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TRICARE EYES FEWER "PRIME" NETWORKS -- Cutting
the
number of Prime Service Areas would save the
government
money, but it would hit thousands of
beneficiaries in the wallet.
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Story here...
http://www.military.com/
features/0,15240,146137,00.html
Story below:
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TRICARE Eyes Fewer 'Prime' Networks
Some TRICARE Prime Networks Seen Too Costly To Keep
Tom Philpott
More than 168,000 TRICARE Prime enrollees -- those in managed care
networks set up more than 40 miles from a military base or a base
closure site -- could lose access to those networks and therefore pay
higher out-of-pocket costs under new TRICARE support contracts to take
effect in 2009.
Retiree advocates say a proposed change to the next generation of
contracts, floated by TRICARE in a draft bid proposal, would encourage
contractors like Humana, TriWest and Health Net to make more
cost-competitive bids by dismantling provider networks that aren’t near
military treatment facilities or Base Realignment and Closure (BRAC)
sites.
Cutting the number of Prime Service Areas, or PSAs, would save the
government money, but it would hit thousands of beneficiaries in the
wallet. Retirees, their spouses and survivors living more than 40 miles
from base would lose access both to TRICARE Prime and also to TRICARE
Extra, the military’s preferred provider option. They would have to
shift to TRICARE Standard, which for beneficiaries is the most costly of
TRICARE’s three options. The number of doctors willing to accept TRICARE
patients also could tighten in areas where PSAs no longer would exist.
TRICARE officials declined to comment on the potential effect of the
draft Request for Proposal, or RFP, which was released for review by
potential bidders and other interested parties a few months ago.
Officials said they don’t want to influence comments they receive. An
official did emphasize that the RFP is only a draft. But the comment
period in fact closed July 19 with few filed. A final RFP is expected to
be issued soon.
The new contracts likely will be awarded next year, take effect in March
2009 and run for six years. Such contracts are vital to TRICARE, the
health plan of 9.2 million military beneficiaries. More than half of all
beneficiaries, roughly 5 million, are enrollees in Prime, the managed
care option. Service members get care at no charge. Other Prime
enrollees pay an annual fee of $230 for individual or $460 for family
coverage, and modest co-payments for doctor visits, lab tests and
hospital care.
Beneficiaries who prefer to chose their own doctors, or who can’t access
Prime where they live, use TRICARE Standard instead, a fee-for-service
plan. Standard users pay an annual deductible of up to $150 for
individuals or $300 for families, plus a hefty share of all medical
bills -- 20 or 25 percent of “allowed charges” depending on patient
category. Standard users can be stuck with additional costs if doctors
won’t accept TRICARE allowable rates. But total medical costs per family
cannot exceed a $3000 a year catastrophic cap.
A third option is TRICARE Extra, also for patients not enrolled in
Prime. Extra provides a five percent discount on co-payments set under
Standard because beneficiaries agree to use a Prime network provider.
Because the military only has hospitals, clinics and staff to treat a
fraction its beneficiary population, it partners with large
private-sector healthcare companies to run robust networks of healthcare
providers. Support contracts for Prime alone cost the Department of
Defense an estimated $6 billion a year.
Humana Military Health Services, headquartered in Louisville, Ky., has
the managed care contract for the south region. TriWest Healthcare
Alliance of Phoenix services the western region. Health Net Federal
Services, of Rancho Cordova, Calif., has the north region contract.
When these current contracts were let, companies were allowed to add
millions of dollars to their offers by promising to establish PSAs for
beneficiaries living far from any base. Contractors were rewarded, or at
least not punished, for such initiatives. Even if they could not claim
to be the lowest bidder, they could still win the contract by claiming
best value.
The draft RFP for the next generation of contracts says specifically
that bids will be judged on providing Prime networks only for
“government mandated PSAs,” those near military treatment facilities and
BRAC sites. Any additional PSAs “will be evaluated as neutral,” which
means a contractor will not help their competitiveness in this round by
promising to extend the number of PSAs beyond base catchment areas.
At our request, TRICARE officials gathered from the three current
contractors their estimate on the number of beneficiaries enrolled in
PSAs that are more than 40 miles from bases or BRAC sites.
Humana, which touts 100 percent Prime coverage across the South region,
reports 90,281 beneficiaries enrolled in these non-government Prime
service areas. In the North region, Health Net has 18 PSAs outside of
government areas with 59,049 beneficiaries enrolled. In the West region,
TriWest operates only eight of these PSAs. They have 18,738 enrollees.
No representative for any of the three current contractors agreed to
speak on the record about the potential impact on beneficiaries if the
next support contracts adhere to TRICARE’s draft guidance. One source
said Humana officials are particularly upset, given their investment in
creating Prime service areas across the South region. With stiff
competition expected for the next multi-billion dollar contract, Humana
officials reportedly see the proposed neutrality toward operating
region-wide PSAs as targeting a key advantage they hold over
competitors.
TRICARE Prime Remote coverage would be unaffected by the new contracts.
This special program allows active duty members and their families
assigned away from military treatment facilities to get whatever care
they need, from whatever doctor they choose, without paying more out of
pocket than they would if they were enrolled in Prime.
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Larry Scott --
