Health Care | New law raises payments 1.6 percent.

Medicare, TRICARE Dodge Payment Cuts

On Feb. 20, President George W. Bush signed the FY 2003 Omnibus Appropriations Act (H.J. Res. 2) into law. This new legislation, among other things, stopped a 4.4 percent reduction in Medicare and TRICARE payments to health care providers that had been scheduled for March 1. Instead, the new law increases those payments by 1.6 percent, also effective as of March 1.

It also gives the Centers for Medicare and Medicaid Services (cms, the agency that oversees Medicare) the authority to change the flawed payment formula that caused the erroneous payment cuts in the first place. cms has signaled its intent to do so, which should keep this situation from recurring in the future.

This is great news for the short term, because doctors were so "up in arms" over the impending payment cuts that many more had threatened to stop seeing Medicare and TRICARE patients. (TRICARE payment rates are linked to Medicare's by law.) But much remains to be done to make these programs more attractive to providers.

Although Medicare officials now have the authority to set provider reimbursement rates as they see fit, Congress must provide sufficient funding to allow cms to attract and retain sufficient Medicare and TRICARE providers. Congress and the Department of Defense also must work to eliminate claims hassles, excessive paperwork, and other obstacles that now inhibit provider participation in TRICARE.

Feedback from Pentagon and Hill officials indicates MOAA members have been doing their part by mailing the tear-out letters on this subject in the February issue of Military Officer magazine. The three letters were preaddressed to the Secretary of Defense and to the chairs of the House and Senate Armed Services committees.

One source told us, "We've received so many of those letters, we've stopped counting them and started weighing them."

This was only the latest of several phases of MOAA's campaign to reverse the Medicare/TRICARE payment cuts. During the last several months MOAA members sent their legislators more than 72,000 messages on this subject via the MOAA Web site.

This is the kind of grassroots participation that is crucial to winning results, and we appreciate it. (See the following article to learn about a new issue on which your help is needed most urgently.)

Survivor Benefits | S. 451 would increase annuity starting in 2004.

Snowe Leads Senate SBP Charge

Last month, we reported that Sen. Olympia Snowe (R-Maine) would soon introduce a Senate companion bill to Rep. Jeff Miller's (R-Fla.) H.R. 548, which proposes to phase out the reduction in Survivor Benefit Plan (sbp) annuities that now affects more than 200,000 military survivors age 62 and older. At press time, H.R. 548 had 142 House cosponsors.

On Feb. 26, Snowe introduced her companion bill, which bears the number S. 451. Sen. John McCain (R-Ariz.) joined her in cosponsoring this important bill.

Like H.R. 548, Snowe's S. 451 would increase the age-62 sbp annuity over a period of five years, with the first annuity increases occurring Oct. 1, 2004. It envisions that all annuitants will be drawing the full 55 percent sbp benefit by Oct. 1, 2007.

In addition, the two bills would authorize a one-year open enrollment period to allow military servicemembers who declined sbp upon retirement to reenter the program and cover their spouses. Late entrants under this provision would pay a higher premium, based on the number of years since retirement.

Retirees enrolled in supplemental sbp coverage (which pays higher benefits at age 62 in return for higher premiums) would see their premiums reduced.

The open season provision is important to protect more survivors. Also, it would recognize that the age-62 benefit reduction is one reason why many retirees chose not to enroll. If the program is improved so significantly, they should get another chance. Further, it helps current enrollees by improving the legislation's odds of enactment (it offers short-term retired pay savings that partially offset the cost of the sbp benefit increase; additional premium deductions mean retired pay outlays go down).

MOAA strongly endorses this legislation for several reasons. First, many retirees who signed up for sbp in the 1970s and early '80s weren't adequately informed about the age-62 benefit reduction. Second, the Pentagon admits that the 40 percent subsidy Congress intended for sbp has now dropped below 17 percent, so retiree premiums are paying a far higher share of program costs than Congress intended. Finally, the military sbp compares poorly with the federal civilian plan, which enjoys a much higher subsidy (33 percent to 48 percent) and offers 50 percent or 55 percent of retired pay for life, with no reduction at age 62.

MOAA believes this is the year to fix sbp, and the key is to win budget authority in the FY 2004 budget resolution, which Congress expects to finish by mid-to-late April.

To kick-start the education process, the MOAA staff already has briefed more than 75 House and Senate staffers on the case for enactment of H.R. 548/S. 451.

But we face a relatively short timetable, and your grassroots help is essential to get your legislators on board. If you have access to a computer, we hope you'll use the special action alert on MOAA's Web site (http://capwiz.com/moaa/home) to remind your legislators of the need to pass this important legislation this year.

You also can call your legislators using MOAA's toll-free Capitol Hill hot line, (877) 762-8762. Just ask to be connected to your legislator's office, then urge your senators and representative to make sure funding for S. 451 and H.R. 548 is included in the budget resolution.

The more postcards, e-mails, letters, and phone calls we can generate to Congress in the next month, the better our chances of success. Please don't be shy about using every option listed on page 18 to contact your legislators several times. Volume definitely counts.

Veterans' Issues | Norton pushes VA health care, concurrent receipt.

TMC Testifies Before Veterans' Committee

On Feb. 12, Col. Bob Norton, USA-Ret., MOAA deputy director for Government Relations, appeared before the House Veterans Affairs Committee on behalf of The Military Coalition (TMC) to comment on issues related to veterans' health care. Norton cochairs TMC's Veterans' Committee.

Norton expressed TMC's strong support for full funding for all enrolled veterans and measures to ensure timely access to Department of Veterans Affairs (VA) health care. Currently, enrollment far surpasses funding capacity, leaving many veterans with excessive wait times for appointments in VA facilities. He also thanked the committee for its opposition to previous proposals to force military retirees to give up either their VA or TRICARE health care benefits, a concept known as "forced choice."

Norton urged the committee's support in making eligibility criteria for the recently enacted special compensation for certain disabled retirees as broad as possible. He also asked for ultimate enactment of full concurrent receipt authority and made a strong case for funding to ensure timely processing of veterans' benefit claims.

Finally, Norton expressed TMC support for indexing Montgomery gi Bill (mgib) benefits to the average cost of a four-year college education, establishment of an mgib enrollment period for servicemembers who declined the inferior Veterans' Educational Assistance Program, and measures to allow qualifying survivors to retain Dependency and Indemnity Compensation if they remarry after age 55.

TRICARE | Plan would pay bonus in underserved areas.

DoD to Raise Some Provider Payments

Medicare has long recognized the need to supplement basic reimbursement rates in areas where there is limited availability of Medicare-participating providers. Now, for the first time, the Department of Defense (DoD) is planning to take the same approach in areas underserved by TRICARE providers.

Beginning this summer, TRICARE will offer a 10 percent bonus in certain areas that meet Medicare criteria for "health professional shortage areas." The payments will be made to both TRICARE Standard providers and TRICARE Prime network providers in the underserved areas.

MOAA is pleased that DoD has recognized the need to address the unavailability of TRICARE providers in shortage areas. It only makes sense that TRICARE mirror Medicare's approach to underserved populations.

The reluctance of providers to accept TRICARE patients because of TRICARE's low fee schedule is an issue we have worked hard to resolve. In meetings with top DoD health care officials, we continue to stress the urgency of solving this fundamental problem.

February's Military Officer included tear-out letters for members to sign and send to the Secretary of Defense and chairs of the House and Senate Armed Services committees, urging them to take action to improve TRICARE reimbursements and beneficiary access.

We will be anxious to see the results of this effort. One key will be to ensure that potential TRICARE providers are made aware of the increased payments.

Once the designated "underserved areas" are identified, we'll urge MOAA members living in those areas to tell their doctors about the bonus payments and urge any currently nonparticipating providers to begin participating.

Retired Pay | S. 392 would authorize concurrent receipt.

Reid Reintroduces Disability Offset Bill

In March, we reported that Rep. Mike Bilirakis (R-Fla.) had reintroduced his concurrent receipt bill, H.R. 303. Already, it numbers 153 cosponsors, a remarkable show of early support.

Now, Sen. Harry Reid (D-Nev.), Sen. John McCain (R-Ariz.), and 36 other cosponsors of both parties have reintroduced the Senate companion bill, S. 392. This is the same bill that was designated S. 170 during the previous Congress.

These extensive lists of cosponsors indicate that disabled retirees and their legislative champions aren't going to be satisfied with the limited "special compensation" Congress authorized in the FY 2003 Defense Authorization Act for certain retirees with combat- or operations-related disabilities.

But we have to recognize that quick action in 2003 appears unlikely, given that we won't know which retirees are and which aren't covered by the recently enacted provision until about June 1. That's the date the new special compensation will be payable, but the Department of Defense is still struggling to work out application and approval procedures to identify which disabilities qualify as combat- or operations-related.

With help from the Department of Veterans Affairs, Pentagon officials hope to develop a process that will go as smoothly as possible with the least possible paperwork. But it will be another month before these procedures are developed and publicized.

In the meantime, you can help by sending your legislators MOAA-prepared messages urging their support for H.R. 303 and S. 392. Visit http://capwiz.com/moaa/issues/bills and click on the bill numbers (under "Retirement Issues"), then enter your ZIP code and click "Go" to see the MOAA-suggested message to Congress.

Health Care | Pentagon proposal would limit beneficiary options.

No Backtracking on NAS Limits

We get regular reminders that we can never let our guard down, even after we win a law change. The latest reminder is in the fine print of the president's FY 2004 budget, which seeks to repeal recent legislation restricting imposition of so-called nonavailability statements (NASs).

A persistent problem with TRICARE Standard has been that beneficiaries who need certain kinds of care have to check with a local military facility before getting the care in the private sector. TRICARE Standard will pay the claim for civilian care in such instances only if the local military facility issues an nas indicating the care can't be provided at the military facility.

TRICARE sees it as the patient's responsibility to know which kinds of care require NASs, and beneficiaries who fail to seek them end up having their claims disapproved and getting stuck paying the bill themselves. One prominent example is delivery of a baby. Understandably, many expectant mothers who have seen civilian doctors throughout their pregnancy want to have their babies delivered by the same civilian doctor. They haven't appreciated the disruption to their continuity of care by being required to go to the (usually more austere) military hospital for the delivery.

Congress has been sympathetic to the case MOAA and The Military Coalition have made on behalf of beneficiaries. The FY 2001 and FY 2002 Defense Authorization acts included provisions ending nas requirements for maternity care (as of the end of this year) and specifying additional justification the Department of Defense (DoD) would have to provide to establish nas requirements under new TRICARE contracts.

The principle here is that TRICARE Standard beneficiaries who pay the higher costs associated with that program shouldn't have to keep tabs on changes in the local military commander's care policies. Similarly, the local commander should have some clear limits on his or her ability to disrupt continuity of care for every Standard beneficiary living within 40 miles of his or her facility.

Simply put, military facilities should have some incentive to compete for TRICARE Standard beneficiaries' business. Where they don't get enough business in certain areas, the local commander should seek to upgrade the facility's attractiveness before imposing the nas hammer. There is plenty of latitude in the new law to impose an nas requirement, if the justification is there.

DoD and service health officials have been making some efforts to enhance their facilities, so we don't understand this effort to repeal the new law before it even goes into effect. Unless DoD is pessimistic about the likely success of its efforts, the delay is for the government's administrative convenience.

MOAA won't support any change to the current law. Standard beneficiaries already are having enough problems just finding a doctor. When they do find one, they ought to be allowed the courtesy of continuity of care with that provider, absent a very good and demonstrable reason.

Taxes | Legislation on fast track.

Key Committee OKs Military Tax Bill

On Feb. 27, the House Ways and Means Committee approved Chairman Rep. Bill Thomas's (R-Calif.) H.R. 878, the Armed Forces Tax Fairness Act of 2003. The Senate Finance Committee, chaired by Sen. Charles Grassley (R-Iowa), earlier approved similar legislation, Grassley's S. 351.

These bills are a continuation of the intense negotiations that nearly led to enactment last year but which ran out of time when the 107th Congress adjourned.

Among other provisions, the bills would:

• exempt up to five years (10 years in S. 351) of service time from the "two out of five years" residency requirement for capital gains tax exemption;
• allow drilling reservists and guardmembers an annual tax deduction of up to $500 (unlimited in S. 351) for drill-related expenses;
• exempt from taxation the full $6,000 death gratuity paid to survivors of members who die on active duty (currently, only $3,000 is exempt);
• extend combat zone delayed tax-filing rules to military members serving in contingency operations; and
• exempt Department of Defense Homeowner Assistance Program payments (to homeowners whose houses are devalued significantly by base closure/realignment) from taxation.

Action by the full House on H.R. 878 was tentatively scheduled for March 6. We're hopeful that the House and Senate will act quickly to pass their respective bills and work out the differences between them so this important legislation can be signed into law early this year.

Litigation | Day supporters march on Capitol.

Rally Highlights Class Act Lawsuit

MOAA President Vice Adm. Norbert R. Ryan Jr., USN-Ret., and several MOAA staff members participated in a Feb. 12 rally in Washington, D.C., sponsored by the Class Act Group (cag) from Florida and Col. George "Bud" Day, USAF-Ret. The event was intended to add public awareness and emphasis to Colonel Day's filing of a petition to have the Supreme Court hear the cag's appeal of its class action health care lawsuit against the government.

An initial district court decision against the Class Act suit was overturned by a three-judge panel of the U.S. Court of Appeals for the Federal Circuit. Then that decision was reversed by the full Court of Appeals last November. MOAA is buttressing Colonel Day's appeal to the Supreme Court with a separate friend-of-the-court brief.

If upheld, the suit would require partial reimbursement of out-of-pocket health care expenses for older retirees who entered the service before mid-1956 - when the law first referenced "space-available" health care.

An estimated 900 people attended, many of whom came from Florida and other locations via train and bus. Numerous MOAA members were present.

Sen. John McCain (R-Ariz.), Rep. Jeff Miller (R-Fla.), and Rep. Mark Foley (R-Fla.) expressed their support for Colonel Day and the marchers at meeting points at Union Station and at the Reserve Officers Association. The assembled groups then rallied in front of the Supreme Court before marching to the reflecting pool in front of the U.S. Capitol. Despite a bitterly cold and windy day, the dedicated veterans who participated helped bring needed public and media attention to the cag and Colonel Day's lawsuit.

Military Pay | Administration would shortchange USPHS, NOAA officers.

Pay Raises Not Uniform

President George W. Bush's budget for FY 2004 would cap January pay raises for the U.S. Public Health Service (USPHS) and the National Oceanic and Atmospheric Administration (NOAA) Corps of commissioned officers at 2 percent - compared to the 4.1 percent targeted raise being sought for the other five uniformed services.

The Office of Management and Budget (OMB) apparently believes NOAA and USPHS officers' work is mostly "civilian" in nature and that they don't merit the same raise scheduled for members of the other services next year.

The administration chose to ignore a letter from The Military Coalition (TMC) to OMB Director Mitch Daniels urging against singling out the USPHS/NOAA Corps for these pay caps.

What's wrong with this picture? First, it would renege on a commitment made by Congress in the FY 2000 defense bill to grant all members of the seven uniformed services "comparability-plus" pay raises (one-half percentage point above private-sector wage growth) from 2000 through 2006.

Second, commissioned officers of the USPHS and NOAA Corps are key partners in the national security team. NOAA Corps officers were deployed to the Gulf War theater to support military operations. By law, all NOAA Corps officers and assets are available for immediate transfer to the Department of Defense to provide scientific and technical expertise to military operations. USPHS officers, too, often are on the front lines, serving on Coast Guard vessels and training and deploying with their military comrades to defend against biological/chemical attacks.

Third, whatever paltry sum will be saved in capping the pay for about 6,000 NOAA and USPHS officers would be offset by the associated cost of overseeing two separate pay tables.

USPHS and NOAA Corps officers swear the same oath of allegiance to protect and defend the Constitution as their fellow comrades-in-arms, and they deserve the same treatment as all other servicemembers. MOAA and TMC will urge lawmakers not to change the current statute that requires the same pay table for all services, and we are confident Congress will agree.

Legislation | MOAA offers tools for council, chapter, individual activists.

2003 Legislative Tool Kit Now Online

Each year, MOAA compiles a package of legislative information designed to be a guidepost for the upcoming year for chapter leaders, as well as for MOAA's staff and board of directors. This package, which we call the Legislative Tool Kit, includes fact sheets on our major issues, tips for contacting Congress, and other helpful tidbits. It's a great asset to have when you're looking for the major arguments in favor of concurrent receipt, the history of the active-duty pay comparability gap, and more. The tool kit is a valuable resource for the dedicated MOAA activist.

At the same time that we mailed the hard copy of the tool kit to chapter presidents and legislative liaisons, we also placed it on our Web site at www.moaa.org/legislative/toolkit/default/asp. There, you can find links to the same material as in the hard copy of the tool kit. In fact, the online version has one distinct advantage - flexibility. As bills progress through the various committees, our Government Relations staff will update the status section of each fact sheet, making sure that the information is as up-to-date as possible.

So if you have a spare moment, take a look at the tool kit and get a sense of the wide variety of issues that we are working on this year. We hope it will be a help to you, as it is to us, in making a clear and compelling argument to Congress for much-needed changes.