DOD employs four civilian health care companies or managed care  support contractors (contractors) that are responsible for developing and  maintaining the civilian provider network that complements the care  delivered by MTFs. In the remaining areas, a network is not required. DOD requires that contractors have a sufficient number and mix of  providers, both primary care and specialists, necessary to satisfy the needs  of beneficiaries enrolled in the Prime option. In addition, DOD has access-to-care standards that are designed to ensure  that Prime beneficiaries receive timely care. DOD has delegated oversight of the civilian provider network to the  regional TRICARE lead agents. DOD’s Civilian Provider Network Oversight Has Weaknesses

DOD’s ability to effectively oversee—and thus guarantee the adequacy  of—the TRICARE civilian provider network is hindered by (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. Although DOD has required its network to meet  established ratios of providers to beneficiaries, the ratios may  underestimate the number of providers needed in an area. Required Provider-to- Beneficiary Ratios May Not Account for Actual Number of Beneficiaries or Availability of Providers

In some cases, the provider-to-beneficiary ratios underestimate the  number of providers, particularly specialists, needed in an area. The ratio is most likely to result in an  underestimation of the need for providers in areas in which the MTF is a  clinic or small hospital with a limited availability of specialists. Specifically, for the network  adequacy reports we reviewed from 5 of the 11 TRICARE regions, we  found that contractors reported less than half of the required information  on access standards for appointment wait, office wait, and travel times. DOD and Contractors Report Three Factors That May Contribute to Network Inadequacies

DOD and contractors have reported three factors that may contribute to  network inadequacy: geographic location, low reimbursement rates, and  administrative requirements. While reimbursement rates and  administrative requirements may have created dissatisfaction among  providers, it is not clear how much these factors have affected network  adequacy because the information the contractors provide to DOD is not  sufficient to reliably measure network adequacy. According to contractor officials, TRICARE Prime providers have  expressed concerns about decreasing reimbursement rates. Contractors also report that providers have expressed dissatisfaction with  some TRICARE administrative requirements, such as credentialing and  preauthorizations and referrals. For example, many providers have  complained about TRICARE’s credentialing requirements. Because the new contracts are not  expected to be finalized until June 2003, the specific mechanisms DOD and  the contractors will use to ensure network adequacy are not known. However, TNEX does not specify how this will be measured. Referral requirements will be reduced, but the MTFs  will still retain the “right of first refusal.”
On the other hand, TNEX may be creating a new administrative concern  for contractors and providers by requiring that 100 percent of network  claims submitted by providers be filed electronically. In fiscal year 2002,  only 25 percent of processed claims were submitted electronically.
Why GAO Did This Study

During 2002, in testimony to the House Armed Services Committee, Subcommittee on Personnel, beneficiary groups described problems with access to care from TRICARE's civilian providers, and providers testified about their dissatisfaction with the TRICARE program, specifying low reimbursement rates and administrative burdens. The Bob Stump National Defense Authorization Act of 2003 required that GAO review DOD's oversight of TRICARE's network adequacy. In response, GAO is (1) describing how DOD oversees the adequacy of the civilian provider network, (2) assessing DOD's oversight of the adequacy of the civilian provider network, (3) describing the factors that may contribute to potential network inadequacy or instability, and (4) describing how the new contracts, expected to be awarded in June 2003, might affect network adequacy. GAO's analysis focused on TRICARE Prime--the managed care component of the TRICARE health care delivery system. This testimony summarizes GAO's findings to date. A full report will be issued later this year.

What GAO Found

To oversee the adequacy of the civilian network, DOD has established standards that are designed to ensure that its network has a sufficient number and mix of providers, both primary care and specialists, necessary to satisfy TRICARE Prime beneficiaries' needs. In addition, DOD has standards for appointment wait, office wait, and travel times that are designed to ensure that TRICARE Prime beneficiaries have adequate access to care. DOD has delegated oversight of the civilian provider network to lead agents, who are responsible for ensuring that these standards have been met. DOD's ability to effectively oversee--and thus guarantee the adequacy of--the TRICARE civilian provider network is hindered in several ways. First, the measurement used to determine if there is a sufficient number of providers for the beneficiaries in an area does not account for the actual number of beneficiaries who may seek care or the availability of providers. In some cases, this may result in an underestimation of the number of providers needed in an area. Second, incomplete contractor reporting on access to care makes it difficult for DOD to assess compliance with this standard. Finally, DOD does not systematically collect and analyze beneficiary complaints, which might assist in identifying inadequacies in the TRICARE civilian provider network. DOD and its contractors have reported three factors that may contribute to potential network inadequacy: geographic location, low reimbursement rates, and administrative requirements. However, the information the contractors provide to DOD is not sufficient to measure the extent to which the TRICARE civilian provider network is inadequate. While reimbursement rates and administrative requirements may have created dissatisfaction among providers, it is not clear that these factors have resulted in insufficient numbers of providers in the network. The new contracts, which are expected to be awarded in June 2003, may result in improved network participation by addressing some network providers' concerns about administrative requirements. For example, the new contracts may simplify requirements for provider credentialing and referrals, two administrative procedures providers have complained about. However, according to contractors, the new contracts may also create requirements that could discourage provider participation, such as the new requirement that 100 percent of network claims submitted by providers be filed electronically. Currently, only about 25 percent of such claims are submitted electronically.