Senate Panel Proposes Health Care Overhaul

May 13, 2016

On May 12, the Senate Armed Services Committee approved its version of the FY 2017 Defense Authorization Bill. In the wake of last year's retirement reform, the committee has turned to overhauls of DoD's leadership structure, procurement, and health care programs.  

As this article was being written, the only information on the changes was a committee press release, which didn't include details of committee recommendations on specific health fees.  

But committee leaders left no doubt about their determination to address problems in beneficiary access and program efficiency, quality, oversight, and contracting.

They also left no doubt they believe many fees associated with TRICARE should be increased.  

That combination of views is best described by a sentence in the committee's press release that said, “[These] reform initiatives adhere to a simple guiding principle: that beneficiaries should only be asked to pay more into a military system that delivers greater value.”

Changes addressed by the committee include: 

  • eliminating preauthorization requirements for specialty care;
  • lowering copays for high-value medications and services;
  • requiring a plan to improve pediatric care;
  • requiring a standardized appointment system in military facilities;
  • establishing performance accountability standards for military health care leaders at all levels;
  • incorporating value-based methods and provider reimbursements in TRICARE contracts;
  • expanding telehealth services;
  • authority for TRICARE beneficiaries to enroll in the federal civilian dental and vision programs;
  • authorizing DoD to conduct a pilot program to provide commercial health insurance for Guard and Reserve beneficiaries; and
  • “realignment of the medical command structure” of DoD (with no further details available yet).  

On the issue of TRICARE fees, the press release was short on details, but said the committee recommended: 

  • no changes for TRICARE For Life;
  • “very modest” enrollment fee increases for retired beneficiaries under age 65;
  • a nine-year schedule of increases in pharmacy copays;
  • authorization for DoD to charge a “no-show” fee for missed appointments in military facilities;
  • changing TRICARE Standard cost shares to flat-dollar amounts rather than the current 20-25 percent of TRICARE-allowed charges;
  • authority for DoD to lower copays for high-value services and increase copays for low-value services;
  • addition of $40 million for autism care to reverse provider reimbursement cuts DoD imposed on April 1, 2016.  

In general, MOAA supports the array of quality and access improvement initiatives the committee proposes, though we remain concerned about the magnitude of potential fee hikes.

On non-health care issues, the committee recommended: 

  • A 1.6 percent military pay raise, as recommended in the Pentagon budget (vs. the 2.1 percent raise recommended by the House committee);
  • Force level reductions recommended in the Pentagon budget (vs. the increases allowed in the House bill);
  • Requiring both males and females to register for the draft;
  • A 25-percent cut in 4-stars and other flag and general officers; and
  • Permanent authority to pay the Special Survivor Indemnity Allowance for SBP-DIC survivors.  

We should be able to provide additional details on TRICARE fees, SSIA, and more in next week's update.


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