards for appointment wait, office wait, and travel
times that are designed to ensure that TRICARE Prime beneficiaries have
adequate access to care. DOD has delegated oversight of the civilian
provider network to lead agents, who are responsible for ensuring that
these standards have been met.
DOD*s ability to effectively oversee the TRICARE civilian provider network
is hindered in several ways. First, the measurement used to determine if
there is a sufficient number of providers for the beneficiaries in an area
does not always account for the actual number of beneficiaries who may
seek care or the availability of providers. In some cases, this may result
in an underestimation of the number of providers needed in an area.
Second, incomplete contractor reporting on access to care makes it
difficult for DOD to assess compliance with these standards. Finally, DOD
does not systematically collect and analyze beneficiary complaints, which
might assist in identifying inadequacies in the TRICARE civilian provider
network. However, DOD has surveys of TRICARE beneficiaries and network
providers and automated reporting systems on appointments and referrals
that, while not designed specifically for monitoring the civilian provider
network, could provide information and potentially improve DOD*s ability
to oversee the civilian provider network.
DOD and its contractors have reported three factors that may contribute to
potential civilian provider network inadequacy: lack of providers in
certain geographic locations, low reimbursement rates, and administrative
requirements. DOD and contractors have reported long- standing provider
Results in Brief
Page 4 GAO- 03- 928 TRICARE Civilian Provider Network shortages in some
geographic areas because providers in certain areas may refuse to join any
network. In areas where DOD determines that
access to care is severely impaired, DOD has the authority to increase
reimbursement rates. Since 2002, DOD has used this authority to increase
reimbursement rates in Alaska and Idaho in an attempt to remedy such
provider shortages. DOD told us that the contractors have achieved some
success in recruiting additional providers by using this authority.
Additionally, civilian providers have expressed concerns about TRICARE*s
reimbursement rates being too low and administrative requirements being
too cumbersome. However, while reimbursement rates and administrative
requirements may have created dissatisfaction among providers, it is not
clear that these factors have resulted in insufficient numbers of
providers in the civilian network because the information contractors
provide to DOD is not sufficient to measure network adequacy.
The new contracts, which DOD expects to award during the summer of 2003,
may result in improved civilian provider network participation by
addressing some network providers* concerns about administrative
requirements. For example, the new contracts may simplify requirements for
provider credentialing and referrals, two administrative procedures
providers have complained about. However, according to contractors, the
new contracts may also create requirements that could discourage provider
participation, such as the new requirement that all network claims
submitted by civilian providers be filed electronically. Currently, only
about 25 percent of such claims are submitted electronically.
We are recommending that the Secretary of Defense direct the Assistant
Secretary of Defense for Health Affairs to improve DOD*s oversight of the
civilian provider network by ensuring sufficient information is reported
to assess network adequacy and by exploring options for evaluating
beneficiary complaints and improving provider survey data. In commenting
on a draft of this report, DOD concurred with the report*s
recommendations.
TRICARE has three options for its eligible beneficiaries: TRICARE Prime,
a program in which beneficiaries enroll and receive care
in a managed network similar to a health maintenance organization;
TRICARE Extra, a program in which beneficiaries receive care from a
network of preferred providers; and TRICARE Standard, a fee- for-
service program that requires no network use. Background
Page 5 GAO- 03- 928 TRICARE Civilian Provider Network The programs vary
according to the amount beneficiaries must contribute toward the cost of
their care and according to the choices beneficiaries
have in selecting providers. In TRICARE Prime, 4 the program in which
active duty personnel generally must participate, the beneficiaries must
select a primary care manager (PCM) 5 who either provides care or
authorizes referrals to specialists. Most beneficiaries who enroll in
TRICARE Prime select their PCMs from MTFs, while other enrollees select
their PCMs from the civilian provider network. Regardless of their status*
military or civilian* PCMs may refer Prime beneficiaries to providers in
either MTFs or TRICARE*s civilian provider network. 6 Both TRICARE Extra
and TRICARE Standard require copayments, but
beneficiaries do not enroll with or have their care managed by PCMs.
Beneficiaries choosing TRICARE Extra use the same civilian provider
network available to those in TRICARE Prime, and beneficiaries choosing
TRICARE Standard are not required to use providers in any network. TRICARE
Extra and Standard beneficiaries may receive care at an MTF when space is
available. The Office of the Assistant Secretary of Defense for Health
Affairs (Health
Affairs) establishes TRICARE policy and has overall responsibility for the
program. TMA, under Health Affairs, is responsible for awarding and
monitoring the TRICARE contracts. DOD has delegated oversight of the
civilian provider network to regional TRICARE lead agents. The lead agent
for each region coordinates the services provided by MTFs and civilian
network providers. The lead agents respond to direction from Health
Affairs, but report directly to their respective Surgeons General. In
overseeing the network, lead agents have staff assigned to MTFs to provide
the local interaction with contractor representatives and respond to
beneficiary complaints as needed and report back to the lead agent.
4 Out of more than 8.7 million eligible beneficiaries, nearly half are
enrolled in TRICARE Prime. 5 A primary care manager is a provider or team
of providers at an MTF or a provider in the civilian network to whom a
beneficiary is assigned for primary care services when he or
she enrolls in TRICARE Prime. Enrolled beneficiaries agree to initially
seek all nonemergency, nonmental health care services from these
providers. 6 DOD*s policy is to optimize the use of the MTF. Accordingly,
when a referral for specialty
care is made by a civilian PCM, the MTF retains the *right of first
refusal* to accommodate the beneficiary within the MTF or refer the
beneficiary to the civilian provider network for the needed medical care.
Page 6 GAO- 03- 928 TRICARE Civilian Provider Network Currently, DOD
employs four civilian health care companies or contractors that are
responsible for developing and maintaining the
civilian provider network that complements the care delivered by MTFs. The
contractors recruit civilian providers into a network of PCMs and
specialists who provide care to beneficiaries enrolled in TRICARE Prime.
Contractors are required to establish and maintain the network of civilian
providers in the following locations: all catchment areas, 7 base
realignment and closure sites, 8 other contract- specified areas, and
noncatchment areas where a contractor deems it cost effective. These
locations are called prime service areas. In the remaining areas, a
network is not required. (See fig. 1.)
7 Catchment areas are geographic areas determined by the Assistant
Secretary of Defense for Health Affairs that are defined by five- digit
zip codes, usually within an approximate 40- mile radius of MTFs with
inpatient care.
8 Base realignment and closure sites are military installations that have
been closed or realigned as the result of decisions made by the
Commissions on Base Realignment and Closure.
Page 7 GAO- 03- 928 TRICARE Civilian Provider Network Figure 1: Areas of
the United States with a TRICARE Network of Civilian Providers
Note: Shaded areas represent zip codes in which there was a TRICARE
network of civilian providers as of May 2003. Source: DOD.
Page 8 GAO- 03- 928 TRICARE Civilian Provider Network This network of
civilian providers also serves as the network of preferred providers for
beneficiaries who use TRICARE Extra. In 2002, contractors
reported that the civilian provider network included about 37,000 PCMs and
134,000 specialists.
The contractors are also responsible for ensuring adequate access to
health care, referring and authorizing beneficiaries for health care,
educating providers and beneficiaries about TRICARE benefits, ensuring
that providers are credentialed, and processing claims. In their network
agreements with civilian providers, contractors establish reimbursement
rates and certain requirements for submitting claims. Reimbursement rates
cannot be greater than Medicare rates unless DOD authorizes a higher rate.
DOD*s four contractors manage the delivery of care to beneficiaries in 11
TRICARE regions. DOD is currently analyzing proposals to award new
civilian health care contracts, and when they are awarded in 2003, DOD
will reorganize the 11 regions into 3* North, South, and West* with a
single contract for each region. Contractors will be responsible for
developing a new civilian provider network that will become operational in
April 2004. Under these new contracts DOD will continue to emphasize
maximizing the role of MTFs in providing care. See appendix II for maps
depicting the current and future regions.
DOD has standards intended to ensure that its civilian provider network
enhances and supports the capabilities of the MTFs in providing care to
millions of TRICARE Prime beneficiaries. DOD requires that contractors
have a sufficient number and mix of providers, both primary care and
specialists, to satisfy the needs of beneficiaries enrolled in the Prime
option. Specifically, it is the responsibility of the contractors to
ensure that each prime service area in the network has at least one full-
time equivalent PCM for every 2,000 TRICARE Prime enrollees and one full-
time equivalent provider (both PCMs and specialists) for every 1,200
TRICARE Prime enrollees. 9 9 In addition, all four contractors generally
follow the Graduate Medical Education National
Advisory Committee recommendation for determining the specialty mix
requirements for their network. DOD Has Standards
for Network Adequacy and Requires Contractors* Compliance
Page 9 GAO- 03- 928 TRICARE Civilian Provider Network In addition, DOD has
access- to- care standards that are designed to ensure that Prime
beneficiaries receive timely care from providers. 10 Under these
standards appointment wait times shall not exceed 24 hours for urgent
care, 1 week
for routine care, or 4 weeks for well- patient and specialty care;
office wait times shall not exceed 30 minutes for nonemergency care; and
travel times shall not exceed 30 minutes for routine care and 1 hour for
specialty care. 11 Lead agents are responsible for ensuring that the
civilian provider network meets these standards so that all TRICARE Prime
beneficiaries in their region have adequate access to health care. To do
so, lead agents told us they use network adequacy reports that contractors
provide each quarter as the primary tool to oversee the network. According
to DOD*s operations
manual, these reports are to contain information on the status of the
network, such as the number and type of specialists; data on adherence to
the access standards; a list of civilian and military primary care
managers;
and the number of their enrollees. The reports may also contain
information on steps contractors have taken to address any network
inadequacies.
However, because the reporting requirements do not specify a standard
process for collecting information on network adequacy, contractors vary
in how they obtain this information. For example, lead agents told us that
one contractor conducts visits of providers* offices to review appointment
wait times, while another contractor uses an automated appointment
tracking system to collect this information.
Lead agents told us they also rely on beneficiary complaints to oversee
the adequacy of the civilian provider network. Beneficiaries may complain
directly to DOD, the contractor, lead agent, or MTF. DOD officials said
that when they receive a beneficiary complaint, they direct the complaint
to either the contractor, lead agent, or MTF, depending on the subject of
the complaint.
10 DOD does not specify access standards for eligible beneficiaries who do
not enroll in TRICARE Prime. However, DOD requires that contractors
provide information and/ or assist all beneficiaries* regardless of which
option they choose* in finding a participating provider in their area.
11 32 C. F. R. S: 199.17( p)( 5)( i), (ii), (iv) and (v) (2002).
Page 10 GAO- 03- 928 TRICARE Civilian Provider Network In addition to
these tools, lead agents periodically monitor contractor compliance by
reviewing performance related to specific contract
requirements, including requirements related to network adequacy. Lead
agents also told us they periodically schedule reviews of special issues
related to network adequacy, such as conducting telephone surveys of
providers to determine whether they are accepting TRICARE Prime patients.
In addition, lead agents stated they meet regularly with MTF and
contractor representatives to discuss network adequacy.
If lead agents determine that the network is inadequate, the lead agents
or TMA may issue enforcement actions to encourage contractors to address
deficiencies in their region. However, lead agents told us that few
enforcement actions have been issued. During our review, three enforcement
actions related to network adequacy were open for the five regions we
visited. 12 Lead agents said they prefer to address deficiencies
informally rather than take formal actions, particularly in areas where
they do not believe the contractor can correct the deficiency because of
local market conditions. For example, rather than taking a formal
enforcement action, one lead agent worked with the contractor to arrange
for a specialist from one area to travel to another area periodically.
DOD*s ability to effectively oversee the TRICARE civilian provider network
is hindered by (1) flaws in its required provider- to- beneficiary ratios,
(2) incomplete reporting on beneficiaries* access to providers, and (3)
the absence of a systematic assessment of complaints. Although DOD
has required the network to meet established ratios of providers to
beneficiaries, the ratios may underestimate the number of providers needed
in an area. Similarly, although DOD has certain requirements governing
Prime beneficiary access to available providers, the information reported
to DOD on this access is often incomplete* making it difficult to assess
compliance with the requirements. Finally, when beneficiaries complain
about availability or access in the network, these complaints can be
directed to different DOD entities, with no guarantee that the complaints
will be compiled and analyzed in the aggregate to identify possible trends
or patterns and correct network problems. However, DOD has existing
surveys and automated reporting systems that, while not
12 All three enforcement actions were for lack of available providers in
certain geographical areas. For example, there were shortfalls of
orthopedic surgeons and neurosurgeons in Spokane, Washington. DOD*s
Oversight of
the Civilian Provider Network Has Weaknesses, But Additional Tools May
Help
Page 11 GAO- 03- 928 TRICARE Civilian Provider Network designed
specifically for monitoring the civilian provider network, could provide
valuable information and potentially improve DOD*s ability to
oversee the civilian provider network. The provider- to- beneficiary
ratios contractors report to DOD for a prime service area do not always
accurately reflect the potential health care workload for that area or the
provider capability to deliver the care. In some cases, the provider- to-
beneficiary ratios underestimate the number of providers, particularly
specialists, needed in an area. This underestimation occurs because in
calculating the ratios, some contractors do not include the total number
of Prime enrollees within the area. Instead, in some areas contractors
base their ratio calculations on the total number of beneficiaries
enrolled with civilian PCMs and do not count beneficiaries enrolled with
PCMs in MTFs. The ratio is most likely to result in an underestimation of
the need for providers in areas in which the MTF is a clinic or small
hospital with a limited availability of specialists. For example, the Air
Force clinic at Grand Forks, N. Dak. has few specialists on staff and must
rely on the civilian provider network for a large proportion of specialist
care. In fiscal year 2002, 90 percent of its specialist appointments were
referred to the network. In contrast, a large MTF, such as Wright
Patterson Medical Center in Dayton, Ohio, has many specialist providers on
staff and referred only 2 percent of its specialty appointments to the
civilian provider network during fiscal year 2002. Incorporating MTF
provider capability and the total number of Prime enrollees into the
network assessment would give DOD a more complete and accurate assessment
of the adequacy of the network for a geographical area.
Moreover, in reporting whether the network meets the established ratios,
contractors do not make the same assumptions about the level of
participation on the part of civilian network providers. Contractors
generally assume that between 10 to 20 percent of their providers*
practices are dedicated to TRICARE Prime beneficiaries. Therefore, if a
contractor assumes 20 percent of all providers* practices are dedicated to
TRICARE Prime rather than 10 percent, the contractor will need half as
many providers in the network in order to meet the prescribed ratio
standard. These assumptions may or may not be accurate, and the
assumptions have a significant effect on the number of providers required
in the network. Provider- to- Beneficiary
Ratios May Not Account for Actual Number of Beneficiaries or Availability
of Providers
Page 12 GAO- 03- 928 TRICARE Civilian Provider Network In the network
adequacy reports we reviewed, the contractors did not always report all
the information required by DOD to assess compliance
with the access standards. Specifically, for the network adequacy reports
we reviewed from 5 of the 11 TRICARE regions, we found that contractors
reported less than half of the required information on access standards
for appointment wait, office wait, and travel times. Some contractors
reported more information than others, but none reported all the required
access information. Contractors said they had difficulties in capturing
and reporting information to demonstrate compliance with the access
standards. They stated that it was not practical or feasible to document
every appointment and office wait time because some beneficiaries make
their own appointments directly and provider offices are spread throughout
the geographic area.
Most of the DOD lead agents we interviewed told us that because
information on access standards is not fully reported, they monitor
compliance with the access standards by reviewing beneficiary complaints.
Lead agents and contractors said such complaints may include a
beneficiary*s inability to get an appointment, having to drive long
distances for care, or a provider not accepting new TRICARE Prime
patients. Because beneficiary complaints are received through numerous
venues, often handled informally on a case- by- case basis, and not
centrally evaluated, it is difficult for DOD to assess the extent of any
systemic
access problems. Separately, TMA has a database of complaints that
includes some complaints about access to care. TMA has received these
complaints either directly, through DOD*s beneficiary survey, or from
letters sent by beneficiaries to their congressional representatives.
However, the usefulness of the database is limited because it does not
capture complaints sent to MTFs, lead agents, or contractors.
While contractor and lead agent officials told us they have received few
complaints about network access problems, this small number of complaints
could indicate either an overall satisfaction with care or a general lack
of knowledge about how or to whom to complain. Additionally, a small
number of complaints, particularly when spread
among many sources, limits DOD*s ability to identify any specific trends
of systemic problems related to network adequacy within TRICARE.
The next generation of contracts, called TNEX, may result in a more
structured approach to collecting complaint information when implemented
in 2004. Under TNEX, the civilian provider network must be
accredited in each region by a nationally recognized accrediting
Information Reported on
Access Standards Was Incomplete
Beneficiary Complaints Are Not Systematically Collected and Evaluated
Page 13 GAO- 03- 928 TRICARE Civilian Provider Network organization, such
as the National Committee for Quality Assurance (NCQA) or the Joint
Commission on Accreditation of Healthcare
Organizations (JCAHO). These organizations typically require procedures
for addressing beneficiary complaints. For example, NCQA guidance requires
procedures for registering, responding to, and investigating complaints.
It also requires documentation of actions taken to address complaints.
JCAHO guidance has similar requirements. Such procedures could provide DOD
with a basic structure that in turn could lead to a more
systematic means of collecting and evaluating complaint data at the prime
service area and regional levels. DOD has some tools that, while not
designed specifically for monitoring the civilian provider network, could
be useful for oversight. For example, the Health Care Survey of DOD
Beneficiaries (HCSDB) could be used as a source of information for
overseeing civilian provider network adequacy at the national level. 13
This quarterly survey contains specific questions on all beneficiaries*
experiences related to access to care. 14 For example, our analysis of the
2000 HCSDB data for all Prime beneficiaries receiving care from civilian
providers indicates that over one- third of these beneficiaries waited
more than DOD*s standard of 1 day for access to a provider for an illness
or an injury. However, the survey*s sample design does not generally allow
for assessing the adequacy of the civilian provider network in most prime
service areas and the survey*s response rate of 35 percent further limits
its usefulness. 15 In addition to DOD*s beneficiary survey, contractors
conduct surveys of
providers that could assist in DOD*s oversight of the civilian provider
network. These surveys are intended to assess providers* satisfaction with
contractors* performance and other TRICARE requirements. However,
13 This survey was required by the National Defense Authorization Act for
Fiscal Year 1993, Pub. L. No. 102- 484, S: 724, 106 Stat. 2315, 2440
(1992). 14 These questions ask how many days a beneficiary had to wait to
see a provider for regular or routine care and how long they had to wait
to receive treatment for an injury or illness, among other things. Also,
DOD recently added questions to the survey specifically aimed at
beneficiaries receiving care from civilian providers. These questions ask
how difficult it was to obtain care and locate a doctor, and whether a
civilian provider had left the network. 15 Even though DOD samples 180,000
beneficiaries annually, the 35 percent response rate reduces the sample to
about 63, 000. As a result the survey estimates may be biased if those who
responded to the survey are not representative of the entire surveyed
population. Potential Network Oversight Tools
Page 14 GAO- 03- 928 TRICARE Civilian Provider Network these surveys have
very low response rates, ranging from 4 to 19 percent, and in some cases
they reflect unrepresentative samples of providers. For
example, one contractor surveyed only those providers who participated in
a contractor- sponsored seminar. Also, we found considerable variation
among the survey instruments, with some assessing provider satisfaction
more thoroughly than others. Despite these weaknesses, if improved, the
surveys could reveal concerns providers may have about participating in
the TRICARE network. This in turn could help DOD address these
concerns and mitigate problems that might affect the adequacy of the
network.
In addition to these existing surveys, DOD is piloting two initiatives for
collecting information on meeting access standards that could help in the
oversight of network adequacy. The first, the Enterprise Wide Referral and
Authorization System (EWRAS), which is currently being tested in the
Washington D. C. area, captures information on specialty care appointments
in MTFs and information on some specialty care appointments in the
civilian provider network. DOD officials said they expect EWRAS to be
fully implemented in Spring 2004. The second initiative, the Access to
Care (ATC) Project, gathers information on appointments and specialty
referrals at or originating from MTFs. Specifically, it captures data on
whether beneficiaries had a referral, declined an appointment that was
available, cancelled an appointment, or left without being seen. It also
records the average number of days between when the appointment was made
and when the beneficiary was seen, as well as clinic cancellations and
future appointments. This information can help indicate the extent to
which MTFs are meeting the appointment wait- time access standards.
Although the ATC Project is currently being piloted at four MTFs, a
similar system, if modified to accommodate the requirements of the
contractors for the civilian provider network, could provide valuable
information on appointment wait time
standards* information that is necessary for overseeing the adequacy of
the network.
DOD and its contractors have reported three factors that may contribute to
potential civilian provider network inadequacy: lack of providers in
certain geographic locations, low reimbursement rates, and administrative
requirements. First, DOD and contractors have reported regional
shortages for certain types of specialists in rural areas. For example,
they reported shortages for endocrinologists in the Upper Peninsula of
Michigan, dermatologists in New Mexico, and neurologists and allergists in
Mountain Home, Idaho. Additionally, in these instances, TRICARE officials
DOD and Contractors
Report Three Factors That May Contribute to Civilian Provider Network
Inadequacy
Page 15 GAO- 03- 928 TRICARE Civilian Provider Network and contractors
have reported difficulties in recruiting providers into the TRICARE Prime
network because in some areas providers, notably
specialists, will not join managed care programs. For example, contractor
network data indicate that there have been long- standing specialist
shortages in TRICARE in areas such as Alaska or eastern New Mexico, where
the lead agent stated that the providers in those locations have
repeatedly refused to join any managed care network.
There are certain geographic locations in which DOD has confirmed
shortages of providers and has raised TRICARE*s reimbursement rates as a
means of remedying such shortages. Although by statute DOD generally
cannot pay TRICARE network providers more than they would be paid under
the Medicare fee schedule, 16 DOD may make payments of up to 115 percent
of the Medicare fee to ensure the availability of an adequate number of
qualified healthcare providers. 17 In 2000, DOD increased reimbursement
rates in rural Alaska in an attempt to entice more providers to join the
network. Similarly, in 2002, DOD increased reimbursement rates for the
rest of Alaska, and in 2003, DOD increased the rates for selected
specialists in Idaho to address documented network shortcomings. These
three instances are the only times DOD has used its authority to pay above
the Medicare rate in order to address local area provider shortages, 18
and the increases have had mixed success. In 2001,
for instance, we found that the 2000 rate increase in rural Alaska had not
increased provider participation. 19 On the other hand, DOD officials told
us that with the 2002 increase in Alaska and the 2003 increase in Idaho,
contractors were experiencing some success in recruiting providers in
those areas. According to DOD officials, for example, six neurosurgeons in
Boise, Idaho agreed to join the network, eliminating the neurosurgeon
shortfall in that prime service area. In Alaska, DOD officials reported
that
16 10 U. S. C. S: 1079( h)( 1) (2000). 17 10 U. S. C. S: 1097b (2000). 18
DOD officials told us that all requests received by Health Affairs to
increase rates have been approved. Additionally, there are two other
instances in which DOD increased its
reimbursement rates above Medicare*s, but these increases did not address
local area shortages. In 1997, DOD increased national reimbursement rates
for obstetrical care. In April 2002, DOD adopted a policy that will
authorize a 10 percent bonus payment to selected TRICARE providers working
in medically underserved areas as defined by the Health Resources and
Services Administration, consistent with Medicare payment policy. DOD
plans to implement the bonus payment in July 2003.
19 U. S. General Accounting Office, Defense Health Care: Across- the-
Board Physician Rate Increase Would Be Costly and Unnecessary, GAO- 01-
620 (Washington, D. C.: May 24, 2001).
Page 16 GAO- 03- 928 TRICARE Civilian Provider Network since the
reimbursement rate increased, providers for radiology, thoracic surgery,
pediatrics, and other specialties have stated they will participate
in TRICARE. The general levels of TRICARE*s reimbursement rates are
another factor that DOD and contractor officials told us may contribute to
civilian provider network inadequacy. Specifically, according to
contractor officials, civilian network providers have expressed concerns
about the decline in Medicare fees in 2002 and the potential for further
reductions, which they have said will affect their participation in the
network. In addition, there have been reported instances in which groups
of providers have banded together and refused to accept TRICARE Prime
patients due to their concerns with low reimbursement rates. One
contractor identified low reimbursement rates as the most frequent cause
of provider dissatisfaction. In addition to provider complaints,
beneficiary advocacy groups, such as the Military Officers Association of
America (MOAA), have cited instances of providers refusing care to
beneficiaries because of low reimbursement rates. However, while TRICARE*s
reimbursement rates may have created dissatisfaction among providers, it
is not clear how much this has affected civilian provider network adequacy
except in limited geographic locations, because the information
contractors provide to DOD is not sufficient to measure network adequacy.
Additionally, there are indications that reimbursement rates have little
influence on providers* decisions to leave the TRICARE network. Data from
one contractor indicated that out of the 2,156 providers who left the
network between June 2001 and May 2002, 900 providers cited reasons for
leaving and only 10 percent of these cited reimbursement rates as a reason
for leaving the
network. Contractors report that providers have also expressed
dissatisfaction with some TRICARE administrative requirements, such as
credentialing and preauthorizations and referrals* but the effect of these
requirements on civilian provider network adequacy is also unclear. For
example, many providers have complained about TRICARE*s credentialing
requirements. In TRICARE, a provider must get recredentialed every 2
years, compared to every 3 years for the private sector. Providers have
said that this places cumbersome administrative requirements on them.
Another widely reported concern about TRICARE administrative requirements
relates to preauthorization and referral requirements. Civilian PCM
providers are required to get preauthorizations from MTFs before referring
patients for care. While preauthorization is a standard managed care
practice, providers complain that obtaining
Page 17 GAO- 03- 928 TRICARE Civilian Provider Network preauthorization
adversely affects the quality of care provided to beneficiaries because it
takes too much time. In addition, civilian PCMs
have expressed concern that they cannot refer beneficiaries to the
specialist of their choice because of MTFs* *right of first refusal* that
gives an MTF discretion to care for the beneficiary or refer the care to a
civilian provider. Nevertheless, there are not direct data confirming that
administrative burdens translate into widespread civilian provider network
inadequacies. Further, when reviewing one contractor*s survey of providers
who left the network, we found that only 1 percent of providers responding
cited administrative burdens as a factor.
DOD*s new contracts for providing civilian health care, called TNEX, may
address some network concerns raised by providers and beneficiaries, but
may create other areas of concern. Because the new contracts had not yet
been finalized as of June 2003, the specific mechanisms DOD and the
contractors will use to ensure network adequacy are not known. Under TNEX,
DOD plans to retain the requirement that the civilian provider network
complement the clinical services provided by MTFs; the access standards
for appointment and office wait times, as well as travel- time standards;
and the periodic reporting on the adequacy of the network. However, the
requirement to use provider- to- beneficiary ratios to measure network
adequacy will be eliminated, although such ratios may be used during the
network accreditation process.
Further, TNEX contains a provision intended to encourage contractors to
develop an adequate civilian provider network. This provision states that
at least 96 percent of contractor referrals shall be to a MTF or network
provider with an appointment available within the access standards.
Failure to achieve the 96 percent standard will affect contractors
financially.
TNEX may reduce the administrative burden related to provider
credentialing and patient referrals. Currently, civilian network providers
must follow TRICARE- specific requirements for credentialing. In contrast,
TNEX will allow network providers to be credentialed through a nationally
recognized accrediting organization. DOD officials stated this approach is
more in line with industry practices. Patient referral procedures will
also change under TNEX. Referral requirements will be reduced, but the
MTFs will still retain the right of first refusal.
On the other hand, TNEX may be creating a new administrative concern for
contractors and providers by requiring that all network claims New
Contracts May
Address Some Network Concerns, But May Create Others
Page 18 GAO- 03- 928 TRICARE Civilian Provider Network submitted by
civilian providers be filed electronically. 20 In fiscal year 2002, only
25 percent of processed claims were submitted electronically. 21
Contractors stated that such a requirement could discourage providers from
joining or staying in the network because providers may not be
willing to modify their systems to submit electronic claims for a small
volume of TRICARE beneficiaries. DOD states that electronic filing will
reduce claims- processing costs.
DOD spends over $5 billion a year for health care delivered by the network
of civilian providers to complement care provided in the MTFs; however,
DOD has exercised limited oversight of the adequacy of the civilian
provider network. The information DOD relies on to assess the network does
not always accurately reflect the actual numbers of beneficiaries or
availability of providers. Further, the contractors do not report
comprehensive data on the network*s compliance with DOD*s access
standards, which are key benchmarks in assessing network adequacy. This
information will be important as DOD oversees the transition to the new
health care delivery contracts. Incorporating data on the numbers and
types of providers in the MTFs and the total number of beneficiaries
enrolled in TRICARE Prime would give DOD a more accurate and comprehensive
report of the potential workload the civilian provider network faces in a
prime service area and the adequacy of the number of PCMs and specialists
to deliver that care. Similarly, more thorough reporting on beneficiaries*
access to care within the standard time frames and development of a more
systematic means of
collecting and evaluating complaint data would help DOD*s oversight of the
ability of the civilian provider network to deliver timely care to
beneficiaries. Further, with improvements in response rates and provider
representation, the civilian provider satisfaction surveys could also be
useful in identifying actions DOD and the contractors could take to
address provider concerns and ensure network stability.
20 The Health Insurance Portability and Accountability Act of 1996
included provisions for the establishment of standards and requirements
for the electronic transmission of health information. Pub. L. No. 104-
191, S: 262, 110 Stat. 1936, 2021. Effective October 16, 2003, Medicare
claims generally must be submitted electronically.
21 This percentage does not include pharmacy claims or claims for care
provided to Medicare- eligible beneficiaries under TRICARE For Life.
Conclusions
Page 19 GAO- 03- 928 TRICARE Civilian Provider Network To improve DOD*s
oversight of the civilian provider network, we recommend that the
Secretary of Defense direct the Assistant Secretary of
Defense for Health Affairs to ensure that MTF capabilities and all
enrolled Prime beneficiaries in prime
service areas are accounted for when assessing and documenting the
adequacy of the civilian provider network; ensure that the information
reported on the required access standards is
sufficient and reliable; explore ways to ensure that beneficiary
complaints are systematically
evaluated and used to oversee the civilian provider network; and explore
options for improving the civilian provider surveys so that the
results of the surveys could be useful to DOD and the contractors in
identifying civilian provider concerns and developing actions that might
mitigate concerns and help ensure the adequacy of the civilian provider
network.
DOD provided written comments on a draft of this report. (See app. III.)
DOD concurred with the report*s recommendations.
In its written comments, DOD stressed that strong oversight of the
civilian provider network is necessary and should be continuously
monitored for improvements. DOD said that the implementation of TNEX will
address many of the points raised in our report. DOD said TNEX will
enhance the reporting of information about network adequacy as well as
provide powerful financial incentives for contractors to optimize the
direct care system, maximize the extent of civilian provider networks, and
achieve the highest level of beneficiary satisfaction. However, since the
TNEX contracts have not been finalized as of July 2003, it is too early to
assess whether the contracts will result in improved oversight.
In its written comments DOD also said that the report title might mislead
some into concluding that we found the TRICARE network to be inadequate.
As we noted in the draft report, we did not assess the adequacy of the
civilian provider network but focused our work on DOD*s oversight of the
network. We believe the title of the report reflects that focus.
DOD also provided technical comments, which we incorporated into the
report as appropriate. Recommendations for
Executive Action Agency Comments and Our Evaluation
Page 20 GAO- 03- 928 TRICARE Civilian Provider Network We are sending
copies of this report to the Secretary of Defense, appropriate
congressional committees, and other interested parties.
Copies will also be made available to others upon request. In addition,
the report is available at no charge on the GAO Web site at http:// www.
gao. gov. If you or your staff have questions about this report, please
contact me at (202) 512- 7101. Other contacts and staff acknowledgments
are listed in appendix IV.
Marjorie E. Kanof Director, Health Care* Clinical
and Military Health Care Issues
Appendix I: Scope and Methodology Page 21 GAO- 03- 928 TRICARE Civilian
Provider Network To describe and evaluate DOD*s oversight of the adequacy
of the civilian provider network, we reviewed and analyzed the information
in the
quarterly network adequacy reports submitted by each contractor. We
identified the requirements for the content of these adequacy reports
based upon the general requirements in the TRICARE Operations Manual and
the additional requirements in contractors* Best and Final Offers. We
reviewed the contents of five of the contractors* quarterly network
adequacy reports, submitted between June 2002 and October 2002, and
compared them to the applicable reporting requirements. Each report was
evaluated for compliance regarding the provider- to- beneficiary ratios
and the access- to- care standards.
Because DOD has delegated the oversight of the network to the regional
lead agents, we discussed civilian provider network oversight with
officials in 5 of the 11 TRICARE regions* Northeast, Mid- Atlantic,
Heartland, Central, and Northwest. To discuss network management, we
interviewed officials from the four contractors* HealthNet, Humana,
Sierra, and TriWest* that are responsible for developing and maintaining
the provider network that augments care provided by DOD*s MTFs. Because
concerns regarding network adequacy may also be identified at the local
level, we met with lead agent and contractor officials at MTFs in each of
the regions we visited. Finally, we interviewed officials at TMA in Falls
Church, Va., the office that is responsible for ensuring that DOD health
policy is implemented, and officials at TMA- West in Aurora, Colo., the
office that carries out contracting functions, including monitoring the
civilian contracts and writing the request for proposals for the future
contracts.
As part of our assessment of DOD*s oversight, we also reviewed surveys of
beneficiaries and providers, as well as DOD data collection initiatives as
potential tools for overseeing DOD*s civilian provider network, but did
not validate the data in the surveys or collection initiatives. Using
annual data from the 2000 HCSDB, we analyzed beneficiaries* responses to
access- tocare questions for those who were enrolled in Prime and received
most of their health care in the civilian provider network. We examined
the results of access- to- care questions based on whether or not these
beneficiaries were seen within the TRICARE access- to- care standards.
Because we included only Prime beneficiaries who received care in the
civilian provider network, our analysis of access to care does not reflect
the entire survey sample. To examine the provider surveys as potential
oversight tools, we obtained and reviewed each contractor*s 2001 provider
survey and assessed the survey*s response rate, sample selection, and the
Appendix I: Scope and Methodology
Appendix I: Scope and Methodology Page 22 GAO- 03- 928 TRICARE Civilian
Provider Network instrument itself. We also discussed DOD initiatives
underway and being tested with cognizant officials to assess their
potential as oversight tools.
To describe factors that may contribute to network inadequacy, we
interviewed and obtained documentation from DOD and contractor officials
regarding current network inadequacies, including their location,
duration, and the type of specialty needed. We also obtained provider
termination reports from three of the four contractors, 1 which described
providers* reasons for leaving the network. To further explore DOD*s
response to civilian provider concerns regarding rates, we interviewed DOD
officials on the use of their authority to raise reimbursement rates. We
also interviewed officials from the American Medical Association, The
Military Coalition, the MOAA, the National Association for Uniformed
Services, and the National Veteran*s Alliance to supplement data on the
possible causes of network inadequacy.
Finally, we reviewed DOD*s request for proposals for the future contracts
and interviewed DOD and contractor officials to describe how the new
contracts might affect network adequacy.
We conducted our work from June 2002 through July 2003 in accordance with
generally accepted government auditing standards.
1 One contractor does not collect data on provider terminations.
Appendix II: Comparison of Current and Future TRICARE Regions
Page 23 GAO- 03- 928 TRICARE Civilian Provider Network The shaded areas in
figure 2 represent the 11 current TRICARE geographic regions. The shaded
areas in figure 3 represent the 3 planned TRICARE
geographic regions under the TNEX contracts expected to be awarded in
2003.
Figure 2: Current TRICARE Regions
Appendix II: Comparison of Current and Future TRICARE Regions
Mid- Atlantic Southeast Gulfsouth Southwest Central
Southern California Golden
Gate Northwest
Alaska (Northwest) Hawaii Pacific Northeast
Heartland
Source: DOD.
Appendix II: Comparison of Current and Future TRICARE Regions
Page 24 GAO- 03- 928 TRICARE Civilian Provider Network Figure 3: Future
TRICARE Regions After TNEX Implementation
West South Alaska (West)
North Hawaii (West) Source: DOD.
Appendix III: Comments from the Department of Defense
Page 25 GAO- 03- 928 TRICARE Civilian Provider Network Appendix III:
Comments from the Department of Defense
Appendix III: Comments from the Department of Defense Page 26 GAO- 03- 928
TRICARE Civilian Provider Network
Appendix III: Comments from the Department of Defense Page 27 GAO- 03- 928
TRICARE Civilian Provider Network
Appendix III: Comments from the Department of Defense Page 28 GAO- 03- 928
TRICARE Civilian Provider Network
Appendix IV: GAO Contacts and Staff Acknowledgments
Page 29 GAO- 03- 928 TRICARE Civilian Provider Network Kristi Peterson,
(202) 512- 7951 Allan Richardson, (404) 679- 1863
In addition to those named above, contributors to this report were Louise
Duhamel, Marc Feuerberg, Krister Friday, Gay Hee Lee, John Oh, and Marie
Stetser. Appendix IV: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments
(290203)
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