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American Forces Press Service

Hale, Woodson Detail Defense Health Reprogramming Request

By Cheryl Pellerin
American Forces Press Service

WASHINGTON, Aug. 2, 2012 – The Defense Department’s June 29 request to Congress to move $708 million in excess funds from the military health budget to other budget areas does not shortchange military health programs, Pentagon officials said today.

Robert F. Hale, DOD comptroller and chief financial officer, and Dr. Jonathan Woodson, assistant secretary of defense for health affairs, participated in a conference call with reporters this morning to discuss the budget reprogramming process.

Congress must approve the movement of funds, known as reprogramming, from one appropriation to another.

“Two years ago, we made an estimate of the amount of funding we would need for the Defense Health Program, which pays TRICARE bills, and was approved by Congress,” Hale said. Uncertainties inherent in such forecasting resulted in an estimate that was 2 percent, or $708 million, higher than the actual $32.5 billion budget for fiscal 2012, he added.

The fiscal 2012 enacted budget for the broader Military Health System is $52.8 billion, up from $19 billion in fiscal 2001.

“We believe these estimates were reasonable,” Hale said. “Given that we are [involved in a war in Afghanistan], we looked carefully at whether or not we had fully funded health care needs, and we believe we have, [with] the funds that we can use through fiscal year 2012.”

The Defense Department has other high-priority needs that must be met before the fiscal year ends Sept. 30, the comptroller explained.

“For example,” Hale said, “we never anticipated the Pakistanis would close the ground lines of communication, [and] that has greatly increased our transportation costs. We’ve put another aircraft carrier strike group in the [U.S. Central Command] region at the request of the commander, [and] we had not budgeted for that. Fuel prices were higher than we had budgeted.”

Given those priorities, “we’ve asked Congress for the authority to move the money into other parts of the defense budget to meet these needs.”

Last week, in a letter to Defense Secretary Leon E. Panetta, 24 members of Congress objected to moving funds from the TRICARE budget because of the “highest priority” of investing the funds to treat serious health problems facing military service members and retirees. They also objected to an increase in TRICARE fees proposed by DOD and rejected in the House version of the fiscal 2013 National Defense Authorization Act.

Another objection to the reprogramming came this week from the Military Officers Association of America, whose leadership said the excess funds indicated that defense leaders who wanted to raise TRICARE fees were misrepresenting health care costs.

During the teleconference, Hale said the department believes that the issue of TRICARE fee increases is separate from the reprogramming issue.

“In 2001 through 2012, the overall military health care budget went up 175 percent, … and it is that growing trend line that has caused us to look at issues like changing the TRICARE fees and [finding] a way to reduce the growth in health care costs, as well as the fact that [TRICARE] fees haven’t been significantly increased for 15 years,” he said.

“We want to move back,” Hale added, “and we believe it’s appropriate to move back to the sort of cost-sharing [ratio] the Congress envisioned when it set up TRICARE.”

Woodson said the $708 million savings represents not a decline in health care costs but a decrease in the rate of the rise in the cost per TRICARE enrollee per year. Budget and cost forecasts are made years in advance of budget execution.

“In 2008, the total cost per [TRICARE Prime] enrollee per year was $3,035,” he explained. “In FY09, it was $3,280, in FY10 $3,418, in FY11 $3,518. So the absolute cost has gone up, although the rate of rise is reduced.”

In response to a question about whether some of the $708 million could be used for care for wounded warriors, Woodson said the Military Health System has fully funded all health programs for fiscal 2012.

“In fact, as part of the reprogramming, we have taken $6 million to fund additional research into wound care and into developing aerial medical support systems we utilize when we evacuate wounded warriors from the theater,” he said.

The broader issue, he said, is the limited time -- about eight weeks -- left in the fiscal year and how long it would take to reassign the funds to wounded warrior programs and execute the programs, including hiring people and developing proposals and research programs.

“We had $663 million requested this year for research, and Congress was very generous to us by plussing that up to $1.2 billion, and we are executing on schedule against that [funding],” Woodson said.

“We have another request in next year for $663 million and a set of proposals to continue to focus on these signature wounds of war,” he added, “and driving toward evidence-based answers to deal with these difficult problems like suicide, [post-traumatic stress] and [traumatic brain injury], both within the Department of Defense and as a collaborative effort with the [Veterans Affairs Department].”

Hale said Congress has been briefed on the reprogramming request. “We have some tentative answers, and I expect more in the next week,” he added.

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