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entitled 'Defense Health Care: Access to Civilian Providers under 
TRICARE Standard and Extra' which was released on June 2, 2011. 

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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

June 2011: 

Defense Health Care: 

Access to Civilian Providers under TRICARE Standard and Extra: 

GAO-11-500: 

GAO Highlights: 

Highlights of GAO-11-500, a report to congressional committees. 

Why GAO Did This Study: 

The Department of Defense (DOD) provides health care through its 
TRICARE program, which is managed by the TRICARE Management Activity 
(TMA). TRICARE offers three basic options. Beneficiaries who choose 
TRICARE Prime, an option that uses civilian provider networks, must 
enroll. TRICARE beneficiaries who do not enroll in this option may 
obtain care from nonnetwork providers under TRICARE Standard or from 
network providers under TRICARE Extra. 

The National Defense Authorization Act for Fiscal Year 2008 directed 
GAO to evaluate various aspects of beneficiaries’ access to care under 
the TRICARE Standard and Extra options. This report examines 
(1) impediments to TRICARE Standard and Extra beneficiaries’ access to 
civilian health care and mental health care providers and TMA’s 
actions to address the impediments; (2) TMA’s efforts to monitor 
access to civilian providers for TRICARE Standard and Extra 
beneficiaries; (3) how TMA informs network and nonnetwork civilian 
providers about TRICARE Standard and Extra; and (4) how TMA informs 
TRICARE Standard and Extra beneficiaries about their options. To 
address these objectives, GAO reviewed and analyzed TMA and TRICARE 
contractor data and documents. GAO also interviewed TMA officials, 
including those in its regional offices, as well as its contractors. 

What GAO Found: 

Reimbursement rates and provider shortages have been cited as the main 
impediments that hinder TRICARE Standard and Extra beneficiaries’ 
access to civilian health care and mental health care providers. 
Providers’ concern about TRICARE’s reimbursement rates—which are 
generally set at Medicare rates—has been a long-standing issue and has 
more recently been cited as the primary reason civilian providers will 
not accept TRICARE Standard and Extra beneficiaries as patients, 
according to TMA’s surveys of civilian providers. TMA can increase 
reimbursement rates in certain instances, such as when it determines 
that access to care is being affected by the level of reimbursement. 
Shortages of certain provider specialties, such as mental health care 
providers, at the national and local levels may also impede access, 
but these shortages are not specific to the TRICARE program and also 
affect the general population. As a result, there are limitations as 
to what TMA can do to address them. 

TMA has primarily used feedback mechanisms, including surveys of 
beneficiaries and civilian providers, to gauge TRICARE Standard and 
Extra beneficiaries’ access to civilian providers. More recently, in 
February 2010, in recognition that TRICARE has had no established 
measures for monitoring the availability of civilian network and 
nonnetwork providers for these beneficiaries, TMA directed the TRICARE 
Regional Offices to develop a model to help identify geographic areas 
where they may experience access problems. GAO’s review of the initial 
models found their methodology to be reasonable. However, because the 
regional models were recently developed, it is too early to determine 
their effectiveness. 

TMA’s contractors educate civilian providers about TRICARE program 
requirements, policies, and procedures. Contractors also conduct 
outreach to increase providers’ awareness of the program, and while TMA’
s provider survey results indicate that civilian providers are 
generally aware of the program, this does not necessarily signify that 
providers have an accurate understanding of the TRICARE program and 
its options. 

Similarly, TMA’s contractors educate beneficiaries on all of the 
TRICARE options and maintain directories of network providers to 
facilitate beneficiaries’ access to care. When the new TRICARE 
contracts are implemented, TMA will also require its contractors to 
include information on nonnetwork providers in their provider 
directories. 

In commenting on a draft of this report, DOD concurred with GAO’s 
overall findings. 

View [hyperlink, http://www.gao.gov/products/GAO-11-500] or key 
components. For more information, contact Randall Williamson at (202) 
512-7114 or williamsonr@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Reimbursement Rates and Provider Shortages Hinder Access to Civilian 
Providers; TMA Can Increase Reimbursement Rates When Needed, but Has 
Only Limited Means to Address Shortages: 

Although TMA Has Typically Used Feedback Mechanisms to Gauge TRICARE 
Standard and Extra Beneficiaries' Access to Civilian Providers, It Is 
Developing a New Method for Monitoring Access: 

TMA's Contractors Educate Civilian Providers about TRICARE and Surveys 
Indicate That Providers Are Generally Aware of the Program: 

TMA's Contractors Educate Beneficiaries on All TRICARE Options and 
Provide Information on Network Providers; New Contracts Will Also 
Require Information about Nonnetwork Providers: 

Agency Comments: 

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

Appendix II: TMA's Studies on TRICARE Reimbursement Rates: 

Appendix III: TMA's Use of Waivers: 

Appendix IV: Access-to-Care Concerns in Alaska: 

Appendix V: Network Adequacy Reporting Requirement of Contractors 
under the Second Generation of TRICARE Contracts: 

Appendix VI: Comments from the Department of Defense: 

Appendix VII: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Summary of TRICARE's Basic Options: 

Table 2: TRICARE-eligible Beneficiaries and Claims Paid to Civilian 
Providers for Fiscal Years 2006 through 2010: 

Table 3: TRICARE Reimbursement Waivers in August 2006 and January 2011: 

Table 4: TRICARE Reimbursement Rates That Remain Higher than Medicare 
Reimbursement Rates for Nonmaternity Procedures and Services: 

Table 5: TRICARE Reimbursement Rates That Remain Higher than Medicare 
Reimbursement Rates for Maternity Procedures and Services: 

Table 6: Applications for Locality Waivers and Approval Results: 

Table 7: Applications for Network Waivers and Approval Results: 

Figures: 

Figure 1: Location of TRICARE Regions: 

Figure 2: TRICARE Standard and Extra Beneficiaries' Claims Paid to 
Network and Nonnetwork Civilian Providers for Fiscal Years 2006 
Through 2010: 

Abbreviations: 

BRAC: Base Realignment and Closure: 

CPT: current procedural terminology: 

DOD: Department of Defense: 

NDAA: National Defense Authorization Act: 

PPACA: Patient Protection and Affordable Care Act: 

TMA: TRICARE Management Activity: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

June 2, 2011: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Howard P. "Buck" McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

In fiscal year 2010, the Department of Defense (DOD) offered health 
care to almost 9.7 million eligible beneficiaries through its TRICARE 
program.[Footnote 1] Under TRICARE, beneficiaries may choose among 
three basic options--TRICARE Prime (a managed care option), TRICARE 
Extra (a preferred provider organization option), and TRICARE Standard 
(a fee-for-service option).[Footnote 2] TRICARE is different from 
other health care plans because not all of the options require 
eligible beneficiaries to enroll to use their benefits. Beneficiaries 
who choose TRICARE Prime are required to enroll in this option. 
Beneficiaries who decide not to use TRICARE Prime may still obtain 
health care through the TRICARE program by using either the TRICARE 
Standard or Extra options, or they may choose not to use their TRICARE 
benefits at all.[Footnote 3] Consequently, DOD does not have complete 
information on which beneficiaries intend to use their benefits, and 
it cannot accurately predict the health care demands of beneficiaries 
who have not enrolled, including how to ensure adequate access to care. 

Under TRICARE, beneficiaries can obtain care either from providers at 
military hospitals and clinics, referred to as military treatment 
facilities, or from civilian providers. DOD's TRICARE Management 
Activity (TMA), which oversees the program, contracts with managed 
care support contractors (contractors) to develop networks of civilian 
providers and to perform other customer service functions, such as 
processing claims and assisting beneficiaries with finding providers. 
Contractors are required to establish adequate networks of civilian 
providers to serve all TRICARE beneficiaries regardless of enrollment 
status in geographic areas called Prime Service Areas.[Footnote 4] 
Contractors use estimates of the number of TRICARE users, among other 
factors, to develop provider networks and ensure adequate access to 
care for beneficiaries. Although some network providers may be located 
outside of Prime Service Areas, contractors are not required to 
develop networks in these areas (which we refer to as non-Prime 
Service Areas). 

All beneficiaries may obtain care at military treatment facilities, 
although priority is given to active duty personnel and then to 
beneficiaries enrolled in TRICARE Prime. Beneficiaries who enroll in 
TRICARE Prime can also obtain care from the civilian providers who 
have joined the provider network established by the TRICARE 
contractors--referred to as network providers.[Footnote 5] 
Beneficiaries who do not enroll in TRICARE Prime may receive care 
either from network providers, in which case they are considered to be 
using TRICARE Extra, or from nonnetwork providers (those outside the 
network), in which case they are considered to be using TRICARE 
Standard. The choices that beneficiaries have in selecting TRICARE 
options and providers vary depending on their location. Beneficiaries 
living in Prime Service Areas can choose between TRICARE Prime, 
TRICARE Standard, and TRICARE Extra. Beneficiaries living in non-Prime 
Service Areas can choose between TRICARE Standard and TRICARE Extra. 
According to a TMA official, about 19 percent of beneficiaries 
eligible for TRICARE Standard and Extra resided in non-Prime Service 
Areas in fiscal year 2010. 

Since TRICARE's inception in 1995, beneficiaries using the TRICARE 
Standard and Extra options have reported difficulties finding civilian 
providers who will accept them as patients. In response to these 
concerns, the National Defense Authorization Act (NDAA) for Fiscal 
Year 2004 directed DOD to monitor access to care for TRICARE 
beneficiaries who were not enrolled in TRICARE Prime through a 
multiyear survey of civilian providers.[Footnote 6] According to TMA, 
which administered the survey, results indicated that nationally, 
about 81 percent of physicians who were accepting new patients would 
accept TRICARE beneficiaries as patients, although the results varied 
by state and by provider specialty. The act also directed us 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 DOD has taken to ensure access to care for 
beneficiaries who were not enrolled in TRICARE Prime. In December 
2006, we reported that TMA and its contractors used various methods to 
monitor access to care, and these methods indicated that access was 
generally sufficient for users of TRICARE Standard and Extra.[Footnote 
7] 

Nonetheless, beneficiaries using the TRICARE Standard and Extra 
options have continued to express concerns about access to civilian 
providers. To better understand the adequacy of access to care for 
this population, the NDAA for Fiscal Year 2008 directed DOD to conduct 
two surveys[Footnote 8]--another multiyear survey of civilian 
providers as well as a multiyear survey of beneficiaries, which 
includes nonenrolled beneficiaries who were eligible to use the 
TRICARE Standard and TRICARE Extra options as well as TRICARE Reserve 
Select--an option similar to TRICARE Standard and Extra that is 
available to certain members of the Reserves and National Guard. The 
NDAA for Fiscal Year 2008 directed us to review these surveys, and in 
March 2010, we reported that the methodology for DOD's surveys of 
civilian providers and nonenrolled beneficiaries was sound, and we 
provided an analysis of the first year's results for each of the 
surveys.[Footnote 9] 

Furthermore, access to mental health care providers is of particular 
concern for all TRICARE beneficiaries, including those who use TRICARE 
Standard and Extra, because the exposure to combat and the stress of 
deployment and redeployment have increased beneficiaries' demand for 
mental health services. From fiscal year 2006 through 2010, TRICARE 
Standard and Extra beneficiaries' visits to civilian mental health 
care providers increased over 27 percent. A June 2007 report by DOD's 
Task Force on Mental Health stated that TRICARE's provider networks 
have been tasked with providing an increasing volume and proportion of 
mental health services for families and retirees.[Footnote 10] In 
assessing the oversight of the mental health network at one location, 
the task force discovered that out of 100 network mental health 
providers contacted from a list on the contractor's Web site, only 3 
would accept new TRICARE patients. 

The NDAA for Fiscal Year 2008 directed us to evaluate issues related 
to TRICARE Standard and Extra beneficiaries' access to health care and 
mental health care, including the identification of access impediments 
and education and outreach efforts directed at civilian providers and 
these beneficiaries. This report identifies and examines: (1) the 
impediments to TRICARE Standard and Extra beneficiaries' access to 
civilian health care and mental health care providers and TMA's 
actions to address the impediments; (2) TMA's efforts to monitor 
access to civilian providers for TRICARE Standard and Extra 
beneficiaries; (3) how TMA informs network and nonnetwork civilian 
providers about TRICARE Standard and Extra; and (4) how TMA informs 
TRICARE Standard and Extra beneficiaries about their options and 
facilitates their access to network and nonnetwork civilian providers. 

To address these objectives, we met with officials in each of the 
three TRICARE Regional Offices (North, South, and West) and with 
officials for each of the three contractors to discuss access 
impediments in their respective regions, how access to network and 
nonnetwork providers is monitored, and their efforts to educate 
civilian providers and TRICARE Standard and Extra beneficiaries. We 
also interviewed TMA officials responsible for program operations, 
medical benefits and reimbursement, contract performance evaluation, 
contract management, data quality, communication and customer service, 
and program analysis and evaluation. We also obtained documentation on 
the contractors' performance in meeting network adequacy and education 
related requirements. Lastly, we met with representatives of military 
beneficiary organizations as well as two national provider 
organizations to obtain their perspectives about access to civilian 
providers for TRICARE Standard and Extra beneficiaries. 

To identify and examine impediments to TRICARE Standard and Extra 
beneficiaries' access to civilian health care and mental health care 
providers and TMA's actions to address them, we obtained and reviewed 
relevant reports and studies. Specifically, we reviewed TMA's reported 
results from its multiyear survey of civilian providers, conducted 
from 2005 through 2007, as well as the first 2 years of its subsequent 
surveys of these providers during fiscal years 2008 and 2009. We 
assessed the reliability of these data by speaking with knowledgeable 
officials and reviewing related documentation, and we determined that 
the survey results were sufficiently reliable for the purposes of this 
report. We also reviewed a 2008 report prepared by CNA[Footnote 11] on 
the current participation of civilian providers in the TRICARE 
program. To examine how TMA addresses access impediments, we reviewed 
TMA's reimbursement policies, studies that assessed TRICARE's 
reimbursement rates, TMA's procedures for increasing reimbursement 
rates, and TMA's procedures for offering bonus payments to physicians 
in areas identified as having physician shortages. We obtained TMA's 
reported data on adjustments to reimbursement rates that it issued 
between January 2002 and January 2011. However, we did not assess the 
appropriateness of TMA's decision to make these adjustments or the 
extent to which these adjustments improved civilian providers' 
acceptance of TRICARE beneficiaries as patients. Additionally, we 
reviewed DOD's 2009 Report to Congress: Access to Mental Health 
Services, and spoke with TMA and contractor officials about access to 
mental health care and actions to improve access. 

To identify and examine the mechanisms that TMA uses to monitor 
TRICARE Standard and Extra beneficiaries' access to civilian 
providers, we reviewed various efforts, including feedback mechanisms, 
that TMA and its contractors use to solicit and gauge beneficiaries' 
concerns, including difficulties with access to civilian providers. 
These feedback mechanisms included TMA's surveys of civilian providers 
and nonenrolled beneficiaries (TRICARE Standard, TRICARE Extra, and 
TRICARE Reserve Select), as well as data collected on beneficiaries' 
inquiries and complaints by TMA and its contractors during either 
fiscal or calendar years 2008 through 2010. We spoke with TMA 
officials and obtained information from its contractors about the 
reliability of their data on beneficiaries' inquiries and determined 
them to be sufficiently reliable for the purpose of our report, but we 
did not independently verify these data. We also reviewed TMA's 2010 
memorandum that directed the TRICARE Regional Offices to implement a 
new approach for monitoring access to civilian providers under the 
TRICARE Standard and Extra options, and we obtained and reviewed 
information about each regional office's monitoring methodology. 

To identify and examine how TMA informs network and nonnetwork 
civilian providers and beneficiaries about TRICARE Standard and Extra 
and how it facilitates access to civilian providers, we reviewed TMA's 
requirements of its contractors as related to educating providers and 
beneficiaries in each TRICARE region under the second generation of 
TRICARE managed care support contracts (contracts).[Footnote 12] We 
also reviewed each contractor's marketing and education plans to 
identify their specific education efforts. Additionally, we obtained 
and reviewed TRICARE provider and beneficiary educational materials to 
gain an understanding of the information that TMA and the contractors 
use to educate providers and beneficiaries. However, we did not assess 
the quality and effectiveness of TMA's or the contractors' education 
efforts and materials. Finally, we reviewed TMA's 2010 memorandum and 
related documentation regarding TMA's effort to facilitate access to 
care through provider directories for TRICARE Standard and Extra 
beneficiaries. 

We conducted this performance audit from July 2010 through June 2011 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives. 

Background: 

In fiscal year 2010, DOD offered health care to almost 9.7 million 
eligible beneficiaries through its TRICARE program. TRICARE is 
organized into three regions, and within these regions, beneficiaries 
may obtain health care from either providers at military treatment 
facilities or civilian providers. 

TRICARE's Benefit Options: 

TRICARE provides three basic options for its non-Medicare-eligible 
beneficiary population. These options vary according to TRICARE 
beneficiary enrollment requirements, the choices TRICARE beneficiaries 
have in selecting civilian and military treatment facility providers 
and the amount TRICARE beneficiaries must contribute towards the cost 
of their care. (See table 1.) 

Table 1: Summary of TRICARE's Basic Options: 

TRICARE option: TRICARE Prime; 
Description: Beneficiaries who choose to use this managed care option 
must enroll. All active duty servicemembers are required to use 
TRICARE Prime, but other TRICARE eligible (i.e., non-active duty) 
beneficiaries may choose to use this option and must enroll to do so. 
TRICARE Prime enrollees may pay an annual enrollment fee[A] and 
receive most of their care from providers at military treatment 
facilities, augmented by network providers who have agreed to meet 
specific standards for appointment wait times among other 
requirements. TRICARE Prime offers lower out-of-pocket costs than the 
other TRICARE options. 

TRICARE option: TRICARE Standard; 
Description: TRICARE beneficiaries who choose not to enroll in TRICARE 
Prime may obtain health care from nonnetwork providers. Under this 
option, beneficiaries must pay an annual deductible and cost-shares, 
which vary among active duty dependents and retirees and their 
dependents. There is no annual enrollment fee. 

TRICARE option: TRICARE Extra; 
Description: Similar to TRICARE Standard, beneficiaries do not have to 
enroll or pay an annual enrollment fee for TRICARE Extra. Under this 
option, beneficiaries may obtain care from a TRICARE network civilian 
provider for lower cost-shares (about 5 percentage points less) than 
they would have if they saw nonnetwork providers under the TRICARE 
Standard option. 

Source: GAO summary of the Department of Defense's TRICARE 
documentation. 

Note: All beneficiaries may obtain care at military treatment 
facilities although priority is given to any active-duty personnel and 
then to TRICARE Prime enrollees. 

[A] There is no annual enrollment fee for active duty servicemembers 
and their dependents. However, retirees and their dependents under 65 
years must pay an annual enrollment fee. 

[End of table] 

TRICARE also offers other options, including TRICARE Reserve Select, a 
premium-based health plan that certain Reserve and National Guard 
servicemembers may purchase. Under TRICARE Reserve Select, 
beneficiaries may obtain health care from either nonnetwork or network 
providers, similar to beneficiaries using TRICARE Standard or Extra, 
respectively, and pay lower cost-shares for using network providers. 

TRICARE Regional Structure and Contracts: 

TRICARE is a regionally structured program that is organized into 
three main regions--North, South, and West. (See figure 1 for the 
location of the three regions.) TMA manages civilian health care in 
each of these regions through contractors. As of March 2011, the 
second generation of TRICARE contracts were in operation, and TMA was 
in the process of awarding the third generation of contracts. 

Figure 1: Location of TRICARE Regions: 

[Refer to PDF for image: U.S. map] 

The map depicts the geographical areas withing each of the following 
regions: 

TRICARE North Region; 
TRICARE South Region; 
TRICARE West Region. 

Source: GAO analysis of TRICARE data. 

[End of figure] 

The contractors are required to establish and maintain adequate 
networks of civilian providers within designated locations referred to 
as 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. These civilian provider networks are also required to 
meet specific access standards for TRICARE Prime beneficiaries--such 
as for travel times or wait times.[Footnote 13] However the access 
standards do not apply to beneficiaries using options other than 
TRICARE Prime, such as TRICARE Standard or Extra. The contractors are 
also responsible for helping TRICARE beneficiaries locate providers 
and for informing and educating TRICARE beneficiaries and providers on 
all aspects of the TRICARE program. In addition, they provide customer 
service to any TRICARE beneficiary who requests assistance, regardless 
of their enrollment status. 

TMA has a TRICARE Regional Office in each region that helps to manage 
health care delivery. These offices are responsible for overseeing the 
contractors, including monitoring network quality and adequacy and 
customer-satisfaction outcomes. Similar to the contractors' efforts, 
these offices provide customer service to all TRICARE beneficiaries 
who request assistance, regardless of their enrollment status. 

TRICARE Network and Nonnetwork Civilian Providers: 

Civilian providers must be TRICARE-authorized to be reimbursed for 
care under the program.[Footnote 14] Such authorization requires a 
provider to be licensed by their state, accredited by a national 
organization, if one exists, and meet other standards of the medical 
community. There are two types of authorized civilian providers--
network and nonnetwork providers, and both types of providers may 
accept TRICARE beneficiaries as patients on a case-by-case basis, 
regardless of enrollment status. 

* Network providers are TRICARE-authorized providers who enter into a 
contract with the regional contractor to provide care to TRICARE 
beneficiaries and agree to accept TRICARE reimbursement rates as 
payment in full.[Footnote 15] By law, TRICARE reimbursement rates for 
civilian providers are generally limited to Medicare rates, but 
network providers may agree to accept lower reimbursements as a 
condition of network membership.[Footnote 16] Network providers are 
not obligated to accept all TRICARE beneficiaries seeking care. For 
example, network providers may decline to accept TRICARE beneficiaries 
as patients because their practices do not have sufficient capacity or 
for other reasons.[Footnote 17] 

* Nonnetwork providers are TRICARE-authorized providers who have not 
entered into a contractual agreement with a contractor to provide care 
to TRICARE beneficiaries. Nonnetwork providers may accept the TRICARE 
reimbursement rate as payment in full or they may charge up to 15 
percent above the reimbursement amount. The beneficiary is responsible 
for paying the extra amount billed in addition to the required cost- 
shares. 

Beneficiaries' Use of TRICARE: 

Claims data from fiscal years 2006 through 2010 show that overall 
TRICARE claims paid to civilian providers have increased by more than 
50 percent, even though the eligible population increased by less than 
6 percent.[Footnote 18] (See table 2.) 

Table 2: TRICARE-eligible Beneficiaries and Claims Paid to Civilian 
Providers for Fiscal Years 2006 through 2010: 

Fiscal year: 2006; 
TRICARE-eligible beneficiaries[A]: 9.19 million; 
TRICARE claims paid to civilian providers: 19.29 million. 

Fiscal year: 2007; 
TRICARE-eligible beneficiaries[A]: 9.22 million; 
TRICARE claims paid to civilian providers: 21.31 million. 

Fiscal year: 2008; 
TRICARE-eligible beneficiaries[A]: 9.39 million; 
TRICARE claims paid to civilian providers: 24.02 million. 

Fiscal year: 2009; 
TRICARE-eligible beneficiaries[A]: 9.58 million; 
TRICARE claims paid to civilian providers: 26.97 million. 

Fiscal year: 2010; 
TRICARE-eligible beneficiaries: 9.69 million; 
TRICARE claims paid to civilian providers: 29.60[B] million. 

Fiscal year: Total percentage change from fiscal year 2006 to 2010; 
TRICARE-eligible beneficiaries[A]: 5.4 percent; 
TRICARE claims paid to civilian providers: 53.4 percent. 

Source: GAO analysis of TRICARE Management Activity (TMA) data. 

Note: Claims were for services provided in an office or other setting 
outside of an institution. Claims for services rendered at hospitals, 
military treatment facilities, and other institutions were excluded. 
TRICARE for Life claims were excluded as well as claims for medical 
supplies and from chiropractors and pharmacies. 

[A] Eligible beneficiaries include active duty personnel and their 
dependents, medically eligible Reserve and National Guard personnel 
and their dependents, and retirees and their dependents and survivors. 

[B] Fiscal year 2010 data are incomplete as TMA allows claims to be 
submitted up to 1 year after care was provided. 

[End of table] 

Between fiscal years 2006 through 2010, TRICARE Standard and Extra 
beneficiaries' use of network providers--as measured by the number of 
claims paid to network providers--has increased significantly, while 
their use of nonnetwork providers--as measured by the number of claims 
paid to nonnetwork providers--has slightly decreased. (See figure 2.) 
Specifically, their use of network providers has increased more than 
66 percent between fiscal years 2006 and 2010, compared to about a 10 
percent decrease in the use of nonnetwork providers over the same time 
period. 

Figure 2: TRICARE Standard and Extra Beneficiaries' Claims Paid to 
Network and Nonnetwork Civilian Providers for Fiscal Years 2006 
Through 2010: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2006; 
Claims paid to network civilian providers: 3,055; 
Claims paid to nonnetwork civilian providers: 3,374. 

Fiscal year: 2007; 
Claims paid to network civilian providers: 3,462; 
Claims paid to nonnetwork civilian providers: 3,267. 

Fiscal year: 2008; 
Claims paid to network civilian providers: 4,025; 
Claims paid to nonnetwork civilian providers: 3,235. 

Fiscal year: 2009; 
Claims paid to network civilian providers: 4,668; 
Claims paid to nonnetwork civilian providers: 3,122. 

Fiscal year: 2010a; 
Claims paid to network civilian providers: 5,075; 
Claims paid to nonnetwork civilian providers: 3,038. 

Source: GAO analysis of TRICARE Management Activity (TMA) data. 

Note: Claims analyzed were for services provided in an office or other 
setting outside of an institution. Claims for services rendered at 
hospitals, military treatment facilities, and other institutions were 
excluded. TRICARE for Life claims were excluded as well as claims for 
medical supplies and from chiropractors and pharmacies. 

[A] Fiscal year 2010 data are incomplete as TMA allows claims to be 
submitted up to 1 year after care was provided. 

[End of figure] 

Reimbursement Rates and Provider Shortages Hinder Access to Civilian 
Providers; TMA Can Increase Reimbursement Rates When Needed, but Has 
Only Limited Means to Address Shortages: 

Reimbursement rates have been cited as the primary impediment that 
hinders beneficiaries' access to civilian health care and mental 
health care providers under TRICARE Standard and Extra. TMA can 
increase reimbursement rates in certain circumstances when a need has 
been demonstrated. Although national and local shortages of certain 
types of providers have also been cited as an impediment to TRICARE 
Standard and Extra beneficiaries' access to civilian providers, TMA is 
limited in its ability to address this impediment as it affects the 
general population and not just TRICARE beneficiaries. Additionally, 
beneficiaries' access to mental health care is affected by provider 
shortages and other issues and is of particular concern because the 
stress of deployment and redeployment has increased the demand for 
these services. 

Reimbursement Rates Have Been Cited as the Primary Impediment to 
Beneficiaries' Access to Civilian Providers under TRICARE Standard and 
Extra, and TMA Can Adjust Them When a Need is Demonstrated: 

Since TRICARE was implemented in 1995, some civilian providers--both 
network and nonnetwork--have expressed concerns about TRICARE's 
reimbursement rates. For example, in 2006, we reported that both 
network and nonnetwork civilian providers said that TRICARE's 
reimbursement rates tended to be lower than those of other health 
plans, and as a result, some of these providers had been unwilling to 
accept TRICARE Standard and Extra beneficiaries as patients.[Footnote 
19] More recent studies by TMA and others have cited TRICARE's 
reimbursement rates as the primary reason civilian providers may be 
unwilling to accept these beneficiaries as patients, for example: 

* TMA's first multiyear survey of civilian providers (2005 through 
2007) showed that TRICARE's reimbursement rates were the primary 
reason cited by providers for not accepting TRICARE Standard and Extra 
beneficiaries as new patients.[Footnote 20] 

* Similarly, results from the first 2 years (2008 and 2009) of TMA's 
second multiyear provider survey showed that the responding providers 
cited TRICARE's reimbursement rates as one of the primary reasons that 
they would not accept new TRICARE patients even though they would 
accept new Medicare patients.[Footnote 21] 

* In a 2008 study on civilian providers' acceptance of TRICARE 
Standard and Extra beneficiaries, CNA reported that the medical 
society officials and physicians they interviewed cited low 
reimbursement as the primary reason for limiting their acceptance of 
TRICARE beneficiaries as patients.[Footnote 22] The providers who were 
interviewed as part of this study noted that while they could accept 
more TRICARE beneficiaries as patients, there are services for which 
the reimbursement was so low that accepting more TRICARE beneficiaries 
as patients hurt rather than helped them. 

In addition to these studies, officials from each of the TRICARE 
Regional Offices and two of the contractors, as well as a national 
provider organization, told us that reimbursement rates were civilian 
providers' primary concern about TRICARE. 

Concerns about TRICARE's reimbursement rates--which generally mirror 
the Medicare program's physician fee schedule[Footnote 23]--have 
increased by the uncertainty surrounding the annual update to these 
Medicare fees.[Footnote 24] All of the contractors expressed concerns 
about the proposed decreases to Medicare rates and how that would 
affect providers' acceptance of TRICARE patients. One contractor told 
us that providers already were expressing concerns about the Medicare 
rate decreases and that some providers said they would no longer 
accept TRICARE beneficiaries as patients if the rates were reduced. 
Furthermore, as of September 2010, this contractor noted that one 
provider had stopped accepting TRICARE beneficiaries as patients 
because of concerns about potential Medicare reimbursement reductions. 

TMA has the authority to adjust TRICARE reimbursement rates under 
certain conditions to increase beneficiaries' access to civilian 
providers, and has done so in some instances. In response to various 
concerns about providers' willingness to accept TRICARE patients, TMA 
contracted with a consulting firm to conduct a number of studies about 
TRICARE reimbursement rates, and some of these studies have resulted 
in increases to reimbursement amounts for certain procedures. (See 
appendix II for a summary of the studies.) For example, in response to 
civilian obstetric providers' concerns about TRICARE reimbursement 
rates, TMA conducted an analysis of historical TRICARE claims data and 
made nationwide changes to its physician payment rates for obstetric 
care in 2006.[Footnote 25] These changes included an additional 
payment for ultrasounds for uncomplicated pregnancies that is likely 
to result in overall higher payments for civilian physicians who 
perform one or more ultrasounds during the course of pregnancy. 

TMA also has the authority to adjust reimbursement rates through the 
use of waivers in areas where it determines that the rates have had a 
negative impact on TRICARE beneficiaries' access to civilian 
providers. TMA can issue three types of reimbursement waivers, 
depending on the type of adjustment that is needed: 

* Locality waivers may be used to increase rates for specific medical 
services in specific areas where access to civilian providers has been 
severely impaired and are applicable to both network and nonnetwork 
providers.[Footnote 26] 

* Network waivers may be 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 in a specific location. 
[Footnote 27] 

* TMA can restore TRICARE reimbursement rates in specific localities 
to the levels that existed before a reduction was made to align 
TRICARE reimbursement rates with Medicare rates for both network and 
nonnetwork providers.[Footnote 28] 

Waivers can be requested by providers, beneficiaries, contractors, 
military treatment facilities, or TRICARE Regional Office directors, 
although all requests must be submitted through the TRICARE Regional 
Office directors. Individuals may apply for waivers by submitting 
written requests to the TRICARE Regional Offices. These requests must 
contain specific justifications to support the claim that access 
problems are related to low reimbursement rates and must include 
information such as the number of providers and TRICARE-eligible 
beneficiaries in a location, the availability of military treatment 
facility providers, geographic characteristics, and the cost- 
effectiveness of granting the waiver. Ultimately, the TRICARE Regional 
Office director reviews and analyzes the requests. If the TRICARE 
Regional Office director agrees with the request, they make a 
recommendation to the Director of TMA that the waiver request be 
approved. Each analysis is tailored to the specific concerns outlined 
in the waiver requests. Once implemented, waivers remain in effect 
indefinitely or until TMA officials determine they are no longer 
needed. 

As shown in table 3, the total number of waivers has increased from 15 
to 24 since we last reported on TMA's use of waivers in 2006. (See 
appendix III for more details about the waivers.) Additionally, 13 of 
the 24 waivers are for locations in Alaska. (See appendix IV for more 
information about access-to-care issues in Alaska.) 

Table 3: TRICARE Reimbursement Waivers in August 2006 and January 2011: 

Type of waiver: Locality waiver; 
Number of waivers in place as of August 2006: 7; 
Number of waivers in place as of January 2011: 16. 

Type of waiver: Network waiver; 
Number of waivers in place as of August 2006: 6; 
Number of waivers in place as of January 2011: 8. 

Type of waiver: Waiving reimbursement rate reductions[A]; 
Number of waivers in place as of August 2006: 2; 
Number of waivers in place as of January 2011: 0. 

Type of waiver: Total; 
Number of waivers in place as of August 2006: 15; 
Number of waivers in place as of January 2011: 24. 

Source: GAO analysis of TRICARE Management Activity (TMA) data. 

[A] TMA has authority to restore TRICARE reimbursement rates in 
specific localities to the levels that existed before a reduction was 
made to align TRICARE reimbursement rates with Medicare rates. The two 
waivers that were in place in 2006 were for Alaska and were 
discontinued when a demonstration project, implemented in 2007, 
increased TRICARE's reimbursement rates so that on average, they 
matched those of the Department of Veterans Affairs. 

[End of table] 

Other than assessing the effectiveness of a specific rate adjustment 
in Alaska, TMA has not conducted analyses to determine if its rate 
adjustments or the use of waivers have increased beneficiaries' access 
to civilian providers. Nonetheless, officials told us that using the 
waivers has proved to be successful by maintaining the stability of 
the provider networks and by increasing the size of the networks in 
some areas. 

National and Local Shortages of Certain Provider Specialties Impede 
Beneficiaries' Access to Civilian Providers, and TMA Is Limited in Its 
Ability to Address Them: 

Another main impediment to TRICARE beneficiaries' access to civilian 
providers is a shortage of certain provider specialties, both at the 
national and local levels. However, TMA is limited in its ability to 
address provider shortages because this impediment affects the entire 
health care delivery system and is not specific to the TRICARE program. 

National and Local Shortages of Certain Provider Specialties Impede 
Access: 

Although the number of civilian providers accepting TRICARE has 
increased over the years,[Footnote 29] access to civilian providers 
remains a concern due to national and local shortages of certain 
provider specialties. These shortages limit access for the general 
population, including all TRICARE beneficiaries regardless of 
enrollment status. Several organizations have reported on national 
provider work-force shortages in primary care as well as in a number 
of specialties.[Footnote 30] For example, the Association of American 
Medical Colleges reported national shortages in provider specialties 
such as anesthesiology, dermatology, and psychiatry. Additionally, the 
contractors and regional office officials we met with told us that 
they were particularly concerned about the national shortage of child 
psychiatrists. 

In addition to national shortages, TRICARE beneficiaries' access to 
civilian providers also may be impeded in certain locations where 
there are insufficient numbers and types of civilian providers to 
cover the local demand for health care. According to the contractors, 
each TRICARE region had areas with civilian provider shortages, for 
example: 

* In TRICARE's West region, a Prime Service Area in northern 
California had provider shortages in 21 different provider 
specialties, including allergists and obstetricians as well as 
psychologists and psychiatrists. According to this region's 
contractor, either there were no providers located in the area or the 
providers located in the area were already contracted as TRICARE 
network providers. 

* In TRICARE's South region, the contractor identified locations in 
Texas, Louisiana, and Florida in which there were limited numbers of 
specialists and mental health providers. For example, according to 
this contractor, Del Rio, Texas has no providers in several 
specialties including dermatology, allergy, and psychiatry. 

* Likewise, in TRICARE's North region, the contractor stated that 
there are mountainous areas, such as parts of West Virginia, and 
remote areas, such as western North Carolina, in which there are 
provider shortages. Consequently, the general population, including 
TRICARE beneficiaries, has to drive longer distances to obtain certain 
types of specialty care. 

TMA is Limited in How it Can Address Provider Shortages: 

TMA has attempted to address civilian provider shortages, but because 
these shortages are not specific to the TRICARE program, there are 
limitations in what TMA can do. One step TMA has taken is the adoption 
of a bonus payment system that mirrors the one used by Medicare for 
certain provider shortage areas.[Footnote 31] Under Medicare, 
providers who provide services to beneficiaries located in Health 
Professional Shortage Areas--geographic areas that the Department of 
Health and Human Services has identified as having shortages of 
primary health, dental, or mental health care providers--receive 10 
percent bonus payments.[Footnote 32] Beginning in June 2003, TMA began 
offering providers a 10 percent bonus payment for services rendered in 
these same locations. TMA estimated that from fiscal year 2007 through 
the third quarter of fiscal year 2010, more than 20,000 individual 
providers received these payments. 

Currently, civilian providers must include a specific code on every 
TRICARE claim they submit to obtain the additional payment. However, 
TMA officials noted that some providers may not be receiving this 
bonus because they do not include the specific code on their claims. 
TMA officials noted the process will become easier once the third 
generation of managed care support contracts is implemented. Once this 
occurs, the contractors will rely on the Centers for Medicare & 
Medicaid Services' public database of zip codes to determine a 
provider's eligibility for these bonus payments instead of requiring 
the provider to include a code on each claim. TMA officials estimated 
that this change will result in an additional $150,000 in bonus 
payments each year for TRICARE claims. 

TRICARE Beneficiaries' Access to Mental Health Care Is Affected by 
Provider Shortages and Other Issues: 

Access to mental health care is a concern for all TRICARE 
beneficiaries, and it has been affected by provider shortages and 
other issues, including providers' lack of knowledge about combat 
related issues, providers' concerns about reimbursement rates, and 
providers' lack of awareness about TRICARE. A 2007 report by the 
American Psychological Association noted that shortages of mental 
health providers specifically trained in military issues and the 
challenge associated with modifying the military culture so that 
mental health services are less stigmatized are impediments to TRICARE 
beneficiaries' access to mental health care.[Footnote 33] Furthermore, 
the report discusses that even where mental health providers are 
available, it can be difficult to find psychiatrists and other mental 
health providers with specific familiarity of TRICARE beneficiaries' 
mental health conditions such as post-traumatic stress disorder and 
deployment issues. This can be frustrating for TRICARE beneficiaries 
who seek mental health care only to discover that providers cannot 
relate to their specific concerns. 

Over the years, Congress has required DOD to report on TRICARE 
beneficiaries' access to mental health care providers. Specifically, 
the NDAA for Fiscal Year 2008 required DOD to report on the adequacy 
of access to mental health services under the TRICARE program. In 
2009, DOD reported that it believed access to mental health care 
providers for TRICARE beneficiaries was adequate due to a dramatic 
increase in both inpatient and outpatient mental health care provided 
in 2008.[Footnote 34] DOD also cited increases in the numbers of 
mental health providers from May 2007 to May 2009 in both the direct 
care system of military treatment facilities (1,952) and in the 
civilian provider network (10,220), while acknowledging that there may 
still be some areas where access to mental health care providers is 
inadequate. However, in the same report, DOD noted that TRICARE 
Standard and Extra beneficiaries reported more problems finding 
civilian mental health care providers than beneficiaries who use other 
health care coverage, and that psychiatrists have the lowest 
acceptance rates of new TRICARE Standard and Extra beneficiaries 
compared with other providers.[Footnote 35] 

In its 2009 Access to Mental Health Services report, DOD noted that 
two reasons most cited by civilian mental health providers, including 
psychiatrists, for not accepting new TRICARE patients were "not aware 
of TRICARE" and "reimbursement." DOD also reported that TMA would 
increase outreach to mental health providers in selected locations to 
improve awareness of the program. In addition to the increased 
outreach, DOD also reported two initiatives designed to enhance 
beneficiaries' access to mental health care--the Telemental Health 
Program and the TRICARE Assistance Program. The Telemental Health 
Program[Footnote 36] connects TRICARE beneficiaries in one office to 
civilian mental health providers in another medical office through an 
audiovisual link. The TRICARE Assistance Program[Footnote 37] is a Web-
based program that enables certain beneficiaries to contact licensed 
civilian counselors 24 hours a day for short-term, nonmedical issues. 
[Footnote 38] Also, in recognition that mental health is an issue of 
concern for its beneficiaries, each of the TRICARE Regional Offices 
and contractors has established staff positions that focus 
specifically on mental health issues, including access to care. 

More recently, the NDAA for fiscal year 2010 required DOD to report on 
the appropriate number of personnel to meet the mental health care 
needs of servicemembers, retired members, and dependents and to 
develop and implement a plan to significantly increase the number of 
DOD military and civilian mental health personnel, among other 
requirements.[Footnote 39] In response to this requirement, DOD 
reported in February 2011 that it has identified criteria for the 
military services to use in determining the appropriate number of 
mental health personnel needed to meet the needs of their 
beneficiaries.[Footnote 40] However, DOD also noted that the military 
services are still testing and validating these criteria to determine 
how effective they would be in gauging adequate mental health staffing 
numbers. Therefore, although DOD reported increases in the number of 
mental health providers employed at military treatment facilities or 
contracted to join TRICARE's network of providers, it did not 
specifically estimate the appropriate number of mental health care 
providers needed. DOD also reported that initiatives are under way to 
increase the number of mental health providers in military treatment 
facilities, including increasing the number of Public Health Service 
providers serving in military treatment facilities as well as 
recruitment and retention incentives. These initiatives, if 
successfully implemented, could reduce the demand for civilian mental 
health providers in those locations. 

Although TMA Has Typically Used Feedback Mechanisms to Gauge TRICARE 
Standard and Extra Beneficiaries' Access to Civilian Providers, It Is 
Developing a New Method for Monitoring Access: 

TMA and its contractors have used various feedback mechanisms, such as 
surveys, to gauge beneficiaries' access to care under TRICARE Standard 
and Extra. More recently, TMA officials have taken steps to develop a 
model to help identify geographic areas where beneficiaries that use 
TRICARE Standard and Extra may experience access problems. However, 
because this initiative is still evolving, it is too early to 
determine its effectiveness. 

TMA Has Primarily Relied on Feedback Mechanisms to Gauge 
Beneficiaries' Access to Civilian Providers under TRICARE Standard and 
Extra: 

TMA has primarily relied on feedback to gauge beneficiaries' access to 
civilian providers under TRICARE Standard and Extra, as historically, 
access to care has only been routinely monitored for beneficiaries 
enrolled in TRICARE Prime, the only option with access standards. 
[Footnote 41] These feedback mechanisms have included surveys of 
civilian health care (including mental health care) providers as well 
as surveys of nonenrolled beneficiaries who are eligible to use the 
TRICARE Standard and Extra options as well as TRICARE Reserve Select. 
Additionally, TMA and its contractors use feedback from beneficiaries' 
inquiries and complaints to help identify problems with access, among 
other issues. 

In fiscal year 2005, TMA implemented its first multiyear survey of 
civilian providers (network and nonnetwork) as required by the NDAA 
2004. TMA's survey was supposed to assess beneficiaries' access to 
civilian providers under the TRICARE Standard and Extra options by 
determining whether civilian providers would accept these 
beneficiaries as new patients. In 2006, we reported on TMA's survey 
methodology, among other issues, and reported that it was sound and 
statistically valid. TMA's results for this first multiyear survey of 
civilian providers, which was fielded through 2007, showed that about 
8 of 10 physicians and behavioral health providers accepted TRICARE 
beneficiaries as new patients, if they accepted any patients at all. 
[Footnote 42] However, while these results appear favorable, as we 
reported in 2006, there is no benchmark with which to compare them. 

Subsequently, the NDAA 2008 required TMA to conduct two multiyear 
surveys--one of civilian providers and one of nonenrolled 
beneficiaries--to determine the adequacy of access to health care and 
mental health care for these beneficiaries. In March 2010, we 
reported[Footnote 43] that the methodology for both of TMA's surveys 
was sound and generally addressed the methodological requirements 
outlined in the law.[Footnote 44] TMA has completed the first 2 years 
(2008 and 2009) of these surveys. 

TMA and its contractors also use feedback collected from 
beneficiaries' inquiries and complaints to identify and gauge 
potential problem areas, including issues with access to care. 
However, this type of feedback is not representative because not every 
beneficiary who has a question or complaint will contact TMA or its 
contractors. TMA uses its Assistance Reporting Tool to collect and 
analyze information on the beneficiary inquiries that it receives, 
including inquiries on access to care from beneficiaries who use 
TRICARE Standard and Extra.[Footnote 45] During fiscal years 2008 
through 2010, data from the Assistance Reporting Tool showed that only 
about 5 percent of closed cases on all TRICARE-related beneficiary 
inquiries and complaints were from TRICARE Standard and Extra 
beneficiaries. Further, of the total inquiries and complaints received 
from these beneficiaries, TMA reported that 313 cases were access-to-
care related (2 percent). 

The contractors separately receive feedback from beneficiaries through 
some or all of the following methods: (1) telephone, (2) e-mail, (3) 
in-person at a TRICARE Service Center, or (4) in writing. Each 
contractor collects and reports information on their beneficiary 
feedback differently. In reviewing contractors' data on beneficiary 
inquiries or complaints received, we found: 

* During fiscal year 2009, TMA's contractor in the North region 
reported receiving 11,176 (less than 1 percent) access-to-care 
inquiries out of a total of more than 5 million inquiries. This 
contractor does not categorize its inquiries by TRICARE option, but 
does collect and categorize inquiries specific to access-to-care 
concerns. In fiscal year 2010, the contractor received 3,642 access-to-
care inquiries (less than 1 percent) out of a total of more than 5 
million inquiries. 

* TMA's contractor in the South region reported that during calendar 
year 2009, it received a total of 7,785 complaints. Of these, 175 (2 
percent) were submitted by TRICARE Standard and Extra beneficiaries. 
While access to care did not represent a top reason for their 
complaints in 2009, this contractor reported that 15 of the complaints 
received were related to beneficiary appointment and wait times. This 
contractor also reported that it received a total of 7,927 complaints 
in calendar year 2010. Of these, 134 (about 2 percent) were submitted 
by TRICARE Standard and Extra beneficiaries, and only 14 of the 134 
complaints were specific to beneficiary appointment and wait times. 

* Finally, data submitted to us by TMA's contractor in the West region 
showed that it received a total of 809 grievances from TRICARE 
beneficiaries between January 2008 and December 2010. Of these, 
TRICARE Standard and Extra beneficiaries submitted 83 inquiries (about 
10 percent), and about 2 percent of the 83 inquiries were specific to 
provider appointment wait times. 

TMA Has Initiated Steps to Establish a Method for Routinely Monitoring 
Access to Civilian Providers for TRICARE Standard and Extra 
Beneficiaries: 

TMA has recently initiated steps to establish an approach to routinely 
monitor beneficiaries' access to both network and nonnetwork providers 
under the TRICARE Standard and Extra options. (The new approach will 
also apply to beneficiaries using the TRICARE Reserve Select option.) 
In recognition that the military health system had no established 
measures for determining the adequacy of network and nonnetwork 
providers for these beneficiaries, in February 2010, TMA's Office of 
Policy and Operations directed the TRICARE Regional Offices to develop 
a model to identify geographic areas where they may experience access 
problems as well as areas of provider shortages for the general 
population. The model is intended to help the TRICARE Regional Offices 
and their contractors identify geographic areas where additional 
efforts to increase access to civilian providers may be warranted. 

To implement this approach, TMA recommended that each regional office 
adapt and standardize the model that had originally been developed by 
its West regional office in 2008. This model applies a specific 
provider-to-beneficiary ratio based on the Graduate Medical Education 
National Advisory Committee's recommended standards for health care 
services[Footnote 46] to different provider specialties to determine 
whether there are sufficient numbers and types of providers for the 
nonenrolled beneficiary population in certain locations. To identify 
locations for analysis, West regional office officials used zip codes 
to identify locations with populations of 500 or more nonenrolled 
beneficiaries. According to officials in the West regional office, 
they then identified the network and nonnetwork providers who 
practiced and had previously accepted a TRICARE patient in these same 
locations and applied a specific provider-to-beneficiary ratio against 
each provider specialty included in the model for the locations 
assessed. Each regional office has developed a model that generally 
follows the same methodology and includes similar data as the West 
regional office's model, although variations exist. For example, while 
one regional office includes provider data that represents 15 provider 
specialties, another regional office includes 40 provider specialties 
in its model. Officials at one regional office told us they have plans 
to update their model to reflect changes in the beneficiary 
population, and an official at another regional office said that staff 
were already in the process of updating their model, which may include 
additional provider demographic factors. 

TMA directed each TRICARE Regional Office to apply the model at least 
semiannually beginning on May 1, 2010. According to officials in TMA's 
South region, they plan to apply the model semi-annually as directed 
while TMA's regional offices in the North and West apply the model as 
needed. More specifically, since TMA's office in the North region 
implemented the model, it has assessed 20 locations, and now applies 
the model as needed in response to specific concerns. Meanwhile, 
officials from TMA's office in the West region told us that they 
initially applied the model to over 50 locations and that they now 
apply the model as needed, such as in response to a specific inquiry 
about access to care in a particular location. Officials in the North 
regional office noted that their model's data are used in conjunction 
with other indicators to assess if further analysis of civilian 
provider availability is needed. Officials in the West region said 
that they plan to reach out to providers in the community or use the 
contractor to help recruit additional providers to the TRICARE network 
if the model identifies an area that is short of their targeted number 
of providers in a given specialty. 

Based on our review of each regional office's initial approach, we 
found this methodology to be reasonable. However, because the regional 
models were recently developed, it is too early to determine their 
effectiveness. And, while the regional offices provided us with 
examples of their models, they did not provide documentation of how 
they applied a provider-to-beneficiary ratio as criteria to determine 
the adequacy of access in these locations or any documentation of 
their results, although they told us that they did not identify any 
access problems. 

TMA's Contractors Educate Civilian Providers about TRICARE and Surveys 
Indicate That Providers Are Generally Aware of the Program: 

TMA's contractors educate civilian providers about TRICARE program 
requirements, policies, and procedures. Contractors also conduct 
outreach to increase providers' awareness of TRICARE, and TMA's 
provider survey results indicate providers are generally aware of the 
program. However, providers' awareness of TRICARE does not necessarily 
signify that they have an accurate understanding of it. 

TMA's Contractors Inform Network and Nonnetwork Providers about 
TRICARE: 

Under the second generation of TRICARE contracts, TMA's contractors 
are required to conduct activities to help ensure that providers--both 
network and nonnetwork--are aware of TRICARE program requirements, 
policies, and procedures in their respective regions. To accomplish 
this, the contractors are required to have active provider education 
programs. In addition, each contractor must submit an annual marketing 
and education plan to TMA's Communications and Customer Service office 
that outlines its methods for educating providers based on contractual 
requirements. All contractors include details in these plans about 
their efforts to satisfy requirements to distribute regular bulletins 
and newsletters as well as educate new network providers, such as 
through orientation sessions or with a Welcome Tool Kit.[Footnote 47] 

The contractors' marketing and education plans also identify provider 
education efforts that vary across the regions. These efforts vary 
because contractors have some flexibility in how they achieve outcomes 
and because the contractors may include additional performance 
standards in their contracts.[Footnote 48] Under the second generation 
of TRICARE contracts, contractors have added performance standards 
related to provider education. For example, one contractor must visit 
high-volume network and nonnetwork providers in its region annually, 
while another contractor must conduct annual seminars for the network 
and nonnetwork providers in its Prime Service Areas.[Footnote 49] TMA 
reported that each contractor had fulfilled its provider education 
requirements as of December 2010. 

All of the contractors also make TRICARE education resources available 
to providers. Many of these resources are available on the 
contractors' Web sites and include the TRICARE Provider Handbook 
[Footnote 50] as well as quick reference charts that include 
information on provider resources and TRICARE covered benefits and 
services, among other topics. One contractor hosts electronic seminars 
on its Web site that allow providers to learn about the TRICARE 
program at their convenience. Another contractor has developed a 
reference chart that details the Prime, Standard, and Extra benefit 
options and has mailed it to both network and nonnetwork providers in 
its region who have accepted TRICARE beneficiaries as patients. 

In addition, all of the contractors have conducted outreach activities 
to promote or increase providers' awareness of TRICARE. This has 
included participating in provider events with local, state, or 
national groups, including physician associations, medical societies, 
military treatment facilities, and military associations. Contractors 
told us that while at these events, they answer providers' questions 
about the program, distribute TRICARE materials, and encourage 
providers to join the regional TRICARE network. All of the contractors 
have also participated in events specific to behavioral health care. 
Contractors said that these events allow them the opportunity to 
discuss behavioral health issues that may particularly affect military 
servicemembers and their families, such as suicide and post-traumatic 
stress disorder, with providers. The contractors also use social media 
[Footnote 51] to highlight TRICARE information for providers, 
including resources and program news and changes. For example, one 
contractor used its Twitter account to provide a link to information 
on how to become a network or TRICARE-authorized provider in its 
region. Additionally, two of the TRICARE Regional Offices as well as 
two contractors have specifically conducted outreach related to either 
encouraging network and nonnetwork providers to accept TRICARE 
beneficiaries as patients or thanking them for doing so. For example, 
in January 2011, one contractor mailed letters to nonnetwork 
providers, encouraging them to support TRICARE beneficiaries by 
joining the network. 

Results of TMA's Provider Surveys Indicate a General Awareness of 
TRICARE, but May Not Necessarily Signify an Accurate Understanding of 
the Program: 

Although TMA's provider surveys indicate a general awareness of the 
program, these results may not signify an accurate understanding of 
TRICARE. Survey results from TMA's first multiyear survey (2005 
through 2007) of civilian providers (network and nonnetwork) indicated 
that 87 percent of providers on average were aware of TRICARE. TMA's 
second multiyear survey of civilian providers (network and 
nonnetwork),[Footnote 52] which has completed 2 years (2008 and 2009) 
of its 4-year cycle, similarly asked whether providers were aware of 
the TRICARE program. Although the results of this survey are not 
generalizeable,[Footnote 53] TMA's results show that, of those 
providers who responded, 87 percent on average were aware of the 
program.[Footnote 54] 

Although TMA's survey results indicate that providers were generally 
aware of TRICARE, this does not necessarily mean that providers had an 
accurate understanding of the program's options and its requirements. 
For example, representatives of an association representing current 
and former servicemembers told us that providers do not always 
understand the differences between the TRICARE Standard and TRICARE 
Prime options. Similarly, in a November 2008 report, CNA stated that 
the providers they interviewed were often confused about the 
differences between TRICARE Standard and TRICARE Prime.[Footnote 55] 
One provider, a former president of a local medical society, said many 
providers are under the misconception that TRICARE Standard is the 
same as TRICARE Prime and that when providers have had bad experiences 
with TRICARE Prime, which generally pays network providers less than 
Medicare, they end up refusing to accept any TRICARE patients because 
they "don't want to deal with" a health maintenance organization. This 
lack of understanding is not always easy to remedy. According to the 
contractors, because many providers have relatively low volumes of 
TRICARE patients, it can be challenging to encourage them to take 
advantage of the available TRICARE education resources or to remain 
current on updates and changes to the program. In 2009, the average 
percentage of Prime Service Areas civilian providers' and non-Prime 
Service Areas civilian providers' TRICARE patient population (under 
any option) was 5.14 percent and 3. 42 percent, respectively. 

TMA's Contractors Educate Beneficiaries on All TRICARE Options and 
Provide Information on Network Providers; New Contracts Will Also 
Require Information about Nonnetwork Providers: 

Under the second generation of TRICARE contracts, TMA's contractors 
have beneficiary education programs that contain information on all of 
the TRICARE options; contractors also maintain directories of network 
providers. Under its third generation of contracts, TMA will also 
require contractors to include information on nonnetwork providers in 
their directories. 

TMA's Contractors Educate Beneficiaries on all TRICARE Options: 

Under the second generation of TRICARE contracts, TMA's contractors 
have established beneficiary education programs that contain 
information on all of the TRICARE options, including Standard and 
Extra. To meet its beneficiary education requirements, each contractor 
must submit an annual marketing and education plan to TMA's 
Communications and Customer Service office that outlines the 
contractor's methods for educating beneficiaries based on its 
contractual requirements. For example, the contractor may include 
details in its marketing and education plan about intentions to 
distribute required beneficiary newsletters and handbooks, which 
include information on TRICARE's options and covered services. These 
plans also specify how the contractors are to provide required weekly 
one-hour TRICARE briefings to audiences specified by the commanders of 
their regional military treatment facilities. TMA reported that each 
of the contractors had fulfilled its beneficiary education 
requirements as of December 2010. 

TMA has only one beneficiary education requirement targeted to TRICARE 
Standard and Extra beneficiaries: contractors must provide these 
beneficiaries with the annual TRICARE Standard Health Matters 
newsletter. The 2010 TRICARE Standard Health Matters newsletter 
included articles on topics such as waiving cost-sharing for certain 
preventive services under TRICARE Standard and Extra. In 2010, the 
contractors mailed this newsletter to approximately 1.1 million 
TRICARE Standard and Extra households and made it available 
electronically through e-mail and their Web sites.[Footnote 56] 
Additionally, for the first time, in summer 2010 TMA developed a 
second TRICARE Standard Health Matters newsletter for TRICARE Standard 
and Extra beneficiaries in an electronic format as an additional 
resource to fill any possible information gaps to beneficiaries. The 
contractors then e-mailed the electronic newsletter to beneficiaries 
and posted it to their Web sites.[Footnote 57] This electronic 
newsletter included articles on topics such as how beneficiaries may 
save money by using TRICARE Extra and how they can stay informed about 
TRICARE. Two of the contractors told us that it is difficult to 
communicate with TRICARE Standard and Extra beneficiaries because they 
do not necessarily have ready access to the beneficiaries' residential 
or e-mail addresses as these beneficiaries are not required to enroll. 
This lack of information can make communicating with these 
beneficiaries challenging, and as a result, TRICARE Standard and Extra 
beneficiaries may not receive all the available information on their 
TRICARE benefit. A TMA official noted that TMA is not considering 
making the additional electronic newsletter a requirement of the third 
generation of TRICARE contracts, although the contractors may use it 
to communicate with beneficiaries. 

All of the contractors also make additional TRICARE education 
resources available to beneficiaries. Many of these resources are 
available on their Web sites, and may include the TRICARE Standard 
Handbook[Footnote 58] and brochures that explain the different TRICARE 
options and costs to beneficiaries, among other topics. For example, 
one contractor makes games available on its Web site, which enables 
beneficiaries to interactively learn about the TRICARE program. 
Another contractor posts its own monthly newsletter to its Web site, 
through which beneficiaries receive information about TRICARE, 
including its different options, and activities specific to its 
region. Meanwhile, the third contractor has developed several 
different fact sheets for beneficiaries that summarize key TRICARE 
program elements in short, easy-to-read formats. 

Each of the three contractors also conducts outreach to enhance 
beneficiaries' awareness of TRICARE. For example, each of the 
contractors has attended events hosted by organizations such as the 
Military Officers Association of America, the Enlisted Association of 
the National Guard of the United States, the National Military Family 
Association, the Military Health System, and the Adjutants General 
Association of the United States. Contractors stated that while at 
these events they can share TRICARE information with attendees. One 
contractor also noted that while at these events it addresses 
beneficiaries' concerns and directs them to further resources. 
Contractors also use social media to communicate with beneficiaries 
and provide information on different TRICARE topics, including (1) 
benefits, (2) resources, and (3) health campaigns. For instance, one 
contractor used its Facebook page to clarify whether TRICARE Standard 
beneficiaries needed primary care managers to coordinate their 
referrals. Another contractor included information on Facebook about 
how beneficiaries could access information about their TRICARE benefit. 

Contractors Provide Directories of Network Providers to Facilitate 
Access to Care; New Contracts Will Also Require Information on 
Nonnetwork Providers: 

To facilitate beneficiaries' access to care, TMA requires its 
contractors to maintain directories of TRICARE-authorized network 
providers. These directories are to include current information 
(updated within 30 days) about each network provider, including 
specialty, address, and telephone number. The contractors are required 
to make their directories readily accessible to all beneficiaries, and 
as a result, all of the contractors' Web sites have online provider 
directories. Under the second generation of TRICARE contracts, TMA 
does not require its contractors to provide similar information on 
nonnetwork providers. However, beneficiaries may contact the TRICARE 
Regional Offices or the contractors for assistance in locating a 
network or nonnetwork provider. Two of the contractors said they 
currently collect information on nonnetwork providers who have 
accepted TRICARE beneficiaries and can use this information to assist 
beneficiaries in locating a nonnetwork provider. Beneficiaries can 
also use TMA's TRICARE Web site, which refers beneficiaries to the 
American Medical Association's provider directory and the Yellow 
Pages, to find a nonnetwork provider. However, these online resources 
do not indicate whether a provider is TRICARE-authorized or has 
accepted TRICARE patients in the past. 

TMA recognized that its Web site asked beneficiaries to "start from 
square one" to identify a TRICARE-authorized nonnetwork provider. 
Although it is not a routine practice for insurance companies to 
identify nonnetwork providers in their online directories, in February 
2010, TMA's Deputy Chief of TRICARE Policy and Operations recommended 
(through a memo) that TMA establish an online search tool on its Web 
site to enable beneficiaries to identify both network and nonnetwork 
providers no later than May 1, 2010. However, TMA noted that it did 
not have sufficient data to develop this online search tool. Instead, 
TMA officials decided that under the third generation of TRICARE 
contracts, each contractor would be responsible for creating an online 
provider directory for its region that would include information for 
beneficiaries on TRICARE-authorized providers, both network and 
nonnetwork. 

Agency Comments: 

We received comments on a draft of this report from DOD. (See appendix 
VI.) DOD concurred with our overall findings and provided technical 
comments, which we incorporated where appropriate. 

We are sending copies of this report to the Secretary of Defense and 
appropriate congressional committees. The report is also available at 
no charge on GAO's Web site at http://www.gao.gov. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-7114 or williamsonr@gao.gov. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. Key contributors to this 
report are listed in appendix VII. 

Signed by: 

Randall B. Williamson Director, Health Care: 

[End of section] 

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

Beginning in fiscal year 1991, in an effort to control escalating 
costs, Congress instructed the Department of Defense (DOD) to 
gradually lower its reimbursement rates for individual civilian 
providers to mirror those paid by Medicare.[Footnote 59] Congress 
specified that reductions were not to exceed 15 percent in a given 
year. As of March 2011, there were seven nonmaternity procedures or 
services for which reimbursement remains higher under TRICARE than 
Medicare. (See table 4.) 

Table 4: TRICARE Reimbursement Rates That Remain Higher than Medicare 
Reimbursement Rates for Nonmaternity Procedures and Services: 

CPT code[A]: 36591; 
Procedure or service performed: Collection of blood specimen from a 
completely implantable venous access device; 
Ratio of TRICARE to Medicare reimbursement: 1.017. 

CPT code[A]: 38240; 
Procedure or service performed: Bone marrow or blood-derived 
peripheral stem cell transplantation; allogenic; 
Ratio of TRICARE to Medicare reimbursement: 1.152. 

CPT code[A]: 38241; 
Procedure or service performed: Bone marrow or blood-derived 
peripheral stem cell transplantation; autologous; 
Ratio of TRICARE to Medicare reimbursement: 1.155. 

CPT code[A]: 86901; 
Procedure or service performed: Blood typing; Rh (D); 
Ratio of TRICARE to Medicare reimbursement: 1.810. 

CPT code[A]: 92953; 
Procedure or service performed: Temporary transcutaneous pacing; 
Ratio of TRICARE to Medicare reimbursement: 1.210. 

CPT code[A]: 99173; 
Procedure or service performed: Screening test of visual acuity, 
quantitative, bilateral; 
Ratio of TRICARE to Medicare reimbursement: 3.466. 

CPT code[A]: 99359; 
Procedure or service performed: Prolonged evaluation and management 
service before and/or after direct (face-to-face) patient care; each 
additional 30 minutes; 
Ratio of TRICARE to Medicare reimbursement: 1.076. 

Source: TRICARE Management Activity and the American Medical 
Association. 

[A] Current procedural terminology 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] 

Additionally, beginning in 1998, the TRICARE Management Activity (TMA) 
established a policy that its reimbursement rates for some maternity 
services and procedures must be set at the higher of the current 
Medicare fee or the 1997 Medicare fee.[Footnote 60] As a result, the 
TRICARE reimbursement rates for 36 maternity services and procedures 
are higher than Medicare. (See table 5.) 

Table 5: TRICARE Reimbursement Rates That Remain Higher than Medicare 
Reimbursement Rates for Maternity Procedures and Services: 

CPT code[A]: 58300; 
Procedure or service performed: Insertion of intrauterine device; 
Ratio of TRICARE to Medicare reimbursement: 1.038. 

CPT code[A]: 58600; 
Procedure or service performed: Ligation or transection of fallopian 
tube(s), abdominal or vaginal approach, unilateral or bilateral; 
Ratio of TRICARE to Medicare reimbursement: 1.070. 

CPT code[A]: 58605; 
Procedure or service performed: Ligation or transection of fallopian 
tube(s), abdominal or vaginal approach, postpartum, unilateral or 
bilateral, during same hospitalization (separate procedure); 
Ratio of TRICARE to Medicare reimbursement: 1.015. 

CPT code[A]: 58615; 
Procedure or service performed: Occlusion of fallopian tube(s) by 
device (e.g., band, clip, Falope ring) vaginal or suprapubic approach; 
Ratio of TRICARE to Medicare reimbursement: 1.118. 

CPT code[A]: 58970; 
Procedure or service performed: Follicle puncture for oocyte 
retrieval, any method; 
Ratio of TRICARE to Medicare reimbursement: 1.004. 

CPT code[A]: 59012; 
Procedure or service performed: Cordocentesis (intrauterine), any 
method; 
Ratio of TRICARE to Medicare reimbursement: 1.200. 

CPT code[A]: 59020; 
Procedure or service performed: Fetal contraction stress test; 
Ratio of TRICARE to Medicare reimbursement: 1.327. 

CPT code[A]: 59025; 
Procedure or service performed: Fetal non-stress test; 
Ratio of TRICARE to Medicare reimbursement: 1.055. 

CPT code[A]: 59030; 
Procedure or service performed: Fetal scalp blood sampling; 
Ratio of TRICARE to Medicare reimbursement: 1.487. 

CPT code[A]: 59050; 
Procedure or service performed: Fetal monitoring during labor by 
consulting physician (e.g., non-attending physician) with written 
report; supervision and interpretation; 
Ratio of TRICARE to Medicare reimbursement: 1.400. 

CPT code[A]: 59051; 
Procedure or service performed: Fetal monitoring during labor by 
consulting physician (e.g. non-attending physician) with written 
report; interpretation only; 
Ratio of TRICARE to Medicare reimbursement: 1.285. 

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: 1.127. 

CPT code[A]: 59140; 
Procedure or service performed: Surgical treatment of ectopic 
pregnancy; cervical, with evacuation; 
Ratio of TRICARE to Medicare reimbursement: 1.093. 

CPT code[A]: 59160; 
Procedure or service performed: Curettage, postpartum; 
Ratio of TRICARE to Medicare reimbursement: 1.136. 

CPT code[A]: 59320; 
Procedure or service performed: Cerclage of cervix, during pregnancy; 
vaginal; 
Ratio of TRICARE to Medicare reimbursement: 1.178. 

CPT code[A]: 59325; 
Procedure or service performed: Cerclage of cervix, during pregnancy; 
abdominal; 
Ratio of TRICARE to Medicare reimbursement: 1.296. 

CPT code[A]: 59350; 
Procedure or service performed: Hysterorrhaphy of ruptured uterus; 
Ratio of TRICARE to Medicare reimbursement: 1.276. 

CPT code[A]: 59409; 
Procedure or service performed: Vaginal delivery only (with or without 
episiotomy and/or forceps); 
Ratio of TRICARE to Medicare reimbursement: 1.318. 

CPT code[A]: 59410; 
Procedure or service performed: Vaginal delivery only (with or without 
episiotomy and/or forceps); including postpartum care; 
Ratio of TRICARE to Medicare reimbursement: 1.135. 

CPT code[A]: 59412; 
Procedure or service performed: External cephalic version, with or 
without tocolysis; 
Ratio of TRICARE to Medicare reimbursement: 1.307. 

CPT code[A]: 59414; 
Procedure or service performed: Delivery of placenta (separate 
procedure); 
Ratio of TRICARE to Medicare reimbursement: 1.397. 

CPT code[A]: 59514; 
Procedure or service performed: Cesarean delivery only; 
Ratio of TRICARE to Medicare reimbursement: 1.361. 

CPT code[A]: 59515; 
Procedure or service performed: Cesarean delivery only; 
including postpartum care; 
Ratio of TRICARE to Medicare reimbursement: 1.087. 

CPT code[A]: 59525; 
Procedure or service performed: Subtotal or total hysterectomy after 
cesarean delivery; 
Ratio of TRICARE to Medicare reimbursement: 1.032. 

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: 1.239. 

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: 1.093. 

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: 1.373. 

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: 1.098. 

CPT code[A]: 59840; 
Procedure or service performed: Induced abortion, by dilation and 
curettage; 
Ratio of TRICARE to Medicare reimbursement: 1.237. 

CPT code[A]: 59850; 
Procedure or service performed: Induced abortion, by one or more intra-
amniotic injections (amniocentesis-injections), including hospital 
admission and visits, delivery of fetus and secundines; 
Ratio of TRICARE to Medicare reimbursement: 1.160. 

CPT code[A]: 59851; 
Procedure or service performed: Induced abortion, by one or more intra-
amniotic injections (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: 1.042. 

CPT code[A]: 59852; 
Procedure or service performed: Induced abortion, by one or more intra-
amniotic injections (amniocentesis-injections), including hospital 
admission and visits, delivery of fetus and secundines; with 
hysterectomy (failed intra-amniotic injection); 
Ratio of TRICARE to Medicare reimbursement: 1.125. 

CPT code[A]: 59855; 
Procedure or service performed: Induced abortion, by one or more 
vaginal suppositories (e.g., prostaglandin) with or without cervical 
dilation (e.g. laminaria), including hospital admission and visits, 
delivery of fetus and secundines; 
Ratio of TRICARE to Medicare reimbursement: 1.010. 

CPT code[A]: 59856; 
Procedure or service performed: Induced abortion, by one or more 
vaginal suppositories (e.g., prostaglandin) with or without cervical 
dilation (e.g. laminaria), including hospital admission and visits, 
delivery of fetus and secundines; with dilation and curettage and/or 
evacuation; 
Ratio of TRICARE to Medicare reimbursement: 1.060. 

CPT code[A]: 59857; 
Procedure or service performed: Induced abortion, by one or more 
vaginal suppositories (e.g., prostaglandin) with or without cervical 
dilation (e.g. laminaria), including hospital admission and visits, 
delivery of fetus and secundines; with hysterotomy (failed-medical 
evacuation); 
Ratio of TRICARE to Medicare reimbursement: 1.229. 

CPT code[A]: 59866; 
Procedure or service performed: Multifetal pregnancy reduction(s); 
Ratio of TRICARE to Medicare reimbursement: 1.365. 

Source: TRICARE Management Activity and the American Medical 
Association. 

[A] Current procedural terminology 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 II: TMA's Studies on TRICARE Reimbursement Rates: 

TMA contracted with a health-policy research and consulting firm to 
conduct a number of studies about specific TRICARE reimbursement 
rates. Some of these studies resulted in changes to the TRICARE 
reimbursement rates for certain procedures. A brief description of 
these studies is provided below. 

Studies of Reimbursement Rates for Specific Maternity/Delivery 
Procedures, 2006 through 2011[Footnote 61] 

Starting in 2006, TMA's consultant has conducted annual comparisons of 
TRICARE's reimbursement rates for certain maternity/delivery 
procedures with Medicaid[Footnote 62] reimbursement rates on a state- 
by-state basis. Any reimbursement rates that were found to be below 
the Medicaid level of payment have been increased. 

* For 2006, TMA found that for at least one procedure, the Medicaid 
rates in 12 states were higher than TRICARE reimbursement rates. 
[Footnote 63] 

* For 2007, TMA found that for at least one procedure, the Medicaid 
rates in 11 states were higher than TRICARE reimbursement rates. 
[Footnote 64] 

* For 2008, TMA found that for at least one procedure, the Medicaid 
rates in 18 states were higher than TRICARE reimbursement rates. 
[Footnote 65] 

* For 2009, TMA found that for at least one procedure, the Medicaid 
rates in 19 states were higher than TRICARE reimbursement rates. 

For 2010, TMA found that for at least one procedure, the Medicaid 
rates in the same 19 states were higher than TRICARE reimbursement 
rates. 

* For 2011, TMA found that 3 of the 19 states from 2010 no longer met 
the criteria of having at least one maternity/delivery procedure with 
TRICARE reimbursement rates lower than Medicaid. As a result, for at 
least one procedure, the Medicaid rates in 16 states were higher than 
TRICARE reimbursement rates. 

Comparison of Commercial, Medicaid, and TRICARE Reimbursement Rates 
for Selected Medical Specialties, April 2009[Footnote 66] 

TMA's consultant compared specific TRICARE reimbursement rates with 
reimbursement rates from Medicaid and commercial insurers. For the 
comparison with Medicaid rates, it identified commonly used procedures 
for 13 medical specialties[Footnote 67] and compared TRICARE's 
reimbursement rates for these procedures with Medicaid's fee-for- 
service rates in 49 states.[Footnote 68] Overall, the median value of 
the 2009 Medicaid rates in the 49 states was about 18 percent lower 
than TRICARE's reimbursement rates. In 24 states, the TRICARE 
reimbursement rates exceeded the state Medicaid program rates for the 
13 medical specialties reviewed. Conversely, the study found that in 3 
states--New Mexico, Arizona, and Wyoming--Medicaid rates, on average, 
exceeded the TRICARE reimbursement rates for these 13 specialties. For 
the comparison with commercial rates, TMA's consultant analyzed 
reimbursement amounts for 12 medical specialties[Footnote 69] in 15 
geographic market areas[Footnote 70] and found that commercial rates 
were higher than TRICARE reimbursement rates for these 12 specialties 
in almost all of the geographic market areas analyzed. 

Review of TRICARE Reimbursement Rates for Pediatric Vaccines and 
Immunizations, January 2009[Footnote 71]: 

TMA's consultant studied TRICARE's reimbursement rates for selected 
pediatric immunizations and vaccines to determine whether TRICARE's 
reimbursement amounts were below the cost that pediatricians must pay 
to acquire these vaccines.[Footnote 72] It analyzed 15 vaccines codes 
(which often have more than one type of vaccine product associated 
with them) and found that for each of the vaccine codes, TRICARE's 
reimbursement rates exceeded the average acquisition cost paid by 
pediatric providers for at least one of the vaccine products. Overall, 
in 2007 TRICARE's reimbursement rates exceeded the average acquisition 
cost for the 15 vaccine codes by 30 percent (when weighted by volume). 
The study also noted that some pediatricians may pay more than the 
average acquisition price, and some network pediatricians may receive 
TRICARE reimbursement rates below the average acquisition cost if they 
have agreed to reimbursement discounts as a condition of belonging to 
the TRICARE provider network.[Footnote 73] The study also compared 
TRICARE's reimbursement rates to those of Medicare and Medicaid. The 
study noted that TRICARE uses the same vaccine prices and 
administration prices as Medicare for vaccine codes for which Medicare 
sets a price (which is mostly at 106 percent of the average sales 
price of the vaccine as of 2005--determined by the Centers for 
Medicare & Medicaid Services). For those vaccines for which Medicare 
does not have a set price, TRICARE reimbursement rates are set at 95 
percent of average wholesale price--which is essentially a "list 
price" set by the manufacturer. When compared to Medicaid's rates, 
TRICARE's reimbursement rate for the administration of a vaccine or 
immunization was higher than Medicaid's in every state in 2008. 
[Footnote 74] 

Analysis of TRICARE Payment Rates for Maternity/Delivery Services, 
Evaluation and Management Services, and Pediatric Immunizations, March 
2006[Footnote 75]: 

TMA's consultant compared TRICARE's reimbursement rates for 14 
specific maternity/delivery services and a pediatrician office visit 
[Footnote 76] with Medicaid[Footnote 77] and commercial payment rates. 
[Footnote 78] It found the following: 

* For these specific maternity/delivery services, TRICARE's 
reimbursement rates were higher than Medicaid rates in 35 of the 45 
states reviewed. Additionally, in 27 of the 35 states, the Medicaid 
payment rate for deliveries was less than 90 percent of TRICARE's 
reimbursement rates. TRICARE's reimbursement rates for deliveries were 
less than the median commercial rates in all but one of the 50 markets 
studied (they were equivalent in the remaining market). Overall, the 
median commercial rates for deliveries were 24 percent higher than 
TRICARE's reimbursement rates in 2005. 

* For pediatric care, TRICARE's reimbursement rate for a mid-level 
office visit for an established patient (the most commonly billed code 
by pediatricians) was higher than the state Medicaid reimbursement 
rate in 41 of the 45 states in 2005.[Footnote 79] However, the median 
commercial reimbursement rates were 10 percent higher than TRICARE's 
reimbursement rates in the 50 TRICARE markets examined. 

* TRICARE's reimbursement for pediatric vaccines and injectable drugs 
generally appeared to be reasonable when derived from Medicare 
pricing, based on an analysis of private sector costs, average 
wholesale prices, and average sales prices for top volume CPT codes. 
However, TRICARE's reimbursement rate for the pediatric and adolescent 
dose of the hepatitis A vaccine was found to be 22 percent lower than 
estimated private sector costs to obtain the vaccine in 2005. 
Specifically, the TRICARE reimbursement rate for this vaccine dose was 
$22.64, while pediatricians were paying between $27.41 and $30.37 for 
the vaccine. Based on the results of this study, TMA used its general 
authority to deviate from Medicare rates (upon which TRICARE rates are 
based),[Footnote 80] and starting May 1, 2006, TMA instructed the 
contractors to reimburse pediatric hepatitis A vaccines nationally at 
a new reimbursement rate of $30.40. 

[End of section] 

Appendix III: TMA's Use of Waivers: 

TMA has the authority to increase TRICARE reimbursement rates for 
network and nonnetwork civilian providers to ensure that all 
beneficiaries, including TRICARE Standard and Extra beneficiaries, 
have adequate access to civilian providers. TMA's authorities include: 
(1) issuing locality waivers that increase rates for specific 
procedures in specific localities,[Footnote 81] (2) issuing network 
waivers that increase some network civilian providers' 
reimbursements,[Footnote 82] and (3) restoring TRICARE reimbursement 
rates in specific localities to the levels that existed before a 
reduction was made to align TRICARE reimbursement rates with Medicare 
rates for both network and nonnetwork providers.[Footnote 83] 

Locality waivers may be used to increase rates for specific medical 
services in specific areas where access to civilian providers has been 
severely impaired. 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 impaired. A total of 
17 applications for locality waivers have been submitted to TMA 
between January 2002 and January 2011. TMA approved 16 of these 
waivers. (See table 6.) 

Table 6: Applications for Locality Waivers and Approval Results: 

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

Date submitted: 8/01/04; 
Affected location: Fairbanks, Alaska; 
Affected services: All inpatient internal medicine procedures or 
services delivered by providers employed by Fairbanks Memorial 
Hospital; 
Amount of increase requested: Veterans Affairs rates; 
Outcome: 10/28/04--Approved. 

Date submitted: 6/08/05; 
Affected location: Anchorage, Alaska; 
Affected services: All medical procedures or services delivered by 
perinatologists; 
Amount of increase requested: 40 percent; 
Outcome: 11/21/05--Approved for perinatologists who are participating 
providers[B]; 11/21/07--Decreased the rate to 35 percent as a result 
of an increase in overall TRICARE reimbursement rates in Alaska. 

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

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

Date submitted: Annual study[D] (originally requested on 10/19/05); 
Affected location: Multiple states[E]; 
Affected services: 14 obstetrical procedures or services; 
Amount of increase requested: Medicaid reimbursement amounts; 
Outcome: 3/01/10--Approved. 

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

Date submitted: 7/17/06[G]; 
Affected location: Puerto Rico[C]; 
Affected services: Medical procedures or services delivered by 
perinatologists, orthopedists, and pediatric urologists; 
Amount of increase requested: Various: 310 percent for perinatologists; 
300 percent for orthopedists; and 162 percent for pediatric urologists; 
Outcome: Denied because the request did not meet the requirements for 
a locality waiver. 

Date submitted: 7/01/06[G]; 
Affected location: All of Alaska; 
Affected services: All medical procedures or services; 
Amount of increase requested: Veterans Affairs rates; 
Outcome: 1/01/07--Approved. 

Date submitted: 8/07/06[G]; 
Affected location: Fairbanks, Alaska; 
Affected services: Three services delivered by a pulmonologist; 
Amount of increase requested: Veterans Affairs rates; 
Outcome: 12/13/06--Approved. 

Date submitted: 5/24/07[G]; 
Affected location: Juneau, Alaska; 
Affected services: All orthopedic and physical medicine rehabilitation 
at Juneau Bone & Joint Center; 
Amount of increase requested: 15 percent; 
Outcome: 8/06/07--Approved. 

Date submitted: 12/18/07[G]; 
Affected location: Key West, Florida; 
Affected services: All psychiatric services in the code range of 90800 
through 90899 delivered by two providers; 
Amount of increase requested: 50 percent; 
Outcome: 1/07/08--Approved for patients 18 and under within the 33040 
zip code. 

Date submitted: 4/16/08[G]; 
Affected location: Puerto Rico[C]; 
Affected services: All medically indicated bilateral breast reduction 
surgeries delivered by surgeons; 
Amount of increase requested: $2,600 (bilateral procedure); 
Outcome: 6/19/08--Approved. 

Date submitted: 8/22/08[G]; 
Affected location: Juneau, Alaska; 
Affected services: Orthopedic and physical medicine/rehabilitation 
services at Juneau Bone & Joint Center; 
Amount of increase requested: 35 percent; 
Outcome: 9/05/08--Approved. 

Date submitted: 5/05/09[G]; 
Affected location: Anchorage/Palmer, Alaska; 
Affected services: Neurosurgical services for three provider groups; 
Amount of increase requested: 250 percent; 
Outcome: 7/14/09--Approved. 

Date submitted: 8/20/09[G]; 
Affected location: Anchorage area, Alaska; 
Affected services: Pain management services for four provider groups 
in and around the Anchorage area; 
Amount of increase requested: 217 percent; 
Outcome: 11/17/09--Approved. 

Date submitted: 11/13/09[G]; 
Affected location: All of Alaska; 
Affected services: Certain rheumatology, orthopedics, and 
otolaryngology services; 
Amount of increase requested: Various: 125 percent for rheumatologists; 
between 150 and 175 percent for orthopedists; and 175 percent for 
otolaryngologists; 
Outcome: 12/30/09--Approved for certain rheumatology, orthopedics, and 
otolaryngology services provided by the 14 practices which have signed 
letters of intent to provide these services, as well as any other 
practices which sign a letter of intent to provide these services. 

Source: GAO analysis of TRICARE Management Activity (TMA) data. 

[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] Participating providers submit claims for reimbursement and accept 
the TRICARE reimbursement rate as payment in full. 

[C] The TRICARE Regional Offices are not responsible for managing 
TRICARE in Puerto Rico because it operates under a different contract 
than what is used for the three TRICARE regions. 

[D] When reviewing the need for this rate adjustment, TMA annually 
compares TRICARE reimbursement rates with Medicaid rates in states for 
which data are available. The 19 states listed were identified as 
needing a rate adjustment based on this analysis. The first of these 
waivers was approved in 2006 and included only 12 states. Each year 
when the TRICARE reimbursement rates are adjusted, TMA intends to 
similarly determine where this adjustment is needed. 

[E] The states are Alabama, Arizona, Connecticut, Georgia, 
Massachusetts, Montana, Nebraska, New Mexico, New York, North Dakota, 
Oregon, Pennsylvania, South Carolina, South Dakota, Vermont, Virginia, 
Washington, West Virginia, and Wyoming. 

[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. 

[G] According to TMA, these dates are the dates the waiver submission 
was assigned or received by TMA to better reflect when TMA started to 
take action on the request. 

[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 in a specific location. Between 
January 2002 and January 2011, 13 applications for network waivers 
have been submitted to TMA. Of these, eight network waivers have been 
approved by TMA and five have been denied. (See table 7.) 

Table 7: Applications for Network Waivers and Approval Results: 

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

Date submitted: 3/07/02; 
Affected location: Great Falls, Montana; 
Affected services: All medical procedures or services delivered by a 
specific clinic representing 32 specialties; 
Amount of increase requested: 200 percent[A]; 
Outcome: 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; 
Outcome: 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, Montana; 
Affected services: All obstetrical or gynecological medical procedures 
or services; 
Amount of increase requested: 15 percent; 
Outcome: Denied--Increase available under TRICARE Prime Remote[B]. 

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

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

Date submitted: 9/26/03; 
Affected location: Ft. Leonard Wood and Springfield, Missouri; 
Affected services: All medical procedures and services delivered by 
network providers; 
Amount of increase requested: 15 percent; 
Outcome: 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, Alaska; 
Affected services: All primary care medical procedures and services; 
Amount of increase requested: 15 percent; 
Outcome: 3/30/05--Approved for nonmental health medical care services, 
excluding laboratory services. 

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

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

Date submitted: 2/16/07[C]; 
Affected location: Ellsworth Air Force Base, South Dakota; 
Affected services: Evaluation and management codes for orthopedic and 
rheumatology services by the Black Hills Orthopedic and Spine Center; 
Amount of increase requested: 15 percent; 
Outcome: 7/13/07--Approved. 

Date submitted: 2/26/07[C]; 
Affected location: Fort Bliss, Texas; 
Affected services: Opthalmology services provided by Southwest Retina 
Consultants; 
Amount of increase requested: 15 percent; 
Outcome: Denied because the documentation was not sufficient to 
support and justify the waiver. 

Date submitted: 1/04/10[C]; 
Affected location: Hawaii; 
Affected services: Inpatient neonatal and pediatric services by 
providers at Kapiolani Medical Specialists; 
Amount of increase requested: 15 percent; 
Outcome: 2/25/10--Approved. 

Source: GAO analysis of TRICARE Management Activity (TMA) data. 

[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 servicemembers who are enrolled in TRICARE Prime Remote 
are eligible to enroll in and receive care under TRICARE Prime Remote 
for Active Duty Family Members. 

[C] According to TMA, these dates are the dates the waiver submission 
was assigned or received by TMA to better reflect when TMA started to 
take action on the request. 

[End of table] 

TMA can also use its authority 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 
previously, 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. However, in 
2007 TMA implemented a demonstration project in Alaska that increased 
reimbursement rates to match those of the Department of Veterans 
Affairs. As a result, the waivers implemented under this authority 
were ended. As of January 2011, TMA did not have any waivers of 
reimbursement rate reductions in place. 

[End of section] 

Appendix IV: Access-to-Care Concerns in Alaska: 

Access to health care in Alaska is hindered by unique impediments due 
to its geographically remote location and small population base, which 
has resulted in some of the highest costs for providing services in 
the country. To identify and examine the unique access concerns for 
Alaska, we reviewed the Interagency Access to Health Care in Alaska 
Task Force Report to Congress. We also spoke with TMA officials and a 
representative of the Alaska State Medical Association to obtain their 
views on the unique access challenges in this state. 

Federal health programs[Footnote 84] are the leading payer of health 
care services to Alaska citizens, constituting approximately 31 
percent of total health care expenditures in the state in 2006. 
[Footnote 85] In 2010, the Department of Health and Human Services 
reported that about 14 percent of the population in Alaska had 
received health care from either DOD's TRICARE program or from the 
Veterans Health Administration.[Footnote 86] According to a 2009 study 
by the Alaska Center for Rural Health, Alaska has a shortage of 
providers that has been further impacted by its remoteness, harsh 
climate, and scarce training resources.[Footnote 87] Workforce 
shortages in urban areas range from a complete lack of certain 
specialists in Fairbanks and other towns, to a relative shortage of 
primary care providers and many specialists in Anchorage. Moreover, 
rural areas have far more difficulty attracting qualified candidates 
than more heavily populated areas, such as Anchorage or Fairbanks. 
TRICARE officials have identified this overall shortage of providers 
and providers' reluctance to accept TRICARE reimbursement rates as the 
main impediments to TRICARE beneficiaries' access to civilian 
providers in Alaska--regardless of which option they use. 

Alaska is part of TRICARE's West region, and until recently, Alaska 
was the only state for which TMA administered and managed TRICARE 
directly as well as being the only state that did not have Prime 
Service Areas with networks of civilian providers.[Footnote 88] In a 
November 2010 Federal Register notice, DOD announced that the 
responsibility for administering and managing TRICARE in Alaska would 
transfer from TMA to the contractor for the West region.[Footnote 89] 
Additionally, the notice required the contractor to develop networks 
of civilian providers in two Prime Service Areas to be established 
around the military treatment facilities located at Fort Wainwright 
and Eielson Air Force Base, near Fairbanks, Alaska. This transition of 
responsibility took place in January 2011, and TMA expects these Prime 
Service Areas to be developed by July 2011. Additionally, the West 
region contractor noted that it expects to receive authorization to 
develop a third Prime Service Area around Elmendorf Air Force Base in 
Anchorage in late summer 2011. 

TMA has taken actions to address TRICARE beneficiaries' access to 
civilian providers in Alaska by (1) increasing TRICARE's reimbursement 
rates through the use of waivers and a demonstration project and (2) 
participating in a federal task force on the delivery of health care 
in Alaska. Specifically, in areas where access is impaired, TMA has 
increased reimbursement rates to encourage civilian providers to 
accept TRICARE beneficiaries through TMA's reimbursement waivers. Of 
the 24 waivers in place as of January 2011, 13 are for locations in 
Alaska. 

In addition, TMA began a demonstration project in Alaska in February 
2007--originally expected to end in December 2009--that raised 
reimbursement rates for physicians and other noninstitutional 
professional providers so that on average, they matched those of the 
Department of Veterans Affairs. Specifically, TRICARE's 2007 
reimbursement rates were increased approximately 35 percent.[Footnote 
90] In July 2009, TMA conducted a preliminary assessment of the 
demonstration project and found mixed results. Specifically, TMA's 
analysis determined that three of seven measures of access to care 
indicated that access had improved since the beginning of the project, 
while the other four measures did not show an improvement in access. 
[Footnote 91] Despite this inconclusive assessment, TMA officials in 
the West region said that the demonstration project and the use of 
waivers have increased access to care, as the number of providers 
accepting TRICARE's reimbursement rates increased. According to these 
officials, the number of providers that have accepted TRICARE's 
reimbursement rate went from under 300 before the demonstration 
project to almost 800, as of July 2010. Although DOD has recognized 
that there have been mixed results on the effectiveness of the 
demonstration project, it extended the demonstration project through 
December 31, 2012. 

Finally, in recognition that Alaska has unique health care challenges, 
Congress established the Interagency Access to Care in Alaska Task 
Force to review how federal agencies with responsibility for health 
care services in Alaska are meeting the needs of Alaskans.[Footnote 
92] The Task Force consisted of members from the following: DOD 
(including TMA), the Department of Veterans Affairs and its Veterans 
Health Administration, the Department of Health and Human Services and 
its Centers for Medicare & Medicaid Services and Indian Health 
Service, and the U.S. Coast Guard. In September 2010, the Task Force 
issued its report recommending that, among other things, federal 
agencies providing health care reimbursement in Alaska should support 
current projects to develop a budget-neutral, uniform provider 
reimbursement rate for similar services for Medicare, TRICARE, and the 
Veterans Health Administration.[Footnote 93] According to TMA 
officials, TMA is currently reviewing the Task Force's recommendations 
to develop options within the framework of current law and 
regulations. However, the full implementation of the recommendations 
will be under the direction of the Secretary of Health and Human 
Services. 

[End of section] 

Appendix V: Network Adequacy Reporting Requirement of Contractors 
under the Second Generation of TRICARE Contracts: 

Under the second generation of contracts, TMA's contractors have been 
required to develop and maintain adequate networks of providers, which 
are to meet the needs of all TRICARE beneficiaries within Prime 
Service Areas.[Footnote 94] In doing so, each contractor uses a 
different methodology for determining the number of providers needed. 
Contractors are also required to develop their own systems to 
continuously monitor and evaluate network adequacy and to submit 
routine reports to TMA on the status of their provider networks in 
accordance with contract requirements. Specifically, TMA requires its 
contractors to submit monthly and quarterly reports on network 
inadequacy and network adequacy, respectively, and to submit 
corrective action plans for each instance of network inadequacy. 

* The monthly report on network inadequacy must include information on 
each instance in which a beneficiary enrolled in TRICARE Prime is 
being referred to: (1) a provider outside of TMA's time or distance 
standards[Footnote 95] or (2) a nonnetwork provider. According to TMA 
officials, network inadequacies may occur because of provider 
shortages; in such instances, contractors are not held accountable for 
not meeting access standards. However, other network inadequacies, 
particularly referrals to nonnetwork providers, may also be due to 
other factors, such as network providers not accepting new patients or 
beneficiaries' not wanting to wait for available appointments with 
network providers who are unable to provide an appointment within 
TMA's access standards. According to a TMA official, none of the 
contractors have been cited for not meeting TMA's time and distance 
standards or for referrals to nonnetwork providers under the second 
generation of TRICARE contracts. 

* Contractors' quarterly reports include: (1) the total number of 
network providers by specialty, (2) the number of additions and 
deletions to the network by specialty, and (3) actions to contract 
with additional providers in areas lacking networks to meet access 
standards, among other things. 

[End of section] 

Appendix VI: Comments from the Department of Defense: 

The Assistant Secretary Of Defense: 
Health Affairs: 
1200 Defense Pentagon: 
Washington, DC 20301-1200: 

May 23 2011: 

Mr. Randall B. Williamson: 
Director: 
Health Care: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Williamson: 

This is the Department of Defense response to the Government 
Accountability Office (GAO) draft report, Defense Health Care: Access 
to Civilian Providers Under TRICARE Standard and Extra (GA0-11-500, 
Code #290858). 

Thank you for the opportunity to review and provide comments on the 
subject draft report. We have carefully reviewed the draft report and 
concur with the report as written. Technical comments are attached to 
address portions of your report. 

We sincerely thank the GAO for their thorough review and analysis of 
issues regarding access to civilian providers under TRICARE Standard 
and Extra. 

My points of contact on this effort are Mr. Mark Ellis (Functional) 
and Mr. Gunther Zimmerman (TRICARE Management Activity Audit Liaison). 
Mr. Ellis may be reached at (703) 681-0039, and Mr. Zimmerman may be 
reached at (703) 681-4365. 

Sincerely, 

Signed by: 

Jonathan Woodson, M.D. 

Attachment: As stated. 

[End of section] 

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Randall B. Williamson at (202) 512-7114 or williamsonr@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Bonnie Anderson, Assistant 
Director; Jennie F. Apter; Kaitlin Coffey; Jeff Mayhew; Lisa Motley; 
C. Jenna Sondhelm; and Suzanne Worth made major contributions to this 
report. 

[End of section] 

Related GAO Products: 

Defense Health Care: 2008 Access to Care Surveys Indicate Some 
Problems, but Beneficiary Satisfaction Is Similar to Other Health 
Plans. [hyperlink, http://www.gao.gov/products/GAO-10-402]. 
Washington, D.C.: March 31, 2010. 

TRICARE: Changes to Access Policies and Payment Rates for Services 
Provided by Civilian Obstetricians. [hyperlink, 
http://www.gao.gov/products/GAO-07-941R]. Washington, D.C.: July 31, 
2007. 

Defense Health Care: Access to Care for Beneficiaries Who Have Not 
Enrolled in TRICARE's Managed Care Option. [hyperlink, 
http://www.gao.gov/products/GAO-07-48]. Washington, D.C.: December 22, 
2006. 

Defense Health Care: Oversight of the TRICARE Civilian Provider 
Network Should Be Improved. [hyperlink, 
http://www.gao.gov/products/GAO-03-928]. Washington, D.C.: July 31, 
2003. 

Defense Health Care: Oversight of the Adequacy of TRICARE's Civilian 
Provider Network Has Weaknesses. [hyperlink, 
http://www.gao.gov/products/GAO-03-592T]. Washington, D.C.: March 27, 
2003. 

Defense Health Care: Across-the-Board Physician Rate Increase Would be 
Costly and Unnecessary. [hyperlink, 
http://www.gao.gov/products/GAO-01-620]. Washington, D.C.: May 24, 
2001. 

[End of section] 

Footnotes: 

[1] Eligible beneficiaries include active duty personnel and their 
dependents, medically eligible Reserve and National Guard personnel 
and their dependents, and retirees and their dependents and survivors. 

[2] The TRICARE program also offers other options, including TRICARE 
Reserve Select and TRICARE for Life. TRICARE Reserve Select is a 
premium-based health plan that qualified Reserve and National Guard 
members may purchase, with care options that are similar to those of 
TRICARE Standard and Extra. TRICARE beneficiaries who are eligible for 
Medicare and enroll in Part B are eligible to receive care under 
TRICARE for Life. 

[3] Eligible beneficiaries may choose not to use TRICARE if, for 
example, they are covered by another health care plan. 

[4] Prime Service Areas are geographic areas determined by the 
Assistant Secretary of Defense for Health Affairs and are defined by a 
set of 5-digit zip codes, usually within an approximate 40-mile radius 
of a military inpatient treatment facility. The managed care support 
contracts also require the contractors to develop civilian provider 
networks at all Base Realignment and Closure (BRAC) sites, which are 
military installations that have been closed or realigned as a result 
of decisions made by the Commission on Base Realignment and Closure. 

[5] A network provider is a provider who has a contractual 
relationship with the TRICARE regional contractors to provide care at 
a negotiated rate. 

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

[7] GAO, Defense Health Care: Access to Care for Beneficiaries Who 
Have Not Enrolled in TRICARE's Managed Care Option. [hyperlink, 
http://www.gao.gov/products/GAO-07-48] (Washington, D.C.: Dec. 22, 
2006). 

[8] See Pub. L. No. 110-181, § 711(a), 122 Stat. 3, 190-91. 

[9] GAO, Defense Health Care: 2008 Access to Care Surveys Indicate 
Some Problems, but Beneficiary Satisfaction Is Similar to Other Health 
Plans, [hyperlink, http://www.gao.gov/products/GAO-10-402] 
(Washington, D.C.; Mar. 31, 2010). 

[10] Department of Defense, Task Force on Mental Health, An Achievable 
Vision: Report of the Department of Defense Task Force on Mental 
Health (Falls Church, Va., June 2007). 

[11] CNA is a nonprofit research organization that operates the Center 
for Naval Analyses and the Institute for Public Research. 

[12] The contracts included in our review are the second generation of 
TRICARE contracts. The implementation period for these contracts was 
set to end on March 31, 2010, with the third generation of contracts 
to begin implementation on April 1, 2010. However, this timeline was 
delayed due to bid protests on two of the three contracts. 

[13] The TRICARE Prime option has five access-to-care standards that 
address the following: (1) travel time, (2) appointment wait time, (3) 
availability and accessibility of emergency services, (4) composition 
of network specialists, and (5) office wait time. See 32 C.F.R. § 
199.17(p)(5) (2010). 

[14] TRICARE beneficiaries who choose to receive medical care from 
providers who are not TRICARE-authorized are responsible for all 
billed charges. Civilian providers consist of primary care physicians, 
specialists, certified clinical social workers, certified psychiatric 
nurse specialists, clinical psychologists, certified marriage and 
family therapists, pastoral counselors, mental health counselors, and 
psychiatrists. 

[15] Network providers also undergo a formal credentialing process 
through the contractor. Credentialing includes a review of the 
provider's training, educational degrees, licensure, practice history, 
etc. 

[16] Beginning in fiscal year 1991, 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. Congress specified that reductions were not to 
exceed 15 percent in a given year. See 10 U.S.C. §§ 1079(h), 1086(f). 

[17] 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. 

[18] Claims analyzed were for services provided in an office or other 
setting outside of an institution. Claims for services rendered at 
hospitals, military treatment facilities, and other institutions were 
excluded. TRICARE for Life claims were excluded as well as claims for 
medical supplies and from chiropractors and pharmacies. 

[19] See [hyperlink, http://www.gao.gov/products/GAO-07-48]. 

[20] TMA's first multiyear survey of civilian providers had 
approximately 18,000, 18,900, and 19,000 responses in 2005, 2006, and 
2007 respectively, for an eligible physician response rate of about 50 
percent each year. 

[21] The first 2 years of TMA's second multiyear survey of civilian 
providers had 19,309 responses in 2008 and 19,812 responses in 2009 
for a 2-year adjusted response rate of 39 percent. TRICARE's 
reimbursement rates, along with a lack of awareness of the TRICARE 
program were tied for the most-cited reasons by providers who were 
accepting new Medicare patients, but would not accept new TRICARE 
patients over all regions surveyed. 

[22] Levy, Robert A., and Gabay, Mary, Some Additional Findings 
Related to the Acceptance by Civilian Providers of TRICARE Standard, 
CNA Research Memorandum D0019101.A2/Final (November 2008). TMA tasked 
CNA to examine the current participation of civilian providers in the 
TRICARE program, focusing on potential reasons that may inhibit many 
of these providers from accepting TRICARE Standard and Extra 
beneficiaries as patients. 

[23] Beginning in fiscal year 1991, 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. Congress specified that reductions were not to 
exceed 15 percent in a given year. See 10 U.S.C. §§ 1079(h), 1086(f). 
As of March 2011, the transition to Medicare rates was nearly 
complete, and reimbursement rates for only 43 services remain higher 
than Medicare reimbursement rates. (See appendix I for a list of these 
services.) 

[24] The Medicare physician fee schedule is updated annually by the 
sustainable growth rate system, with the intent of limiting the total 
growth in Medicare spending for physician services over time. Because 
of rapid growth in Medicare spending for physician services, the 
sustainable growth rate has called for fee reductions since 2002. 
However, congressional action has temporarily averted such fee 
reductions for 2003 through 2011. Although under current law, 
Medicare's fees to physicians are scheduled to be reduced by about 
29.5 percent in 2012, Congress has considered ways to repeal or 
replace the sustainable growth rate system for a number of years. See 
42 U.S.C. § 1395w-4(d). 

[25] For more information on TMA's changes to its physician payment 
rates for obstetric care, see GAO, TRICARE: Changes to Access Policies 
and Payment Rates for Services Provided by Civilian Obstetricians, 
[hyperlink, http://www.gao.gov/products/GAO-07-941R] (Washington, 
D.C.: July 31, 2007). 

[26] 32 C.F.R. § 199.14(j)(1)(iv)(D) (2010). According to a TMA 
official, TMA usually defines a locality using one or more zip codes. 

[27] 32 C.F.R. § 199.14(j)(1)(iv)(E) (2010). 

[28] 32 C.F.R. § 199.14(j)(1)(iv)(C) (2010). 

[29] According to TMA, from fiscal year 2006 to 2009, 44,000 
additional civilian providers (network and nonnetwork) accepted 
TRICARE (a more than 13 percent increase). 

[30] See for example: Institute of Medicine, Hospital-Based Emergency 
Care: At the Breaking Point, (Washington, D.C.: The National Academies 
Press, 2006), and Center for Workforce Studies, Association of 
American Medical Colleges, Recent Studies and Reports on Physician 
Shortages in the U.S. (November 2010). 

[31] 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 generally required to make the bonus payments in the same amounts 
as authorized for Medicare. See 32 C.F.R. § 199.14(j)(2) (2010). 

[32] See 42 U.S.C. § 1395l(m). Health Professional Shortage Areas 
include both urban and rural areas. For example, Fulton County, 
Georgia, (which could be considered an urban area) contains 90 Health 
Professional Shortage Areas because it lacks primary and mental health 
care providers. Likewise, the state of Alaska (which is predominantly 
considered to be a rural area) contains 141 Health Professional 
Shortage Areas that lack primary and mental health care providers. 

[33] American Psychological Association, Presidential Task Force on 
Military Deployment Services for Youth, Families and Service Members, 
The Psychological Needs of U.S. Military Service Members and Their 
Families: A Preliminary Report (Feb. 18, 2007). 

[34] Department of Defense, Report to Congress: Access to Mental 
Health Services (Sept. 9, 2009). 

[35] According to the first 2 years of TMA's second round of provider 
surveys, less than 46 percent of responding psychiatrists who were 
accepting any new patients would accept new nonenrolled beneficiaries, 
compared to almost 69 percent of responding primary care providers and 
almost 72 percent of responding specialist providers. 

[36] TMA's Telemental Health Program, which began on August 1, 2009, 
uses medically supervised, secure audio-visual conferencing to link 
beneficiaries in one location with mental health care providers in 
another. These providers can evaluate, treat, and refer patients as 
necessary by video. 

[37] TMA's TRICARE Assistance Program, which began on August 1, 2009, 
allows eligible beneficiaries to access licensed counselors for 
nonmedical issues including stress management and deployment issues. 

[38] These beneficiaries include active duty family members and those 
using TRICARE Reserve Select. 

[39] The law also required the Secretary of Defense to assess the 
feasibility of establishing one or more military mental health 
specialties for officers or enlisted servicemembers and required the 
secretary of each military department to increase the authorized 
number of active-duty mental health personnel by at least 25 percent. 
See Pub. L. No. 111-84, § 714, 123 Stat. 2190, 2381-82 (2009). 

[40] DOD, Mental Health Personnel Required to Meet Mental Health Care 
Needs of Service Members, Retired Members, and Dependents; Report to 
Congress (Feb. 1, 2011). 

[41] Contractors have only been required to monitor access to care for 
TRICARE Prime beneficiaries. To do this, contractors are to determine 
the adequacy of civilian provider networks. Although TRICARE Prime is 
the only option with required access-to-care standards, network 
adequacy may also affect nonenrolled beneficiaries who use network 
providers. (See appendix V for information on network adequacy 
requirements which are used to gauge access to care.) 

[42] TMA's reported results showed that on average, 92 percent of 
civilian providers were accepting any new patients. 

[43] See [hyperlink, http://www.gao.gov/products/GAO-10-402]. 

[44] The law also directed DOD to give high priority to locations 
having high concentrations of Selected Reserve servicemembers, which 
would likely result in surveying beneficiaries who may be under the 
TRICARE Reserve Select option. However, TMA did not give a high 
priority to locations with high concentrations of Selected Reserve 
members. Instead, for both of its surveys, TMA randomly selected areas 
to produce results that can be generalized to the populations from 
which the survey samples were drawn. TMA plans to cover the entire 
United States at the end of the 4-year survey period, which will 
include any locations with higher concentrations of Selected Reserve 
servicemembers. 

[45] The Assistance Reporting Tool does not include information 
reported to the contractors. Implemented in 2001, this tool is used by 
customer service staff in TRICARE program offices, military treatment 
facilities, and the uniformed services. 

[46] The Graduate Medical Education National Advisory Committee 
projected the need for and supply of physicians and other providers 
and developed guidelines for the geographic distribution of physicians. 

[47] Welcome Tool Kits are distributed to new providers who join the 
contractor's developed network, and may include reference charts, the 
TRICARE Provider Handbook, and a welcome letter. 

[48] The second generation of managed care support contracts are 
performance-based contracts. A performance-based contract includes 
certain performance standards that those offerors submitting bids must 
achieve if selected for the contract or they may be subject to certain 
penalties. In their bids for the contract, offerors may also submit 
additional performance standards for incorporation into the contract 
where the request for proposal does not have a minimum standard. Under 
these managed care support contracts, contractors have different 
requirements related to provider education due to contractors' 
submission of additional performance standards during the solicitation 
period. 

[49] While these examples are unique to these contractors' contracts, 
all three contractors may offer these resources to the providers in 
their regions. 

[50] TMA developed the TRICARE Provider Handbook and updates it 
annually to inform providers about basic and important information 
about TRICARE and emphasize key operational aspects of the program and 
program options. The handbook assists providers in coordinating care 
for TRICARE beneficiaries, and contains information about specific 
TRICARE programs, policies, and procedures. Any TRICARE program 
changes and updates may be communicated periodically through the 
TRICARE Provider News publications. 

[51] Social media refers to services that enable individuals to 
publicly create, share, and discuss information. These services 
include Facebook and Twitter. 

[52] TMA's second civilian provider survey (2008 and 2009) was fielded 
as two versions. The first version was fielded to physicians, 
including psychiatrists. The second version was fielded to 
nonphysician mental health providers, including: (1) certified 
marriage and family therapists, (2) mental health counselors, (3) 
pastoral counselors, (4) certified psychiatric nurse specialists, (5) 
clinical psychologists, and (6) certified clinical social workers. 

[53] TMA's consultant conducted analyses of the responses to determine 
whether they could be generalized to the populations surveyed and 
found that their responses could not be generalized. As each survey 
year's results are cumulative, the results may be generalizable at the 
end of the 4-year survey period. 

[54] The result reported above is from responses to the physician 
survey. 

[55] Levy, Robert A., and Gabay, Mary, Some Additional Findings 
Related to the Acceptance by Civilian Providers of TRICARE Standard 
(Nov. 2008, p. 4, 29-30). 

[56] TMA's Communications and Customer Service annually provides the 
contractors with a mail file that includes the residential addresses 
of TRICARE Standard beneficiaries for the purpose of mailing the 
annual newsletter. TRICARE Extra beneficiaries are included in this 
list because they are the same as TRICARE Standard beneficiaries 
except that they choose to obtain health care from network providers. 

[57] Although TRICARE Standard and Extra beneficiaries are not 
required to enroll, these beneficiaries can sign-up for e-mail alerts 
that deliver the latest TRICARE information. According to a TMA 
official, the contractors may also collect beneficiaries' e-mail 
addresses and use these e-mail addresses to communicate with 
beneficiaries. 

[58] The TRICARE Standard Handbook has been developed to guide TRICARE 
beneficiaries in using the Standard and Extra options. It explains the 
different types of TRICARE providers and outlines services covered 
under TRICARE Standard and Extra as well as costs and requirements. 

[59] See 10 U.S.C. §§ 1079(h), 1086(f). 

[60] According to a TMA official, this TRICARE policy was established 
in 1998 because Medicare decreased the maternity rates by 10 percent 
that year. The official also noted that TMA determined this 10 percent 
decrease would jeopardize access and decided that the rates should not 
fall below the 1997 levels. 

[61] See the 2011 report at Kennell, D., Witsberger, C., Doukeris, C., 
Information on Maternity CMACs for 2011 (Task Order No. 3005-001), 
Kennell and Associates, Inc. (Feb. 1, 2011). This report contains 
summaries of all previous analyses beginning in 2006. 

[62] Medicaid is the joint federal-state program that provides health 
care coverage for certain low-income individuals. 

[63] TMA's consultant reviewed data from 47 states (all except 
Tennessee, Delaware, and Rhode Island). A state was identified as 
having TRICARE reimbursement rates below Medicaid if the TRICARE 
reimbursement rate in any locality was below the Medicaid rate for any 
of 6 specific maternity/delivery current procedural terminology (CPT) 
codes. For any state where at least 1 of these 6 TRICARE reimbursement 
rates were below the Medicaid rate, the rates for 14 CPT codes (the 6 
specific codes plus 8 others) were set at the greater of the TRICARE 
reimbursement rate or the Medicaid rate. 

[64] TMA's consultant reviewed data from the 12 states identified in 
2006, as well as Idaho, Oklahoma, Virginia, North Carolina, Maryland, 
Alabama, Vermont, Utah, Kentucky, New Hampshire, and Illinois. 

[65] For the 2008, 2009, 2010, and 2011 studies, TMA's consultant 
reviewed data from all states except Tennessee. 

[66] Kennell, D., Brooks, A., Witsberger, C., Cottrell, L., Caney, K., 
Comparison of Commercial, Medicaid, and TRICARE Reimbursement Rates 
for Physicians (Task Order 1005-009), Kennell and Associates, Inc. 
(Apr. 22, 2009). 

[67] In order to capture differences between different types of 
physicians, TMA's consultant examined 13 specialties that provide the 
vast majority of physician services to TRICARE beneficiaries. The 13 
specialties were (1) general and family practice providers, (2) 
pediatricians, (3) internists, (4) obstetricians/gynecologists, (5) 
psychiatrists, (6) psychologists, (7) cardiologists, (8) orthopedic 
surgeons, (9) radiologists, (10) general surgeons, (11) 
gastroenterologists, (12) physical medicine specialists, and (13) 
ophthalmologists. 

[68] Tennessee was not included as it did not have a Medicaid fee-for- 
service program. 

[69] There was insufficient commercial data to analyze rates for 
obstetricians. 

[70] The geographic market areas were equally distributed among the 
three TRICARE regions: two high-volume TRICARE markets and three 
smaller markets in each region. 

[71] Kennell, D., Brooks, A., Witsberger, C., TRICARE Reimbursement of 
Pediatric Vaccines and Immunizations (Task Order No. 1005-005), 
Kennell and Associates, Inc. (Jan. 14, 2009). 

[72] At the time of the study, TRICARE reimbursed providers for 
pediatric vaccines in two components: (1) a reimbursement for the 
vaccine and (2) a separate amount (in many cases) for the 
administration of the vaccine. 

[73] Network providers may agree to accept lower reimbursements as a 
condition of network participation. 

[74] According to the study, TRICARE payments for pediatric vaccines 
could not be compared to Medicaid payments because pediatric vaccines 
were typically supplied free to pediatricians by states and/or the 
Centers for Disease Control and Prevention's Vaccines for Children 
program. The Vaccines for Children program provides free vaccines to 
enrolled public and private providers for recommended immunizations 
for children who are Medicaid-eligible, uninsured, on Medicaid, 
American Indian/Alaska Native, or underinsured by having insurance 
that does not cover routine immunizations. When a pediatrician 
receives Vaccines for Children products free, he or she is usually 
paid an administration fee by most Medicaid programs which generally 
ranges between $3 and $10, with most states paying between $4 and $6. 
TRICARE's 2008 reimbursement rate for this same service is $20.57. 

[75] Kennell and Associates, Inc., Analysis of TRICARE Payment Rates 
for Maternity/Delivery Services, Evaluation and Management Services, 
and Pediatric Immunizations (Mar. 30, 2006). 

[76] The study examined the 14 maternity/delivery CPT codes with the 
highest number of TRICARE purchased care uses, as well as the most 
frequently billed CPT code under TRICARE used by pediatricians--a mid- 
level office visit for an established patient. 

[77] The study examined the 2006 state Medicaid rates for 45 states. 
According to the study, Tennessee and Delaware did not have fee-for- 
service Medicaid programs at the time of the study, and Massachusetts, 
Rhode Island, and Kansas' data were unavailable. 

[78] The study examined the median commercial rates for September 2005 
in the 50 areas with the highest number of TRICARE purchased care 
deliveries in fiscal year 2005. 

[79] Three of the four states in which the Medicaid rates exceeded 
TRICARE's reimbursement rates for this service were states that also 
had higher Medicaid rates for maternity/delivery services. The fourth 
state had Medicaid rates that were roughly equal to TRICARE's 
reimbursement rate for this service. 

[80] See 10 U.S.C. §§ 1079(h)(1), 1086(f). 

[81] 32 C.F.R. § 199.14(j)(1)(iv)(D) (2010). According to a TMA 
official, TMA usually defines a locality using one or more zip codes. 

[82] 32 C.F.R. § 199.14(j)(1)(iv)(E) (2010). 

[83] 32 C.F.R. § 199.14(j)(1)(iv)(C) (2010). 

[84] The federal responsibility for health care in Alaska includes, 
but is not limited to, providing or funding health care to users of 
the Indian Health Service, Medicare, Medicaid, TRICARE, and Veterans 
Health Administration. 

[85] See Sebelius, Kathleen, Secretary of Health and Human Services, 
Report to Congress of the Interagency Access to Health Care in Alaska 
Task Force (Sept. 17, 2010, p. 19). 

[86] Alaska ranks first in the nation in the percent of population 
receiving TRICARE or Veterans Health Administration paid services. The 
national average is about 4 percent of the population. See Report to 
Congress of the Interagency Access to Health Care in Alaska Task Force 
(Sept. 17, 2010, p.19). 

[87] Alaska Center for Rural Health, Alaska's AHEC Institute of Social 
and Economic Research, 2009 Alaska Health Workforce Vacancy Study 
(December 2009). 

[88] TRICARE administration and management in each of the other 49 
states was overseen by one of three regional contractors. 

[89] See 75 Fed. Reg. 67,695 (Nov. 3, 2010). 

[90] TMA calculated that, on average, the Department of Veterans 
Affairs reimbursement rates were 35 percent higher than TRICARE's 
rates in 2006, and 73 percent higher than Medicare's rates in Alaska. 
The 13 reimbursement waivers in Alaska are in addition to the 
demonstration project rate increases. 

[91] The seven measures included: (1) the number of unique 
beneficiaries who received civilian care; (2) the number of unique 
civilian physicians who saw a TRICARE beneficiary; (3) the number of 
services (visits and other services) received by TRICARE patients; (4) 
the number of civilian emergency room visits; (5) the number of visits 
and admissions by Alaska residents outside of Alaska (prior to 2007, 
many beneficiaries had to be sent outside of Alaska for services 
because physicians would not treat them in Alaska); (6) the number of 
TRICARE waivers granted for active-duty servicemembers; and (7) survey 
information on whether physicians are willing to accept TRICARE 
Standard patients (this indicator of access is based on results of TMA 
surveys). These seven measures were developed in discussions with TMA 
and TRICARE Regional Office officials. 

[92] See Patient Protection and Affordable Care Act, Pub. L. No. 111- 
148, § 10501(b), 124 Stat. 119, 993-94 (2010) (adding section 5104 to 
PPACA). 

[93] See Report to Congress of the Interagency Access to Health Care 
in Alaska Task Force (Sept. 17, 2010). 

[94] TMA defines an "adequate network" as one that ensures that all 
access standards are continuously maintained in all TRICARE Prime 
Service Areas for the delivery of health care under TRICARE Prime and 
Extra. 

[95] Among others, these time and distance standards set allowable 
travel and appointment wait times. Specifically, under normal 
circumstances, travel time may not exceed 30 minutes from home to 
primary care delivery site, or 1 hour from home for specialty care, 
unless a longer time is necessary because of the absence of providers 
(including providers not part of the network) in the area. 
Additionally, the wait time for an appointment for well-patient visits 
or specialty care referrals shall not exceed 4 weeks; for a routine 
visit, the wait time for an appointment shall not exceed 1 week; and 
for an urgent care visit the wait time for an appointment shall 
generally not exceed 24 hours. Office waiting times in nonemergency 
circumstances must not exceed 30 minutes, except when emergency care 
is being provided to patients and disrupts the normal schedule. See 32 
C.F.R. § 199.17(p)(5) (2010). 

[End of section] 

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