The next iteration of Tricare will give some military families and retirees the option to choose a health network other than the two selected to manage the Tricare East and West regions, according to a report delivered by the Pentagon to Congress in August.
The new contracts, known as T-5, will require the winning contractors to partner with local health plans or networks in their regions to provide health services to Tricare beneficiaries -- a test of the "multiple provider network" concept to determine how effectively the expanded opportunities might work.
The Defense Health Agency will also implement a separate pilot program to test the concept in certain areas, issuing contracts directly to provider networks so they can accept Tricare beneficiaries, according to the report sent Aug. 14 to leaders of the Senate Armed Services Committee.
"We believe this approach, which will allow local and regional contracted health plans and providers to focus solely on delivering health care services rather than these back office activities unique to Tricare, will lead to more plans and providers competing for Tricare business," defense officials wrote.
The fiscal 2017 National Defense Authorization Act required the DoD to make significant changes to the military health system and to Tricare, the department's program for managing private health services for military beneficiaries and retirees.
The law also required the DoD to report on the structure of its managed care contracts and explain how it plans to comply with previous legislation requiring the department to give patients more health care choices, part of an effort to improve access and quality and lower costs.
In the report, the DoD said it plans to offer broader selection in phases, first as demonstration or pilot projects before "rolling them out program-wide."
"This demonstration will require education of beneficiaries on new options, assessment of the cost structure and other requirements of the innovations to ensure they improve care, quality and access, and analysis and evaluation to understand what could work," the report states.
To understand how the new system may work, Tricare beneficiaries can look to Atlanta, where Tricare East Region contractor Humana Military has partnered with Kaiser Permanente, the not-for-profit health care company, to offer Tricare Prime to area residents.
Under the agreement, which runs through 2023, Kaiser Permanente is to provide "value-based care" to retirees and military family members, defined as a health program that rewards providers based on performance, quality and value, as defined by the DoD.
The pilot, according to Humana Military, is a test as to whether Kaiser Permanente's version of managed care "can improve health care quality and reduce health care costs for Tricare beneficiaries."
The Pentagon released a draft request for proposal last week for the two T-5 contracts, which could be worth up to $58 billion. Currently, Humana Military Healthcare Services holds the contract for Tricare East, while Health Net Federal Services manages the Tricare West contract.
Responses to the draft RFP from interested bidders are due Sept. 18.