Change in Tricare Coverage Regions May Take Effect Mid-2017: Pentagon

Staff Sgt. Lorylee Willis injects Pediarix into two-month old Sophia Grace Pellegrino, as her father, Dr. (Capt.) Peter Pelligrino, 71st MDG pediatrician, looks on. (U.S. Air Force photo by Staff Sgt. Brian Hill)

The number of Tricare regions will shrink from three to two starting as early as mid-2017 as a new pair of regional management contracts worth almost $60 billion kick in.

Currently, the system is administered in three regions -- North, South and West -- by three separate contractors. The new plan changes that configuration, and instead designates only two areas, the West region and the new East region.

Under the new plan, the East region will be managed by Humana, which currently manages the South region, while the West will be managed by Health Net, which currently manages the North region. Current West region manager United Healthcare will no longer hold a Tricare regional contract.

Officials said they chose to reorganize rather than simply rebid for three separate contracts to simplify the system for both the government and users.

"We've been doing this now for almost 20 years, and in each generation of our contract we've learned something new," said Vice Adm. Raquel Bono, who directs the Defense Health Agency. "Why this makes sense here is ... we really wanted to make sure that our beneficiaries have the benefit of a more simplified, straightforward process."

Officials said the change will allow all Tricare beneficiaries to use the electronic health record transfer system when they move between military treatment facilities and civilian doctors. Currently, that system is not used by any of the three Tricare contractors.

The change could also make it easier for users to switch regions or areas during a military move and to manage complicated medical cases, such as those often faced by special needs families, Bono said.

"One of things we have in this contract is more rigorous case management and medical management," she said. "As we work with beneficiaries and work with these new contracts, what we've also put in place is ability to share data with each other."

If the contracts are managed well and the handoff is smooth, the change should have very little impact on Tricare beneficiaries, including Tricare for Life users. But the relationship between beneficiary and contractor can quickly go bad when payments to providers are slow to process or the contractor kicks back to the patient bills for services that should be covered.

Tricare officials said they are working with Humana and Health Net to make sure the handoff and reorganization are as easy as possible by testing all the systems before they go live. Beneficiaries shouldn't see any changes until the shift is ready, they said.

"For right now, beneficiaries have the same access, the same process they are dealing with today," Bono said. "One of the things that may change for them is that, as we prepare to go live, they will be hearing from a contractor that they might not have worked with in the past. Our contractors will reach out to them to introduce themselves."

No contract protests have been filed by the losing bidders, although Tricare officials said they anticipate there could be before the official award is completed. Such a protest could delay the change. Officials said four companies bid for the West region, while three put in bids for the East region.

The new East region will include the District of Columbia; Alabama; Arkansas; Connecticut; Delaware; Florida; Georgia; Illinois; Indiana; the Rock Island Arsenal area of Iowa; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Mississippi; the St. Louis, Missouri, area; New Hampshire; New Jersey; New York; North Carolina; Ohio; Oklahoma; Pennsylvania; Rhode Island; South Carolina; Tennessee; most of Texas; Vermont; Virginia; West Virginia and Wisconsin.

The new West region will include Alaska; Arizona; California; Colorado; Hawaii; Idaho; all of Iowa except the Rock Island Arsenal area; Kansas; Minnesota; all of Missouri except the St. Louis area; Montana; Nebraska; Nevada; New Mexico; North Dakota; Oregon; South Dakota; west Texas; Utah; Washington and Wyoming.

-- Amy Bushatz can be reached at amy.bushatz@military.com.

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