[Federal Register: November 20, 2006 (Volume 71, Number 223)]
[Notices]
[Page 67112-67113]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20no06-41]
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DEPARTMENT OF DEFENSE
Office of the Secretary
Office of the Secretary of Defense (Health Affairs)/TRICARE
Management Activity
AGENCY: Department of Defense.
ACTION: Notice of a TRICARE demonstration project for the State of
Alaska
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[[Page 67113]]
SUMMARY: This notice is to advise interested parties of a Military
Health System (MHS) demonstration project entitled TRICARE Provider
Reimbursement Demonstration Project for the State of Alaska. The
delivery of health care services in the State of Alaska represents a
unique situation that cannot be addressed fully by strictly applying
the same reimbursement rules that apply to TRICARE programs in the
other 49 states without some modification. Typically, provider payments
are the same as under Medicare, unless the Department has taken
specific action to increase payment rates in response to a particular,
severe access problem in a location. Under this demonstration, payment
rates for physicians and other non-institutional individual
professional providers in the State of Alaska will be set at a rate
higher than the Medicare rate. The demonstration project will test the
effect of this change on provider participation in TRICARE, beneficiary
access to care, cost of health care services, military medical
readiness, morale and welfare. In particular, the demonstration will
test whether the increased costs of provider payments are offset in
whole or part by savings in travel costs, lost duty time, and other
factors. This demonstration will be conducted under statutory authority
provided in 10 U.S.C. 1092.
EFFECTIVE DATE: January 1, 2007. This demonstration will remain in
effect for a period of 3 years.
ADDRESSES: TRICARE Management Activity (TMA), TRICARE Operations
Directorate, 5111 Leesburg Pike, Suite 810, Falls Church, VA 22041-
3206.
FOR FURTHER INFORMATION CONTACT: CAPT Cynthia DiLorenzo, Office of the
Assistant Secretary of Defense (Health Affairs)--TRICARE Management
Activity, telephone (619) 236-5304.
SUPPLEMENTARY INFORMATION:
A. Background
Alaska is a land of extremes and contradictions. It is the largest
state in the United States, containing one-fifth of all United States
land, yet is one of the least populated. It boasts both the highest
mountain in North America and the longest coastline of any state. There
are just a few major roads providing residents the ability to travel to
the major cities in the State. Other means of transportation are by
boat or plane. which places severe hardships on beneficiaries
attempting to access needed health care services. It has geography
characterized by harsh ice islands and desert tundra. Alaska's citizens
are no less diverse.
Alaska's population is just under 627,000. Of these, approximately
71,000 are Military Health System (MHS) beneficiaries. More than half
of these beneficiaries reside in south-central Alaska in the State's
largest city--Anchorage. Alaska's military treatment facilities (MTFs)
meet a large percentage of Alaska's beneficiary health care needs.
Those remaining are referred to local civilian providers or to the
lower 48 states. Access to health care services in Alaska is often
severely limited by the overall dearth of providers, their reluctance
to accept TRICARE payment rates, transportation issues, and other
factors. In response TRICARE has taken steps to increase payment rates,
as detailed below.
B. Past Efforts to Address Access Issues
In 2000, TRICARE created a new payment locality encompassing all of
Alaska except Anchorage, and increased payment rates by 28 percent in
the new locality. In 2004, pursuant to specific Congressional action,
Medicare increased its payment rates in Alaska by 50 percent, and
TRICARE rates were increased to match the new Medicare rates. The
higher Medicare rates continued though the end of 2005, when the
special Congressional provision expired; the Medicare rates reverted to
former levels. TRICARE rates reverted to their former level, 28 percent
higher than Medicare rates.
C. Other Payers in Alaska
As noted, TRICARE payment rates in Alaska are 28 percent above
Medicare rates. It is estimated that commercial rates in Alaska are
about 70 percent above TRICARE rates. The Department of Veterans'
Affairs purchases some health care services for Veterans in Alaska,
using a specially developed rate schedule. Most rates are higher than
TRICARE rates, and a few are lower; on average, the VA rates are
approximately 35 percent higher than TRICARE rates.
D. Current Status of Access
Large numbers of providers in Alaska are considering no longer
treating military beneficiaries owing to low payment rates. Over 70
providers or provider groups in a wide range of specialties are of
concern, some of them the sole provider in Alaska for their specialty.
The alternatives to local purchase of services for military
officials are to transport patients to Seattle or another location for
treatment, or to relocate scarce military medical assets to Alaska to
provide services. The first is an expensive proposition that brings
with it considerable lost duty time and other complications; the second
approach is untenable in wartime, and as a practical matter medical
practice in Alaska would not provide sufficient opportunity for
military medical specialists to maintain their skills.
Under a recent policy change, TRICARE limits its payment in cases
where Medicare providers ``opt out'' of Medicare and enter into private
contracts with Medicare patients. This may be problematic in Alaska,
with the very small number of providers available.
E. Description of Demonstration Project
Under this demonstration, DoD will waive, for services provided in
the State of Alaska, the provisions of 10 U.S.C. section 1079(h) that
require TRICARE payments for physicians and other individual
professional, non-institutional providers to be the same as under
Medicare. Instead, TRICARE will adopt a rate that is 1.35 times the
current TRICARE allowable rate. In addition, DoD will be the primary
payer for services obtained from providers who have opted out of
Medicare by Medicare-eligible uniformed services beneficiaries.
This action will directly increase reimbursement levels for
providers, and is expected to result in increased access to care for
military beneficiaries; reduced travel to Seattle, accompanied by a
reduction in lost duty days; and improved morale for military members
and families as a result of increased access and reduced separation.
F. Implementation
The demonstration will go into effect on January 1, 2007.
G. Evaluation
An independent evaluation of the demonstration will be conducted.
The evaluation will be designed to use a combination of administrative
and survey measures of health care access to provide analyses and
comment on the effectiveness of the demonstration in meeting its goal
of improving beneficiary access to health care by maximizing the
potential pool of health care providers in Alaska.
Dated: November 14, 2006.
L. M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. E6-19553 Filed 11-17-06; 8:45 am]
BILLING CODE 5001-06-P