Defense Health Care: Access to Care for Beneficiaries Who Have	 
Not Enrolled in TRICARE's Managed Care Option (22-DEC-06,	 
GAO-07-48).							 
                                                                 
The Department of Defense (DOD) provides health care through its 
TRICARE program. Under TRICARE, beneficiaries may obtain care	 
through a managed care option that requires enrollment and the	 
use of civilian provider networks, which are developed and	 
managed by contractors. Beneficiaries who do not enroll may	 
receive care through TRICARE Standard, a fee-for-service option, 
using nonnetwork civilian providers or through TRICARE Extra, a  
preferred provider organization option, using network civilian	 
providers. Nonenrolled beneficiaries in some locations have	 
reported difficulties finding civilian providers who will accept 
them as patients. The National Defense Authorization Act (NDAA)  
for fiscal year 2004 directed GAO to provide information on	 
access to care for nonenrolled TRICARE beneficiaries. This report
describes (1) how DOD and its contractors evaluate nonenrolled	 
beneficiaries' access to care and the results of these		 
evaluations; (2) impediments to civilian provider acceptance of  
nonenrolled beneficiaries, and how they are being addressed; and 
(3) how DOD has implemented the NDAA fiscal year 2004		 
requirements to take actions to ensure nonenrolled beneficiaries'
access to care. To address these objectives, GAO examined DOD's  
survey results and DOD and contractor documents and interviewed  
DOD and contractor officials.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-48						        
    ACCNO:   A64432						        
  TITLE:     Defense Health Care: Access to Care for Beneficiaries Who
Have Not Enrolled in TRICARE's Managed Care Option		 
     DATE:   12/22/2006 
  SUBJECT:   Access to health care				 
	     Beneficiaries					 
	     Department of Defense contractors			 
	     Federal law					 
	     Health care programs				 
	     Managed health care				 
	     Medical fees					 
	     Surveys						 
	     DOD TRICARE Program				 

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GAO-07-48

   

     * [1]Results in Brief
     * [2]Background

          * [3]Composition of TRICARE's Beneficiary Population
          * [4]Network and Nonnetwork Civilian Providers Under TRICARE
          * [5]TRICARE's Benefit Options
          * [6]TRICARE Contracts and Regional Structure
          * [7]Requirements in the NDAA for Fiscal Year 2004 Related to Non

     * [8]TMA and Its MCSCs Use Various Methods to Evaluate Access to

          * [9]TMA Uses Various Methods for Evaluating Access to Care

               * [10]TMA's Survey of Civilian Providers
               * [11]TMA's Beneficiary Health Care Survey
               * [12]Beneficiary Feedback

          * [13]MCSCs Have Approaches for Monitoring Access to Care Though T

     * [14]Various Factors Impede Providers' Acceptance of Nonenrolled

          * [15]Providers Cite Concerns about TRICARE's Reimbursement Rates

               * [16]Providers' Concerns about TRICARE Reimbursement Rates
               * [17]TMA Has Authority to Use Waivers to Adjust Reimbursement
                 Rat

          * [18]Providers Cite Concerns About TRICARE's Administrative Issue
          * [19]Though TMA and MCSCs Attempt to Address Impediments That Are

     * [20]NDAA Responsibilities for Nonenrolled TRICARE Beneficiaries'
     * [21]Agency Comments and Our Evaluation

          * [22]TMA and MCSCs' Evaluation of Nonenrolled Beneficiaries' Acce
          * [23]Impediments to Provider Acceptance of Nonenrolled TRICARE Be
          * [24]DOD Implementation of NDAA Fiscal Year 2004 Requirements for

     * [25]GAO Contact
     * [26]Acknowledgments
     * [27]GAO's Mission
     * [28]Obtaining Copies of GAO Reports and Testimony

          * [29]Order by Mail or Phone

     * [30]To Report Fraud, Waste, and Abuse in Federal Programs
     * [31]Congressional Relations
     * [32]Public Affairs

Report to Congressional Committees

United States Government Accountability Office

GAO

December 2006

DEFENSE HEALTH CARE

Access to Care for Beneficiaries Who Have Not Enrolled in TRICARE's
Managed Care Option

GAO-07-48

Contents

Letter 1

Results in Brief 4
Background 6
TMA and Its MCSCs Use Various Methods to Evaluate Access to Care That
Indicate Sufficient Access for Nonenrolled TRICARE Beneficiaries 18
Various Factors Impede Providers' Acceptance of Nonenrolled TRICARE
Beneficiaries, and TMA and MCSCs Have Different Ways to Address Them 29
NDAA Responsibilities for Nonenrolled TRICARE Beneficiaries' Access to
Care Are Being Carried Out by TMA and the MCSCs, but Were Not Formally
Designated to a Senior Official 41
Agency Comments and Our Evaluation 44
Appendix I Scope and Methodology 47
Appendix II Methodology Used for TMA's Civilian Provider Survey 51
Appendix III Civilian Provider Survey Instrument 56
Appendix IV Categorized Responses to the Civilian Provider Survey's
Open-ended Question 59
Appendix V TRICARE Reimbursement Rates That Remain Higher than Medicare
Reimbursement Rates 60
Appendix VI Comments from the Department of Defense 63
Appendix VII GAO Contacts and Staff Acknowledgments 65

Tables

Table 1: Summary of the Three Main TRICARE Options 10
Table 2: TMA's 2005 Civilian Provider Survey Results Showing Percent of
Surveyed Providers Accepting Nonenrolled TRICARE Beneficiaries (of Those
Accepting New Patients) by State 20
Table 3: TMA's 2005 Civilian Provider Survey Results Showing Percent of
Surveyed Providers Accepting Nonenrolled TRICARE Beneficiaries (of Those
Accepting New Patients) by Hospital Service Area 22
Table 4: Applications for Locality Waivers and Approval Results 33
Table 5: Applications for Network Waivers and Approval Results 35
Table 6: Responsibilities Outlined in the NDAA for Fiscal Year 2004 and
the Entities Covering Them 42
Table 7: "What are the reasons Doctor X is Not Accepting New TRICARE
[Nonenrolled] Patients?" 59

Figures

Figure 1: TRICARE Beneficiaries in Fiscal Year 2005 7
Figure 2: Location of Prime Service Areas in Each TRICARE Region 13
Figure 3: All Nonenrolled TRICARE Beneficiaries by Region 15
Figure 4: Percent of Claims Paid for TRICARE Standard and Extra for Each
TRICARE Region for Fiscal Years 2001-2005 16

Abbreviations

ART Assistance Reporting Tool ASD Assistant Secretary of Defense CAHPS
Consumer Assessment of Healthcare Providers and Systems CPT current
procedural terminology DOD Department of Defense HSA hospital service area
MCSC managed care support contractor MTF military treatment facility NDAA
National Defense Authorization Act OMB Office of Management and Budget TFL
TRICARE for Life TMA TRICARE Management Activity TRO TRICARE regional
office

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separately.

United States Government Accountability Office

Washington, DC 20548

December 22, 2006

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 Department of Defense (DOD) offers health care to almost 10 million
beneficiaries, including active duty personnel, retirees, and their
dependents, through its regionally structured TRICARE program, which is
expected to cost about $37 billion in fiscal year 2006. Under TRICARE,
health care is available through the military services' system of military
hospitals and clinics, referred to as military treatment facilities (MTFs)
and through civilian providers. Although DOD and the military services
strive to maximize the use of MTFs, TRICARE beneficiaries have received an
increasing amount of care through civilian providers. Between fiscal years
2000 and 2005, the percent of inpatient care delivered to TRICARE
beneficiaries by civilian providers increased from about 50 percent to an
estimated 75 percent. During the same time frame, the percent of
outpatient care delivered by civilian providers increased from 39 percent
to an estimated 65 percent.^1

TRICARE has three options for its beneficiaries:^2 Prime, Standard, or
Extra. These options vary according to enrollment requirements, the
choices beneficiaries have in selecting civilian and MTF providers, and
the amount they must contribute towards the cost of their care. Prime, a
program in which beneficiaries receive care in a managed care provider
network similar to a health maintenance organization, is the only option
requiring enrollment and has the lowest copayments. Beneficiaries who
enroll in Prime usually obtain health care from the MTF, but they may also
obtain care from a network civilian provider when MTF care is not
available. Beneficiaries do not need to enroll to receive care under
Standard, a fee-for-service option, or Extra, a preferred provider
organization option. Under Standard, nonenrolled beneficiaries can obtain
health care from civilian providers who do not belong to the TRICARE
network but agree to accept TRICARE beneficiaries as patients.
Beneficiaries have the highest copayments under Standard. Under Extra,
nonenrolled beneficiaries may obtain health care from network civilian
providers. Nonenrolled beneficiaries cannot be categorized as belonging to
an Extra or Standard group because each time they seek care, they can
choose to see either a network or nonnetwork civilian provider, and this
choice determines whether they receive coverage under Extra or Standard.
Under any option, TRICARE beneficiaries may receive care at an MTF when
space is available. Priority for MTF usage is given first to active duty
personnel and then to beneficiaries enrolled in Prime.

^1Fiscal year 2005 data are estimates by the TRICARE Management Activity
(TMA) because providers and TRICARE beneficiaries have up to a year to
file health care claims.

^2TRICARE beneficiaries who are eligible for Medicare and enroll in Part B
are eligible to receive care under TRICARE for Life. Under this program,
TRICARE processes claims after they have been adjudicated by Medicare.

DOD's TRICARE Management Activity (TMA) uses managed care support
contractors (MCSC) to develop networks of civilian providers and perform
other customer service functions, such as claims processing, and to ensure
that all beneficiaries--including nonenrolled beneficiaries--receive
satisfactory service under TRICARE, such as assistance with finding
providers. Currently, there is one MCSC for each of TRICARE's three
regions--North, South, and West. For each region, TMA has established a
TRICARE Regional Office (TRO) and has designated the TRO directors as the
health plan managers for their regions with responsibilities such as
monitoring provider network quality and adequacy, overseeing the MCSCs,
and monitoring customer satisfaction.

Since TRICARE began in 1995, nonenrolled TRICARE beneficiaries in some
locations have complained about difficulties finding nonnetwork civilian
providers who will accept them as patients. In addition, TRICARE
beneficiaries have cited concerns that TMA has focused more attention on
the Prime option, which allows TMA to manage beneficiaries' care, and has
given less attention to the options available for nonenrolled TRICARE
beneficiaries. In response to these concerns, the National Defense
Authorization Act (NDAA) for fiscal year 2004 directed DOD to monitor
nonenrolled TRICARE beneficiaries' access to care through a survey of
civilian providers.^3 In addition, the NDAA required DOD to designate a
senior official to take actions to ensure access to care for nonenrolled
TRICARE beneficiaries.

The NDAA for fiscal year 2004 also directed GAO to review the processes,
procedures, and analysis used by DOD to determine the adequacy of the
number of network and nonnetwork civilian providers and the actions taken
to ensure access to care for nonenrolled TRICARE beneficiaries.
Specifically, as discussed with the committees of jurisdiction, this
report describes (1) how TMA and its MCSCs evaluate nonenrolled TRICARE
beneficiaries' access to care and the results of these evaluations; (2)
the impediments to civilian provider acceptance of nonenrolled TRICARE
beneficiaries, and how they are being addressed; and (3) how DOD has
implemented the fiscal year 2004 NDAA requirements to take actions to
ensure nonenrolled TRICARE beneficiaries' access to care.

To determine how TMA evaluates nonenrolled TRICARE beneficiaries' access
to care, we interviewed and obtained documentation from TMA officials
about the civilian provider survey, which included a random,
representative sample of civilian providers in selected geographic
locations and therefore included both network and nonnetwork civilian
providers. We also reviewed information from TMA's annual beneficiary
health care survey, which includes information on beneficiaries' access to
care. In addition, we met with TRO and MCSC officials for each of the
three regions, TMA officials, and representatives from each of the
services' Surgeons General to identify and evaluate the tools used for
monitoring access to care. To identify the impediments to network and
nonnetwork civilian providers' acceptance of nonenrolled TRICARE
beneficiaries and how these impediments are being addressed, we obtained
information from TMA, TRO, and MCSC officials. We also met with
representatives of TRICARE beneficiaries and the American Medical
Association to discuss their concerns about impediments to health care
access for nonenrolled TRICARE beneficiaries. In addition, we obtained and
analyzed data related to TMA's implementation of reimbursement rate
increases in specific locations for the purpose of improving access to
care. However, we did not evaluate the extent to which the rate increases
improved civilian providers' acceptance of TRICARE beneficiaries as
patients. To examine how DOD has implemented the fiscal year 2004 NDAA
requirements to take actions to ensure nonenrolled TRICARE beneficiaries'
access to care, we obtained information from TMA, TRO, and MCSC officials.
Through our review of the relevant documentation and our discussions with
TMA, TRO, and MCSC officials, we determined that the data presented in
this report were sufficiently reliable for our purposes. We conducted our
work from July 2005 through December 2006 in accordance with generally
accepted government auditing standards. Appendix I contains more details
about our scope and methodology, and appendix II contains more detail
about the scope and methodology of DOD's civilian provider survey.

^3See Pub. L. No. 108-136, S 723, 117 Stat. 1392, 1532-34 (2003) and S.
Rep. No. 108-46, at 330 (2003).

Results in Brief

TMA and its MCSCs use various methods to evaluate access to care, and
according to TMA and MCSC officials, the resulting measures indicate that
nonenrolled TRICARE beneficiaries' access to care is generally sufficient
and that access problems appear to be minimal. Among methods used by TMA
to evaluate access to care are its recently implemented civilian provider
survey and an annual beneficiary health care survey. The survey of
civilian providers, which includes network and nonnetwork providers, is
designed to measure access to care by identifying how many civilian
providers are willing to accept nonenrolled TRICARE beneficiaries as new
patients. The first round of this survey, implemented in 2005, focused on
20 states and found that 14 percent of civilian providers were not
accepting new patients from any government or commercial health plan. Of
those accepting new patients, about 80 percent would accept nonenrolled
TRICARE beneficiaries as new patients. In addition, the results of each of
TMA's annual beneficiary health care surveys for 2003 through 2005 show
that nonenrolled TRICARE beneficiaries' satisfaction with access to care
was similar to satisfaction reported by participants in commercial health
plans. TMA and the TROs also receive anecdotal information through
beneficiary feedback, and, according to these officials, complaints about
access to care are infrequent. Each of the MCSCs also has its own methods
of monitoring access to care, including analyzing provider and beneficiary
locations as part of their responsibility for ensuring sufficient network
capacity for all TRICARE beneficiaries residing in locations with civilian
provider networks. While the MCSCs' methods were not designed specifically
to evaluate access for nonenrolled TRICARE beneficiaries, they do provide
helpful information that allows the MCSCs to monitor the availability of
both network and nonnetwork civilian providers for this population.
According to MCSC officials, their measures indicate that nonenrolled
TRICARE beneficiaries' access to care is sufficient overall.

TMA, MCSCs, and beneficiary and provider representatives cited various
factors as impediments to network and nonnetwork civilian providers'
acceptance of nonenrolled TRICARE beneficiaries and different ways to
address them. These impediments include concerns that are specific to the
TRICARE program, including reimbursement rates and administrative issues,
as well as issues that are not specific to TRICARE, such as providers not
having sufficient capacity in their practices for additional patients and
provider shortages in geographically remote areas. TMA and the MCSCs have
specific ways to respond to impediments related to TRICARE reimbursement
rates and administrative issues, while the others are more difficult to
address. For example, TMA has the authority to increase reimbursement
rates for network and nonnetwork civilian providers in locations where TMA
determines that access to care is impaired. Using this authority, TMA has
increased reimbursement rates for specific services for network and
nonnetwork civilian providers in 15 locations, including two waivers
covering the state of Alaska. To respond to network and nonnetwork
civilian providers' concerns about administrative issues, such as problems
with claims processing, MCSCs are working to educate providers on TRICARE
requirements. However, while MCSCs and TMA believe that efforts to
increase reimbursement rates and assist providers with administrative
issues have improved access to care, the actual extent to which these
efforts have improved access is unclear. Nonetheless, other impediments
that are not specific to TRICARE are more difficult for TMA and MCSCs to
resolve. For example, some network and nonnetwork civilian providers do
not accept nonenrolled TRICARE beneficiaries as new patients because their
practices are already at capacity. In addition, there are few practicing
civilian providers, either network or nonnetwork, in some geographically
remote areas, impairing access for all local residents, including TRICARE
beneficiaries. Recently TMA has adopted two bonus payment systems similar
to those used by Medicare for locations with provider shortages.

Various TMA offices, including the TROs, and the MCSCs are carrying out
the responsibilities outlined by the NDAA for fiscal year 2004--such as
educating civilian providers and recommending reimbursement rate
adjustments--actions that help ensure nonenrolled beneficiaries' access to
care. For example, in some locations, the TROs have recommended
adjustments to reimbursement rates when access to care was impaired. Other
activities, such as educating nonnetwork civilian providers, are shared by
the TROs, other TMA offices, and the MCSCs. However, a senior official was
not formally designated to have responsibility for these actions as
required in this mandate.

DOD said our approach used to address issues in this report was thoughtful
and insightful, but DOD disagreed with our finding that a senior official
was not formally designated to take actions to ensure adequate access to
care for nonenrolled TRICARE beneficiaries, including ensuring adequate
participation by nonnetwork providers, as outlined by the NDAA for fiscal
year 2004. DOD stated that the agency has an existing directive that
designates a senior official to serve as program manager for TRICARE,
which meets the NDAA mandate for nonenrolled beneficiaries. However, we do
not agree that DOD has adequately addressed the mandate. First, during our
audit work we found that no specific actions had been taken to designate a
senior official. Second, while the responsibilities of the TMA Director
and the TROs under the directive generally encompass provision of care to
nonenrolled beneficiaries, the directive does not task any one official
with identifying the specific actions necessary to ensure adequate
provider participation in each market area, as the law required.

Background

In fiscal year 2005, almost 10 million beneficiaries were eligible to
receive health care under TRICARE, DOD's regionally structured health care
program. Under TRICARE, beneficiaries have choices among three different
benefit options and may obtain care from either MTFs or civilian
providers. The NDAA for fiscal year 2004 directed DOD to conduct a survey
to monitor access to care for beneficiaries who chose not to use TRICARE's
managed care option and to appoint a senior official to take actions to
ensure that these beneficiaries have adequate access to care.

Composition of TRICARE's Beneficiary Population

TRICARE beneficiaries fall into various categories, including active duty
personnel and their dependents and retirees and their dependents. Retirees
and certain dependents and survivors who are entitled to Medicare Part A
and enrolled in Part B, and who are generally age 65 and older,^4 are
eligible to obtain care under a separate program called TRICARE for Life
(TFL).^5 As shown in figure 1, active duty personnel and their dependents
represent 42 percent of the beneficiary population. Retirees and their
dependents who are not entitled to Medicare (generally under age 65)
comprised 44 percent of the TRICARE beneficiary population while retirees
and dependents over 65 represented 14 percent of the beneficiary
population.

^4TRICARE beneficiaries under 65 years of age who are eligible for
Medicare Part A on the basis of disability or end stage renal disease are
eligible for TRICARE for Life if they enroll in Medicare Part B.

Figure 1: TRICARE Beneficiaries in Fiscal Year 2005

aTRICARE beneficiaries under 65 years of age who are eligible for Medicare
Part A on the basis of disability or end stage renal disease are eligible
for TRICARE for Life if they enroll in Medicare Part B.

bNational Guard and reservists who have been activated are included as
active duty personnel and their family members are included as dependents.

^5TRICARE for Life is a program for Medicare-eligible beneficiaries
enrolled in Medicare Part B, which covers charges from licensed
practitioners, as well as clinical laboratory and diagnostic services,
surgical supplies and durable medical equipment, and ambulance services.
TRICARE for Life pays expenses remaining after Medicare has paid its share
of claims and also pays for certain skilled nursing and inpatient
hospitalization services that Medicare does not cover.

Network and Nonnetwork Civilian Providers Under TRICARE

TRICARE beneficiaries can choose to obtain health care through MTFs or
through civilian providers, which includes providers who belong to the
TRICARE provider network as well as nonnetwork providers who agree to
accept TRICARE beneficiaries as patients. Individual civilian providers
must be licensed by their state, accredited by a national organization, if
one exists, and meet other standards of the medical community to be
authorized to provide care under TRICARE. Individual TRICARE-authorized
civilian providers can include attending physicians, certified
nurse-practitioners, clinical nurse specialists, dentists, clinical
psychologists, physician assistants, podiatrists, and optometrists, among
others. There are two types of authorized civilian providers--network and
nonnetwork providers. Network civilian providers are TRICARE-authorized
providers who enter a contractual agreement with the regional MCSC to
provide health care to TRICARE beneficiaries. By law, TRICARE maximum
allowable reimbursement rates must generally mirror Medicare rates, but
network providers may agree to accept lower reimbursements as a condition
of network membership. In some cases, they agree to accept negotiated
reimbursement rates, which are usually discounts off of the TRICARE
reimbursement rates, as payment in full for medical care or services.
Network civilian providers are reimbursed at their negotiated rate
regardless of whether they are providing care to enrolled TRICARE
beneficiaries under the Prime option or nonenrolled TRICARE beneficiaries
under the Extra option. Network civilian providers file claim forms for
TRICARE beneficiaries and follow other contractually required processes,
such as those for obtaining referrals. However, network civilian providers
are not obligated to accept all TRICARE beneficiaries seeking care. For
example, a network civilian provider may decline to accept TRICARE
beneficiaries as patients because the provider's practice does not have
sufficient capacity or for other reasons.^6

Nonnetwork civilian providers are TRICARE-authorized providers who do not
have a contractual agreement with an MCSC to provide care to TRICARE
beneficiaries.^7 Nonnetwork civilian providers may accept TRICARE
beneficiaries as patients on a case-by-case basis. These providers may
choose to accept the TRICARE reimbursement rate as payment in full for
their services on a case-by-case basis. This practice is referred to as
"participating" or accepting assignment on a claim. Nonnetwork civilian
providers also have the option of charging up to 15 percent more than the
TRICARE reimbursement rate for their services on a case-by-case basis--a
practice referred to as "non-participating." However, when a nonnetwork
civilian provider bills more than the TRICARE reimbursement rate, TRICARE
beneficiaries are responsible for paying the extra amount billed in
addition to their required copayments. TROs and MCSCs told us that this
authority is infrequently used, in part, because when providers bill the
additional 15 percent, they usually collect their total reimbursement from
the TRICARE beneficiaries, who may not always pay promptly.^8 When
nonnetwork civilian providers "participate" on a claim and agree to accept
the TRICARE reimbursement amount as payment in full, the MCSCs usually pay
them directly, ensuring timely payment of the claim.

^6For example, network providers may determine that only a set amount of
their practice--such as 10 or 20 percent--will be allocated to TRICARE
patients. When this percentage is met, providers may decline to accept any
new TRICARE patients.

^7TRICARE beneficiaries who choose to receive medical care from providers
who are not TRICARE-authorized may be responsible for all billed charges.

TRICARE's Benefit Options

TRICARE provides its benefits through three main options for its
non-Medicare eligible beneficiary population that vary according to
TRICARE beneficiary enrollment requirements, the choices TRICARE
beneficiaries have in selecting civilian and MTF providers, and the amount
TRICARE beneficiaries must contribute towards the cost of their care.
However, while there are three main options, there are only two types of
TRICARE beneficiaries--enrolled and nonenrolled--and two types of civilian
providers--network and nonnetwork. (See table 1.) All beneficiaries may
also obtain care at MTFs although priority is given to active duty
beneficiaries and Prime enrollees.

^8Between fiscal years 2001 and 2005 the percent of nonnetwork civilian
providers who billed TRICARE beneficiaries an additional 15 percent over
the TRICARE reimbursement rate on some of their claims decreased from 10
percent to 6.3 percent. Similarly, the percent of nonnetwork civilian
providers who billed an additional 15 percent over the TRICARE
reimbursement rate on all of their claims decreased from 7.4 percent in
fiscal year 2001 to 4.4 percent in fiscal year 2005.

Table 1: Summary of the Three Main TRICARE Options

                                                                      Beneficiary   
                                               Civilian               copayment     
TRICARE                  Enrollment Enrollment provider               (outpatient   
option   Type of option  required   fee        status^a   Deductible  care)^b       
Prime    Managed care    Yes        Yes^c      Network    None        $0-$12^d      
Standard Fee-for-service No         No         Nonnetwork $50-$150    20-25% of the 
                                                          per         TRICARE       
                                                          individual; reimbursement 
                                                          $100-$300   rate^e        
                                                          per                       
                                                          family^f                  
Extra    Preferred       No         No         Network    $50-$150    15-20% of the 
         provider                                         per         TRICARE       
         organization                                     individual; reimbursement 
                                                          $100-$300   rate          
                                                          per                       
                                                          family^f                  

Source: GAO analysis of DOD data.

aBeneficiaries may also use MTF providers. Priority for MTF usage is given
to active duty personnel and beneficiaries enrolled in Prime.

bThe lower range of copayments apply to active duty dependents while
higher copayments apply to retirees and their dependents. There is no
charge for outpatient care received at MTFs.

cThere is no enrollment fee for active duty servicemembers and their
dependents. However, retirees and their dependents under 65 years must pay
an annual enrollment fee of $230 per individual or $460 per family.

dInpatient care and other types of service require different levels of
copayment for retirees. Active duty family members who enroll in Prime
never incur a copayment.

eOn a case-by-case basis, nonnetwork civilian providers may charge up to
15 percent more than the TRICARE reimbursement rate. In these instances,
the TRICARE beneficiaries are also responsible for this amount in addition
to copayments.

fDependents of lower-ranked enlisted personnel pay lower deductible
amounts. Dependents of higher-ranked military personnel, as well as
retirees and their dependents, pay the higher deductible amounts.

The three main options with their corresponding enrollment requirements
and provider categories are as follows:

           o TRICARE Prime: This managed care option is the only TRICARE
           option requiring enrollment. Active duty servicemembers are
           required to enroll in this option while other TRICARE
           beneficiaries may choose to enroll.^9 Prime enrollees receive most
           of their care from providers at MTFs, augmented by network
           civilian providers who have agreed to meet specific access
           standards for appointment wait times among other requirements.^10
           Prime enrollees have a primary care manager who either provides
           care or authorizes referrals to specialists. Beneficiaries can be
           assigned to a primary care manager at the MTF or, if the MTF is at
           capacity or no MTF is available, Prime enrollees may select a
           civilian primary care manager. Prime offers lower out-of-pocket
           costs than the other TRICARE options. Active duty personnel and
           their dependents do not pay enrollment fees, annual deductibles,
           or copayments for care obtained from network civilian providers.
           Retirees and their dependents who are not entitled to Medicare pay
           an annual enrollment fee and small copayments for care obtained
           from network civilian providers.

           o TRICARE Standard: TRICARE beneficiaries who choose not to enroll
           in Prime may obtain health care using this fee-for-service option,
           which is designed to provide maximum flexibility in selecting
           providers. Under Standard, nonenrolled TRICARE beneficiaries may
           obtain care from TRICARE-authorized nonnetwork civilian providers
           of their choice. TRICARE beneficiaries using this option do not
           need a referral for most specialty care. Under Standard, all
           TRICARE beneficiaries must pay an annual deductible and
           copayments, which vary among active duty dependents and retirees
           and their dependents, and there is no annual enrollment fee.^11 In
           addition, nonnetwork providers are not required to meet access
           standards, such as those for appointment wait times.

           o TRICARE Extra: Similar to a preferred-provider organization,
           nonenrolled TRICARE beneficiaries may also obtain health care from
           a TRICARE network civilian provider for lower copayments than they
           would have under the Standard option--about 5 percent less.
           TRICARE beneficiaries choosing to use Extra must pay towards the
           same annual deductible as Standard and are responsible for
           copayments. Similar to Standard, there is no annual enrollment
           fee. Additionally, network civilian providers caring for
           nonenrolled TRICARE beneficiaries must adhere to the same access
           standards for appointment wait times that they use for enrolled
           TRICARE beneficiaries under Prime.

           Among TRICARE beneficiaries who were not Medicare eligible in
           fiscal year 2005, about 5.5 million or 65 percent of TRICARE's
           beneficiaries were enrolled in Prime and thereby declared their
           intent to use their TRICARE benefit. In contrast, TMA does not
           know whether nonenrolled beneficiaries intend to use their TRICARE
           benefit. In fiscal year 2005, claims data showed that about 1.2
           million or 14 percent of nonenrolled TRICARE beneficiaries
           obtained care with 66 percent of this care being delivered through
           the Standard option and 34 percent delivered through the Extra
           option. The remaining 1.8 million or 21 percent of nonenrolled
           beneficiaries were eligible for TRICARE benefits but did not use
           them during this time period.^12 At any time, this population of
           eligible nonusers could elect to use Standard or Extra, and DOD
           would reimburse claims submitted for their health care after
           annual deductibles are met.
			  
			  TRICARE Contracts and Regional Structure

           TMA uses three MCSCs to provide civilian health care under the
           TRICARE program. Each MCSC is responsible for the delivery of care
           to TRICARE beneficiaries in one of three geographic
           regions--North, South, and West. The MCSCs are contractually
           required to establish and maintain networks of civilian providers
           in designated locations within these regions that are referred to
           as Prime Service Areas. (See fig. 2 for the location of Prime
           Service Areas in each of the three TRICARE regions.) Prime Service
           Areas include all MTF enrollment areas,^13 Base Realignment and
           Closure sites,^14 and additional areas where either TMA or the
           MCSC deems networks to be cost effective. As a result, each region
           may contain multiple Prime Service Areas. In these areas, civilian
           provider networks are required to be large enough to provide
           access for all TRICARE beneficiaries regardless of enrollment
           status or Medicare-eligibility. TMA contractually requires that
           MCSCs' civilian provider networks meet specific access standards,
           such as travel times or wait times, for both primary and specialty
           care. For example, TRICARE beneficiaries seeking primary care
           should not have to drive more than 30 minutes to get to their
           appointment locations. In addition to contractual requirements,
           the MCSCs can add additional access standards that they strive to
           meet.

^9To use the TRICARE Prime option, eligible TRICARE beneficiaries must
reside in locations where TRICARE Prime is offered.

^10Prime enrollees may also receive care from nonnetwork providers;
however, such care is subject to deductibles and copayments of 50 percent
of the TRICARE reimbursement rate unless the enrollee has a referral for
the care from the Primary Care Manager.

^11The annual deductible also varies from $50 to $150 per person or from
$100 to $300 per family. Dependents of lower-ranked active duty enlisted
personnel pay the lower deductible amounts. Dependents of high-ranked
personnel and retirees and their dependents pay the higher deductible
amounts.

^12About 1.3 million additional beneficiaries were eligible for TRICARE
for Life in fiscal year 2005.

^13MTF enrollment areas are geographic areas determined by the ASD for
Health Affairs that are defined by five-digit zip codes, usually within an
approximate 40-mile radius of MTFs with inpatient care. In areas
encompassing MTFs, the civilian provider networks are expected to
complement the clinical services provided in MTFs.

^14Base Realignment and Closure sites are military installations that have
been closed or realigned as a result of decisions made by the Commission
on Base Realignment and Closure.

Figure 2: Location of Prime Service Areas in Each TRICARE Region

Note: Shaded areas represent counties in which there was a TRICARE network
of civilian providers available to serve both enrolled and nonenrolled
beneficiaries.

MCSCs are also responsible for performing other customer service
functions, such as processing claims and helping TRICARE beneficiaries
locate providers. They also are required to operate TRICARE Service
Centers, which are frequently located within MTFs, to provide TRICARE
beneficiaries with information on the different TRICARE options,
information on benefit coverage, assistance with finding network and
nonnetwork civilian providers, determining eligibility status, and other
activities. MCSCs provide customer service to any TRICARE beneficiary who
requests assistance, regardless of their enrollment status.

In each of the three regions, TMA uses a TRO to manage health care
delivery. TRO directors are considered the health plan managers for the
regions and are responsible for overseeing the MCSCs, including monitoring
network quality and adequacy, monitoring customer satisfaction outcomes,
and coordinating appointment and referral management policies. TRO
directors and staff also provide customer service to all TRICARE
beneficiaries who request assistance regardless of their enrollment
status.

Although they vary in the size of the geographic area covered, each
TRICARE region has approximately the same number of TRICARE beneficiaries.
However, the number of nonenrolled TRICARE beneficiaries varies by region
as does their access to network providers under the Extra option depending
on their proximity to a Prime Service Area. (See fig. 3 for the number and
distribution of nonenrolled beneficiaries by region.)

Figure 3: All Nonenrolled TRICARE Beneficiaries by Region

Note: Shaded areas represent counties where nonenrolled beneficiaries
resided.

Throughout the three regions, about 16 percent of nonenrolled TRICARE
beneficiaries reside outside of Prime Service Areas. In the North region,
23 percent of nonenrolled TRICARE beneficiaries live outside of Prime
Service Areas, and in the West Region, 21 percent of nonenrolled TRICARE
beneficiaries live outside of Prime Service areas. Because the South
Region has extensive Prime Service Areas, no TRICARE beneficiaries live in
locations without a civilian provider network.

Although most nonenrolled TRICARE beneficiaries nationwide live in a Prime
Service Area, making Extra a readily available option, nonenrolled TRICARE
beneficiaries have used Standard more frequently than Extra for each
fiscal year from 2001 through 2005. (See fig. 4.)

Figure 4: Percent of Claims Paid for TRICARE Standard and Extra for Each
TRICARE Region for Fiscal Years 2001-2005

Note: In 2004, TMA consolidated its 11 TRICARE regions into 3 TRICARE
regions. TMA officials reallocated the data from the 11 regions to
correspond to the current regional structure.

Requirements in the NDAA for Fiscal Year 2004 Related to Nonenrolled TRICARE
Beneficiaries

The NDAA for fiscal year 2004 directed DOD to monitor nonenrolled TRICARE
beneficiaries' access to care under the TRICARE Standard option and to
designate a senior official to take the actions necessary to ensure access
to care for nonenrolled TRICARE beneficiaries.^15 Specifically, the NDAA
required surveys to be done in 20 market areas^16 each fiscal year until
all markets were surveyed to determine how many civilian providers^17 were
accepting nonenrolled TRICARE beneficiaries as new patients. Although the
law focused on Standard, TMA officials told us that since nonenrolled
TRICARE beneficiaries can receive care through both the Standard and Extra
options, they designed the survey to monitor access to care from both
network and nonnetwork providers.

When developing the survey's methodology, TMA defined market areas as
individual states and determined that all states could be surveyed within
a 3-year period. TMA implemented its survey in fiscal year 2005 for the
first 20 states.^18 The survey collected data from the billing and
insurance specialists of selected civilian providers, both network and
nonnetwork, to determine how many were accepting nonenrolled TRICARE
beneficiaries as new patients and to identify the reasons providers cite
for not accepting these TRICARE beneficiaries. About 17 percent of the
providers in the sample belonged to a TRICARE network while the remaining
83 percent of providers in the sample were nonnetwork providers. Because
about 14 percent of all civilian providers belong to the TRICARE network,
TMA's sample of civilian providers is fairly representative of the network
and nonnetwork civilian provider population serving all TRICARE
beneficiaries, including nonenrolled beneficiaries who can use the
Standard and Extra options. TMA's four-question survey focused on a given
provider's awareness of TRICARE, whether the provider was accepting
nonenrolled beneficiaries as new patients, and if not, the reasons why
they were not. (See app. II for a detailed discussion of the methodology
used for this survey and app. III for the complete survey instrument.)

^15See Pub. L. No. 108-136, S 723, 117 Stat. 1392, 1532-34 (2003) and S.
Rep. No. 108-46, at 330 (2003).

^16Neither the NDAA nor any congressional reports accompanying the
legislation provided a definition for `market areas.'

^17The NDAA did not specify network or nonnetwork providers for the
survey, but both types of providers can accept nonenrolled TRICARE
beneficiaries as patients. Network providers see nonenrolled TRICARE
beneficiaries under TRICARE's Extra option.

^18TMA obtained clearance to distribute its Survey of Continued Viability
of TRICARE Standard (the civilian provider survey) from the Office of
Management and Budget on May 16, 2005. This clearance is required by the
Paperwork Reduction Act. See 44 U.S.C. SS 3507 and 3508.

The NDAA for fiscal year 2004 also required DOD to designate a senior
official to take actions necessary for achieving and maintaining the
participation of nonnetwork civilian providers in a number adequate to
ensure care for nonenrolled TRICARE beneficiaries in each market area.
According to this legislation, the senior official would have the
following responsibilities:

           o educating nonnetwork civilian providers about TRICARE,

           o encouraging nonnetwork civilian providers to accept nonenrolled
           TRICARE beneficiaries as patients,

           o ensuring that nonenrolled TRICARE beneficiaries have the
           information necessary to locate nonnetwork civilian providers
           readily, and

           o recommending adjustments in reimbursement rates that the
           official considers necessary to ensure adequate availability of
           nonnetwork civilian providers for nonenrolled TRICARE
           beneficiaries.
			  
			  TMA and Its MCSCs Use Various Methods to Evaluate Access to Care
			  That Indicate Sufficient Access for Nonenrolled TRICARE Beneficiaries

           TMA and its MCSCs use various methods for evaluating access to
           care, and according to TMA and MCSC officials, the resulting
           measures indicate that access to care is generally sufficient for
           nonenrolled TRICARE beneficiaries. TMA is administering the
           civilian provider survey required by the NDAA for fiscal year
           2004, which is designed to obtain information on network and
           nonnetwork civilian providers' willingness to accept nonenrolled
           TRICARE beneficiaries as new patients. TMA also obtains
           information about access to care through its annual health care
           survey of all TRICARE beneficiaries and through the anecdotal
           beneficiary feedback they receive from the TROs, which monitor
           access in their respective regions. MCSCs also use a variety of
           approaches to evaluate access to care, including inquiries from
           beneficiaries, analyses of claims data, and monitoring of the
           capacity of civilian provider networks.
			  
			  TMA Uses Various Methods for Evaluating Access to Care

           TMA uses multiple methods of evaluating access to care for its
           nonenrolled TRICARE beneficiaries, including the recently
           implemented survey of civilian providers and its annual health
           care survey of TRICARE beneficiaries. In addition, TMA monitors
           centrally received beneficiary complaints and inquiries, and each
           TRO monitors access to care in its respective region.
			  
			  TMAï¿½s Survey of Civilian Providers

           In fiscal year 2005, TMA completed the first phase of its mandated
           survey of civilian health care providers.^19 (See app. II for
           discussion of technical aspects of this survey's methodology.)
           Although the survey was designed to determine the extent to which
           providers were willing to accept nonenrolled TRICARE beneficiaries
           as new patients, it is premature to interpret the results because
           this is the first of three rounds of the survey, and TMA does not
           have an established benchmark for determining the number of
           civilian providers that are needed for nonenrolled beneficiaries.
           During this initial round, TMA randomly selected a representative
           sample of over 40,000 providers in 20 states. TMA found that the
           majority of the providers surveyed were accepting new patients,
           including nonenrolled TRICARE beneficiaries.^20 Specifically, only
           14 percent of providers reported that they were not accepting new
           patients, including TRICARE patients, privately insured patients,
           or patients who were paying for their own care. Of the remaining
           86 percent accepting new patients, the percent that would accept
           nonenrolled TRICARE beneficiaries as new patients averaged 80
           percent for all 20 states.^21 (See table 2 for overall results by
           state.) An additional comparison of the acceptance rate for two
           categories of providers--primary care providers^22 and
           specialists^23--in each of these 20 states revealed very little
           difference between the two categories.^24 Of those accepting new
           patients, 78 percent of primary care providers and 81 percent of
           specialists would accept nonenrolled TRICARE beneficiaries as new
           patients.^25

           Table 2: TMA's 2005 Civilian Provider Survey Results Showing
           Percent of Surveyed Providers Accepting Nonenrolled TRICARE
           Beneficiaries (of Those Accepting New Patients) by State
			  
			                            Percent of surveyed providers accepting nonenrolled 
Surveyed states    TRICARE beneficiaries (of those accepting new patients) 
South Dakota                                                            93 
Maine                                                                   92 
Idaho                                                                   91 
Kansas                                                                  90 
Mississippi                                                             89 
Nebraska                                                                89 
Wyoming                                                                 88 
Alaska                                                                  87 
Wisconsin                                                               87 
Massachusetts                                                           87 
New Mexico                                                              86 
Indiana                                                                 84 
South Carolina                                                          84 
Illinois                                                                83 
California                                                              81 
Washington                                                              79 
Delaware                                                                78 
Texas                                                                   76 
New Jersey                                                              70 
New York                                                                68 
Total                                                                   80 

^25Indiana is the only state, among those surveyed, with a statistically
significant difference in acceptance rates between primary care and
specialist providers. However, both primary care and specialist acceptance
rates in Indiana are relatively high, with 89 percent of specialists and
78 percent of primary care providers accepting new nonenrolled TRICARE
beneficiaries.

           Source: GAO analysis of DOD data.

           In addition to the statewide sample, TMA also sampled civilian
           providers in several smaller geographic locations, defined as
           hospital service areas (HSA),^26 in order to respond to concerns
           about access to care that were specific to certain locations. TMA
           selected 29 HSAs--12 that were randomly selected from within the
           20 states evaluated for fiscal year 2005 and 17 based on
           beneficiary concerns about specific locations.^27 As in the
           20-state survey, TMA found that most providers in the selected
           HSAs were accepting new patients, including nonenrolled TRICARE
           beneficiaries. Specifically, only 13 percent of surveyed providers
           reported that they were not accepting new patients. Of the
           remaining 87 percent accepting new patients, 81 percent were
           accepting nonenrolled TRICARE beneficiaries as new patients. (See
           table 3.) An additional comparison of the acceptance rates for
           primary care providers and specialists who were accepting new
           patients revealed that 75 percent of the surveyed primary care
           providers and 85 percent of the surveyed specialists would accept
           nonenrolled TRICARE beneficiaries as new patients.^28 A further
           comparison of providers accepting nonenrolled TRICARE
           beneficiaries as new patients between the HSAs selected based on
           TRICARE beneficiaries' concerns and the HSAs randomly selected
           from the 20 surveyed states showed minimal difference in
           acceptance rates--80 percent and 83 percent, respectively.

           Table 3: TMA's 2005 Civilian Provider Survey Results Showing
           Percent of Surveyed Providers Accepting Nonenrolled TRICARE
           Beneficiaries (of Those Accepting New Patients) by Hospital
           Service Area
			  
                                      Percent of surveyed providers accepting 
                                  nonenrolled TRICARE beneficiaries (of those 
Hospital Service Areas^a                           accepting new patients) 
Peoria, Illinois^b                                                      96 
Fort Wayne, Indiana^b                                                   94 
Battle Creek, Michigan^b                                                93 
Watertown, New York                                                     92 
Santa Fe, New Mexico^b                                                  90 
Eau Claire, Wisconsin^b                                                 90 
Belleville, Illinois                                                    87 
Waukegan, Illinois                                                      87 
Evansville, Indiana                                                     89 
Charleston, South Carolina^b                                            87 
Lafayette, Indiana^b                                                    87 
Syracuse, New York                                                      86 
Corpus Christi, Texas^b                                                 84 
Killeen, Texas                                                          84 
Spokane, Washington                                                     84 
San Diego, California                                                   83 
Tallahassee, Florida^b                                                  83 
Kalamazoo, Michigan^b                                                   80 
San Antonio, Texas                                                      80 
Boca Raton, Florida^b                                                   79 
Indianapolis, Indiana                                                   79 
Columbia, South Carolina                                                79 
Sacramento, California^b                                                77 
Olympia, Washington                                                     72 
Houston, Texas^b                                                        68 
Monterey, California^b                                                  67 
Arlington, Texas^b                                                      62 
Brooklyn, New York^b                                                    60 
Seattle, Washington^b                                                   60 
Total                                                                   81 

           Source: GAO analysis of DOD data.

           aHospital Service Areas are collections of zip codes organized
           into geographic regions in which Medicare TRICARE beneficiaries
           seek the majority of their care from one hospital or a collection
           of hospitals. Hospital Service Areas have nonoverlapping borders
           and contain all U.S. zip codes without gaps in coverage.

           bLocations requested by TRICARE beneficiary groups and TRICARE
           Regional Offices for assessment of access to care. These locations
           were not randomly selected.

           In both the states and HSAs, civilian providers who indicated that
           they were not accepting nonenrolled TRICARE beneficiaries as new
           patients were asked to identify why they made this decision in
           their own words, and were permitted to provide as many reasons as
           they wanted. More than half of both network and nonnetwork
           respondents cited not having a provider available or reimbursement
           issues as reasons. For providers citing nonavailability as a
           reason, many explained that they were either in the process of
           retiring or were too busy to accept any new patients at this time.
           Providers citing reimbursement issues most often stated an opinion
           that TRICARE's reimbursement rates were low and that claims
           payment was slow. (See app. IV for TMA's summary of the aggregate
           results by category.)

           Although there is no benchmark with which to compare the results
           of the initial civilian provider survey effort, TMA officials
           stated that their analysis of the 2005 survey results did not
           indicate widespread problems with nonenrolled TRICARE
           beneficiaries' access to care. Nonetheless, TRO officials used the
           survey results to identify specific cities in their regions where
           civilian providers' acceptance of nonenrolled TRICARE
           beneficiaries and knowledge about TRICARE were low in comparison
           to the other locations surveyed.^29 To assist in this effort, the
           Assistant Secretary of Defense (ASD) for Health Affairs directed
           TMA's Communications and Customer Service Directorate to work with
           the TROs and other TMA officials to develop a strategic marketing
           plan for these locations.^30 The cities selected by the TROs are
           as follows:

           o West region: Olympia, Washington (2,732 nonenrolled
           beneficiaries), Monterey, California (1,180 nonenrolled
           beneficiaries), Seattle, Washington ( 2,358 nonenrolled
           beneficiaries), and Anchorage, Alaska (3,381 nonenrolled
           beneficiaries);

           o North region: Brooklyn, New York (4,276 nonenrolled
           beneficiaries) and Eau Claire, Wisconsin (902 nonenrolled
           beneficiaries); and

           o South region: Arlington, Texas (3,025 nonenrolled
           beneficiaries), Houston, Texas (6,415 nonenrolled beneficiaries),
           and Boca Raton, Florida (447 nonenrolled beneficiaries).

           TMA officials and TRICARE beneficiaries have stated that
           additional survey questions could have yielded useful information.
           For example, the survey did not ask providers whether they are
           accepting new Medicare patients--an important proxy because
           TRICARE reimbursement rates are established using Medicare
           reimbursement rates, and a comparison of the two programs could
           provide information on whether providers are more concerned with
           the amount of reimbursement or other issues.^31 Furthermore, the
           survey did not ask providers how much of their current practice
           consists of TRICARE beneficiaries, to capture whether or not
           providers may already have TRICARE beneficiaries in their
           practices. However, a provision in the NDAA for fiscal year 2006
           instructs TMA to add the following questions to its civilian
           provider survey:			  
			  
                        1. What percentage of Dr. X's current patient
                        population uses any form of TRICARE?
                        2. Does Dr. X accept patients under the Medicare
                        program?
                        3. Would Dr. X accept additional Medicare
                        patients?^32		  

			  TMAï¿½s Beneficiary Health Care Survey

           In addition to its civilian provider survey that covered 20
           states, TMA gathers worldwide information on nonenrolled TRICARE
           beneficiaries' access to care through its annual Health Care
           Survey of DOD Beneficiaries, which covers all TRICARE
           beneficiaries and all TRICARE options.^33 According to survey
           results from 2003 through 2005, about 77 percent of nonenrolled
           TRICARE beneficiaries who obtained care reported that "getting
           needed care" was not a problem for them. Similarly, over 80
           percent of these TRICARE beneficiaries reported that they could
           "get care quickly." For the same time period, TMA compared its
           survey results with the results of a civilian health plan survey,
           the Consumer Assessment of Healthcare Providers and Systems
           (CAHPS(R)),^34 which asked participants the same questions on
           access to care under their plans. From this comparative analysis,
           TMA found that a similar percentage of civilian health plan
           participants--about 80 percent--responded that "getting needed
           care" was not a problem and that they could "get care quickly."
           TMA uses this survey as a benchmark to compare TRICARE against
           civilian plans.
			  
			  Beneficiary Feedback

           Anecdotal information about access to care is available through
           TMA's centralized Beneficiary and Provider Services office, which
           collects and monitors information on TRICARE beneficiaries'
           complaints and general inquiries, including issues about access to
           care. TRICARE beneficiaries may contact this office by telephone,
           e-mail, written correspondence, or through their congressional
           representatives. TMA officials broadly categorize each contact by
           issue and use this information to monitor trends in the feedback
           they receive through these contacts. A TMA official stated that if
           the number of contacts they receive related to an issue rises, the
           appropriate program officials--such as the TROs--are notified and
           encouraged to investigate the issue. Furthermore, TMA maintains a
           record of TRICARE beneficiary and provider contacts that have been
           addressed and those that remain open and continue to require
           attention. Although the Beneficiary and Provider Services office
           does not specifically track access-to-care issues as a separate
           issue, one of the TMA officials responsible for tracking the
           contacts told us that TRICARE beneficiary complaints and inquiries
           relating to access issues have been minimal. Overall, concerns and
           inquiries for the "contractor service complaint" category, which
           could include access-to-care issues for both enrolled and
           nonenrolled TRICARE beneficiaries, represented about 1 percent of
           about 6,900 total contacts about the MCSCs for 2005.

           In addition, on a regional level, the TROs collect and monitor
           TRICARE beneficiary feedback gathered from e-mails and phone
           calls, as well as correspondence they receive from TRICARE
           beneficiary groups. However, the TROs told us that detailed
           information on each of these contacts is not routinely maintained.
           For example, one TRO told us that when a TRICARE beneficiary
           contacts them for assistance in locating a provider, they track
           the general reason for the call, but do not document the specific
           concerns. TRO officials told us that they receive only a small
           number of contacts from nonenrolled TRICARE beneficiaries who are
           unable to obtain care from nonnetwork civilian providers.^35 For
           example, one TRO told us that they received approximately 34
           requests for assistance locating a provider in calendar year 2005
           from the over 600,000 nonenrolled TRICARE beneficiaries in this
           region. TRO officials indicated that sometimes these requests are
           due to TRICARE beneficiaries' inability to obtain care from a
           specific provider at a specific time and are not necessarily
           indicative of access problems because that provider may be
           available at another time or other providers may be available. The
           TROs told us that they also monitor nonenrolled TRICARE
           beneficiaries' access to care retrospectively by evaluating claims
           data as a record of health care usage. For example, the TROs use
           these data to identify how many network and nonnetwork providers
           have accepted nonenrolled TRICARE beneficiaries as patients and to
           evaluate the use of the different TRICARE options.

           Finally, the TROs and military services are in the process of
           implementing a new method of monitoring TRICARE beneficiary
           feedback. The Assistance Reporting Tool (ART) is a computer
           database that when fully operational will be used to archive and
           manage TRICARE beneficiary feedback on all aspects of health care.
           Currently each of the three TROs, all Army MTFs, and a portion of
           Navy and Air Force MTFs use this system as either their primary or
           one of several tools for managing and archiving TRICARE
           beneficiary feedback.^36 Because ART is not mandatory for all
           MTFs, the TROs also rely on other feedback mechanisms to capture
           the most complete record of TRICARE beneficiary concerns and
           questions. These other mechanisms include e-mails from TRICARE
           beneficiaries to MTFs and data requests that the TROs periodically
           make to MTFs. In addition, while the MCSCs are not required to use
           ART because it was introduced after TRICARE's current health care
           delivery contracts were awarded, one of the MCSCs is currently
           using it. In the next cycle of TRICARE contracts, TMA officials
           told us that they plan to require that all MCSCs use this system.
           TMA officials who have reviewed the preliminary information
           captured by ART told us that the tool has obtained very little
           feedback that would indicate nonenrolled TRICARE beneficiaries are
           having problems with access to care.
			  
			  MCSCs Have Approaches for Monitoring Access to Care Though They Are
			  Not Specific to Nonenrolled TRICARE Beneficiaries

           Each of the three MCSCs has developed its own methods for
           monitoring whether TRICARE beneficiaries in its region have access
           to care both in Prime Service Areas and in areas where provider
           networks do not exist. According to the MCSCs, while their methods
           for evaluating access to care were not designed to evaluate access
           specifically for nonenrolled TRICARE beneficiaries, they do
           provide some information that they use to monitor the availability
           of both network and nonnetwork civilian providers for this
           population, which is one component of access to care.

           The MCSCs also monitor access to care through beneficiary
           inquiries. Each maintains a data system to archive and tabulate
           anecdotal TRICARE beneficiary feedback received through some or
           all of the following methods: telephone, e-mail, congressional
           correspondence, or walk-in visits to a TRICARE Service Center. The
           MCSCs organize TRICARE beneficiary feedback into subject
           categories and then monitor changes in the frequency of contacts
           in these categories to identify trends and important issues. At
           our request, each of the MCSCs reviewed their most recent TRICARE
           beneficiary complaint data and found very small numbers of
           comments pertaining to health care access. The MCSCs told us this
           was an indication that TRICARE beneficiaries--both enrolled and
           nonenrolled--were not experiencing any widespread problems with
           access to care. For example, one MCSC identified fewer than 40
           complaints related to access out of one million contacts with
           TRICARE beneficiaries in a 1-month period. The second MCSC
           reported that for the last two quarters of 2005 they received an
           average of 355 inquiries and complaints each month about access to
           care. Officials from this MCSC told us that while their TRICARE
           beneficiary feedback system could not quantify the total number of
           inquiries received, these 355 inquiries represented a small
           percentage of all contacts. The third MCSC reported that out of
           more than 250,000 phone calls and walk-in visits to TRICARE
           Service Centers during the month of December 2005, 71 contacts, or
           less than 1 percent of the total contacts, were related to access.

           The MCSCs also determine how many civilian providers have accepted
           at least one TRICARE beneficiary by analyzing claims data to
           examine the extent to which both network and nonnetwork civilian
           providers are accepting TRICARE beneficiaries as patients. Each
           MCSC has concluded that more than half of all licensed civilian
           providers--both network and nonnetwork--in their respective
           regions have accepted at least one TRICARE beneficiary, regardless
           of enrollment status, as a patient in the last year.^37 According
           to MCSCs, access to care appears to be generally sufficient
           because the percentage of all licensed civilian providers in each
           region who have submitted at least one TRICARE claim during the
           past year are as follows: 90 percent in the South region, where
           TRICARE beneficiaries represent 3.7 percent of the entire region's
           population; 56 percent in the West region, where TRICARE
           beneficiaries represent 3.1 percent of the region's population;
           and 52 percent in the North region, where all TRICARE
           beneficiaries represent an estimated 2.1 percent of the region's
           population.^38

           Each MCSC told us that one of the primary ways they ensure
           sufficient access to care for both enrolled and nonenrolled
           TRICARE beneficiaries is by monitoring whether their civilian
           provider networks have the capacity to provide care to all
           beneficiaries in their Prime Service Areas. Throughout the three
           regions, the majority of nonenrolled TRICARE beneficiaries--84
           percent--live within Prime Service Areas, making the choice of
           using a civilian network provider through Extra a readily
           available option for them. In the South region, all TRICARE
           beneficiaries reside in Prime Services Areas. In this region, the
           MCSC monitors access to care through geographic analyses of
           provider and TRICARE beneficiary locations to determine whether
           its networks meet the needs of both enrolled and nonenrolled
           TRICARE beneficiaries using TRICARE's access standards. In another
           region, where not all TRICARE beneficiaries live in Prime Service
           Areas, the MCSC will assist nonenrolled TRICARE beneficiaries in
           finding nonnetwork civilian providers on an as-needed basis. In
           the third region where the Prime Service Areas also do not
           encompass all TRICARE beneficiaries, the MCSC recruits and
           contracts with providers outside of Prime Service Areas who are
           available and willing to deliver care to nonenrolled TRICARE
           beneficiaries living there. Network providers who deliver care in
           locations outside of Prime Service Areas currently account for 25
           percent of this MCSCs' network providers.
			  
			  Various Factors Impede Providersï¿½ Acceptance of Nonenrolled TRICARE
			  Beneficiaries, and TMA and MCSCs Have Different Ways to Address Them

           TMA, MCSCs, and provider representatives have cited various
           factors as impediments to civilian providers' willingness to
           accept nonenrolled TRICARE beneficiaries as patients, and TMA and
           its MCSCs have different ways to address them. Some impediments
           are specific to TRICARE, including concerns about reimbursement
           rates and administrative issues, and TMA and its MCSCs have
           specific ways to address these issues. For example, TMA has the
           authority to increase reimbursement rates in certain
           circumstances, and both TMA and MCSCs conduct outreach efforts
           targeted to assist civilian providers with administrative issues.
           Other impediments--such as providers' practices being at maximum
           patient capacity and provider shortages in certain locations--are
           not specific to TRICARE and are therefore inherently more
           difficult for TMA and the MCSCs to address.
			  
			  Providers Cite Concerns about TRICAREï¿½s Reimbursement Rates as a
			  Reason for Denying Nonenrolled TRICARE Beneficiariesï¿½ Access to
			  Care, but TMA Has Authority to Adjust Rates When Needed

           Since TRICARE was implemented in 1995, some civilian
           providers--both network and nonnetwork--have complained that
           TRICARE's reimbursement rates tend to be lower than those of other
           health plans, and as a result, some of these providers have been
           unwilling to accept nonenrolled TRICARE beneficiaries as patients.
           According to the results of the initial round of TMA's civilian
           provider survey, concern about reimbursement amounts was one of
           the primary reasons that both network and nonnetwork civilian
           providers cited for not accepting nonenrolled TRICARE
           beneficiaries as new patients. In the 2005 civilian provider
           survey, of those who gave reasons for not accepting nonenrolled
           TRICARE beneficiaries as new patients, 20 percent of network
           providers and 25 percent of nonnetwork providers cited concerns
           about reimbursement amounts. However, TMA has the authority to
           adjust reimbursement rates in areas where it determines that
           reimbursement rate amounts have been negatively impacting TRICARE
           beneficiaries' ability to obtain care.
			  
			  Providersï¿½ Concerns about TRICARE Reimbursement Rates

           One of providers' main reasons for not accepting nonenrolled
           TRICARE beneficiaries as patients is providers' concern about low
           reimbursement amounts. TRICARE's reimbursement rates generally
           mirror reimbursement rates paid by the Medicare program. Beginning
           in fiscal year 1991,^39 in an effort to control escalating health
           care costs, Congress instructed DOD to gradually lower its
           reimbursement rates for individual civilian providers to mirror
           those paid by Medicare^40--an adjustment that has saved hundreds
           of millions of dollars since the conversion.^41 As of January
           2006, the transition to Medicare rates was nearly complete, and
           reimbursement rates for only 48 services remain higher than
           Medicare reimbursement rates. (See app. V for a list of these
           services.)

           According to TMA and MCSC officials, civilian providers, including
           both network and nonnetwork, generally seek to develop a practice
           that includes patients with higher-paying private insurers to
           compensate for the acceptance of patients with lower-paying health
           plans, including Medicare, Medicaid, and TRICARE. However,
           according to TMA and MCSC officials, TRICARE generally has little
           leverage to encourage network and nonnetwork civilian provider
           acceptance of its patients because the TRICARE population is small
           and transient. Further, in locations where the demand for
           providers' services exceeds the supply--such as in
           Alaska--providers can be selective about who they accept as
           patients.

           TMA and MCSC officials have also cited providers' concerns that
           TRICARE's pediatric and obstetric rates are lower than Medicaid
           rates for these services. To investigate these concerns, TMA
           conducted a comparative analysis that found TRICARE's
           reimbursement rates for selected pediatric and obstetric
           procedures were generally higher than Medicaid's rates in many
           states for March 2006. TMA compared the TRICARE reimbursement rate
           for the service most commonly billed by pediatricians--an office
           visit for an established patient--with Medicaid rates for this
           service and found that in 41 of the 45 states for which Medicaid
           data were available, the TRICARE reimbursement rate exceeded
           Medicaid's rate for this service. In addition, TMA compared its
           reimbursement rates for 14 commonly used maternity and delivery
           services with Medicaid rates and found that in 35 of the 45 states
           for which Medicaid data were available,^42 TRICARE reimbursement
           rates for these services exceeded the Medicaid payment rates.

           TMA also analyzed reimbursement rates for pediatric immunizations
           based on MCSCs' concerns that providers viewed these rates as too
           low. However, when TMA compared TRICARE's reimbursement rates with
           the cost of the vaccine for the 10 most frequently used pediatric
           vaccines and for the hepatitis A vaccine, TMA's analysts concluded
           that the TRICARE reimbursement rates were generally reasonable and
           not undervalued in relation to what a provider might actually pay
           to obtain them. Only one vaccine--the pediatric hepatitis A
           vaccine--appeared to be priced lower than the reasonable cost of
           obtaining the vaccine. In this instance, the TRICARE reimbursement
           rate was $22.64, while pediatricians were paying between $27.41
           and $30.37 for the vaccine. As a result of this discrepancy, TMA
           used its general authority to deviate from Medicare rates,^43 and
           starting May 1, 2006, TMA instructed the MCSCs to reimburse
           pediatric hepatitis A vaccines nationally at a new reimbursement
           rate of $30.40.
			  
			  TMA Has Authority to Use Waivers to Adjust Reimbursement Rates

           TMA has the authority to increase TRICARE reimbursement rates for
           network and nonnetwork civilian providers to ensure that all
           beneficiaries, including nonenrolled beneficiaries, have adequate
           access to care. TMA's authorities include (1) waiving
           reimbursement rate reductions for both network and nonnetwork
           providers that resulted when TRICARE reimbursement rates were
           lowered to Medicare levels,^44 (2) issuing locality waivers that
           increase rates for specific procedures in specific localities,^45
           and (3) issuing network-based waivers that increase some network
           civilian providers' reimbursements.^46 Once implemented, waivers
           remain in effect indefinitely until TMA officials determine they
           are no longer needed. As of August 2006, TMA had approved 15
           waivers in total--2 waiving reimbursement rates reductions that
           resulted when TRICARE reimbursement rates were lowered to Medicare
           levels, 7 locality waivers, and 6 network waivers.

           TMA can use its authority to waive reimbursement rate reductions
           to restore TRICARE reimbursement rates in specific localities to
           the levels that existed before a reduction was made to align
           TRICARE rates with Medicare rates. On two occasions, TMA has used
           this authority in Alaska to encourage both network and nonnetwork
           civilian providers to accept TRICARE beneficiaries as patients in
           an effort to ensure adequate access to care. In 2000, TMA used
           this waiver authority to uniformly increase reimbursement rates
           for network and nonnetwork civilian providers in rural Alaska, and
           in 2002 TMA implemented this same waiver for network and
           nonnetwork civilian providers in Anchorage. The use of these
           waivers resulted in an average reimbursement rate increase of 28
           percent for all of Alaska. However, in 2001, we studied the effect
           of the 2000 waiver on access to care in rural Alaska and found
           that it did not increase TRICARE beneficiaries' access to care.^47

           Locality waivers may be used to increase rates for specific
           medical services in specific areas where access to care has been
           severely impaired. Reimbursement rate increases for this type of
           waiver can be established in one of three ways: by adding a
           percentage factor to the existing TRICARE reimbursement rate, by
           calculating a prevailing charge,^48 or by using another government
           reimbursement rate, such as rates used by the Department of
           Veterans Affairs to purchase health care from civilian providers.
           The resulting rate increase would be applied to both network and
           nonnetwork civilian providers for the medical services identified
           in the areas where access is severely impaired. A total of nine
           applications for locality-based waivers have been submitted to TMA
           between January 2003 and August 2006. (See table 4.) Of these,
           seven locality waivers have been approved by TMA and two are still
           pending. Six of the approved locality waivers as well as one
           pending application are for locations in Alaska. This includes one
           approved waiver to adjust the reimbursement rates for obstetric
           services to match Medicaid rates in Alaska and nine additional
           states based on TMA's comparative analysis of reimbursement rates
           for 14 obstetrical procedures.

^19In accordance with the law, TMA plans to conduct a survey of civilian
health care providers using a 3-year phased approach, surveying 20 states
in each year for 2 years, and 10 states plus the District of Columbia
during the final year.

^20In fiscal year 2004 TMA piloted this survey in 20 cities where TRICARE
beneficiary advocacy groups anecdotally identified problems with access to
care for nonenrolled TRICARE beneficiaries.

^21This ranged from a low of 68 percent in New York to a high of 93
percent in South Dakota.

^22The primary care provider category consists of providers whose
specialties include family or general practice, internal medicine,
obstetrics and gynecology, or pediatrics.

^23The specialist category consists of all other medical specialties not
captured in the primary care category.

^24TMA did not subdivide primary care and specialist providers into
network and nonnetwork categories.

^26HSAs are collections of zip codes organized into over 3,000 geographic
regions in which Medicare beneficiaries seek the majority of their care
from one hospital or a collection of hospitals. HSAs have nonoverlapping
borders and contain all U.S. zip codes without gaps in coverage.

^27Four of the HSAs selected by TRICARE beneficiaries--two in Florida and
two in Michigan--were located outside of the selected states.

^28In one community, Arlington, Texas, the survey found a sizeable
difference in the rate of acceptance between primary care providers (47
percent) and specialists (73 percent).

^29Eight of the locations were surveyed as HSAs in the 2005 civilian
provider survey. One additional location, Anchorage, Alaska, was
previously identified as an area with low civilian provider acceptance of
nonenrolled beneficiaries during TMA's pilot of the survey in 2004.

^30TMA has not specified a timeline for this task.

^31In Medicare Fee-for-Service Beneficiary Access to Physician Services:
Trends in Utilization of Services, 2000 to 2002, [33]GAO-05-145R
(Washington, D.C.; Jan. 12, 2005), we evaluated two indicators of
beneficiary access to Medicare physician services and found that although
Medicare physician fees had been reduced by 5.4 percent in 2002, the
indicators we evaluated suggested an increase in access to care.

^32See Pub. L. No. 109-163, S 711, 119 Stat. 3136, 3343.

^33The Health Care Survey of DOD Beneficiaries was implemented in response
to a requirement in the NDAA for fiscal year 1993 to annually survey
beneficiaries of DOD's health care programs about their ability to access
health care services and their satisfaction with the services they
received, among other things. See 10 U.S.C. S 1071, note. TMA conducts
this survey on a yearly basis using a representative sample of all TRICARE
beneficiaries worldwide.

^34CAHPS is a registered trademark of the Department of Health and Human
Services' Agency for Healthcare Research and Quality. CAHPS refers to a
family of surveys that asks consumers and patients to evaluate their
health care using a standardized set of questions. The Centers for
Medicare & Medicaid Services conducts a CAHPS survey of both the Medicare
fee-for-service population and the Medicare Advantage population.
Throughout this report we refer to the fee-for-service CAHPS(R) survey as
the CAHPS survey.

^35The TROs acknowledge that the majority of TRICARE beneficiaries direct
their concerns and inquiries to the MCSCs and not to the TRO.

^36The office of the Army Surgeon General has mandated that all Army MTFs
use the ART.

^37TRICARE beneficiaries did not seek care from all licensed civilian
providers because in some areas TRICARE serves a small percentage of the
general population.

^38Our estimate excluded the census population of residents living in
small portions of Iowa, Missouri, and Tennessee that are part of the North
Region.

^39Prior to the implementation of TRICARE, DOD provided civilian health
care to eligible beneficiaries under the Civilian Health and Medical
Program of the Uniformed Services to supplement health care provided
through MTFs.

^40Congress specified that reductions were not to exceed 15 percent in a
given year. See Department of Defense Appropriations Act for Fiscal Year
1991, Pub. L. No. 101-511, S 8012 104 Stat. 1856, 1877 (1990). This
instruction was eventually codified at 10 U.S.C. S 1079(h).

^41We previously evaluated the methodology used to transition to Medicare
level of payment and concluded this methodology complies with statutory
requirements and generally conformed with accepted actuarial practice in
Reimbursement Rates Appropriately Set; Other Problems Concern Physicians,
[34]GAO/HEHS-98-80 (Washington, D.C.: Feb. 26, 1998).

^42Two states do not have fee-for-service Medicaid programs. The remaining
three states and the District of Columbia did not provide data on Medicaid
reimbursements.

^43See 10 U.S.C. S 1079(h)(1).

^4432 C.F.R. S 199.14(j)(1)(iv)(C).

^4532 C.F.R. S 199.14(j)(1)(iv)(D). According to a TMA official, TMA
usually defines a locality using one or more zip codes.

^4632 C.F.R. S 199.14(j)(1)(iv)(E).

^47See Across-the-Board Physician Rate Increases Would be Costly and
Unnecessary, [35]GAO-01-620 (Washington, D.C.: May 24, 2001).

^48Prevailing charges are commonly used charges that fall within the range
of charges most frequently and widely used by providers in a locality for
a particular procedure or service.

Table 4: Applications for Locality Waivers and Approval Results

                                            Amount of                         
Date      Affected                       increase                          
submitted location     Affected services requested      Status             
1/23/03   Juneau, AK   All gynecological 600 percent^a  3/26/03--Approved  
                          procedures or                    for nonroutine     
                          services                         gynecological      
                          delivered by one                 procedures or      
                          provider                         services           
8/2004    Fairbanks,   All inpatient     Veterans       10/28/04--Approved 
             AK           internal medicine Administration                    
                          procedures or     rates^b                           
                          services                                            
                          delivered by                                        
                          providers                                           
                          employed by                                         
                          Fairbanks                                           
                          Memorial Hospital                                   
6/08/05   Anchorage,   All medical       40 percent     11/21/05--Approved 
             AK           procedures or                    for                
                          services                         perinatologists    
                          delivered by                     who are            
                          perinatologists                  participating      
                                                           providers^c        
6/08/05   Fairbanks,   Four medical      175-253        5/18/06--Approved  
             AK           procedures or     percent        to increase rates  
                          services                         to the rate paid   
                          delivered by two                 by the Veterans    
                          plastic surgeons                 Administration for 
                                                           professional       
                                                           services provided  
                                                           by plastic         
                                                           surgeons in Alaska 
3/03/05   Puerto       All medical       40 percent     10/26/05--Approved 
             Rico^d       procedures or                                       
                          services                                            
                          delivered by                                        
                          neurosurgeons                                       
10/19/05  Alaska,      14 obstetrical    Medicaid       03/20/06--Approved 
             Arizona,     procedures or     reimbursement                     
             Connecticut, services          amounts                           
             Montana,                                                         
             Nevada,                                                          
             Oregon,                                                          
             South                                                            
             Carolina,                                                        
             Washington,                                                      
             West                                                             
             Virginia,                                                        
             Wyoming.^e                                                       
2/23/06   Fairbanks,   All anesthesia or 200 percent    6/02/06--Approved  
             AK           pain management                  to increase rates  
                          and treatment                    by 252 percent^f   
                          services                                            
                          delivered by                                        
                          anesthesiologists                                   
3/06/06   Puerto       Five high-risk    Various:       Pending            
             Rico^d       medical           Between 160                       
                          procedures or     percent and                       
                          services          460 percent                       
                          delivered by      for                               
                          obstetricians;    obstetricians;                    
                          multiple medical  300 percent                       
                          procedures or     for                               
                          services          orthopedists;                     
                          delivered by      and 162                           
                          orthopedists and  percent for                       
                          urologists        urologists                        
7/2006    All of       All medical       Veterans       Pending            
             Alaska       services or       Administration                    
                          procedures        rates^b                           

Source: DOD.

aRequest did not include a specific increase amount. The approved waiver
was for the lesser of billed charges or 600 percent of the TRICARE
reimbursement rate.

bTMA agreed to match the Department of Veterans Affairs reimbursement
rates for these procedures.

cParticipating providers submit claims for reimbursement and are not
permitted to bill TRICARE beneficiaries an additional 15 percent above the
TRICARE reimbursement rate.

dThe TROs are not responsible for managing TRICARE in Puerto Rico because
it operates under a different contract than used for the threeTRICARE
regions.

eWhen reviewing the need for this rate adjustment, TMA compared TRICARE
reimbursement rates with Medicaid rates in 45 states for which data were
available. The 10 states listed were identified as needing a rate
adjustment based on this analysis. Each year when the TRICARE
reimbursement rates are adjusted, TMA intends to similarly determine where
this adjustment is needed.

fBecause the TRICARE reimbursement rate changed during the period between
the application and the approval of this waiver, TMA raised the percentage
of the increase.

Network waivers are used to increase reimbursement rates for network
providers up to 15 percent above the TRICARE reimbursement rate in an
effort to ensure an adequate number and mix of primary and specialty care
network civilian providers for a specific location. Between January 2002
and August 2006, 10 applications for network waivers have been submitted
to TMA. Of these, 6 network waivers have been approved by TMA and 4 have
been denied. (See table 5.)

Table 5: Applications for Network Waivers and Approval Results

                                            Amount of                         
Date      Affected        Affected       increase                          
submitted location        services       requested  Status                 
1/29/02   Fredricksburg,  33 varied      28         Denied--Application    
             VA              medical        percent^a  did not substantiate   
                             procedures or             an access to care      
                             services,                 problem                
                             encompassing                                     
                             various                                          
                             specialties                                      
3/07/02   Great Falls, MT All medical    200        Denied--Application    
                             procedures or  percent^a  did not directly       
                             services                  request a network      
                             delivered by a            waiver and increase    
                             specific                  could be handled under 
                             clinic                    TRICARE Prime Remote^b 
                             representing                                     
                             32 specialties                                   
8/13/02   Idaho           All medical    15 percent 1/15/03--Approved for  
                             procedures and            nine specialties in    
                             services                  the Mountain Home Air  
                                                       Force Base Prime       
                                                       Service Area           
12/20/02  Bozeman, MT     All            15 percent Denied--Increase       
                             obstetrical or            available under        
                             gynecological             TRICARE Prime Remote^b 
                             medical                                          
                             procedures or                                    
                             services                                         
4/08/03   Cheyenne, WY    Three newborn  To match   7/16/03--Approved      
                             inpatient      civilian   increase to 15 percent 
                             medical        insurers'  above TRICARE          
                             procedures or  rates      reimbursement rates    
                             services                                         
2/03 and  Watertown, NY   Deliveries     Not        Denied-Incomplete      
3/03      Norwich, CT     provided by    specified  application package    
                             nurse midwives            submitted              
                             in NY and                                        
                             emergency                                        
                             gynecological                                    
                             services in CT                                   
9/26/03   Ft. Leonard     All medical    15 percent 12/24/03--Approved for 
             Wood and        procedures and            11 specialties in Ft.  
             Springfield, MO services                  Leonard Wood Prime     
                             delivered by              Service Area Denied    
                             network                   for Springfield        
                             providers                                        
1/05/05   Delta Junction  All primary    15 percent 3/30/05--Approved for  
             and Tok, AK     care medical              nonmental health       
                             procedures and            medical care services, 
                             services                  excluding laboratory   
                                                       services               
6/10/05   Norfolk, VA     All medical    15 percent 7/08/05--Approved      
                             procedures and                                   
                             services for                                     
                             three                                            
                             specialties                                      
                             delivered by a                                   
                             group of                                         
                             pediatric                                        
                             specialists                                      
3/06/06   Rapid City, SD  All            Not        5/16/2006--Approved a  
                             obstetrical or specified  15 percent increase    
                             gynecological             for one group of       
                             services                  obstetricians and      
                             delivered by a            gynecologists          
                             group of                                         
                             specialists                                      

Source: DOD.

aAccording to TMA, the waiver requesters did not understand that the
maximum network waiver is 15 percent over TRICARE reimbursement rates. If
the waiver had been granted it would have been limited to 115 percent of
the TRICARE reimbursement rate.

bTRICARE Prime Remote is a specialized version of TRICARE Prime available
for active duty members when they are assigned to duty stations in areas
not served by the military health care system. Under this program,
civilian network providers can be reimbursed up to 15 percent above the
TRICARE reimbursement rate. Family members who reside with service members
who are enrolled in TRICARE Prime Remote are eligible to enroll in and
receive care under TRICARE Prime Remote for Active Duty Family Members.

Providers, TRICARE beneficiaries, MCSCs, as well as TRO directors may
apply for a reimbursement rate waiver by submitting written requests
supporting the need for reimbursement rate increases on the grounds that
access to health care services is impaired due to low reimbursement rates.
These requests must contain specific justifications to support the claim
that access problems are related to reimbursement rates and must include
information such as the number of providers and TRICARE beneficiaries in a
location, the availability of MTF providers, geographic characteristics,
and cost effectiveness of granting the waiver. All waiver requests are
submitted to the TRO directors, who review the application and make a
decision whether to forward the request to the Director of TMA through
TMA's contracting officers, who are responsible for administering the
MCSCs' contracts. According to a TMA official, the contracting officers
work with TMA analysts to review the submitted requests and verify whether
there is an insufficient number of providers in the area and conduct a
cost-benefit analysis before making a recommendation to the Director of
TMA that the waiver be accepted or denied. Each analysis is tailored to
the specific concerns outlined in the waiver requests. According to this
official, TMA conducts these additional analyses to ensure that an
increase in reimbursement rates would actually alleviate access problems
and that access was not impaired due to such things as administrative
problems or providers' unhappiness with claims payment timeliness or
accuracy.

Once a waiver is granted, there is no mechanism that automatically
terminates it. According to a TMA official, there was an expectation
within TMA that the continued need for existing waivers would be evaluated
on an annual basis.^49 However, waivers have been reviewed on a periodic,
ad hoc basis rather than on an annual basis as expected. When TMA
implemented new MCSC contracts in fiscal years 2004 and 2005, TMA and the
MCSCs discussed existing waivers and mutually agreed to extend all of them
because they continued to believe that these waivers were necessary to
ensure access to care. However, without a formal analysis of how these
waivers have impacted access in the areas in which they were implemented,
the actual extent of their effect is unclear.

^49The regulation authorizing locality waivers based on severe impairment
of access states that those decisions are "subject to review and
determination or modification at any time ... if circumstances change so
that adequate access to health care services would no longer be severely
impaired." See 32 C.F.R. S 199.14(j)(1)(iv)(D)(1). The regulations for the
other two waivers do not specifically address review.

Providers Cite Concerns About TRICARE's Administrative Issues as Reasons for Not
Accepting Nonenrolled TRICARE Beneficiaries, but MCSCs Use Various Methods to
Address These Concerns

Since the inception of TRICARE, both network and nonnetwork civilian
providers have expressed concerns about administrative issues or "hassles"
associated with the program, which, when combined with low reimbursement
rates, make them less likely to accept nonenrolled TRICARE beneficiaries
as patients. TMA and MCSC officials stated that because TRICARE
beneficiaries usually represent only a small percentage of a provider's
practice, both network and nonnetwork civilian providers may not be as
knowledgeable about the program and its unique administration
requirements. Adding to the potential for confusion, while some
administrative requirements apply to all TRICARE beneficiaries, the
TRICARE program also has separate and distinct administrative requirements
for enrolled and nonenrolled TRICARE beneficiaries. For example, network
providers must meet specific time frame and documentation requirements
when referring enrolled TRICARE beneficiaries for specialty care or when
delivering specialty care to enrolled TRICARE beneficiaries. However,
referral standards usually do not apply to nonenrolled TRICARE
beneficiaries. Additionally, according to the initial round of TMA's
civilian provider survey, 15 percent of network respondents and 7 percent
of nonnetwork respondents who gave explanations for why they were not
accepting nonenrolled TRICARE beneficiaries as new patients cited
administrative inconveniences as a reason. These administrative
inconveniences included too much paperwork, problems understanding the
benefits and policies, and a lengthy referral process.

MCSC and TMA officials also told us that providers' past experiences with
TRICARE administrative issues may have biased their opinion of the
program, while, in some cases, there have been improvements. For example,
according to MCSCs and TMA officials, some providers perceive that
previously identified claims processing problems persist and cite problems
with timeliness and claims payment decisions as reasons for not accepting
TRICARE patients. While claims processing problems plagued the TRICARE
program in its early years, we reported in 2003 that efforts had been made
to improve claims processing efficiency, and as a result, claims were
being processed in a more timely manner, though some inefficiencies
remained.^50 In addition, some TRO officials and providers said that
TRICARE claims payment decisions sometimes are not always clear to
providers and, as a result, they may believe problems with claims
processing exist. This is due in part to the fact that TRICARE's claims
processing outcomes may differ from Medicare's--despite the programs'
similarities in reimbursement rates--due to different benefit structures
and different claims processing tools that are used to prevent
overpayment. Furthermore, because they do not always understand the
program, providers and TRICARE beneficiaries may complain about
adjudication decisions on claims that have been processed correctly.
Problems may also occur because providers and TRICARE beneficiaries may
make mistakes when filing their claims.

In efforts to address problems related to administrative issues, MCSCs
conduct a variety of outreach efforts to educate nonnetwork civilian
providers on TRICARE requirements and assist with both actual and
perceived administrative concerns. For example, MCSCs provide on-line
tools and toll-free telephone support to mitigate administrative issues.
Also, one MCSC works with state medical associations to address provider
concerns and to ensure that information about TRICARE requirements is
included in medical association newsletters. Each of the MCSCs has
provider relations representatives located in areas throughout the region
outside of their central office. These provider relations representatives
schedule opportunities to meet with nonnetwork civilian providers that
include booths or speaking engagements at health fairs, conferences, and
other provider events and, when necessary, work one-on-one with network
and nonnetwork civilian providers to provide instructions on ways to
respond to TRICARE's administrative requirements and to help eliminate the
burden of unnecessary paperwork. According to MCSCs, these efforts have
been helpful because they are not experiencing widespread problems with
TRICARE beneficiaries' access to care. However, similar to the use of
waivers, the actual extent to which these efforts have improved access to
care is unclear.

^50See GAO, Defense Health Care: TRICARE Claims Processing Has Improved
but Inefficiencies Remain, [36]GAO-04-69 (Washington, D.C.: Oct. 15,
2003).

Though TMA and MCSCs Attempt to Address Impediments That Are Not Specific to
TRICARE, These Issues Cannot Always be Resolved

TMA and MCSCs attempt to address impediments to network and nonnetwork
provider acceptance of nonenrolled TRICARE beneficiaries that are not
specific to the TRICARE program. However, TMA and MCSCs cannot always
resolve access problems related to these impediments. Some network and
nonnetwork civilian providers may be unwilling to accept TRICARE
beneficiaries as patients because their practices are already at capacity.
For example, the initial round of TMA's civilian provider survey found
that 14 percent of providers in the 20 states surveyed were not available
to accept any new patients, including TRICARE patients, privately insured
patients, or patients who were paying for their own care. According to the
MCSCs, access problems related to practice capacity are more likely to
occur in geographically remote areas that have few providers than in more
densely populated areas with more providers. However, one MCSC stated that
access problems related to practice capacity can also occur in urban areas
where the medical needs of the population exceed the supply of specific
specialties, such as dermatology.

TRICARE beneficiaries' access to care is also impeded in areas where there
are insufficient numbers and types of civilian providers, both network and
nonnetwork, to cover the local demand for health care. In these locations,
the entire community is impacted by provider shortages. Consequently,
TRICARE beneficiaries, as well as all other local residents, must
sometimes travel long distances to obtain health care. MCSC officials
stated that each TRICARE region includes areas with civilian provider
shortages. For example, in TRICARE's North Region, Watertown, New York,
has an insufficient number of certain specialty providers for its
population, which includes TRICARE beneficiaries stationed at a nearby
military installation whose MTF is too small to handle all of their health
care needs. TRICARE's South Region contains many rural areas with few
providers, including multiple locations in Oklahoma and Texas. Likewise,
in TRICARE's West Region, MCSC officials stated that there are provider
shortages in various locations, including Cheyenne, Wyoming, and Mountain
Home, Idaho.

TMA and the MCSCs have limited means of responding to access-to-care
impediments in areas with network and nonnetwork civilian provider
shortages, although TMA has adopted two bonus payment systems that mirror
those used by Medicare for these areas.^51 In June 2003, TMA began paying
providers a 10 percent bonus payment for the services rendered in Health
Professional Shortage Areas, which the Department of Health and Human
Services has identified as having a shortage of primary care, dental, or
mental health providers.^52 Also, in January 2005, TMA followed Medicare
in initiating payment of a 5 percent bonus for services rendered by
primary care providers in geographic areas designated by the Department of
Health and Human Services as Physician Scarcity Areas,^53 a program that
is only operational through 2007.^54 Providers who are eligible for and
wish to receive either of these bonus payments must include a specific
code on every claim they submit to obtain these additional payments.
According to a TMA official, TMA does not know the extent to which these
payments have been used and has not evaluated the effectiveness of these
bonus payments on access to care.

TMA and the MCSCs have attempted to overcome obstacles related to practice
capacity and provider shortages by using high-ranking military personnel
and field provider relation representatives to make personal appeals to
network and nonnetwork civilian providers. In August 2004, the ASD for
Health Affairs wrote a letter to providers appealing to their patriotism
and asking them to accept TRICARE beneficiaries as patients. One MCSC
official claimed that this letter has resulted in additional providers
accepting both enrolled and nonenrolled TRICARE beneficiaries as patients.
In addition, in certain areas where access is problematic, MCSC provider
relations representatives or TRO officials personally call on providers to
solicit their support of military personnel through TRICARE.

^51TMA has the authority to implement bonus payment programs for
physicians in areas determined to be medically underserved areas by the
Department of Health and Human Services for Medicare purposes. TMA is
required to make the bonus payments in the same amounts as authorized for
Medicare. See 32 C.F.R. S 199.14(j)(2).

^52See 42 U.S.C. S 1395l(m). Health Professional Shortage Area
designations are based on shortages of primary medical care, dental, or
mental health providers and may be rural or urban areas, population
groups, or medical or other public facilities.

^53Physician Scarcity Area designations are based on the calculation of
the ratios of active providers of primary and specialty care to Medicare
beneficiaries in every county in the United States. See 42 U.S.C. S
1395l(u).

^54The Medicare bonus payment program for Physician Scarcity Areas expires
at that time.

NDAA Responsibilities for Nonenrolled TRICARE Beneficiaries' Access to Care Are
Being Carried Out by TMA and the MCSCs, but Were Not Formally Designated to a
Senior Official

Various TMA offices, including the TROs, and the MCSCs are carrying out
the responsibilities that are outlined in the NDAA for fiscal year 2004 to
take actions to ensure nonenrolled beneficiaries' access to care, such as
educating civilian providers and recommending reimbursement rate
adjustments--though these responsibilities were not formally designated to
a single, senior official. For example, TMA's Communications and Customer
Service Directorate has primary responsibility for education and marketing
activities for all civilian providers--including nonnetwork
providers--although the TROs and MCSCs also share this responsibility.
(See table 6.) This office oversees a national contract for marketing and
education materials with input from the TROs and the MCSCs. As part of
this responsibility, this office designs and prepares marketing and
education materials in conjunction with its contractor. On a regional
level, the TROs and MCSCs also have responsibilities for educating both
network and nonnetwork civilian providers. As part of these efforts, each
TRO works with its region's MCSC to host town-hall meetings and to provide
briefings for network and nonnetwork civilian providers. In addition, the
MCSCs contact, support, educate, and market to both network and nonnetwork
civilian providers. For example, one MCSC distributes its monthly provider
newsletter or bulletin to nonnetwork civilian providers who submit 25 or
more TRICARE claims in 1 year. MCSCs also provide educational materials to
civilian providers, including nonnetwork providers, and, in some
instances, schedule provider seminars for nonnetwork providers.

Table 6: Responsibilities Outlined in the NDAA for Fiscal Year 2004 and
the Entities Covering Them

Responsibilities                          Entities                         
Educate nonnetwork civilian providers        o TMA's Communications and    
about Standard                               Customer Services Directorate 
                                                o TROs                        
                                                o MCSCs                       
Encourage nonnetwork civilian providers      o MCSCs^a                     
to accept nonenrolled TRICARE                                              
beneficiaries as patients under Standard                                   
Ensure that nonenrolled TRICARE              o TMA                         
beneficiaries have information necessary     o TROs                        
to locate nonnetwork providers readily       o MCSCs                       
Recommend adjustments in provider            o TROs^b                      
reimbursement rates to ensure adequate                                     
availability of nonnetwork providers for                                   
nonenrolled TRICARE beneficiaries                                          

Source: GAO analysis of DOD information.

aMCSCs solicit nonnetwork providers to accept TRICARE beneficiaries when
nonenrolled TRICARE beneficiaries cannot locate providers in a specific
location.

bAlthough the TROs are responsible for preparing and submitting
justification for payment waivers, other interested parties, including
MCSCs, providers, and TRICARE beneficiaries can submit requests for
payment adjustments through the TROs.

Actions to encourage both network and nonnetwork civilian providers to
accept nonenrolled TRICARE beneficiaries as patients are currently being
addressed by the MCSCs. First, in areas with network civilian providers,
MCSCs are required by contract to ensure that the networks are robust
enough to provide health care to both enrolled and nonenrolled TRICARE
beneficiaries in that location. As a result, MCSCs strive to ensure
adequate numbers of network civilian providers who could also provide care
to nonenrolled TRICARE beneficiaries. In addition, when nonenrolled
TRICARE beneficiaries request assistance with finding providers, MCSCs
work to encourage civilian providers, who could be either network or
nonnetwork, to accept these TRICARE beneficiaries as patients. In some
instances when a provider cannot be easily identified for a TRICARE
beneficiary, MCSCs told us their provider relations representatives, who
are knowledgeable about providers in their regions, will call on
individual providers to encourage them to accept these TRICARE
beneficiaries as patients. Nonetheless, as contractually required, MCSCs
are focused on recruiting civilian providers for their networks and do not
proactively recruit nonnetwork civilian providers to accept TRICARE
beneficiaries as patients. Efforts to obtain nonnetwork civilian providers
for nonenrolled TRICARE beneficiaries using the Standard option are
initiated on an as-needed basis.

Additionally, TMA, its TROs, and the MCSCs all have procedures and tools
in place aimed at ensuring that nonenrolled TRICARE beneficiaries can
readily locate both network and nonnetwork civilian providers. A central
TMA office maintains an online directory of both network and nonnetwork
civilian providers who have accepted TRICARE beneficiaries as patients in
the last 2 years. MCSCs' Web sites provide a link to this TMA directory
and also provide a directory of network civilian providers in their
regions. Also, the TROs provide services, including assistance with
locating civilian providers, to any TRICARE beneficiary who contacts them.
Among other services they provide, Beneficiary Service Representatives at
MCSC-operated TRICARE Service Centers assist "walk-in" TRICARE
beneficiaries--regardless of their enrollment status--to locate providers.
In addition, all MCSCs are contractually required to have representatives
available by phone 24 hours a day, 7 days a week to assist with locating a
network provider. One MCSC told us that if a network provider is not
available, the phone representatives will help locate nonnetwork providers
in the area.

Finally, the TROs currently are responsible for recommending reimbursement
rate adjustments--that have been initiated by their offices, MCSCs,
providers, and TRICARE beneficiaries--to increase provider reimbursement
rates in areas where access to care is impaired for both enrolled and
nonenrolled TRICARE beneficiaries. Since the TROs were established in
2004, two of the three TROs have recommended such increases to provider
reimbursement rates in their regions.^55

Nonetheless, TMA has not formally designated a senior official to take
responsibilities for nonenrolled TRICARE beneficiaries and nonnetwork
civilian providers as outlined in the NDAA for fiscal year 2004. According
to TMA officials, this role was assumed by the ASD for Health Affairs, who
is responsible for overseeing DOD's health programs and resources, because
these responsibilities are included in the official directive for this
position.^56 According to senior TMA officials, the ASD for Health Affairs
intended to delegate these responsibilities to the TRO directors. However,
while this intent was communicated verbally, the delegation was never
formalized in writing. TRO officials told us that while they were aware of
the ASD for Health Affairs' intent, they never received official
notification or designation outlining these responsibilities and
expectations. As a result, at the time of our site visits, the TROs had
not undertaken any efforts beyond the level of assistance they were
already providing to nonenrolled TRICARE beneficiaries and nonnetwork
civilian providers.^57 Nonetheless, during the time of our review, each
TRO was in the process of assigning responsibilities for nonenrolled
beneficiaries to a specific staff member in accordance with the staffing
plan TMA established for the TROs. Additionally, officials at each of the
TROs told us that they provide services and assistance to all TRICARE
beneficiaries regardless of enrollment status.

^55Prior to the establishment of the TROs, regional offices, referred to
as Lead Agents, were responsible for coordinating and submitting waiver
request packages.

^56DOD Directive 5136.1, which describes the responsibilities, functions,
relationships, and authorities of the ASD for Health Affairs, would
include these responsibilities.

To more directly assign responsibilities for nonenrolled beneficiaries'
access to care to the TROs, the NDAA for fiscal year 2006 specifically
instructs the TROs to (1) identify nonnetwork providers who will accept
nonenrolled TRICARE beneficiaries as patients; (2) communicate with
nonenrolled TRICARE beneficiaries; (3) conduct outreach to nonnetwork
providers, encouraging their acceptance of TRICARE beneficiaries as
patients; and (4) publicize which nonnetwork providers in each region
accept nonenrolled TRICARE beneficiaries as patients.^58 It also requires
that DOD submit annual reports to Congress on efforts to implement these
activities.

Agency Comments and Our Evaluation

We received comments on a draft of this report from DOD (see app. VI). In
its comments DOD stated that it appreciated the collaborative, insightful,
and thorough approach that was taken with this important issue. However,
DOD disagreed with our finding that it had not formally designated a
senior official to ensure nonenrolled beneficiaries' access to care,
including adequate participation by nonnetwork providers, as required by
the NDAA for fiscal year 2004. DOD stated that DOD directive 5136.12
assigned these duties to the TMA director and the TROs by designating the
TMA Director as the program manager for TRICARE health and medical
resources and other responsibilities. DOD stated that this responsibility
clearly encompasses provision of care to nonenrolled beneficiaries and
therefore meets the NDAA requirement.

^57Since the NDAA for 2006, which tasked the TROs with responsibility for
monitoring, oversight, and improvement of the Standard option within their
respective regions, all three TROs have undertaken a number of new
initiatives to meet these responsibilities.

^58See Pub. L. No. 109-163, S 716, 119 Stat. 3136, 3345.

We continue to believe that DOD has not adequately addressed the
requirement in the mandate. First, in multiple interviews and e-mail
exchanges during our audit work, senior DOD officials told us that no
specific actions had been taken to designate a senior official and that,
by default, the duties fell to the ASD for Health Affairs who is
responsible for overseeing DOD's health programs and resources. Further,
during our site visits, TRO officials told us they had never been
officially notified of their responsibilities and expectations for
nonenrolled beneficiaries and nonnetwork providers. As a result, at the
time of our site visits the TROs told us they had not undertaken any
efforts beyond the level of assistance they had already been providing to
nonenrolled beneficiaries and nonnetwork civilian providers. Second, we do
not agree with DOD that the terms of the pre-existing directive satisfy
the requirements of the mandate. Contrary to the requirement in the law
that one official be designated, the directive generally assigns
responsibilities to TMA, as well as to multiple TROs on a geographic
basis. While part of the TROs' responsibilities include developing a plan
for the delivery of healthcare within the geographic region, the mandate
contemplated a more global approach to addressing provider participation,
specifically requiring one senior official to ensure provider
participation in each market area.

DOD also provided technical comments that we incorporated where
appropriate.

We are sending copies of this report to the Secretary of Defense,
appropriate congressional committees, and other interested parties. We
will also make copies available to others upon request. In addition, the
report is available at no charge on the GAO Web site at
[37]http://www.gao.gov . If you or your staff have questions about this
report, please contact me at (202) 512-7119. Contact points for our Office
of

Congressional Relations and Public Affairs may be found on the last page
of this report. GAO staff who made major contributions are listed in
appendix VII.

Marcia Crosse
Director, Health Care

Appendix I: Scope and Methodology

The National Defense Authorization Act (NDAA) for fiscal year 2004
directed GAO to review the processes, procedures, and analysis used by the
Department of Defense (DOD) to determine the adequacy of the number of
network and nonnetwork civilian providers and the actions taken to ensure
access to care for nonenrolled TRICARE beneficiaries. Specifically, this
report describes (1) how TRICARE Management Activity (TMA) and its managed
care support contractors (MCSC) evaluate nonenrolled TRICARE
beneficiaries' access to care and the results of these evaluations; (2)
the impediments to civilian provider acceptance of nonenrolled TRICARE
beneficiaries, and how they are being addressed; (3) how DOD has
implemented the fiscal year 2004 NDAA requirements to take actions to
ensure nonenrolled TRICARE beneficiaries' access to care.

TMA and MCSCs' Evaluation of Nonenrolled Beneficiaries' Access to Care and the
Status of Access

To describe how TMA evaluates nonenrolled TRICARE beneficiaries' access to
care, we interviewed and obtained documentation from officials in TMA's
Health Program Analysis and Evaluation Directorate about its civilian
provider survey, called the Survey on Continued Viability of TRICARE
Standard. Although DOD was required to conduct a survey to assess
nonenrolled beneficiaries' access to care under the Standard option, the
survey was administered to both network and nonnetwork civilian providers
since nonenrolled beneficiaries can receive care from these providers
under both the Extra and Standard options. We reviewed the survey
methodology, including the methods for selecting respondents, the survey's
response rate,^1 the designation of TRICARE market areas, and the survey
instrument itself. We also reviewed TMA's methods for randomly sampling
market areas and providers and their administration of the survey
instrument and found these decisions methodologically sound and
statistically valid. In addition, we reviewed the survey results,
including the published results and analysis. While we did not
independently validate the survey data, we did assess the reliability of
the data by reviewing survey documentation and internal controls and by
interviewing knowledgeable agency officials and found that the data were
sufficiently reliable for our purposes. To obtain information on how the
civilian provider survey was developed, we interviewed officials at the
Office of Management and Budget (OMB) because the Paperwork Reduction Act
required OMB approval before it could administered. We also interviewed
TRICARE beneficiary group representatives who had recommended sites for
inclusion in the survey where nonenrolled TRICARE beneficiaries' access to
health care may be impaired. To identify how the civilian provider survey
results would be used to evaluate access to care, we met with officials of
TMA's Office of Health Plan Operations, the director of TMA's Standard
Programs Division, and officials from the three TRICARE Regional Offices
(TROs).

^1The survey had a 55 percent response rate.

We also reviewed TMA's annual Health Care Survey of Defense Beneficiaries
and compared it with a survey conducted by the Department of Health and
Human Services' Consumer Assessment of Health Care Providers and System of
individuals who received health care through civilian health insurers.
These surveys include identical questions on access-to-care issues that
allowed for comparative analysis of the opinions expressed by TRICARE
beneficiaries and civilian health plan users. Using data from the
2003-2005 surveys we analyzed nonenrolled TRICARE beneficiaries' responses
to access to care and compared them with results from the Consumer
Assessment of Health Care Providers and Systems. We did not independently
verify the data from each of these surveys; however, we did assess the
reliability of these data by reviewing related documentation and
interviewing knowledgeable agency officials and found that they were
sufficiently reliable for our purposes.

To further identify and describe other methods TMA and MCSCs used to
evaluate care access for nonenrolled TRICARE beneficiaries, we met with
officials of TMA, the TROs, MCSCs, and each of the services' Office of the
Surgeon General to obtain information on the systems they use for
monitoring TRICARE beneficiary feedback and conducting other types of
analyses, such as monitoring health care claims. The TROs and military
services provided information on the Assistance Reporting Tool, a system
that is being developed to monitor and archive TRICARE beneficiary
feedback. The MCSCs also shared information about their independent
systems for maintaining TRICARE beneficiary feedback. TMA, MCSC, and
military service officials provided us with examples of TRICARE
beneficiary feedback reports and health care claims data for nonenrolled
TRICARE beneficiaries that TMA uses to evaluate access to care for this
population. We did not independently verify data from the MCSCs' TRICARE
beneficiary feedback systems and TMA's claims data files; however, we did
assess the reliability of these data by interviewing knowledgeable
officials and reviewing previous GAO work using these data and found that
they were sufficiently reliable for our purposes. To identify how the
MCSCs monitor access to care both in Prime Service Areas and in areas
where networks have not been established, we obtained information about
their techniques for network development and for civilian provider
recruitment.

Impediments to Provider Acceptance of Nonenrolled TRICARE Beneficiaries and How
They Are Being Addressed

To identify and describe the impediments to providers' acceptance of
nonenrolled TRICARE beneficiaries, we obtained information from TMA Health
Plan Operations, TMA Health Program Analysis and Evaluation Directorate,
TRO, and MCSC officials on the possible reasons that providers were
unwilling to accept nonenrolled TRICARE beneficiaries as patients. We also
met with representatives of TRICARE beneficiary groups and the American
Medical Association to obtain anecdotal information about impediments to
health care access and to supplement our data on possible access-to-care
problems.

To identify and describe how impediments, such as TRICARE reimbursement
rates and administrative issues, are being addressed, we reviewed
TRICARE's reimbursement policies and authorities as well as provider
outreach strategies and marketing and education efforts of TMA and its
MCSCs. We also reviewed the procedures for issuing waivers used to
increase reimbursement rates in areas where TMA determines that access to
care is impaired, including the application, review, and decision process.
We then obtained information from TMA's Office of Medical Benefit and
Reimbursement Systems on all of the completed and pending requests for
reimbursement waivers. Finally, we interviewed MCSC and TRO officials to
identify the administrative issues that impact provider acceptance of
TRICARE beneficiaries and how they conduct outreach efforts to alleviate
problems and/or educate providers about these issues. However, we did not
assess the extent to which these efforts improved civilian providers'
acceptance of nonenrolled beneficiaries as patients.

DOD Implementation of NDAA Fiscal Year 2004 Requirements for Oversight of
Nonenrolled Beneficiaries' Access to Care

To examine how DOD has implemented the NDAA fiscal year 2004 requirements
for oversight of nonenrolled TRICARE beneficiaries' access to care, we
reviewed pertinent sections of this legislation outlining the tasks that
DOD must perform to comply with the law. We interviewed officials in TMA's
office of Health Plan Operations, the director of the TRICARE Standard
Programs Division, and officials in each of the TROs. To identify whether
and how the oversight responsibilities outlined in the NDAA were being
managed, we obtained information from TRO and MCSC officials for each of
the three regions and TMA's Communications and Customer Service
Directorate to identify activities in place to educate network and
nonnetwork providers about TRICARE Standard, to encourage network and
nonnetwork providers to treat nonenrolled TRICARE beneficiaries, and to
ensure that nonenrolled TRICARE beneficiaries have the information
necessary to locate providers readily.

We conducted our work from July 2005 through December 2006 in accordance
with generally accepted government auditing standards.

Appendix II: Methodology Used for TMA's Civilian Provider Survey

The National Defense Authorization Act (NDAA) for fiscal year 2004
required that the TRICARE Management Activity (TMA) conduct surveys in
TRICARE market areas within the United States to determine how many health
care providers are accepting new patients under TRICARE Standard in each
market area. The NDAA did not stipulate how TMA should define a market
area but specified that 20 market areas should be completed each fiscal
year until all market areas in the United States have been surveyed.
Although the mandate focused on Standard, TMA officials designed the
survey to monitor access to care from both network and nonnetwork
providers since nonenrolled TRICARE beneficiaries can receive care through
both the Standard and Extra options.

Before TMA could begin administering the civilian provider survey, it
required review and clearance from the Office of Management and Budget
(OMB) under the Paperwork Reduction Act.^1 Subsequent to this review, OMB
approved a four-item questionnaire for the study administered in fiscal
year 2005.^2 (See app. III for the approved questionnaire.)

In designing the Survey on Continued Viability of TRICARE Standard (the
civilian provider survey), TMA defined the individual states and the
District of Columbia as 51 market areas--a definition that will allow TMA
to complete the survey of all markets within a 3-year period and to
develop estimates of access to health care at both the state and national
levels. However, in order to provide information on smaller geographic
areas where nonenrolled TRICARE beneficiaries may be having problems
finding either network or nonnetwork providers, TMA supplemented the
statewide samples by oversampling^3 from submarkets within each state
called Hospital Service Areas (HSA). The HSA geographic designation is
derived from a Dartmouth University study that groups zip codes into
distinct sets based on the analysis of patient travel patterns to the
hospital or hospitals they use most often. TMA endorsed the HSA submarket
methodology because these areas are nonoverlapping and encompass all of
the United States. In addition, nonenrolled TRICARE beneficiaries reside
in almost all of the 3,436 HSAs. TMA's methodology asks for oversamples
from HSAs in the 24 states where 80 percent of nonenrolled TRICARE
beneficiaries reside. When the study is complete in fiscal year 2007, TMA
will have survey data from 2 HSAs selected randomly from each of the 24
states where the majority of nonenrolled TRICARE beneficiaries live, as
well as information from HSAs purposively selected because TRICARE
beneficiaries or TROs were concerned with access in these areas.

^1The Paperwork Reduction Act requires that all federal agency activities
that involve collecting information from the public involving 10 or more
people be approved by OMB to ensure that collection of this information
will have a minimum burden on the public. See 44 U.S.C. SS 3507 and 3508.

^2DOD's submission package to OMB included additional questions that OMB
did not approve for inclusion in the fiscal year 2005 survey because they
did not directly respond to the NDAA for fiscal year 2004. The excluded
questions that did not satisfy OMB's clearance criteria included the
percentage of a provider's current patient population that uses any form
of TRICARE, a provider's willingness to accept new Medicare patients, and
if a provider is not accepting new Medicare patients, the reasons why.

^3The purpose of oversampling is to increase the sample size of some
target subpopulation. In this case the target subpopulation is several
defined geographic locations within each state that were randomly selected
for analysis. Oversampling this subpopulation provides TMA with reliable
information about health care providers at the local level to supplement
what they learn about providers in each state as a whole.

To select the market areas that would be surveyed in fiscal year 2005, TMA
randomly selected sites from the individual states and the District of
Columbia and randomly selected 12 submarket HSAs within the 20 market
areas. In addition, in order to be able to respond to TRICARE beneficiary
concerns that access in some locations was impaired, TMA selected 17
additional submarket HSAs that TRICARE beneficiaries had identified as
problem areas in terms of access to health care. Four of these 17 sites
were outside the 20 selected state-wide market areas because TRICARE
beneficiaries had raised concerns about access issues in these locations.

TMA selected its sample for the civilian provider survey from the American
Medical Association Masterfile, a data set of U.S. providers that includes
data on all providers who have the necessary educational and credentialing
requirements. This Masterfile did not differentiate between TRICARE's
network and nonnetwork civilian providers. However, TMA selected this file
because it is widely recognized as one the best commercially available
lists of providers in the United States and contains over 600,000 active
providers along with their addresses, phone numbers, and information on
practice characteristics, such as their specialty.^4 Although the
Masterfile is considered to contain most providers, deficiencies in
coverage and inaccuracies in detail remain. Therefore, TMA attempted to
update providers' addresses and phone numbers and to ensure that providers
were eligible for the survey.

^4The providers in the American Medical Association's Masterfile are both
medical doctors and doctors of osteopathy.

From this Masterfile, TMA expected to randomly sample about 1,000
providers from each market and submarket area--a sample size that would
achieve TMA's desired margin of error.^5 However, in some instances, a
sample of 1,000 exceeded the number of providers in the market or
submarket area, in which case TMA attempted to contact all providers in
that area. Overall, TMA initially sampled about 41,000 providers,
including both network and nonnetwork civilian providers. After verifying
phone numbers and eliminating ineligible providers,^6 TMA attempted to
contact about 33,000 office-based providers in the 20 states and 29 HSAs
evaluated in fiscal year 2005. When analyzing provider responses, TMA
weighted each response so that the sampled providers represented the
population from which they were selected.

To administer the civilian provider survey TMA hired a contractor, who
conducted the fieldwork for this project. The contractor mailed a combined
cover letter and questionnaire to the billing managers for all providers
in their sample. If the provider did not respond to the mailed
questionnaire, TMA followed up with a second mailing 3 weeks later and
conducted a telephone interview within 30 days of the first mailing for
those who did not respond to the mailed survey.^7 During the survey
period, telephone interviewers called each provider's office up to 10
times in an attempt to obtain a completed survey.

Because the overall response rate to the survey was 55 percent, TMA
conducted an analysis of their findings to determine whether the results
were biased by a high percentage of providers not responding. Although TMA
officials told us that OMB's approval for the fiscal year 2005 survey did
not specify a required response rate, OMB's public guidance specifies that
if response rates are lower than 80 percent, agencies need to conduct a
nonresponse analysis.^8 Such an analysis is used to verify that
nonrespondents to the survey would not answer differently from those who
did respond and that the respondents are representative of the target
population, thus ensuring that the data are statistically valid. When
conducting this analysis, TMA interviewed a sample of providers who did
not respond to the original survey and compared their responses and
demographics with the original survey respondents.^9 TMA also compared
nonrespondents' demographics with those of the target population of health
care providers. The results of TMA's nonresponse analysis indicate that
the survey respondents are representative of the target population of
providers.

^5TMA ultimately dropped the sample size for each market and submarket
area to about 800 providers in each location in order to accommodate both
randomly and judgmentally selected sites and remain within its resourced
and OMB-approved overall sample of about 40,000 physicians. According to
TMA officials, the reduction in sample size did not affect the sample
outcomes and their ability to project results.

^6According to TMA officials, providers were ineligible for such reasons
as being employed by the military or the government.

^7The questionnaire or phone interview was directed to an administrative
staff person in the provider's office.

^8According to OMB officials, this is a common industry practice when
there is potential for concern about the reliability of survey results due
to a low response rate.

The nonresponse analysis provided additional useful information for TMA.
First, it did not show a difference in the rate that responding and
nonresponding network civilian providers were aware of the TRICARE
program. However, it did show a statistically significant difference in
the rate of awareness between responding and nonresponding nonnetwork
civilian providers. These results indicate that having a familiarity with
TRICARE increases a provider's incentive to respond to the survey. In
order to adjust for this bias, TMA could have calculated an adjustment to
the sampling weights--an adjustment that has not been applied to the
survey results. As a result, the unweighted survey results tend to
overstate civilian providers' awareness and acceptance of TRICARE.^10
Nonetheless, TMA's survey contractor noted that the survey results are not
problematic if the survey is used to compare changes in awareness and
acceptance from year to year. Further, TMA's use of the unadjusted results
of the initial survey phase as indicators of areas in which to focus
marketing and outreach efforts is appropriate because TMA is using it to
make relative comparisons of the areas surveyed.

TMA's survey of civilian providers continues, and their analysts expect to
complete data collection for the nation over a 3-year period ending in
fiscal year 2007. Although TMA's efforts meet the mandate's requirement of
surveying 20 market areas each fiscal year until all market areas were
surveyed, collecting survey results over this period may limit TMA's
stated goal of deriving an overall national estimate because the national
estimate will combine data collected over several years rather than during
one relatively short time period, as well as the likelihood different
instruments will be used over time. For example, four additional questions
may be added to the fiscal year 2006 survey. TMA officials told us that
the time lag could potentially impact the results used to derive a
national estimate, but that their limited resources for this study prevent
them from conducting a nationwide survey under a shorter time frame.

^9For example, TMA compared provider specialty and network status between
the original respondents and the nonrespondents in bias analysis.

^10According to TMA officials, TMA expects to provide post-survey
weighting to account for differential response rates.

Appendix III: Civilian Provider Survey Instrument

The National Defense Authorization Act (NDAA) for fiscal year 2004
directed the Department of Defense (DOD) to monitor nonenrolled TRICARE
beneficiaries' access to care under the TRICARE Standard option.^1
Although the mandate focused on Standard, nonenrolled TRICARE
beneficiaries can receive care from both nonnetwork civilian providers
through the Standard option and from network civilian providers through
the Extra option. Beneficiaries can move freely between these options
depending on their choice of civilian provider each time they receive
care. Therefore, DOD's survey was designed to monitor nonenrolled
beneficiaries' access to care from both network and nonnetwork providers.
As each cycle of the survey is completed, TMA will be able to project
survey results to the sampled market areas. When all cycles of the survey
are complete, TMA will be able to project the survey data at the national
level.

Following is the actual survey instrument that was used to obtain
information from civilian providers. The staff administering this survey
were not aware of whether the civilian providers they contacted were
network or nonnetwork, and the same survey questions, which specifically
mentioned the Standard option, were asked of all respondents. Nonetheless,
if network civilian providers were to deliver care to nonenrolled
beneficiaries, the responding providers' staff would likely understand
that this care would be provided under the Extra option. Therefore, for
the purposes of the survey, the term "Standard" referred to both the
Standard and Extra option.

^1See Pub. L. No. 108-136, S 723, 117 Stat. 1392, 1532-34 (2003) and S.
Rep. No. 108-46, at 330 (2003).

Appendix IV: Categorized Responses to the Civilian Provider Surveyï¿½s
Open-ended Question

Table 7: "What are the reasons Doctor X is Not Accepting New TRICARE
[Nonenrolled] Patients?"

                               Percent of providers who cited this reason
                                                   Nonnetwork            
Reason for not accepting     Network (Extra)    (Standard)        All 
new TRICARE patients               providers     providers  providers 
Doctor not available                                    31         29   29 
Reimbursement                                           20         25   24 
Other/miscellaneous                                     12         11   12 
Administrative                                                             
inconveniences                                          15          7    8 
Takes other forms of                                                       
TRICARE                                                  7          8    8 
Specialty not covered                                    6          6    6 
Insurance/image problems                                 3          6    5 
Not aware of TRICARE                                     1          3    3 
Only takes certain                                                         
insurance                                                0          3    3 
Customer service                                         4          2    2 
Application in process                                   0          1    1 
Total percent                                         99^a       101a 101a 
Total responses                                        378       3837 4215 

Source: GAO analysis of DOD data.

aTotal does not equal 100 percent due to rounding errors.

Appendix V: TRICARE Reimbursement Rates That Remain Higher than Medicare
Reimbursement Rates

                                                          Ratio of TRICARE to 
                                                                     Medicare 
CPT code^a Procedure or service performed                    reimbursement 
20250      Biopsy, vertebral body, open; thoracic                    1.007 
38240      Bone marrow or blood-derived peripheral                         
              stem cell transplantation; allogenic                      2.980 
38241      Bone marrow or blood-derived peripheral                         
              stem cell transplantation; autologous                     2.954 
52355      Cystourethroscopy, with ureteroscopy and/or                     
              pyeloscopy; with resection of ureteral or                       
              renal pelvic tumor                                        1.090 
58600      Litigation or transaction of fallopian                          
              tube(s), abdominal or vaginal approach,                         
              unilateral or bilateral                                   1.084 
58605      Litigation or transaction of fallopian                          
              tube(s), abdominal or vaginal approach,                         
              postpartum, unlaterial or bilateral, during                     
              same hospitalization (separate procedure)                 1.024 
58615      Occlusion of fallopian tube(s) by device                        
              (eg. Band, clip, Galope ring) vaginal or                        
              suprapubic approach                                       1.040 
59012      Cordocentesis (intrauterine), any method                  1.137 
59020      Fetal contraction stress test                             1.427 
59025      Fetal non-stress test                                     1.184 
59030      Fetal scalp blood sampling                                1.210 
59050      Fetal monitoring during labor by consulting                     
              physician (ie, non-attending physician)                         
              with written report; supervision and                            
              interpretation                                            1.324 
59051      Fetal monitoring during labor by consulting                     
              physician (ie, non-attending physician)                         
              with written report; interpretation only                  1.219 
59120      Surgical treatment of ectopic pregnancy;                        
              tubal or ovarian, requiring salpingectomy                       
              and/or oophorectomy, abdominal or vaginal                       
              approach                                                  1.016 
59135      Surgical treatment of ectopic pregnancy;                        
              interstitial, uterine pregnancy requiring                       
              total hysterectomy                                        1.017 
59140      Surgical treatment of ectopic pregnancy;                        
              cervical, with evacuation                                 1.161 
59320      Cerciage of cervix, during pregnancy;                           
              vaginal                                                   1.122 
59325      Cerciage of cervix, during pregnancy;                           
              abdominal                                                 1.094 
59350      Hysterorrhaphy of ruptured uterus                         1.205 
59409      Vaginal delivery only (with or without                          
              episiotomy and/or forceps)                                1.184 
59410      Vaginal delivery only (with or without                          
              episiotomy and/or forceps); including                           
              postpartum car                                            1.156 
59412      External cephalic version, with or without                      
              tocolysis                                                 1.139 
59414      Delivery of placenta (separate procedure)                 1.190 
59514      Cesarean delivery only                                    1.175 
59515      Cesarean delivery only; including                               
              postpartum care                                           1.126 
59612      Vaginal delivery only, after previous                           
              cesarean delivery (with or without                              
              episiotomy and/or forceps)                                1.118 
59614      Vaginal delivery only, after previous                           
              cesarean delivery (with or without                              
              episiotomy and/or forceps); including                           
              postpartum care                                           1.104 
59620      Cesarean delivery only, following attempted                     
              vaginal delivery after previous cesarean                        
              delivery                                                  1.127 
59622      Cesarean delivery only, following attempted                     
              vaginal delivery after previous cesarean                        
              delivery; including postpartum care                       1.078 
59812      Treatment of incomplete abortion, any                           
              trimester, completed surgically                           1.044 
59840      Induced abortion, by dilation and curettage               1.217 
59850      Induced abortion, by one or more                                
              intra-amniotic injuctions                                       
              (amniocentesis-injections), including                           
              hospital admission and visits, delivery of                      
              fetus and secundines                                      1.021 
59851      Induced abortion, by one or more                                
              intra-amniotic injuctions                                       
              (amniocentesis-injections), including                           
              hospital admission and visits, delivery of                      
              fetus and secundines; with dilation and                         
              curettage and/or evacuation                               1.019 
59855      Induced abortion, by one or more vaginal                        
              suppositories (eg, prostaglandin) with or                       
              without cervical dilation (eg, laminaria),                      
              including hospital admission and visits,                        
              delivery of fetus and secudines                           1.015 
59856      Induced abortion, by one or more vaginal                        
              suppositories (eg, prostaglandin) with or                       
              without cervical dilation (eg, laminaria),                      
              including hospital admission and visits,                        
              delivery of fetus and secudines; with                           
              dilation and curettage and/or evacuation                  1.046 
59857      Induced abortion, by one or more vaginal                        
              suppositories (eg, prostaglandin) with or                       
              without cervical dilation (eg, laminaria),                      
              including hospital admission and visits,                        
              delivery of fetus and secudines; with                           
              hysterotomy (failed medical evacuation)                   1.058 
59866      Multifetal pregnancy reduction(s) (MPR)                   1.151 
63091      Vertebral corpectomy (vertebral body                            
              resection), partial or complete,                                
              transperitoneal or retroperitoneal approach                     
              with decompression of spinal cord, cauda                        
              equine or nerve root(s), lower thoracic,                        
              lumbar, or sacral; each additional segment                      
              (List separately in addition to code for                        
              primary procedure)                                        1.003 
67334      Strabismus surgery by posterior fixation                        
              suture technique, with or without muscle                        
              recession (List separately in addition to                       
              code for primary procedure)                               1.025 
92953      Temporary transcutaneous pacing                           2.965 
93541      Injection procedure during cardiac                              
              catheterization; for pulmonary angiography                1.624 
93542      Injection procedure during cardiac                              
              catheterization; for selective right                            
              ventricular or right atrial angiography                         
              (eg.internal mammary), whether native or                        
              used for bypass.                                          1.216 
93543      Injection procedure during cardiac                              
              catheterization; for selective left                             
              ventricular or left atrial angiography                    1.558 
93544      Injection procedure during cardiac                              
              catheterization; for aortography                          1.979 
93545      Injection procedure during cardiac                              
              catheterization; for selective coronary                         
              angiography (injection of radiopaque                            
              material may be by hand)                                  1.833 
93616      Esophageal recording of atrial electrogram                      
              with or without ventricular electrogram(s);                     
              with pacing                                               1.198 
93660      Evaluation of cardiovascular function with                      
              tilt table evaluation, with continuous ECG                      
              monitoring and intermittent blood pressure                      
              monitoring, with or without pharmacological                     
              intervention                                              1.320 
94760      Noninvasive ear or pulse oximetry for                           
              oxygen saturation; single determination                   1.901 

Source: GAO analysis of DOD data.

aCurrent Procedural Terminology (CPT) is a set of codes, descriptions, and
guidelines intended to describe procedures and services performed by
physicians and other health care providers.

Appendix VI: Comments from the Department of Defense

Appendix VII: GAO Contacts and Staff Acknowledgments

GAO Contact

Marcia Crosse (202) 512-7119 or [email protected]

Acknowledgments

In addition to the contact named above, Bonnie Anderson, Assistant
Director, Kevin Dietz, Cathleen Hamann, Lois Shoemaker, Robert Suls, and
Suzanne Worth made key contributions to this report.

(290398)

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Highlights of [46]GAO-07-48 , a report to congressional committees

December 2006

DEFENSE HEALTH CARE

Access to Care for Beneficiaries Who Have Not Enrolled in TRICARE's
Managed Care Option

The Department of Defense (DOD) provides health care through its TRICARE
program. Under TRICARE, beneficiaries may obtain care through a managed
care option that requires enrollment and the use of civilian provider
networks, which are developed and managed by contractors. Beneficiaries
who do not enroll may receive care through TRICARE Standard, a
fee-for-service option, using nonnetwork civilian providers or through
TRICARE Extra, a preferred provider organization option, using network
civilian providers. Nonenrolled beneficiaries in some locations have
reported difficulties finding civilian providers who will accept them as
patients.

The National Defense Authorization Act (NDAA) for fiscal year 2004
directed GAO to provide information on access to care for nonenrolled
TRICARE beneficiaries. This report describes (1) how DOD and its
contractors evaluate nonenrolled beneficiaries' access to care and the
results of these evaluations; (2) impediments to civilian provider
acceptance of nonenrolled beneficiaries, and how they are being addressed;
and (3) how DOD has implemented the NDAA fiscal year 2004 requirements to
take actions to ensure nonenrolled beneficiaries' access to care. To
address these objectives, GAO examined DOD's survey results and DOD and
contractor documents and interviewed DOD and contractor officials.

DOD and contractor officials use various methods to evaluate access to
care, and according to these officials, their methods indicate that access
is generally sufficient for nonenrolled beneficiaries. For example, in its
2005 survey of civilian providers DOD found that 14 percent of civilian
providers surveyed in 20 states were not accepting new patients from any
health plan. Of those accepting new patients, about 80 percent would
accept nonenrolled TRICARE beneficiaries as new patients. DOD's
contractors use various methods to monitor access to care. While these
methods were not designed specifically to evaluate access for nonenrolled
beneficiaries, they provide information that allows contractors to monitor
the availability of both network and nonnetwork civilian providers for
this population. According to contractor officials, their measures
indicate that nonenrolled beneficiaries' access to care is sufficient
overall.

DOD, its contractors, and beneficiary and provider representatives cited
various factors as impediments to network and nonnetwork civilian
providers' acceptance of nonenrolled TRICARE beneficiaries and ways to
address them. These impediments include concerns specific to TRICARE,
including reimbursement rates and administrative issues, as well as issues
not specific to TRICARE, such as providers without sufficient practice
capacity for additional patients. DOD and its contractors have specific
ways to address impediments related to reimbursement rates and
administrative issues, but issues that are not specific to TRICARE are
more difficult to resolve. For example, DOD has authority to increase
reimbursement rates for network and nonnetwork civilian providers in areas
where access to care has been impaired. Furthermore, other impediments not
specific to TRICARE, such as provider practices at capacity and few
providers in geographically remote locations, cannot be readily resolved
and create access difficulties for all local residents, including TRICARE
beneficiaries.

Various DOD offices as well as DOD's contractors are already carrying out
the responsibilities outlined by the NDAA for fiscal year 2004--such as
educating civilian providers and recommending reimbursement rate
adjustments--actions that help ensure nonenrolled beneficiaries' access.
However, a senior official was not formally designated to have
responsibility for these mandated actions.

DOD commented on the report, stating that GAO's approach was insightful,
but disagreeing with GAO's finding that a senior official was not formally
designated to be responsible for taking actions to ensure TRICARE
beneficiaries' access to care as outlined in the NDAA. DOD said that an
existing directive designating a senior official to serve as program
manager for TRICARE met this requirement. However, the directive does not
specifically designate an official responsible for ensuring access as
specified in the NDAA. Nor did DOD take other actions to designate that a
senior official have such responsibilities.

References

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  33. http://www.gao.gov/cgi-bin/getrpt?GAO-05-145R
  34. http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-98-80
  35. http://www.gao.gov/cgi-bin/getrpt?GAO-01-620
  36. http://www.gao.gov/cgi-bin/getrpt?GAO-04-69
  37. http://www.gao.gov/
  38. file:///home/webmaster/infomgt/d0748.htm#mailto:[email protected]
  39. http://www.gao.gov/
  40. http://www.gao.gov/
  41. http://www.gao.gov/fraudnet/fraudnet.htm
  42. file:///home/webmaster/infomgt/d0748.htm#mailto:[email protected]
  43. file:///home/webmaster/infomgt/d0748.htm#mailto:[email protected]
  44. file:///home/webmaster/infomgt/d0748.htm#mailto:[email protected]
  45. http://www.gao.gov/cgi-bin/getrpt?GAO-07-48
  46. http://www.gao.gov/cgi-bin/getrpt?GAO-07-48
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