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More Provider Choices for Some TRICARE Recipients

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TRICARE Recipients May Have More Provider Choices

There are a number of changes to the TRICARE program every year. The most recent proposed change will allow the option for some military families and retirees to choose a different health network apart from the current East and West regions available. Presently, Humana Military Healthcare Services holds the TRICARE East contract and Health Net Federal Services holds the TRICARE West contract.

RELATED: New TRICARE Select Fees for Retirees

T-5, The Fifth Generation of TRICARE Managed Care Support Contracts

In August of this year, the Pentagon delivered a report to Congress addressing the fifth generation of TRICARE managed care support contracts, known as T-5. A number of issues were raised by a congressional committee in regards to the current contract structure.

The Current Contract Structure:

  • Does not support innovation, beneficiary choice, or market-based management strategies
  • Stifles competition
    • Incumbents have significant advantage
    • Few private sector health care delivery companies have financial resources or relevant past performance to compete for such large scale contracts
  • Limits the Defense Health Agency (DHA) and does not conform with the reforms previously directed by the committee to:
    • Provide the DHA with options to swiftly address contractor performance issues or shortfalls
    • Incentivize contractors to comport with the most high quality, innovative, and cost-effective industry best practices to improve quality of care for TRICARE beneficiaries
    • Maximize returns on DHA investment

The reforms mentioned by the committee are in reference to the 2017 National Defense Authorization Act, which required the Department of Defense (DOD) to make significant changes to TRICARE, regularly report on the structure of its managed care contracts, and explain how it will comply with legislation that patients will be afforded more health care choices – something the DOD said it will carry out in phases and with wide-spread education of changes to beneficiaries.

“Multiple Provider Network” Concept

The proposed T-5 changes would involve partnerships between winning TRICARE contractors and local health plans/networks in the regions, creating a “multiple provider network” concept. The congressional committee hopes that by shifting the next iteration of TRICARE contracts to this construct, it will allow private sector support plans to better serve beneficiaries. Better service would come by more closely matching local beneficiary needs with innovative service and care capabilities, improving integration with military treatment facility leadership, and facilitating a more agile, cost-effective approach for the DOD.

In a second August report, sent from the DHA to the Senate Armed Services Committee, the implementation of a pilot program with these proposed changes was set out, testing the concept only in certain areas. Contracts will be issued directly to provider networks, enabling them to accept TRICARE beneficiaries – an approach which will allow local/regional “plans and providers to focus solely on delivering health care services rather than these back office activities [and hopefully] lead to more plans and providers competing for TRICARE business.”

This pilot program is already underway in Atlanta, where the TRICARE East Region contractor Humana Military has partnered with Kaiser Permanente in an agreement through 2023 to offer TRICARE Prime to local residents. Kaiser Permanente is one of the nation’s largest not-for-profit health plans, serving 12.4 million members and continuously developing and refining medical practices to help ensure that care is delivered in the most efficient and effective manner possible. According to Humana Military, this pilot program will test whether such a partnership actually can improve the quality of care while also reducing costs for TRICARE beneficiaries.

The Pentagon-released draft request for proposal for the T-5 contracts could be worth upwards of $58 billion. Responses to the draft from interested contract bidders are due September 18.





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