Legislative Outlook | Administration resisting pay, benefit upgrades.

Budget Battles Looming

As indicated in January's "Washington Scene" column, there's a long list of problems MOAA intends to see fixed. But let's not pretend that it's going to be easy.

The executive branch already is signaling its resistance to spending more money on people issues. We saw that last year with the administration's dogged opposition to any relief for disabled retirees.

More recently, the president's budget director expressed his intent to cut back on existing people programs - by capping the troops' pay raises below the average American's, for starters (see page 20). The Department of Defense (DoD) also doesn't want to pay for TRICARE rate increases needed to attract more doctors (see page 24).

To MOAA, those are signals to gird for battle, not to lower our sights. After all, it's usually been Congress that has stood up for doing the right thing by military members, retirees, and families - often over executive branch opposition.

It will be more challenging this year. Because both House and Senate are controlled by the same political party as the president, we can expect they'll be less disposed to oppose the presidential will. But that doesn't mean there won't be winnable battles.

MOAA President Vice Adm. Norbert R. Ryan Jr., usn-Ret., hasn't been shy about personally expressing our organization's concerns to senior administration officials.

In November, Ryan and representatives of several other organizations met with Secretary of Defense Donald Rumsfeld to discuss concurrent receipt, health care, and other issues.

Ryan related MOAA's deep disappointment with DoD's unwillingness to discuss the concurrent receipt provisions passed by the House and Senate. Additionally, he expressed concern about the tone of public statements by senior DoD civilians to the effect that disabled veterans are adequately compensated, which many disabled retirees viewed as devaluing their service and misportraying them as greedy.

Rumsfeld expressed dismay at such perceptions, and his staff talked of establishing a dialogue on the issue in 2003. Ryan responded that retiree groups were prepared and preferred to undertake those discussions immediately.

During the discussions on health care, Ryan expressed his view that the No. 1 health care problem is the lack of adequate numbers of doctors who will take TRICARE patients. He urged DoD leaders to work with all involved to make it a priority to reverse this situation, especially in currently underserved areas.

In December, Ryan and other association leaders met with Tim Goeglein, the White House's deputy director for Public Liaison, to discuss issues of concern in the military and veterans' arena.

Ryan again expressed his disappointment at the negative tone of many administration representatives' public statements regarding military personnel issues. In addition to unjustly asserting that disabled retirees don't deserve any relief, administration representatives have opposed manpower increases to relieve overstressed troops and families, asserted that health care costs are too high and no further improvements in that area are warranted, and claimed personnel costs are preventing needed increases in weapons systems and war-fighting capabilities.

We at MOAA believe the nation can and must afford to treat its military people fairly.

With a force that's 30 percent smaller than it was 15 years ago, it's not personnel costs that are the problem. It's the failure to recognize that the cost of long-delayed modernization and ever-increasing operations with a much-reduced force can't be balanced on the backs of active, Guard, Reserve, and retired members and their families and survivors without long-term retention and readiness consequences.

Military Pay Gap Smaller, But Still There

Recent pay raise upgrades have reduced the accumulated gap between military and private-sector pay raises to 6.4 percent versus 1982, when military and private-sector pay were last deemed "reasonably comparable." Current law calls for modest further improvements through 2006 but reimposes mandatory military pay-raise caps every year after that. The director of the White House Office of Management and Budget recently proposed reimposing pay-raise caps as soon as 2004. MOAA supports restoration of full comparability. Pay caps are penny-wise and pound-foolish.

Military Pay | Budget chief would cap raises beginning in 2004.

Troops to Get Short Shrift?

It's enough to make you shake your head. Last year, Office of Management and Budget (OMB) Director Mitch Daniels fought tooth and nail against putting up any money to treat disabled military retirees more fairly.

Now, Daniels has proposed capping active duty, Guard, and Reserve members' 2004 pay raise at 2 percent and shifting to a different standard with the intent of cutting their raises in future years. All in the name of budget austerity.

It would be laughable if it weren't so appalling. This is the president's chief budgeteer saying this, not some bit player. But he's thinking from an ivory tower, if not some other planet.

Let's state up front that we don't think Congress will buy it, for a few reasons.

First, Congress passed a law several years ago requiring military pay raises that are at least one-half percentage point above private-sector pay growth every year until 2006. It did that because years of past pay caps had created a double-digit pay gap with the private sector (see chart at left) and helped cause a retention and readiness crisis in the late 1990s. So Congress would have to change the law again to allow any cap.

Second, the administration just last year signed off on a new pay-table concept that recognized military people are underpaid compared to civilians of comparable age and education, and the secretary of defense and the president already have bought into a multiyear effort to restore military pay comparability.

Third, has anyone noticed there's a war on, and another one appears imminent? Is the government that's putting active duty, Guard, and Reserve troops in harm's way and wearing out their families with extended deployments time after time, year after year, really going to reward them by telling them they don't even deserve pay raises that keep up with the average American's?

Finally, exactly who is bearing the burden of the nation's budget deficit and making the real wartime sacrifices? The administration and Congress are pushing for all sorts of expensive initiatives that could deepen the deficit by hundreds of billions of dollars. If that won't leave enough money to pay the troops an equal raise, it's time to modify some of those other proposals rather than going after the troops' paychecks.

Pay comparability is a fundamental principle of the all-volunteer force. We've had decades of experience with administrations of both parties that tried to save money by picking the troops' pockets, and the result was the same every time: serious morale, retention, and readiness problems.

When the president's proposed budget is published in early February, we'll see whether he listened to Daniels' advice. If he did, MOAA will do everything possible to restore the much-needed pay increases. Hopefully, Congress, the president, and the secretary of defense are paying attention and learning from previous history.

Because the OMB director apparently isn't.

Health Care | Provider access, other problems need attention.

MOAA Briefs Health Survey Findings

In December, MOAA's president, Vice Adm. Norbert R. Ryan Jr., usn-Ret., and staff members briefed senior representatives of the assistant secretary of defense, health affairs, and the TRICARE Management Activity (TMA) on the results of a health care survey conducted last summer among MOAA members under age 65.

About 37 percent of respondents use TRICARE Prime, while 27 percent use TRICARE Standard. Another 24 percent use an employer-provided health plan. The 84 percent satisfaction level reported by TRICARE Prime enrollees compared favorably with the 85 percent satisfaction reported by participants in the Federal Employees Health Benefits Program (FEHBP). However, the number of TRICARE Standard users reporting they are "satisfied" or "very satisfied" was a much lower 72 percent. This is 8 percentage points lower than any other source of care. Other coverages reported include the Uniformed Services Family Health Plan (88 percent satisfaction), Department of Veterans Affairs (VA) facilities (80 percent), and employer/private insurance (85 percent). About 15 percent of TRICARE Standard and VA users reported being "dissatisfied" or "very dissatisfied" - versus 6 percent to 8 percent dissatisfaction rates for other sources.

Access to providers can be a problem in TRICARE Prime, as well. Thirty percent of Prime respondents reported waiting longer than a week (the Department of Defense (DoD) limit) for a primary care appointment. Seventeen percent had to wait more than DoD's maximum of 30 days for a specialty care appointment.

Responses on provider availability among Standard users were most troubling. One-fourth of respondents reported that their doctor refuses to participate in TRICARE Standard, so the beneficiary must pay the bill up front and file his or her own claims for partial TRICARE reimbursement.

Respondents ranked improved provider access as the most important change necessary for TRICARE. Reducing or eliminating requirements for prior authorization and nonavailability statements was ranked as the second most important need.

MOAA urged DoD officials to take any and all possible actions to increase doctors' participation in TRICARE Standard, including:

• supporting legislation to increase Medicare and TRICARE payments to providers;
• using DoD's administrative authority to increase provider payments in locations with inadequate numbers of participating doctors;
• considering "disproportionate funding" legislation for TRICARE (similar to that used by Medicare) to pay higher fees to providers who have TRICARE beneficiaries as a disproportionate share of their clientele. Many providers are reluctant to take significant numbers of TRICARE patients because TRICARE payments often don't cover their office costs;
• tracking TRICARE Standard and TRICARE Prime statistics separately, to avoid allowing more favorable Prime experience to mask continuing problems with Standard; and
• requiring TRICARE contractors to develop specific programs to assist beneficiaries in finding providers who will accept new TRICARE Standard patients.

We were encouraged by the DoD representatives' candid, open dialogue and their acknowledgement of the need for further action on these issues, particularly provider access. The DoD attendees expressed their belief that the new generation of TRICARE contracts will help address several of these issues and expressed a desire to work together to explore options to increase provider payments and access.

But they acknowledged that the administration doesn't want any significant increase in the health budget. (See "Grassroots Alert".)

Retired Pay | Special pay for combat disabilities poses challenges.

MOAA, DoD Discuss New Compensation

In January, representatives of MOAA, The Military Coalition, and other military and veterans' organizations met with Department of Defense (DoD) and Department of Veterans Affairs (VA) officials for an initial discussion on implementation issues regarding the new special compensation for certain retirees with combat- or operations-related disabilities, as authorized in the fy 2003 Defense Authorization Act.

The newly authorized compensation will effectively make up the retired pay offset for retirees with at least 20 years of active duty for any disabilities associated with combat wounds (Purple Heart recipients) or for disabilities rated at 60 percent to 100 percent that were caused by combat- or operations-related injuries or illnesses.

DoD and the VA have until June 1 to figure out how to define, develop, and administer the new program. Two things are certain: We're several months away from knowing the rules, and this will not be an easy development process.

The biggest problem is defining, locating, and retrieving medical and other information DoD administrators will need to determine which disabilities are combat- or operations-related. The National Personnel Records Center in St. Louis has most veterans' medical records - although several million veterans' records were destroyed in a 1973 fire. Also, most older records exist only on paper and are not computerized, so accessing and screening them in a timely way will be a challenge.

As of mid-December, DoD and VA officials were just starting to address the issues and weren't close to any conclusions on approval or processing guidelines, but representatives of MOAA and other associations offered several general recommendations for their consideration.

• A rule of "substantial evidence" rather than "burden of proof" should be used in the decision process.
• VA presumptions for conditions like Agent Orange, Gulf War Syndrome, and posttraumatic stress disorder should be accepted as combat related.
• Due process requirements must include an appeals process, with right of representation for the member.
• Realistic and reasonably timely processing standards are essential.
• Approval guidelines should be consistent for all applicants, regardless of service or location.
• DoD and the VA should make every effort to notify potential eligible retirees by letter, pay statement notice, etcetera.
• Payments should be retroactive to the date of qualifying disability award or June 1, 2003, whichever is later, regardless of when the disabled retiree applies for the new compensation; survivors should be eligible to apply for payments between the effective date and the date of the retiree's death.
• The government, not the member, should be responsible for mining DoD and VA records data.

Obviously, the question on many disabled retirees' minds is, "Will my circumstances qualify for these payments?" We urge retirees to hold off sending such inquiries to DoD or VA officials. The people who have to answer the mail are the same ones who face many months of work to develop the policy. Let's not divert them from that important task by sending them questions they can't answer yet.

If you have more general suggestions, MOAA will be happy to take your input for use in our follow-on discussions with DoD and VA officials as development proceeds.

Congress | Armed services committees change leadership.

Warner, Hunter Set to Take Key Posts

As a result of retirements, election defeats, and the shift of the Senate to Republican control, the hierarchy of the House and Senate Armed Services committees (HASC/SASC) will see significant changes in 2003.

In the Senate, the chairman and ranking minority member will switch roles as a result of the Republican majority. Sen. John Warner (R-Va.), who previously served as SASC chairman from 1998–2001, will resume his former post, whereas current Chairman Sen. Carl Levin (D-Mich.) will assume the post of ranking minority member.

The SASC Personnel Subcommittee - of particular interest to MOAA members because it oversees issues affecting personnel, compensation, benefits, and force structure - will undergo more dramatic changes. Both the chairman and the ranking minority member of that subcommittee, Sens. Max Cleland (D-Ga.) and Tim Hutchinson (R-Ark.), respectively, lost their reelection bids. With 11 Senate seats changing hands and the Republicans assuming the majority's higher share of committee assignments, committee rosters hadn't been finalized at press time.

In the House, Armed Services Committee Chairman Rep. Bob Stump (R-Ariz.) retired at the end of the 107th Congress, bringing to a close his 26 years of distinguished service in Congress. His successor will be Rep. Duncan Hunter (R-Calif.), previously chairman of the HASC Subcommittee on Military Research and Development. A former Army officer who served in Vietnam, Hunter is entering his 12th term.

Health Care | New reduction heightens provider participation concerns.

Medicare Announces March 1 Payment Cut

The Centers for Medicare and Medicaid Services (CMS) have announced that Medicare payments to health care providers will be reduced 4.4 percent, effective March 1, 2003.

This reduction is in addition to last year's 5.4 percent cutback. And if that weren't enough, more cuts will be coming over the next two years. Unless Congress prevents these rate cuts, the decreases will total 18 percent over four years, even though doctors complain that the payments are already too low to cover their rising overhead costs.

CMS acknowledges the reduced rates will result in fewer doctors accepting Medicare patients and even fewer willing to take on any new ones.

Because TRICARE rates are tied to Medicare, this affects not only TRICARE For Life (TFL) beneficiaries but also all active duty family members and retirees who receive TRICARE services from civilian providers. MOAA is concerned about what this means for access for TFL and TRICARE beneficiaries as providers' fees do not cover their overhead costs. We believe military beneficiaries deserve the nation's best health care, not the cheapest. And the timing of the payment cuts couldn't be worse for military beneficiaries.

The war on terrorism and the threat of conflict in Iraq are already straining the capacity of the military direct health care system, as large numbers of medical corps members are deployed. That means more and more TRICARE patients will have to get their care in civilian networks. This puts even more pressure on civilian providers who already have absorbed significant fee cuts for their TRICARE patients.

Our deployed servicemembers need to focus on their mission and not be worried whether their family members at home can find a doctor.

Congress can - and must - fix this mistake by acting early in 2003 to reverse Medicare and TRICARE payment cuts. See the box above for information on how you can help.

TRICARE | Security breach worries enrollees.

TriWest Computer Files Stolen

The Department of Defense (DoD) has announced the theft of computer files containing the personal information of TRICARE beneficiaries serviced by the TRICARE Central Region health contractor, TriWest Healthcare Alliance Corp., headquartered in Phoenix. The files were stolen Dec. 14, 2002. On Dec. 23, DoD requested that MOAA and other military service organizations alert their members about this incident.

The theft involves the personal identification information of 560,000 active duty and retired TRICARE Prime-enrolled families. There is no indication that other regions in the TRICARE system have been compromised. The Defense Criminal Investigative Service and the FBI are investigating the crime.

TriWest has indicated it will be contacting the affected TRICARE Prime enrollees individually to advise them that, "Although we do not know the intent of the crime or if any of the information will ever be accessed or misused, we want to advise you that the theft of your personal information, to include your Social Security Account Number (ssan), may potentially place you at risk for identity theft." DoD has ordered other TRICARE contractors to assess their own security measures in the hope of preventing future thefts.

The DoD TRICARE Management Authority issued a news release on the incident Dec. 23 (available via Military Officer's links page, www.moaa.org/magazine/links.asp). The release contains an e-mail address (computertheft@triwest.com) and a toll-free number for potentially affected beneficiaries in the TRICARE Central Region to contact: (888) 339-9378.

The TRICARE Central Region includes Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, extreme west Texas, Utah, and Wyoming. The Federal Trade Commission Web site offers valuable information to help citizens confronted with identity theft and is available via Military Officer's links page, www.moaa.org/magazine/links.asp.

MOAA is deeply troubled by this serious breach of personal information security. Identity theft is a serious crime. We will closely monitor the TRICARE Management Authority's follow-up on this unfortunate situation. The Defense Criminal Investigative Service, FBI, and other law enforcement agencies must do all they can to protect members from unauthorized use of the stolen information. They also must ensure that security measures are strengthened to preclude a similar event in the TRICARE Central Region or elsewhere in the TRICARE system.