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entitled 'Defense Health Care: Access to Care for Beneficiaries Who 
Have Not Enrolled in TRICARE's Managed Care Option' which was released 
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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: 

GAO Highlights: 

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

Why GAO Did This Study: 

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 

What GAO Found: 

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. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-48]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Marcia Crosse at (202) 
512-7119 or crossem@gao.gov. 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

TMA and Its MCSCs Use Various Methods to Evaluate Access to Care That 
Indicate Sufficient Access for Nonenrolled TRICARE Beneficiaries: 

Various Factors Impede Providers' Acceptance of Nonenrolled TRICARE 
Beneficiaries, and TMA and MCSCs Have Different Ways to Address Them: 

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: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

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

Appendix III: Civilian Provider Survey Instrument: 

Appendix IV: Categorized Responses to the Civilian Provider Survey's 
Open-ended Question: 

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

Appendix VI: Comments from the Department of Defense: 

Appendix VII: GAO Contacts and Staff Acknowledgments: 

Tables: 

Table 1: Summary of the Three Main TRICARE Options: 

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: 

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: 

Table 4: Applications for Locality Waivers and Approval Results: 

Table 5: Applications for Network Waivers and Approval Results: 

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

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

Figures: 

Figure 1: TRICARE Beneficiaries in Fiscal Year 2005: 

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

Figure 3: All Nonenrolled TRICARE Beneficiaries by Region: 

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

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: 

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.[Footnote 1] 

TRICARE has three options for its beneficiaries:[Footnote 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. 

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.[Footnote 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. 

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,[Footnote 4] are eligible to obtain care under a separate 
program called TRICARE for Life (TFL).[Footnote 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. 

Figure 1: TRICARE Beneficiaries in Fiscal Year 2005: 

[See PDF for image] 

Source: GAO analysis of DOD data. 

[A] TRICARE 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. 

[B] National Guard and reservists who have been activated are included 
as active duty personnel and their family members are included as 
dependents. 

[End of figure] 

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.[Footnote 6] 

Nonnetwork civilian providers are TRICARE-authorized providers who do 
not have a contractual agreement with an MCSC to provide care to 
TRICARE beneficiaries.[Footnote 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.[Footnote 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. 

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. 

Table 1: Summary of the Three Main TRICARE Options: 

TRICARE option: Prime; 
Type of option: Managed care; 
Enrollment required: Yes; 
Enrollment fee: Yes[C]; 
Civilian provider status[A]: Network; 
Deductible: None; 
Beneficiary copayment (outpatient care)[B]: $0-$12[D]. 

TRICARE option: Standard; 
Type of option: Fee-for-service; 
Enrollment required: No; 
Enrollment fee: No; 
Civilian provider status[A]: Nonnetwork; 
Deductible: $50-$150 per individual; $100-$300 per family[F]; 
Beneficiary copayment (outpatient care)[B]: 20-25% of the TRICARE 
reimbursement rate[E]. 

TRICARE option: Extra; 
Type of option: Preferred provider organization; 
Enrollment required: No; 
Enrollment fee: No; 
Civilian provider status[A]: Network; 
Deductible: $50-$150 per individual; $100-$300 per family[F]; 
Beneficiary copayment (outpatient care)[B]: 15-20% of the TRICARE 
reimbursement rate. 

Source: GAO analysis of DOD data. 

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

[B] The 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. 

[C] There 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. 

[D] Inpatient 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. 

[E] On 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. 

[F] Dependents 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. 

[End of table] 

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

* 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.[Footnote 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.[Footnote 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. 

* 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.[Footnote 11] In addition, nonnetwork providers are not 
required to meet access standards, such as those for appointment wait 
times. 

* 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.[Footnote 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,[Footnote 13] Base Realignment and Closure sites,[Footnote 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. 

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

[See PDF for image] 

Source: GAO analysis of DOD data. 

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

[End of figure] 

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: 

[See PDF for image] 

Source: GAO analysis of DOD data. 

Note: Shaded areas represent counties where nonenrolled beneficiaries 
resided. 

[End of figure] 

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: 

[See PDF for image] 

Source: GAO analysis of TMA data. 

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. 

[End of figure] 

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.[Footnote 
15] Specifically, the NDAA required surveys to be done in 20 market 
areas[Footnote 16] each fiscal year until all markets were surveyed to 
determine how many civilian providers[Footnote 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.[Footnote 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.) 

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: 

* educating nonnetwork civilian providers about TRICARE, 

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

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

* 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. 

TMA's Survey of Civilian Providers: 

In fiscal year 2005, TMA completed the first phase of its mandated 
survey of civilian health care providers.[Footnote 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.[Footnote 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.[Footnote 21] (See table 
2 for overall results by state.) An additional comparison of the 
acceptance rate for two categories of providers--primary care 
providers[Footnote 22] and specialists[Footnote 23]--in each of these 
20 states revealed very little difference between the two 
categories.[Footnote 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.[Footnote 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: 

Surveyed states: South Dakota; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 93. 

Surveyed states: Maine; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 92. 

Surveyed states: Idaho; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 91. 

Surveyed states: Kansas; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 90. 

Surveyed states: Mississippi; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 89. 

Surveyed states: Nebraska; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 89. 

Surveyed states: Wyoming; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 88. 

Surveyed states: Alaska; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Surveyed states: Wisconsin; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Surveyed states: Massachusetts; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Surveyed states: New Mexico; Percent of surveyed providers accepting 
nonenrolled TRICARE beneficiaries (of those accepting new patients): 
86. 

Surveyed states: Indiana; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 84. 

Surveyed states: South Carolina; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 84. 

Surveyed states: Illinois; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 83. 

Surveyed states: California; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 81. 

Surveyed states: Washington; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 79. 

Surveyed states: Delaware; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 78. 

Surveyed states: Texas; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 76. 

Surveyed states: New Jersey; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 70. 

Surveyed states: New York; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 68. 

Surveyed states: Total; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 80. 

Source: GAO analysis of DOD data. 

[End of table] 

In addition to the statewide sample, TMA also sampled civilian 
providers in several smaller geographic locations, defined as hospital 
service areas (HSA),[Footnote 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.[Footnote 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.[Footnote 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: 

Hospital Service Areas[A]: Peoria, Illinois[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 96. 

Hospital Service Areas[A]: Fort Wayne, Indiana[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 94. 

Hospital Service Areas[A]: Battle Creek, Michigan[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 93. 

Hospital Service Areas[A]: Watertown, New York; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 92. 

Hospital Service Areas[A]: Santa Fe, New Mexico[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 90. 

Hospital Service Areas[A]: Eau Claire, Wisconsin[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 90. 

Hospital Service Areas[A]: Belleville, Illinois; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Hospital Service Areas[A]: Waukegan, Illinois; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Hospital Service Areas[A]: Evansville, Indiana; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 89. 

Hospital Service Areas[A]: Charleston, South Carolina[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Hospital Service Areas[A]: Lafayette, Indiana[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 87. 

Hospital Service Areas[A]: Syracuse, New York; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 86. 

Hospital Service Areas[A]: Corpus Christi, Texas[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 84. 

Hospital Service Areas[A]: Killeen, Texas; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 84. 

Hospital Service Areas[A]: Spokane, Washington; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 84. 

Hospital Service Areas[A]: San Diego, California; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 83. 

Hospital Service Areas[A]: Tallahassee, Florida[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 83. 

Hospital Service Areas[A]: Kalamazoo, Michigan[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 80. 

Hospital Service Areas[A]: San Antonio, Texas; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 80. 

Hospital Service Areas[A]: Boca Raton, Florida[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 79. 

Hospital Service Areas[A]: Indianapolis, Indiana; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 79. 

Hospital Service Areas[A]: Columbia, South Carolina; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 79. 

Hospital Service Areas[A]: Sacramento, California[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 77. 

Hospital Service Areas[A]: Olympia, Washington; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 72. 

Hospital Service Areas[A]: Houston, Texas[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 68. 

Hospital Service Areas[A]: Monterey, California[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 67. 

Hospital Service Areas[A]: Arlington, Texas[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 62. 

Hospital Service Areas[A]: Brooklyn, New York[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 60. 

Hospital Service Areas[A]: Seattle, Washington[B]; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 60. 

Hospital Service Areas[A]: Total; 
Percent of surveyed providers accepting nonenrolled TRICARE 
beneficiaries (of those accepting new patients): 81. 

Source: GAO analysis of DOD data. 

[A] Hospital 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. 

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

[End of table] 

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.[Footnote 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.[Footnote 30] The cities selected by 
the TROs are as follows: 

* 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); 

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

* 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.[Footnote 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?[Footnote 32] 

TMA's 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.[Footnote 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®),[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 
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 Providers' 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 TRICARE's Reimbursement Rates as a Reason 
for Denying Nonenrolled TRICARE Beneficiaries' 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. 

Providers' 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,[Footnote 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[Footnote 40]--an adjustment that has saved hundreds of 
millions of dollars since the conversion.[Footnote 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,[Footnote 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,[Footnote 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,[Footnote 44] (2) issuing locality waivers that increase rates 
for specific procedures in specific localities,[Footnote 45] and (3) 
issuing network-based waivers that increase some network civilian 
providers' reimbursements.[Footnote 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.[Footnote 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,[Footnote 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. 

Table 4: Applications for Locality Waivers and Approval Results: 

Date submitted: 1/23/03; 
Affected location: Juneau, AK; 
Affected services: All gynecological procedures or services delivered 
by one provider; 
Amount of increase requested: 600 percent[A]; 
Status: 3/26/ 03--Approved for nonroutine gynecological procedures or 
services. 

Date submitted: 8/2004; 
Affected location: Fairbanks, AK; 
Affected services: All inpatient internal medicine procedures or 
services delivered by providers employed by Fairbanks Memorial 
Hospital; 
Amount of increase requested: Veterans Administration rates[B]; 
Status: 10/28/ 04--Approved. 

Date submitted: 6/08/05; 
Affected location: Anchorage, AK; 
Affected services: All medical procedures or services delivered by 
perinatologists; 
Amount of increase requested: 40 percent; 
Status: 11/ 21/05--Approved for perinatologists who are participating 
providers[C]. 

Date submitted: 6/08/05; 
Affected location: Fairbanks, AK; 
Affected services: Four medical procedures or services delivered by two 
plastic surgeons; 
Amount of increase requested: 175-253 percent; 
Status: 5/18/ 06--Approved to increase rates to the rate paid by the 
Veterans Administration for professional services provided by plastic 
surgeons in Alaska. 

Date submitted: 3/03/05; 
Affected location: Puerto Rico[D]; 
Affected services: All medical procedures or services delivered by 
neurosurgeons; 
Amount of increase requested: 40 percent; 
Status: 10/26/ 05--Approved. 

Date submitted: 10/19/05; 
Affected location: Alaska, Arizona, Connecticut, Montana, Nevada, 
Oregon, South Carolina, Washington, West Virginia, Wyoming.[E]; 
Affected services: 14 obstetrical procedures or services; 
Amount of increase requested: Medicaid reimbursement amounts; 
Status: 03/20/06--Approved. 

Date submitted: 2/23/06; 
Affected location: Fairbanks, AK; 
Affected services: All anesthesia or pain management and treatment 
services delivered by anesthesiologists; 
Amount of increase requested: 200 percent; 
Status: 6/02/06--Approved to increase rates by 252 percent[F]. 

Date submitted: 3/06/06; 
Affected location: Puerto Rico[D]; 
Affected services: Five high-risk medical procedures or services 
delivered by obstetricians; multiple medical procedures or services 
delivered by orthopedists and urologists; 
Amount of increase requested: Various: Between 160 percent and 460 
percent for obstetricians; 300 percent for orthopedists; and 162 
percent for urologists; 
Status: Pending. 

Date submitted: 7/2006; 
Affected location: All of Alaska; 
Affected services: All medical services or procedures; 
Amount of increase requested: Veterans Administration rates[B]; 
Status: Pending. 

Source: DOD. 

[A] Request 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. 

[B] TMA agreed to match the Department of Veterans Affairs 
reimbursement rates for these procedures. 

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

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

[E] When 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. 

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

[End of table] 

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: 

Date submitted: 1/29/02; 
Affected location: Fredricksburg, VA; 
Affected services: 33 varied medical procedures or services, 
encompassing various specialties; 
Amount of increase requested: 28 percent[A]; 
Status: Denied--Application did not substantiate an access to care 
problem. 

Date submitted: 3/07/02; 
Affected location: Great Falls, MT; 
Affected services: All medical procedures or services delivered by a 
specific clinic representing 32 specialties; 
Amount of increase requested: 200 percent[A]; 
Status: Denied--Application did not directly request a network waiver 
and increase could be handled under TRICARE Prime Remote[B]. 

Date submitted: 8/13/02; 
Affected location: Idaho; 
Affected services: All medical procedures and services; 
Amount of increase requested: 15 percent; 
Status: 1/15/03--Approved for nine specialties in the Mountain Home Air 
Force Base Prime Service Area. 

Date submitted: 12/20/02; 
Affected location: Bozeman, MT; 
Affected services: All obstetrical or gynecological medical procedures 
or services; 
Amount of increase requested: 15 percent; 
Status: Denied-- Increase available under TRICARE Prime Remote[B]. 

Date submitted: 4/08/03; 
Affected location: Cheyenne, WY; 
Affected services: Three newborn inpatient medical procedures or 
services; 
Amount of increase requested: To match civilian insurers' rates; 
Status: 7/16/03--Approved increase to 15 percent above TRICARE 
reimbursement rates. 

Date submitted: 2/03 and 3/03; 
Affected location: Watertown, NY Norwich, CT; 
Affected services: Deliveries provided by nurse midwives in NY and 
emergency gynecological services in CT; 
Amount of increase requested: Not specified; 
Status: Denied-Incomplete application package submitted. 

Date submitted: 9/26/03; 
Affected location: Ft. Leonard Wood and Springfield, MO; 
Affected services: All medical procedures and services delivered by 
network providers; 
Amount of increase requested: 15 percent; 
Status: 12/24/03--Approved for 11 specialties in Ft. Leonard Wood Prime 
Service Area Denied for Springfield. 

Date submitted: 1/05/05; 
Affected location: Delta Junction and Tok, AK; 
Affected services: All primary care medical procedures and services; 
Amount of increase requested: 15 percent; 
Status: 3/30/05--Approved for nonmental health medical care services, 
excluding laboratory services. 

Date submitted: 6/10/05; 
Affected location: Norfolk, VA; 
Affected services: All medical procedures and services for three 
specialties delivered by a group of pediatric specialists; 
Amount of increase requested: 15 percent; 
Status: 7/08/05--Approved. 

Date submitted: 3/06/06; 
Affected location: Rapid City, SD; 
Affected services: All obstetrical or gynecological services delivered 
by a group of specialists; 
Amount of increase requested: Not specified; 
Status: 5/16/2006--Approved a 15 percent increase for one group of 
obstetricians and gynecologists. 

Source: DOD. 

[A] According 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. 

[B] TRICARE 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. 

[End of table] 

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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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.[Footnote 
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,[Footnote 53] a program that is 
only operational through 2007.[Footnote 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. 

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: Educate nonnetwork civilian providers about Standard; 
Entities: 
* TMA's Communications and Customer Services Directorate; 
* TROs; 
* MCSCs. 

Responsibilities: Encourage nonnetwork civilian providers to accept 
nonenrolled TRICARE beneficiaries as patients under Standard; 
Entities: 
* MCSCs[A]. 

Responsibilities: Ensure that nonenrolled TRICARE beneficiaries have 
information necessary to locate nonnetwork providers readily; 
Entities: 
* TMA; 
* TROs; 
* MCSCs. 

Responsibilities: Recommend adjustments in provider reimbursement rates 
to ensure adequate availability of nonnetwork providers for nonenrolled 
TRICARE beneficiaries; 
Entities: 
* TROs[B]. 

Source: GAO analysis of DOD information. 

[A] MCSCs solicit nonnetwork providers to accept TRICARE beneficiaries 
when nonenrolled TRICARE beneficiaries cannot locate providers in a 
specific location. 

[B] Although 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. 

[End of table] 

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.[Footnote 
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.[Footnote 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.[Footnote 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. 

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.[Footnote 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. 

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 [Hyperlink, 
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. 

Signed by: 

Marcia Crosse: 
Director, Health Care: 

[End of section] 

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,[Footnote 59] 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). 

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. 

[End of section] 

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.[Footnote 60] Subsequent to 
this review, OMB approved a four-item questionnaire for the study 
administered in fiscal year 2005.[Footnote 61] (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[Footnote 62] 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. 

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.[Footnote 63] 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. 

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.[Footnote 64] 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,[Footnote 65] 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.[Footnote 
66] 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.[Footnote 67] 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.[Footnote 68] 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. 

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.[Footnote 69] 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. 

[End of section] 

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.[Footnote 70] 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. 

Office Of The Assistant Secretary Of Defense: 
Health Affairs:

Tricare Management Activity:
Health Program Analysis And Evaluation Directorate:

[Unique Physician 1D Number]
ATTN: Billing Manager For [Insert Physician Name] 
Street Address:
City, State, and Zip:

Dear Billing Manager,

Hello! In support of the thousands of U.S. military men and women who 
are currently defending our communities at home and abroad, Congress is 
interested in whether family members of active duty military, and 
military retirees and their families, have sufficient access to the 
health care they need. Much of their care is delivered at military 
facilities; however, a substantial amount of health care is delivered 
by private, civilian physicians. The Department of Defense (DoD) health 
care benefits program is known as TRICARE, and we need your help in 
answering the enclosed survey.

To determine the adequacy of private health care access, Congress has 
directed DoD's TRICARE program to survey civilian providers across the 
U.S. The TRICARE program has contracted Synovate to conduct this 
survey. The physician named above was randomly selected to participate 
in this very important effort.

Please answer the questions on the back of this letter and return it in 
the provided postage paid envelope or fax the completed survey to 1- 
800-585-9446 within five days of receipt. Please note that more than 
one survey may have been sent to you. If you are responsible for more 
than one physician, please complete each survey only for the physician 
listed above. If you are not the appropriate person to answer these 
questions, please pass this on to the person in your office who would 
be able to.

Thank you in advance for your cooperation and help as we examine this 
important issue that impacts our American service men and women. If you 
have questions about this survey, please call Synovate between the 
hours of 8 AM and 5 PM Eastern Time at 1-800-228-6764.

Thank you again.

Sincerely yours,

Signed by: 

Michael R. Peterson, DVM, MPH, DrPH: 
Director:

Office of the Assistant Secretary of Defense (Health Affairs) 
TRICARE Management Activity/Health Program Analysis and Evaluatiore 
Directorat:

Survey Questions On Reverse Side:

[Unique Physician ID Number] 
[Bar Code]    

OMB NO.: 0720-0031:
Expiration Date: 0513112005:

Are you the person in the office who is most familiar with billing and 
insurance for Dr. X? If so, please answer the following questions. If 
not, please give this to the person who is the most familiar with 
billing and insurance for Dr. X:

Q1. Is Dr. X aware of the TRICARE health care program?

Yes: 
No: 
Don't Know: 

Q2. As of today, is Dr. X accepting NEW TRICARE Standard patients?

* Yes, for all claims (Go to Q4):

* Yes, on a claim-by-claim basis only (Go to Q4):

* No (Go to Q3):

* Don't know (Go to Q4):

Q3. What are the reasons Dr. X is not accepting new TRICARE Standard 
patients? Please list all the reasons. (If Additional Space Is Needed, 
Please Include A Separate Sheet Of Paper.):

Q4. As of today, is Dr. X accepting ANY new patients?

* Yes: 
* No: 
* Don't Know:

Thank you for taking the time to complete this survey.

Please put this in the enclosed postage-paid envelope and return it to 
the Survey Processing Center or fax the survey to Synovate at 1-800- 
585-9446: 

[End of section] 

Appendix IV: Categorized Responses to the Civilian Provider Survey's 
Open-ended Question: 

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

Reason for not accepting new TRICARE patients: Doctor not available; 
Percent of providers who cited this reason: Network (Extra) providers: 
31; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers: 29; 
Percent of providers who cited this reason: All providers: 29. 

Reason for not accepting new TRICARE patients: Reimbursement; 
Percent of providers who cited this reason: Network (Extra) providers: 
20; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers: 25; 
Percent of providers who cited this reason: All providers: 24. 

Reason for not accepting new TRICARE patients: Other/miscellaneous; 
Percent of providers who cited this reason: Network (Extra) providers: 
12; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers: 11; 
Percent of providers who cited this reason: All providers: 12. 

Reason for not accepting new TRICARE patients: Administrative 
inconveniences; 
Percent of providers who cited this reason: Network (Extra) providers): 
15; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 7; 
Percent of providers who cited this reason: All providers: 8. 

Reason for not accepting new TRICARE patients: Takes other forms of 
TRICARE; 
Percent of providers who cited this reason: Network (Extra) providers): 
7; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 8; 
Percent of providers who cited this reason: All providers: 8. 

Reason for not accepting new TRICARE patients: Specialty not covered; 
Percent of providers who cited this reason: Network (Extra) providers): 
6; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 6; 
Percent of providers who cited this reason: All providers: 6. 

Reason for not accepting new TRICARE patients: Insurance/image 
problems; 
Percent of providers who cited this reason: Network (Extra) providers): 
3; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 6; 
Percent of providers who cited this reason: All providers: 5. 

Reason for not accepting new TRICARE patients: Not aware of TRICARE; 
Percent of providers who cited this reason: Network (Extra) providers): 
1; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 3; 
Percent of providers who cited this reason: All providers: 3. 

Reason for not accepting new TRICARE patients: Only takes certain 
insurance; 
Percent of providers who cited this reason: Network (Extra) providers): 
0; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 3; 
Percent of providers who cited this reason: All providers: 3. 

Reason for not accepting new TRICARE patients: Customer service; 
Percent of providers who cited this reason: Network (Extra) providers): 
4; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 2; 
Percent of providers who cited this reason: All providers: 2. 

Reason for not accepting new TRICARE patients: Application in process; 
Percent of providers who cited this reason: Network (Extra) providers): 
0; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 1; 
Percent of providers who cited this reason: All providers: 1. 

Total percent; 
Percent of providers who cited this reason: Network (Extra) providers): 
99[A]; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 101[A]; 
Percent of providers who cited this reason: All providers: 101[A]. 

Total responses; 
Percent of providers who cited this reason: Network (Extra) providers): 
378; 
Percent of providers who cited this reason: Nonnetwork (Standard) 
providers): 3837; 
Percent of providers who cited this reason: All providers: 4215. 

Source: GAO analysis of DOD data. 

[A] Total does not equal 100 percent due to rounding errors. 

[End of table] 

[End of section] 

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

Table 8: 

CPT code[A]: 20250; 
Procedure or service performed: Biopsy, vertebral body, open; thoracic; 
Ratio of TRICARE to Medicare reimbursement: 1.007. 

CPT code[A]: 38240; 
Procedure or service performed: Bone marrow or blood-derived peripheral 
stem cell transplantation; allogenic; 
Ratio of TRICARE to Medicare reimbursement: 2.980. 

CPT code[A]: 38241; 
Procedure or service performed: Bone marrow or blood-derived peripheral 
stem cell transplantation; autologous; 
Ratio of TRICARE to Medicare reimbursement: 2.954. 

CPT code[A]: 52355; 
Procedure or service performed: Cystourethroscopy, with ureteroscopy 
and/or pyeloscopy; with resection of ureteral or renal pelvic tumor; 
Ratio of TRICARE to Medicare reimbursement: 1.090. 

CPT code[A]: 58600; 
Procedure or service performed: Litigation or transaction of fallopian 
tube(s), abdominal or vaginal approach, unilateral or bilateral; 
Ratio of TRICARE to Medicare reimbursement: 1.084. 

CPT code[A]: 58605; 
Procedure or service performed: Litigation or transaction of fallopian 
tube(s), abdominal or vaginal approach, postpartum, unlaterial or 
bilateral, during same hospitalization (separate procedure); 
Ratio of TRICARE to Medicare reimbursement: 1.024. 

CPT code[A]: 58615; 
Procedure or service performed: Occlusion of fallopian tube(s) by 
device (eg. Band, clip, Galope ring) vaginal or suprapubic approach; 
Ratio of TRICARE to Medicare reimbursement: 1.040. 

CPT code[A]: 59012; 
Procedure or service performed: Cordocentesis (intrauterine), any 
method; 
Ratio of TRICARE to Medicare reimbursement: 1.137. 

CPT code[A]: 59020; 
Procedure or service performed: Fetal contraction stress test; 
Ratio of TRICARE to Medicare reimbursement: 1.427. 

CPT code[A]: 59025; 
Procedure or service performed: Fetal non-stress test; 
Ratio of TRICARE to Medicare reimbursement: 1.184. 

CPT code[A]: 59030; 
Procedure or service performed: Fetal scalp blood sampling; 
Ratio of TRICARE to Medicare reimbursement: 1.210. 

CPT code[A]: 59050; 
Procedure or service performed: Fetal monitoring during labor by 
consulting physician (ie, non-attending physician) with written report; 
supervision and interpretation; 
Ratio of TRICARE to Medicare reimbursement: 1.324. 

CPT code[A]: 59051; 
Procedure or service performed: Fetal monitoring during labor by 
consulting physician (ie, non-attending physician) with written report; 
interpretation only; 
Ratio of TRICARE to Medicare reimbursement: 1.219. 

CPT code[A]: 59120; 
Procedure or service performed: Surgical treatment of ectopic 
pregnancy; tubal or ovarian, requiring salpingectomy and/or 
oophorectomy, abdominal or vaginal approach; 
Ratio of TRICARE to Medicare reimbursement: 1.016. 

CPT code[A]: 59135; 
Procedure or service performed: Surgical treatment of ectopic 
pregnancy; interstitial, uterine pregnancy requiring total 
hysterectomy; 
Ratio of TRICARE to Medicare reimbursement: 1.017. 

CPT code[A]: 59140; 
Procedure or service performed: Surgical treatment of ectopic 
pregnancy; cervical, with evacuation; 
Ratio of TRICARE to Medicare reimbursement: 1.161. 

CPT code[A]: 59320; 
Procedure or service performed: Cerciage of cervix, during pregnancy; 
vaginal; 
Ratio of TRICARE to Medicare reimbursement: 1.122. 

CPT code[A]: 59325; 
Procedure or service performed: Cerciage of cervix, during pregnancy; 
abdominal; 
Ratio of TRICARE to Medicare reimbursement: 1.094. 

CPT code[A]: 59350; 
Procedure or service performed: Hysterorrhaphy of ruptured uterus; 
Ratio of TRICARE to Medicare reimbursement: 1.205. 

CPT code[A]: 59409; 
Procedure or service performed: Vaginal delivery only (with or without 
episiotomy and/or forceps); 
Ratio of TRICARE to Medicare reimbursement: 1.184. 

CPT code[A]: 59410; 
Procedure or service performed: Vaginal delivery only (with or without 
episiotomy and/or forceps); including postpartum car; 
Ratio of TRICARE to Medicare reimbursement: 1.156. 

CPT code[A]: 59412; 
Procedure or service performed: External cephalic version, with or 
without tocolysis; 
Ratio of TRICARE to Medicare reimbursement: 1.139. 

CPT code[A]: 59414; 
Procedure or service performed: Delivery of placenta (separate 
procedure); 
Ratio of TRICARE to Medicare reimbursement: 1.190. 

CPT code[A]: 59514; 
Procedure or service performed: Cesarean delivery only; 
Ratio of TRICARE to Medicare reimbursement: 1.175. 

CPT code[A]: 59515; 
Procedure or service performed: Cesarean delivery only; including 
postpartum care; 
Ratio of TRICARE to Medicare reimbursement: 1.126. 

CPT code[A]: 59612; 
Procedure or service performed: Vaginal delivery only, after previous 
cesarean delivery (with or without episiotomy and/ or forceps); 
Ratio of TRICARE to Medicare reimbursement: 1.118. 

CPT code[A]: 59614; 
Procedure or service performed: Vaginal delivery only, after previous 
cesarean delivery (with or without episiotomy and/ or forceps); 
including postpartum care; 
Ratio of TRICARE to Medicare reimbursement: 1.104. 

CPT code[A]: 59620; 
Procedure or service performed: Cesarean delivery only, following 
attempted vaginal delivery after previous cesarean delivery; 
Ratio of TRICARE to Medicare reimbursement: 1.127. 

CPT code[A]: 59622; 
Procedure or service performed: Cesarean delivery only, following 
attempted vaginal delivery after previous cesarean delivery; including 
postpartum care; 
Ratio of TRICARE to Medicare reimbursement: 1.078. 

CPT code[A]: 59812; 
Procedure or service performed: Treatment of incomplete abortion, any 
trimester, completed surgically; 
Ratio of TRICARE to Medicare reimbursement: 1.044. 

CPT code[A]: 59840; 
Procedure or service performed: Induced abortion, by dilation and 
curettage; 
Ratio of TRICARE to Medicare reimbursement: 1.217. 

CPT code[A]: 59850; 
Procedure or service performed: Induced abortion, by one or more intra-
amniotic injuctions (amniocentesis-injections), including hospital 
admission and visits, delivery of fetus and secundines; 
Ratio of TRICARE to Medicare reimbursement: 1.021. 

CPT code[A]: 59851; 
Procedure or service performed: 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; 
Ratio of TRICARE to Medicare reimbursement: 1.019. 

CPT code[A]: 59855; 
Procedure or service performed: 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; 
Ratio of TRICARE to Medicare reimbursement: 1.015. 

CPT code[A]: 59856; 
Procedure or service performed: 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; 
Ratio of TRICARE to Medicare reimbursement: 1.046. 

CPT code[A]: 59857; 
Procedure or service performed: 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); 
Ratio of TRICARE to Medicare reimbursement: 1.058. 

CPT code[A]: 59866; 
Procedure or service performed: Multifetal pregnancy reduction(s) 
(MPR); 
Ratio of TRICARE to Medicare reimbursement: 1.151. 

CPT code[A]: 63091; 
Procedure or service performed: 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); 
Ratio of TRICARE to Medicare reimbursement: 1.003. 

CPT code[A]: 67334; 
Procedure or service performed: Strabismus surgery by posterior 
fixation suture technique, with or without muscle recession (List 
separately in addition to code for primary procedure); 
Ratio of TRICARE to Medicare reimbursement: 1.025. 

CPT code[A]: 92953; 
Procedure or service performed: Temporary transcutaneous pacing; 
Ratio of TRICARE to Medicare reimbursement: 2.965. 

CPT code[A]: 93541; 
Procedure or service performed: Injection procedure during cardiac 
catheterization; for pulmonary angiography; 
Ratio of TRICARE to Medicare reimbursement: 1.624. 

CPT code[A]: 93542; 
Procedure or service performed: Injection procedure during cardiac 
catheterization; for selective right ventricular or right atrial 
angiography (eg.internal mammary), whether native or used for bypass; 
Ratio of TRICARE to Medicare reimbursement: 1.216. 

CPT code[A]: 93543; 
Procedure or service performed: Injection procedure during cardiac 
catheterization; for selective left ventricular or left atrial 
angiography; 
Ratio of TRICARE to Medicare reimbursement: 1.558. 

CPT code[A]: 93544; 
Procedure or service performed: Injection procedure during cardiac 
catheterization; for aortography; 
Ratio of TRICARE to Medicare reimbursement: 1.979. 

CPT code[A]: 93545; 
Procedure or service performed: Injection procedure during cardiac 
catheterization; for selective coronary angiography (injection of 
radiopaque material may be by hand); 
Ratio of TRICARE to Medicare reimbursement: 1.833. 

CPT code[A]: 93616; 
Procedure or service performed: Esophageal recording of atrial 
electrogram with or without ventricular electrogram(s); with pacing; 
Ratio of TRICARE to Medicare reimbursement: 1.198. 

CPT code[A]: 93660; 
Procedure or service performed: Evaluation of cardiovascular function 
with tilt table evaluation, with continuous ECG monitoring and 
intermittent blood pressure monitoring, with or without pharmacological 
intervention; 
Ratio of TRICARE to Medicare reimbursement: 1.320. 

CPT code[A]: 94760; 
Procedure or service performed: Noninvasive ear or pulse oximetry for 
oxygen saturation; single determination; 
Ratio of TRICARE to Medicare reimbursement: 1.901. 

Source: GAO analysis of DOD data. 

[A] Current 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. 

[End of table] 

[End of section] 

Appendix VI: Comments from the Department of Defense: 

The Assistant Secretary Of Defense: 
Washington, D.C. 20301-1200: 

Health Affairs: 

Nov 14 2006: 

Ms. Marcia Crosse: 
Director, Health Care: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Ms. Crosse: 

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-07-48, "Defense Health Care: Access to Care for 
Beneficiaries Who Have Not Enrolled in TRICARE's Managed Care Option," 
dated October 16, 2006 (GAO Code 290398). 

Thank you for the opportunity to review and comment on the draft 
report. First, let me say that I appreciate the collaborative, 
insightful, and thorough approach your team has taken with this 
important issue. 

Technical comments about the draft report are enclosed. There is one 
discrepancy, however, that I am compelled to specifically address 
because it indicates GAO misunderstands a fundamental delegation of 
responsibility and accountability for management of the health program. 
Several instances within the draft report state that DoD has not 
formally designated a senior official with responsibility for non- 
enrolled TRICARE beneficiaries and non-network civilian providers as 
outlined in the National Defense Authorization Act for Fiscal Year 2004 
(NDAA for FY04). This is incorrect. By directive (DoDD 5136.12), the 
Secretary of Defense has formally designated the TMA Director to "serve 
as the program manager for TRICARE health and medical resources, 
supervising and administering TRICARE programs, funding, and other 
resources within the DoD." The Directive further assigns to the TRICARE 
Regional Offices the responsibility and accountability for "ensuring 
the consistent implementation and management of MHS policies and the 
uniform health benefit within their geographical area" and "development 
and execution of an integrated plan for the delivery of health care 
within the geographic region." The scope of this responsibility clearly 
encompasses provision of care to non-enrolled beneficiaries, whether by 
network or non-network civilian providers. Congress has recognized the 
appropriateness of this assignment by requiring, in the NDAA for FY06, 
an annual report of the TRICARE Regional Office's efforts to monitor, 
oversee, and improve TRICARE Standard. 

Again, thank you for the opportunity to provide these comments. My 
points of contact for additional information are Mr. Michael O'Bar 
(functional) at (703) 681-0039 and Mr. Gunther Zimmerman (audit 
liaison) at (703) 681-3492. 

Sincerely, 

Signed by: 

William Winkenwerder, Jr., MD: 

Enclosure: 
As stated: 

[End of section] 

Appendix VII: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

Marcia Crosse (202) 512-7119 or crossem@gao.gov: 

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. 

FOOTNOTES 

[1] Fiscal 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. 

[2] TRICARE 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. 

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

[4] TRICARE 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. 

[5] TRICARE 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. 

[6] For 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. 

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

[8] Between 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. 

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

[10] Prime 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. 

[11] The 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. 

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

[13] MTF 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. 

[14] Base 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. 

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

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

[17] The 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. 

[18] TMA 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. §§ 3507 and 
3508. 

[19] In 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. 

[20] In 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. 

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

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

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

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

[25] Indiana 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. 

[26] HSAs 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. 

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

[28] In 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). 

[29] Eight 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. 

[30] TMA has not specified a timeline for this task. 

[31] In Medicare Fee-for-Service Beneficiary Access to Physician 
Services: Trends in Utilization of Services, 2000 to 2002, 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. 

[32] See Pub. L. No. 109-163, § 711, 119 Stat. 3136, 3343. 

[33] The 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. § 1071, note. TMA 
conducts this survey on a yearly basis using a representative sample of 
all TRICARE beneficiaries worldwide. 

[34] CAHPS 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® survey as the CAHPS survey. 

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

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

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

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

[39] Prior 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. 

[40] Congress 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, § 8012 104 Stat. 1856, 1877 
(1990). This instruction was eventually codified at 10 U.S.C. § 
1079(h). 

[41] We 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, GAO/HEHS-98-80 (Washington, D.C.: Feb. 26, 1998). 

[42] Two 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. 

[43] See 10 U.S.C. § 1079(h)(1). 

[44] 32 C.F.R. § 199.14(j)(1)(iv)(C). 

[45] 32 C.F.R. § 199.14(j)(1)(iv)(D). According to a TMA official, TMA 
usually defines a locality using one or more zip codes. 

[46] 32 C.F.R. § 199.14(j)(1)(iv)(E). 

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

[48] Prevailing 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. 

[49] The 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. § 199.14(j)(1)(iv)(D)(1). The 
regulations for the other two waivers do not specifically address 
review. 

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

[51] TMA 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. § 199.14(j)(2). 

[52] See 42 U.S.C. § 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. 

[53] Physician 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. § 1395l(u). 

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

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

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

[57] Since 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. 

[58] See Pub. L. No. 109-163, § 716, 119 Stat. 3136, 3345. 

[59] The survey had a 55 percent response rate. 

[60] The 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. §§ 3507 and 3508. 

[61] DOD'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. 

[62] The 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. 

[63] The providers in the American Medical Association's Masterfile are 
both medical doctors and doctors of osteopathy. 

[64] TMA 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. 

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

[66] The questionnaire or phone interview was directed to an 
administrative staff person in the provider's office. 

[67] According 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. 

[68] For example, TMA compared provider specialty and network status 
between the original respondents and the nonrespondents in bias 
analysis. 

[69] According to TMA officials, TMA expects to provide post-survey 
weighting to account for differential response rates. 

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

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