Survivor Benefits  | New strategy needed to end Social Security offset.

What Will It Take to Win on SBP?

For years, MOAA has been fighting to win a Survivor Benefit Plan (SBP) annuity increase for survivors age 62 and older. SBP-upgrade bills are regularly introduced in Congress and usually attract significant numbers of cosponsors (H.R. 548 currently has 275 cosponsors, S. 451 has 39). But Congress has never passed a fix, and older survivors continue to suffer the inequity of lower payments. Many ask, “What will it take to win?” The answer is “Far more grassroots support than has been generated so far.”

Disappointed at the lack of progress in this year’s defense bill, MOAA is launching a grassroots campaign aimed at gaining overwhelming support for including SBP upgrade funding in next year’s congressional budget resolution.

This fall, MOAA staff and board members are preparing for a series of chapter visits across the country, urging chapter leaders to organize grassroots support efforts. MOAA chapter and council presidents and legislative chairs have received special SBP information packets with sample letters to legislators and a briefing that can be used to discuss SBP improvements with legislators when they are in their home districts.

MOAA members can get involved by committing to spending $10 in postage on SBP letters of support between now and May 2004. That translates to one letter a month to your representative and each of your senators. For a sample letter, you can contact your local chapter or visit MOAA's Web site, http://capwiz.com/moaa/issues/bills. Click on one of the SBP bills (see box) and follow the instructions to proceed.

Individual members also are encouraged to call their legislators’ offices on MOAA's toll-free Capitol Hill hotline, (877) 762-8762. 

We hope that during the next several months you will join local chapter and council leaders in turning up the heat on SBP improvements. Please do what you can to rally support in your community and put pressure on your legislators to act. If SBP reform is going to happen, we have to do whatever it takes to raise the grassroots noise level on this issue—and raise it significantly

Active Duty | Administration would cut special pays for overseas troops. 

Debate on Special Pays Continues 

Earlier this year, Congress increased Imminent Danger Pay (IDP) and the Family Separation Allowance (FSA) to $225 and $250, respectively, in an emergency wartime supplemental bill (H.R. 1559). The rate increases were authorized for duty anywhere in the world (not just Afghanistan and Iraq) retroactive to Oct. 1, 2002. But Congress also imposed an expiration date of Sept. 30 on the special pay increases.

Reluctant to allow those increases to expire, the House and Senate Armed Services committees inserted provisions in their respective defense authorization bills to extend the special pay increases. The House version would extend the increased IDP and FSA rates only to troops in combat zones under Operations Iraqi Freedom and Enduring Freedom. The Senate, on the other hand, proposes to make the increases permanent for all deploying servicemembers.

MOAA reported in May that the administration opposed these provisions since there was no money for them in the FY 2004 budget. We strongly objected then and we continue to urge the government to do all it can to help overworked troops posted around the world.

Clearly, the Department of Defense (DoD) opposes making the increased IDP and FSA rates permanent for every deployed servicemember now receiving them. DoD would prefer to target the increases by using other authorities (such as hardship duty pay) in those locations they feel most deserving, such as Iraq and Afghanistan. That means if Congress doesn’t adopt the Senate provisions to make the IDP and FSA increases permanent for all deployed troops, thousands of servicemembers working in high-stress overseas assignments will see their paychecks cut. That’s plain wrong.

MOAA continues to strongly urge final passage of the Senate provision in the FY 2004 National Defense Authorization Act to make the increases to IDP and FSA permanent.

Health Care | Humana, TriWest, Health Net win bids.

DoD Awards TRICARE Contracts

Dr. William Winkenwerder Jr., assistant secretary of defense, Health Affairs, announced in August the award of three next generation TRICARE (TNEX) contracts to administer services to more than 8.7 million beneficiaries beginning in June 2004. The contractors will work with military treatment facilities (MTFs) to provide care to military beneficiaries in the continental United States, Hawaii, and Puerto Rico.

Based on a competitive bidding process, the following health care administration companies were selected to work along with MTFs to provide services to TRICARE beneficiaries in each region:

• North: Health Net Federal Services
• South: Humana Military Healthcare Services
• West: TriWest Healthcare Alliance Corp.

The military’s health plan will consolidate care delivery in the current 12 TRICARE regions, and the three winners will replace the current four managed care support contractors (MCSCs).

It is important to recognize that, despite the contract changes, the TRICARE benefit structure will not change. Beneficiaries in TRICARE For Life (TFL), Prime, Standard, and Extra will continue to have the same coverage levels as before.

In fact, MOAA believes the new TNEX contracts might enhance the quality of service and access to TRICARE beneficiaries. The contracts are expected to improve the administration of TRICARE in a number of ways, including: 

• to remove the requirement for Prime beneficiaries to obtain prior authorization for specialty care when referred to a network provider;
• to deem Medicare providers as TRICARE authorized providers;
• to streamline TRICARE claims processing to mirror Medicare requirements;
• to permit electronic claims processing for Medicare-eligibles under age 65;
• to establish an allotment process that would permit retiree Prime enrollment fees to be deducted from retired pay; and
• to institute monthly payments for Prime enrollment fees.

The new contract environment could cause some confusion during the transition. With eight of the current regions (1, 2, 5, 6, 9, 10, 11, and 12) being allocated to a new MCSC, it is likely that the changeover could have complications. MOAA will monitor it closely, especially in areas where there are new contractors. We have established a partnership with TRICARE administration and other military service organizations to work through implementation issues.

The issues to be addressed with TRICARE administration and the MCSCs include: 

Customer service: Will the outgoing MCSC maintain a high level of service as its contract winds down? How will the handoff between the old and new contractors be handled?

Provider churn: Because the contract was re-awarded in four regions, those beneficiaries should experience minimal turnover. But, in the other eight regions, will beneficiaries have to find new physicians willing to contract with the new MCSC? What should beneficiaries do if they currently are undergoing treatment and their doctor no longer accepts TRICARE? 

Uniformity of benefit: Each contractor may adopt his or her own concept of best business practices. What does that mean for beneficiaries residing in different regions?

Contractor interaction: Services such as TFL claims processing, retail pharmacy, marketing, and education, have been carved out into separate national contracts. How will this affect program delivery? Will these contractors be able to work together effectively?

These MCSC contracts follow other changeovers in TRICARE management. In March, Express Scripts International began a five-year agreement to manage the TRICARE Mail-Order Pharmacy. In August, Wisconsin Physician Service was awarded the contract to manage TFL administration, claims, and customer service. Two contracts, one for retail pharmacy management and one for marketing and education, are yet to be awarded.

The new contracts certainly will cause some confusion, but MOAA is hopeful that TRICARE beneficiaries will benefit from TNEX. The new contracts use incentives to reward better performance in customer service, quality of care, and access to care. By streamlining TRICARE administration, DoD will be able to improve service delivery and enhance access for military beneficiaries. MOAA will be fully involved in the changeover process and do everything it can to ensure the next generation of contracts gives TRICARE beneficiaries the world-class health care they deserve.

Reserves | Norton makes the case for expansion of USERRA.

Coalition Testifies at Hearing

This summer, MOAA Deputy Director for Government Relations Col. Bob Norton, USA-Ret., was invited before the Subcommittee on Benefits of the House Veterans Affairs Committee to present testimony regarding the Uniformed Services Employment and Reemployment Rights Act (USERRA). USERRA governs the rights and responsibilities of all servicemembers to return to their jobs with pay raises and restoration of other benefits as though they had never left the workplace. Reemployment rights laws have been on the books in one form or another since World War II.

Norton, chairman of The Military Coalition’s veterans committee, recommended Congress:

• require the Department of Justice (DoJ) represent claims of reservist-employees of state agencies or elements. Although authorized to do so since 1998, the DoJ has never represented a reservist-employee of any state as intended by the USERRA;
• strengthen the provisions of law to require that federal employee-reservists may be represented in reemployment rights violation claims by a federal office designated in the statute. At present, federal employees must hire their own attorneys or hope that a federal administrative review process will consider their claims fairly;
• direct the Department of Labor to publish federal regulations and a USERRA handbook to educate and inform employers, reservists, and the public about reemployment rights laws;
• provide reinstatement protections in law for mobilized student reservists so that they are not financially or academically penalized when called to extended federal service; and
• permit the escalator principle to be applied in situations where merit raises are determined by performance evaluations. (The escalator principle dates back to World War II and directs that workers be reinstated with the salary and other benefits they would have risen to had they never been activated.) Normally, the escalator principle is applied in situations where there is a defined pay scale, but in today’s workplace, employers often determine salary increases on an individual employee’s demonstrated performance. In such situations, an employer could be tempted to avoid using the escalator principle because the mobilized employee might be absent on military duty during the entire evaluation period for setting the merit raise. Norton suggested that one solution would be to use the average of recent merit pay increases to determine how the escalator principle should be applied. 

Health Care | MTF approval no longer needed for inpatient care.

DoD Prepares to Eliminate NAS

The Department of Defense (DoD) has published the long-awaited interim final rule titled “Elimination of Nonavailability Statement and Referral Authorization Requirements and Elimination of Specialized Treatment Services Program” implementing sections of the FY 2001 and FY 2002 National Defense Authorization acts (NDAAs).

MOAA has long lobbied for the elimination of the nonavailability statement (NAS), which requires TRICARE Standard beneficiaries residing within 40 miles of a military treatment facility (MTF) to use the MTF as the first option for care when undergoing inpatient procedures or document that the MTF is unable to provide the care. Apart from the hassle of obtaining an NAS, this requirement eliminates any continuity of care that had been established between the patient and the provider. Patients could go through an entire pretreatment regimen with one doctor or facility, only to be switched to an MTF physician with little notice.

Specifically, the proposed rule eliminates (as of the indicated date) the requirement for:

• Standard beneficiaries living in a 40-mile radius of an MTF to obtain an NAS (Dec. 28, 2003);
• Standard beneficiaries who live outside the 200-mile radius of a specialized treatment services (STS) facility to get an NAS (June 1, 2003);
• preauthorization from an MTF before receiving inpatient care (other than mental health services) and maternity care from a civilian provider (Dec. 28, 2003); and
• prior authorization for referral to a specialty care network provider (starting next year under the new TRICARE contracts).

For obstetrical care, the NAS requirement will be eliminated if the first prenatal visit takes place on or after Dec. 28, 2003. The NAS for inpatient mental health care will continue to be required. The STS program was eliminated June 1, 2003.

The new rule, however, does include a number of exceptions for non-maternity care (the department no longer can require an NAS for maternity care for any reason). DoD still has the authority to reinstate an NAS requirement if:

• significant costs would be avoided by performing specific procedures at the affected MTF; 
• a specific procedure must be provided at a particular MTF to ensure the providers at the facility can gain or maintain their skill proficiency (known as Graduate Medical Education); or
• the lack of NAS data would significantly interfere with TRICARE contract administration.

So far, DoD has not announced any requirements for NASs for any facilities or procedures and must give 60 days advance notice if it intends to require an NAS.

MOAA is concerned about the potential problems in communicating these technical requirements to beneficiaries and providers. If DoD decides to require NASs for certain procedures in specific MTFs, how will providers and beneficiaries be informed? The rule states when the waiver authority is used, the department will notify the affected beneficiaries by publishing a notice in the Federal Register and notify Congress. As a practical matter, however, more must be done to ensure this information gets in the hands of those who need it. Beneficiaries should not learn after the fact that an NAS was required and then be held accountable for paying for care they thought was covered under tricare.

In those MTFs where DoD establishes a requirement for NASs, MOAA will be working with the department to look for innovative ways to inform beneficiaries and their providers. Contacting hospitals should not be difficult, but identifying and communicating with Standard providers and beneficiaries will prove to be a challenge. Proposed changes that we expect to be included in the FY 2004 NDAA will require DoD to reach out to both Standard providers and beneficiaries and thus make TRICARE Standard a more viable benefit.

We are pleased that, to date, there has been no indication from DoD that it intends to implement any NAS requirements at local MTFs. We are concerned that the law gives such broad waiver authority, which weakens the intent to provide relief from NAS. The three loopholes give leeway for the reinstatement of NAS at DoD’s will. Our goal remains that all requirements for NAS be removed and all waivers be eliminated. The precedent built on maternity care must be applied to all beneficiaries by eliminating NAS authority for all care.

Veterans’ Health Care | Grades given to House appropriators.

VA Health and Benefits Update

Just before the summer recess, the House of Representatives cut back on a funding increase for the Department of Veterans Affairs (VA) health care system approved by Congress in the FY 2003 budget resolution. The action almost surely will result in more veterans being added to long waiting lists for appointments in VA facilities, especially in Florida and the Southwest.

The House and Senate Joint Budget Resolution passed in April 2003 set a $3.2 billion increase in VA health care above the amount requested by the administration. The budget resolution represents an agreement to allocate certain funding levels to each of the 13 federal departments during the appropriations process that follows.

But in a surprise move, House appropriators and the full House cut $1.8 billion from the agreed increase of $3.2 billion despite a bipartisan effort to stick to the budget resolution led by Reps. Chris Smith (R-N.J.), Lane Evans (D-Ill.), and Rob Simmons (R-Conn.). With the nation at war and hundreds of injured troops eventually being transferred from military health care into the VA health care system, it’s imperative that the Senate honor the full $3.2 billion increase for VA health care services.

On the plus side, House appropriators killed an administration proposal to establish a $250 annual enrollment fee for veterans enrolled in Priority Group 8 (those with no service-connected disabilities and incomes above a zip code-based means test). The proposal also would have increased prescription copayments for these veterans from $7 to $15. VA suspended new enrollments in Priority Group 8 earlier this year, but veterans already enrolled in that category would have faced the new payments.

The House also passed a bill (H.R. 2357) that establishes chiropractic care as a VA benefit. The legislation has not yet been taken up by the Senate. We expect further action on these bills in the fall. MOAA will do everything it can to ensure Congress sticks to its word and provides full funding for the VA health care system. 

Health Care | MOAA concerned about inability to track provider access.

TRICARE Prime Access Study Issued

In August, the General Accounting Office (GAO) released a long-awaited evaluation of the TRICARE program, “Defense Health Care—Oversight of the TRICARE Civilian Provider Network Should Be Improved.” The report was authorized by the FY 2003 National Defense Authorization Act (NDAA) in response to a hearing last year at which The Military Coalition, TRICARE providers, and other stakeholders testified before the Armed Services committees.

The GAO sought to do a complete assessment of TRICARE Prime provider participation, but concluded there was too little information to judge the adequacy of the Prime network. Instead, the study turned to a review of the Department of Defense’s (DoD’s) oversight of the program and how more should be done to define, monitor, and maintain a network of medical providers.

The report recommended DoD improve its oversight of Prime networks by:

• making sure enough information is reported by the direct care (military) system and TRICARE contractors;
• collecting and analyzing beneficiary complaints; and
• doing a better job of collecting data from civilian providers.

DoD agreed with the recommendations, but said that the new TNEX contracts (see page 20) would take care of these shortcomings. The GAO agreed that TNEX offers many opportunities for improving DoD’s oversight of the networks. However, because these contracts had not been implemented yet, GAO could not substantiate DoD’s assertion. 

Needless to say, MOAA is disappointed that the report does not address concerns that low reimbursements and administrative hassles are keeping doctors from accepting TRICARE patients. The report only acknowledges these problems but draws no conclusions other than to fault DoD for poor oversight.

MOAA surveys, however, demonstrate continuing access problems with the TRICARE Prime and Standard programs. Congress is likely to direct a follow-on study of access to TRICARE Standard providers in the FY 2004 NDAA. But if such a study adopts the same approach as the GAO Report on TRICARE Prime access, another year will have been wasted and military families will be no better off. DoD and the TRICARE Management Authority must begin to address TRICARE Prime and Standard access problems now and not assume that the new TRICARE contracts will be a panacea.