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US House Armed Services Committee






 March 18, 2004



Mr. Chairman, distinguished members of the Committee, The National Military and Veterans Alliance wishes to thank you for the honor of testifying before your subcommittee concerning crucial improvements that are needed to support Military Retirees and their survivors. 

The Alliance was founded in 1996 as an umbrella organization to encourage all military and veteran associations to work together towards their common goals.  The Alliance Members are: 

v     American Logistics Association

v     American Military Retirees Association

v     American Military Society

v     American Retirees Association

v     American World War II Orphans Network

v     AMVETS

v     Association of Old Crows

v     Catholic War Veterans

v     Class Act Group

v     Gold Star Wives of America

v     Korean War Veterans

v     Legion of Valor

v     Military Order of the Purple Heart

v     Military Order of the World Wars

v     National Association for Uniformed Services

v     National Gulf War Resource Center

v     Naval Enlisted Reserve Association

v     Naval Reserve Association

v     Paralyzed Veterans of America

v     Reserve Enlisted Association

v     Reserve Officers Association

v     Society of Military Widows

v     The Retired Enlisted Association

v     TREA Senior Citizens League

v     Tragedy Assistance Program for Survivors

v     Uniformed Services Disabled Retirees

v     Veterans of Foreign Wars

v     Vietnam Veterans of America

v     Women in Search of Equity 

The preceding organizations represent almost 5 million members and collectively, represent some 80 million Americans, those who serve or have served their country and their families. 

The overall goal of the National Military and Veteran's Alliance is a strong National Defense. In light of this overall objective, we would request that the committee examine the following proposals. 



 One of the most pressing issues facing the military health care system is an adequately funded Department of Defense health care budget.  The additional costs of the ongoing war against terrorism and the increased level of deployments require Congress to stay vigilant against future budgetary shortfalls that would damage the quality and availability of health care. 

The Defense Health Program budget must have adequate funding to maintain the quality and availability of health care for all uniformed services beneficiaries, regardless of age, status or location.  This is essential to readiness and retention of competent and healthy personnel.  The Alliance strongly urges the Subcommittee to ensure full funding for the upcoming year.   


We would like to thank the Subcommittee for their efforts over the last two years revitalizing the TRICARE Standard program, i.e. Sec. 712 of the FY 2003 NDAA (P.L. 107-314) and Secs. 723 and 724 of the FY 2004 NDAA (P.L. 108-136).   

While these were great steps forward, the TRICARE Standard program and its beneficiaries are still in jeopardy.  The Alliance asks that there is a continued push to rejuvenate the program.   

With the implementation of Sec 724 in the FY 2004 NDAA, one of our main concerns will finally be addressed.  Communication between TRICARE and the Standard beneficiary, especially during the transition to the new contracts, is of the utmost importance.  DoD has a responsibility to directly educate the Standard beneficiary on the extent of their health care coverage; costs, problem resolution processes and most importantly locating authorized providers.   

This last point of communication will be the most difficult.  While even in the civilian sector maintaining a viable network of health care providers is difficult, convincing doctors to accept TRICARE Standard seems to be a monumental task.  It is well known that the health care providers are dissatisfied with TRICARE reimbursement rates. The Alliance was relieved that PL 108-173 increased the Medicare reimbursement levels, as TRICARE rates are directly tied to Medicare Rates.   

TRICARE Provider Participation Impediments/Access to Care

Access to care is still the Alliance's number one concern.  Our members report that there are few providers willing to accept new TRICARE Standard patients.  Expanded communications will be of little use to the Standard beneficiary if they cannot find a provider.   

The significance of low reimbursement rates, slow claims processing and administrative hassles are just part of the frustrations that keep these providers out of the system.  Inadequate education about the Standard program from either the Managed Care Support Contractor or TMA exasperates this situation. 

We understand the complexities of these issues and how they affect the choices of the provider.  One way to get increased provider participation would be to increase the provider reimbursement rates.  DoD has tied the TRICARE system, especially the TRICARE Maximum Allowable Charges, to the Medicare system.  This ties them to the flawed provider reimbursement formula used by the Centers for Medicare and Medicaid (CMS).  Cuts in the Medicare provider payments, on top of the providers overhead costs, liability insurance and administrative costs makes it difficult for these providers to be willing to participate in either program. 

The Department of Defense must increase the TRICARE Standard provider reimbursement rates to an equal level with other insurance rates in order to attract and maintain an adequate number of providers.  Administrative changes can only go so far.  Therefore we ask this Committee to support TRICARE in using its authority to increase the provider reimbursement rates in those areas most in need.   

Federal Employee Health Benefits Program Option

One alternative for the TRICARE Standard Beneficiary would be to allow the TRICARE Beneficiary the option of enrolling in the Federal Employees Health Benefit Program (FEHBP).   

Many of the Uniformed Services retirees, who live in areas of the country where TRICARE Prime is not an option and TRICARE Standard participation by providers is weak, could enroll in the already existing FEHBP networks and be provided with the health care they both need and deserve.  Since FEHBP requires a substantial premium, the Alliance does not believe that there will be a great influx of new enrollees. 

Non-availability Statements under TRICARE Standard

While it must be clear to the Committee that the Alliance is very happy with the provision in the FY 2002 NDAA that waives the requirement for a beneficiary to obtain a Non-availability Statement (NAS), we are concerned that the law does allow DoD the broad waiver authority originally intended. 

The Secretary may waive the prohibition in subsection (a) if: 

a)      The Secretary demonstrates that significant costs would be avoided by performing specific procedures at the affected military medical treatment facility or facilities

b)     The Secretary determines that a specific procedure must be provided at the affected military medical treatment facility or facilities to ensure the proficiency levels of the practitioners at the facility or facilities,

c)      The Secretary determines that the lack of Non-Availability Statement data would significantly interfere with TRICARE contract administration. 

In fact, if invoked, these waivers will make the TRICARE Standard program more complex; with each MTF catchment area having different requirements.  This will be compounded by the fact that there is no true communication between TRICARE and the Standard Beneficiary.   

The TRICARE program was expanded to both manage costs and to provide beneficiaries a choice in health care programs.  These waiver authorities counter these goals.   


While it must be made very clear to the Committee that the Alliance is very pleased with the progress that has been made for the Medicare eligible beneficiaries under the TRICARE For Life program, there are still certain areas of the program that need to be monitored or improved upon to provide the full benefit that beneficiaries of the military health system deserve.   

Medicare Part B Penalty Waiver

The Alliance was pleased to see that the Congress addressed the issue of Medicare Part B enrollment in last years Medicare reform bill (PL 108-173).  Before TRICARE For Life was implemented, retirees who lived near an MTF or in Europe were advised that there was no reason for them to enroll in Medicare Part B.  Now that TRICARE For Life has been implemented, with the Part B requirement, these retirees are faced with a 10% per year late enrollment penalty.   

SEC. 625 (PL 108-173) waives the penalty for those beneficiaries who enrolled during 2001, 2002, 2003, or 2004 and allows an open enrollment period for those beneficiaries who have yet to enroll due to the penalty.  

We ask that the committee continue this assistance to beneficiaries and monitor it to ensure the smooth and timely implementation of this provision. 

Permanent Dependent ID Cards for over 65

As well as Part B enrollment, dependent TRICARE For Life beneficiaries are required to have an updated military identification card.  Until TFL, there was little reason for those beneficiaries who either resided in nursing homes or lived miles from a military installation to renew their ID cards every four years as is required.  For the elderly with limited mobility, it is next to impossible to renew their identification cards and renewal by mail is not an option.  The administrative processes are confusing at best and for those beneficiaries who rely on family caregivers, access to military information adds an additional level of complexity.   

The Alliance requests that this Subcommittee direct the Secretary of Defense to authorize permanent military identification cards to military retiree dependents and survivors who are 65 and older.   

Initial Preventative Physical Examination

Last year the Congress enacted Sec 611 of the Medicare reform bill (PL 108-173), which provides for an initial Medicare preventative physical examination upon becoming eligible for Medicare at age 65. This is a welcomed preventative care addition for seniors.

Since this is a new benefit, it is not a covered TRICARE benefit.  And because this is not a TRICARE covered benefit, TFL beneficiaries are required to pay the remaining cost-shares, after Medicare pays its 80%.  Therefore, in order to prevent the TFL beneficiary from incurring out of pocket expenses and to maintain the mandated TRICARE/Medicare mirrored system, the Alliance asks the Subcommittee to authorize the initial preventative physical examination as a TRICARE benefit for the TRICARE For Life eligible beneficiaries.     

TRICARE Retiree Dental Program

The focus of the TRICARE Retiree Dental Plan (TRDP) is to maintain the dental health of Uniformed Services retirees and their family members. Several years ago we saw the need to modify the TRDP legislation to allow the Department of Defense to include some dental procedures that were previously prohibited by law to fulfill the intent of the TRDP to maintain good dental health for retirees and their family members. With this modification the TRDP benefit plan achieved equity with the active duty dental plan.  

For full equity, another step is necessary. The Department should assist retirees in maintaining their dental health by providing a government cost-share for the retiree dental plan. With many retirees and their families on a fixed income, a government cost-share would ease the financial burden on this population and promote a seamless cost structure transition from the active duty dental plan to the retiree dental plan.  

Additionally, we ask the Committee to include overseas beneficiaries in the retiree dental plan. These beneficiaries have earned this benefit with their service to this nation's security. 

TRICARE Prime Remote

The Alliance would like to reiterate its gratitude for Sec 702 in the FY 2003 NDAA, which allowed dependents residing at remote locations to retain their TRICARE Prime Remote benefit (TPR) when their sponsor's are sent on an unaccompanied assignment.   

However, there still remains the issue that these benefits are authorized only if the dependents remain at the former duty station.  There are too many reasons why the remaining family may need to relocate to another area while the sponsor is on his/her unaccompanied tour.  In many of these instances, the government will even pay for the family's relocation, but will not allow them to retain their TPR eligibility if TRICARE Prime is not available in the new location.   

With so many of our service members, especially the Guard and Reserve who are most likely to utilize the TPR benefit, being mobilized and sent overseas, it is imperative that the government ensures that the remaining family members receive the finest and most cost effective health care possible.    

The Alliance requests that the Subcommittee direct the Secretary of Defense to authorize eligible family members to retain TRICARE Prime Remote eligibility when they move to another Prime Remote area while their sponsor is overseas. 

Coordination of Benefits

Prior to 1995, the Department of Defense shifted its policy of the 115% billing limit (TRICARE only recognized amounts up to the 115% of the TRICARE allowable charges for each procedure even though providers may charge any amount for a particular service) in cases of other health insurance from a "coordination of benefits" to a "benefits-less-benefits" methodology.  This new policy, unlike the standard billing policies used by TFL, FEHBP and the civilian sector, adds significant health care cost to the servicemembers, their dependents and survivors. 

Under the "coordination of benefits" policy, any third party insurer would pay first, and then TRICARE would pay any remaining costs, up to what would have been paid if TRICARE had been first payer.  Example:  a physician bills $500 for a procedure that has a TRICARE allowable rate of $300.  The beneficiary's OHI pays $400 for this procedure.  TRICARE would pay the remaining $100 since if it were the primary payer it would have paid $300. 

Under the "benefits-less-benefits" policy, TRICARE will not pay any of the cost shares if the beneficiary's other health insurance pays an equal amount or higher than the 115% billing limit.  Example:  a physician bills $500 for a procedure that has a TRICARE allowable rate of $300.  The beneficiary's OHI pays $400 for this procedure.  TRICARE will not pick up the remaining $100 since the other insurance paid more that the 115% of the TRICARE allowable charge. 

This shift in policy unfairly penalizes the TRICARE beneficiary who is actually saving DoD money by using their other health insurance first.   

The Alliance strongly urges the Subcommittee to direct the Secretary of Defense to eliminate the "benefits-less-benefits" 115% billing limit and reinstate the coordination of benefits policy. 


The Alliance is committed to work with DoD and Congress to develop, monitor and maintain a comprehensive uniform pharmacy benefits.  Section 701 of the FY 2000 NDAA mandated the expansion of the basic core formulary, a Beneficiary Advisory Panel and a three-tiered formulary.   

The Alliance is grateful for the change to provide input into the program, as representatives on the Beneficiary Advisory Panel and will continue to direct our efforts in ensuring that the final formulary is a broad as possible, the medical necessity appeals process is as streamline as possible and that the education and communicate with the beneficiaries on the scope of the benefit is as all-encompassing as possible. 

The Alliance urges the Subcommittee to ensure a robust, reasonable and well-communicated pharmaceutical program is offered to the military health care beneficiaries. 


Throughout this year, the Department of Defense will implement its new TRICARE health care contracts.  This is a major and very complicated task and it is imperative to make this implementation process as smooth and transparent to the beneficiary as possible.   

The simplest of transitions can be turbulent.  With the start of the new TRICARE contracts, retail pharmacy services and appointing services, most importantly, have been carved out of the regional contracts.  All efforts must be made to assure that the beneficiary will not be confused about where to go for information about service delivery, how to access services, nor how to resolve problems which they encounter.  For the beneficiary who previously had a one-stop shop routine, this requires well thought out, timely, and repeated communication, which is accurate, and exactly the same across all communication sources.  This takes planning and instruction well in advance of the delivery start-work date. 

The Alliance requests that the Subcommittee monitor this aspect of the implementation of these new TRICARE contracts and ensure a single source for assistance to resolve problems, especially when the problem revolves around the interface of multiple contracts and contractors.  Timely and effective communication with all beneficiaries is critical to the successful implementation of the new TRICARE contracts and continued beneficiary satisfaction with the TRICARE program. 

In addition to this customer service component, there are two other areas of concern during transition and implementation.  

1.  Resource Sharing

Resource sharing has provided a very necessary tool to recruit, place and manage healthcare personnel (doctors, nurses, technicians and administrative staff) to fill short and long term vacancies in the Military Treatment Facilities (MTF's).  This policy allows the MTF to meet its goal to increase its patient capacity and shorten its access timeframes for all users of the MTF in a truly cost effective and efficient manner. 

Resource sharing currently is managed in the civilian component of the Military Health System by the MCSC who manages this function regionally with collaborative concurrence by the appropriate MTF Commander and Lead Agent.  Under the next generation of managed care support contracts, this function is removed from the MCSC and moved to Service responsibility so that each MTF commander will arrange for these services on a facility-by-facility basis.   

Our concern is with the transition.  Each agreement will expire at the start of the new managed care contracts in each region   No mechanism is in place to assure to the beneficiary population that the services provided by some 600 resource sharing agreements currently in place will be available on day one of the new contracts.  Not only will this put the healthcare of users at risk, but it will put in jeopardy the jobs of 3,000 dedicated employees who currently provide services under resource sharing agreements. 

The Alliance recommends that the Subcommittee seek assurance from the Secretary of Defense and the Surgeon Generals that services under resource sharing agreements will not be lost as we transition to the new contracts and to formalize the mechanisms to achieve that end in a timely fashion.

2.  Continuity of Care

Our final transition concern is that while it is inevitable that there will be some change among network providers as one Managed Care Support Contractor takes over geography that it previously did not serve, the Alliance seeks assurances that the beneficiary in treatment for a particular condition be able to continue receiving care through the same provider throughout the course of that treatment, in the instances where the provider does not join the new network.  This is critical to continued quality patient care and beneficiary satisfaction. 


The War on Terror has already gone from a short-term endeavor to being described as a multi-generational, prolonged engagement which will require more than the thirty-seven percent of the Guard and Reserve forces who have already been called up to duty. 

The Alliance would like to express our gratitude for the Subcommittees addressing the expanded health care needs of our National Guard and Reserve Forces.  However, health care readiness remains the number one problem when mobilizing the Reserve Component.  Studies have shown that between 20-25 percent of the National Guard and Reserve are currently uninsured.  These members, though not serving 24/7 are on call to be activated at any given notice.  They must be physically and dentally ready to be able to be deployed and perform the duties required of them.   

The steps towards expanding military health care for Reserve Components and their families with the inclusion of Sections 701, 702, 703, and 704 (P.L. 108-136) is decidedly appreciated, but there needs to be more done to ensure that the Reserve and Guard are ready to engage in battle. 

Therefore, the Alliance urges the Subcommittee to expand full heath care coverage to the Guard and Reserve in order to support full medical, physical and emotional readiness for the Guard and Reserve.   

The FY 04 National Defense Authorization Act authorized TRICARE coverage for unemployed and uninsured Guard and Reserve.  However, Congress tied the program to an end-year deadline.  Due to administrative difficulties, TRICARE has yet to implement this new program.  The Alliance would like to see this program implemented as soon as possible.  And to make it a viable program, not only for the eligible beneficiaries, but also for DoD, extend this program to cover a full year, from the date of implementation. This will allow the Guard and Reserve to actually use their benefit and, DoD to fully test the program for participation and cost.  

In addition to permanent Reserve Health Care Programs, the Alliance recognizes that Dental readiness is a concern within Guard and Reserve Health Care programs. 

1.  Pre Deployment Dental Readiness

Dental readiness is still the number one problem in deployment.  The National Guard and Reserve Component members are required to maintain a certain level of dental readiness for deployment. 

While the Department of Defense does offer a dental program to the National Guard and Reserve Component members and their families, only five percent of eligible members are enrolled.  This low participation rate indicates that a large portion of the RC may not be dentally ready for deployment.   

Recognizing this, Congress wrote section 701: Medical or Dental Screening at no Cost for Ready Reserve Members (P.L. 108-136).  This section did not go far enough.  First, the law requires screening for members who have been alerted for mobilization.  However, in most cases, the initial alert period does not give the service member enough time to obtain said screens or corrective measures.  Secondly, this benefit is extremely ineffectual.  The medical and dental screens are dependent upon the Secretaries providing the authorization and the funding. 

The Alliance requests that the Subcommittee expand the dental screening program to a yearly benefit.   

2.  Post-deployment Dental Readiness

When deployed overseas, dental hygiene and dental diagnostic and preventative care is difficult to maintain.  To offset this, DoD policy has been to provide an examination screening and repair for deployed military members.  If post-deployment Reserve Component members are not provided with these exams, corrective coverage is only allowed at a Military Treatment Facility for 30 days in a space available status after deactivation.  The RC members have a lower priority than Active Duty family members, who historically have difficulty getting dental treatment themselves.  It is incumbent upon DoD to return post-deployment RC members to a dental readiness status.  It is incumbent upon DoD to return post-deployment RC members to a classification T-D dental readiness status.  If MTF access is not available, then DoD should subsidize TRICARE Dental coverage for a period of 120 days to permit repairs. 

The Alliance urges the Subcommittee to extend the same post deployment dental coverage to the National Guard and Reserve Component.


House Armed Services Committee
2120 Rayburn House Office Building
Washington, D.C. 20515

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