Regulatory Developments

On March 27, 2003, Marjorie Kanof, Director, Health Care – Clinical and Military Health Care Issues for the U.S. Government Accounting Office (GAO), provided testimony to the House Armed Services Committee, Subcommittee on Personnel, about problems described by beneficiary groups with access to care from TRICARE's providers. In turn, providers described problems they have experienced with low reimbursement rates and the administrative burdens involved with serving TRICARE beneficiaries. See Oversight of the Adequacy of TRICARE's Civilian Provider Network Has Weaknesses (GAO-03-592T) TRICARE, the health care system for the Department of Defense (DOD), provides care for over 8.7 million active duty military personnel and their dependents, as well as military retirees, through Military Treatment Facilities (MTFs) and through its provider network. As Kanof explained, “TRICARE's civilian provider network … is designed to complement the availability of care offered by MTFs [which] supply most of the health care services TRICARE beneficiaries receive. Report Highlights, at 2. TRICARE offers three options to its beneficiaries:

• TRICARE Prime (a managed care network similar to an HMO);
• TRICARE Extra (a preferred providers network); and
• TRICARE Standard (a fee-for-service program).

The GAO found weaknesses with the DOD's civilian provider network due to: “1) flaws in its required provider-to-beneficiary ratios, 2) incomplete reporting on beneficiaries' access to providers, and 3) the absence of a systematic assessment of complaints … ” Id. at 7. In particular, the GAO exp- lained, the provider-to-beneficiary ratios tend to underestimate the number of providers needed in a given area (particularly as to specialists). Moreover, the GAO found that due to problems with the ability of DOD's contractors to access data, the contractors were not able to adequately assess the extent and respond to beneficiary's complaints.