TRICARE is the Department of Defense's (DOD) health care system for active duty and retired uniformed service members and their families. TRICARE consists of four separate programs. Three of these programs--TRICARE Prime, a managed care option; TRICARE Extra, a preferred provider option; and TRICARE Standard, a fee for service option--cover active duty personnel, their dependents, and retirees under age 65. Prior to 2001, TRICARE beneficiaries would lose their TRICARE coverage when they reached age 65, and Medicare--the federal health insurance program that provides medical benefits to over 42 million elderly and disabled Americans--would become their primary health insurer. However, in 2001, the Congress expanded TRICARE by establishing a fourth program, known as TRICARE for Life (TFL). TFL provides supplementary health care coverage for TRICARE beneficiaries who are entitled to Medicare Part A, and enrolled in Part B. It pays for many services that Medicare only partially covers. While TRICARE beneficiaries do not have to pay for their TFL coverage, they are required to pay premiums for Medicare Part B. Section 625 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) provided enrollment incentives to TRICARE beneficiaries who were entitled to Medicare Part A, but were not enrolled in Medicare Part B during their initial eligibility period. Four federal organizations had a role in implementing Section 625 of MMA. DOD's TRICARE Management Activity (TMA), which oversees the TFL program, and DOD's Defense Manpower Data Center (DMDC), which maintains the military's personnel database in its Defense Enrollment Eligibility Reporting System (DEERS), both had key roles in implementing the new law. In addition, the Centers for Medicare & Medicaid Services (CMS)--the Department of Health and Human Services agency that oversees the Medicare program--and SSA, which enrolls Medicare beneficiaries and assists with the collection of Medicare premiums on CMS's behalf, had significant responsibilities. Interested in determining the extent to which TRICARE beneficiaries benefited from the provisions of Section 625 of MMA, Congress asked GAO to report on the implementation of this law. This report describes (1) the steps that TMA, DMDC, CMS, and SSA took in response to Section 625 of MMA, including their efforts to correct problems encountered during the law's implementation, and (2) the extent to which TRICARE beneficiaries were served.

All four organizations--TMA, DMDC, CMS, and SSA--collaborated to implement Section 625 of MMA. The organizations took a series of steps, including reaching agreement to share necessary data. To identify the targeted TRICARE beneficiaries, the organizations worked together, from May through July of 2004, to perform a data match--a process during which they compared and matched Social Security numbers and dates of birth of TRICARE beneficiaries in their respective databases. DMDC mailed information to TRICARE beneficiaries in September 2004, alerting them that they would receive important information from SSA concerning their Medicare Part B enrollment. Also in September 2004, after the data match was finalized, SSA sent notices to about 49,000 TRICARE beneficiaries advising them that they had been automatically enrolled in Part B or that they were eligible for a repayment of their premium surcharges. However, the data used for this match were incomplete. As a result, TRICARE beneficiaries who should have been identified were inadvertently excluded. Some of those who did not receive a notice from SSA alerted federal officials to the error, within days of the SSA mailing. Over the next several months, DOD and CMS worked unsuccessfully to resolve the error. They decided, in December 2004, that it would be more expeditious to conduct a second data match than to pinpoint and correct the problems associated with the first data match. The organizations completed the second data match by mid-February 2005. CMS extended the Part B special enrollment period mandated by Section 625 of MMA from December 2004 through June 2005. Beneficiaries identified by the second data match had the option of enrolling in any month of 2004 or in one of the first 6 months of 2005. In addition, SSA developed processes to enroll individuals who presented themselves, but had not received letters. Information on the total number of TRICARE beneficiaries served under Section 625 of MMA is not known. Available SSA and CMS data show that over 44,000 TRICARE beneficiaries were either enrolled in Medicare Part B or repaid for their 2004 premium surcharges, under the provisions of Section 625 of MMA. About 26,000 TRICARE beneficiaries enrolled during the special enrollment period, and about 18,700 additional TRICARE beneficiaries were either credited or repaid for premium surcharges. Although SSA determined that it had received nearly 15,000 TFL-related inquiries since January 2004, it did not separately track how many of these inquiries resulted in enrollments in Part B, premium adjustments, or repayments. Further, SSA did not separately track how many TFL-related appeals it received or the disposition of such appeals, so such information is unavailable.

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