DHA’s TRICARE Dental Care Office administers and oversees  the TRICARE dental care programs. TRICARE Dental Care Programs

			The TRICARE Active Duty Dental Program

The ADDP supplements the dental services available to active duty  servicemembers through DTFs with the goal of maintaining readiness for  deployment. The TRICARE Dental Program

The TDP is a dental insurance program that is available to dependents of  active duty servicemembers, and to members of the National Guard and  Reserve and their dependents.sharing premiums, certain procedure fees, and costs above annual and  lifetime maximums. The TRICARE Retiree Dental Program

The TRDP is a dental insurance program that is available to retired  uniformed service members and their dependents. Acquisition Planning. DHA Analyzed Market Research, Performance Data, and Other Information in Developing Dental Services Contract Requirements

To develop requirements for each of its current dental services contracts,  DHA officials analyzed market research, data from contractors’ past  performance, legislation, independent cost estimates, and other  information. DHA officials used this information to align the contracts’  requirements with contract goals to deliver high quality dental services in  a cost effective manner, and to facilitate access to care. As part of its development of contract requirements,  DHA officials gathered information through market research and analyzed  it to determine the capabilities within the dental services market to satisfy  the agency’s needs. Performance Monitoring. DHA officials analyzed information about  contractors’ past performance, including contractors’ monthly reports and  claims payment data, to assess and revise contract requirements for  future contractors. Legal requirements. DHA officials reviewed laws relevant to each dental  services contract to identify changes required by statute. DHA officials reviewed independent cost  estimates for new benefit requirements they were considering to assess  cost efficiency. Other sources of information DHA  officials reviewed prior to determining whether to add, change, or  eliminate requirements from their dental service contracts included
Lessons learned from previous procurements for other health  services. Dental best practices and changes in the professional practice of  dentistry. DHA Uses Separate Contracts Because of Funding Differences and Other Factors

DHA uses separate contracts for different beneficiary groups, in part,  because the programs that serve them are funded differently. For  example, the TRDP contract is separate from the ADDP and the TDP  contracts because the government does not contribute any funds for the  TRDP, but does contribute funds for the ADDP and TDP. Other factors  that contributed to DHA’s decision to use separate contracts for its  different beneficiary groups included differences between programs, such  as differences in their purposes, covered dental services, and network  access standards. DHA officials told us that they discussed this issue with  potential contractors, who said that they would have to operate the  programs separately. DHA officials determined that there would be  minimal cost savings or efficiencies from combining contracts under these  circumstances. ADDP and TDP Contracts

Among other factors, differences in how the ADDP and TDP programs  are funded also influenced DHA’s decision to use separate contracts for  these programs. For example, DOD pays all costs for necessary care  provided to active duty servicemembers through the ADDP upon receipt  of invoices for individually priced services. In contrast, the TDP is an  insurance program: DOD and TDP beneficiaries share in the costs of  premiums, which are paid to the contractor; and the contractor is at risk  for payment to providers. The potential disadvantages of combining the contracts that DHA officials  and contractors identified included: a reduction in competition if carriers do not want to participate in one  or the other program, do not want to manage two different programs  simultaneously under the same contract, or do not want to undertake  a contract of the resultant size; greater difficulty in selecting the best contractor to award the contract,  as one offer may be a better match for the ADDP requirements and  another offer a better match for the TDP requirements;  the potential for confusion among beneficiaries, dentists, and  contractor staff because of differences between the programs (such  as different benefits and payment requirements); and  the potential for a compromise on quality if the contractor is not able  to meet the requirements of both programs simultaneously and well. Agency Comments

We requested comments on a draft of this product from DOD. DOD also provided a technical comment, which was  incorporated.
Why GAO Did This Study

DOD offers comprehensive health care coverage to millions of beneficiaries through TRICARE, a system of health care that DOD purchases from private insurers to supplement the health care that DOD provides through its military and dental treatment facilities (DTF). Purchased dental services are provided through separate programs for different groups of beneficiaries: (1) the ADDP provides dental care to active duty servicemembers who do not have ready access to a DTF; (2) the TDP provides dental insurance to eligible dependents of active duty servicemembers, and to National Guard and Reserve members and their dependents; and (3) the TRDP provides dental insurance to retired uniformed service members and their dependents. DHA is responsible for awarding, administering, and overseeing contracts with private insurers for these programs.
Senate Report 112-173, which accompanied the Senate Committee on Armed Services' version of the National Defense Authorization Act for fiscal year 2013, mandated that GAO review DOD's private sector care contracts, including its contracts for dental services. GAO examined (1) how DHA developed the requirements for its current dental services contracts and (2) the reasons for DHA's use of separate contracts for different beneficiary groups. GAO reviewed relevant laws, regulations, and DOD contracts and acquisition planning documents. GAO also interviewed DHA officials and other stakeholders.
GAO made no recommendations.

What GAO Found

To develop requirements for its current dental services contracts, officials from the Department of Defense's (DOD) Defense Health Agency (DHA) analyzed market research, data from contractors' past performance, legislation, independent cost estimates, and other information. DHA officials used this information to align the contracts' requirements with contract goals to deliver high quality dental services in a cost effective manner and to facilitate access to care.
Market research: DHA officials gathered information through market research and analyzed it to determine the capabilities within the dental services market to satisfy the agency's needs.
Performance monitoring: DHA officials analyzed information about contractors' past performance, including claims payment data, to assess and revise contract requirements.
Legal requirements: DHA officials reviewed laws relevant to each dental services contract to identify changes required by statute.
Independent cost estimates: DHA officials reviewed cost estimates for new benefit requirements they were considering for the TRICARE Retiree Dental Program (TRDP) and TRICARE Dental Program (TDP) contracts to assess cost efficiency.
Other sources of information: DHA officials reviewed lessons learned from previous procurements, current dental services contract requirements, and dental best practices and changes in the professional practice of dentistry.
DHA uses separate contracts for different beneficiary groups in part because the programs that serve them are funded differently. The TRDP contract is separate from the TRICARE Active Duty Dental Program (ADDP) and the TDP contracts because the government does not contribute any funds for the TRDP, but does contribute funds for the ADDP and TDP. To provide assurance that government funds are not expended for the TRDP, contractors said they would have to operate the programs separately. As a result, DHA officials determined that there would be minimal cost savings from combining contracts. Differences in how the ADDP and TDP programs are funded also influenced DHA's decision to use separate contracts for these programs. DOD pays all costs for necessary care provided to active duty servicemembers through the ADDP. In contrast, the TDP is an insurance program: DOD and TDP beneficiaries share in the costs of premiums, which are paid to the contractor; the contractor is at risk for payment to providers. DHA officials concluded that the disadvantages of combining these two contracts outweighed the potential advantages. Other factors that contributed to DHA's decision to use separate contracts for different beneficiary groups included differences in program purposes, dental services, and network access standards.
In comments on a draft of this report, DOD agreed with its findings and provided a technical comment, which was incorporated.