Bono: New TRICARE Laws, Contracts to Drive 'Historic' Reforms

tom-phipottMilitary Update: Military healthcare is seven months from rolling out “historic” reforms to improve patient access and quality of care, to streamline health operations across Army, Navy and Air Force, and to better integrate that direct care system with networks of private sector providers supporting TRICARE insurance beneficiaries, said Vice Adm. Raquel Bono, director of the Defense Health Agency (DHA).

tom-phipottMilitary Update: Military healthcare is seven months from rolling out “historic” reforms to improve patient access and quality of care, to streamline health operations across Army, Navy and Air Force, and to better integrate that direct care system with networks of private sector providers supporting TRICARE insurance beneficiaries, said Vice Adm. Raquel Bono, director of the Defense Health Agency (DHA).

DHA is responsible for implementing the changes while following through on many previous reforms the last two defense secretaries had set in motion for modernizing the military health care system.

“This is historic because we have the opportunity here to redesign our system of health,” says Bono. “At the heart of it, I believe, is a growing recognition, both in the military health system and the commercial and private healthcare system, that our patients truly need to be co-designers.”

Many elements of military healthcare are in flux due to three factors: a hefty package of reforms voted by Congress last December; a new generation of TRICARE support contracts taking effect soon, and the introduction of MHS Genesis, the military’s new electronic records and scheduling system, which began at few medical facilities earlier this year and will be running department-wide by 2022.

Bono sees all three as opportunities to more tightly integrate the goal of improving healthcare delivery with enhancing medical readiness, and doing so “around our patients” by incorporating their feedback in all system-wide reforms.

“They need to help us understand what the best ways are to integrate. And that’s part of the historic nature that I see here,” she said

The fiscal 2017 National Defense Authorization Act (NDAA) directs scores of changes both to the TRICARE benefit but also to how on-base hospitals, clinics and staffs are organized and operate so military providers care for more patients.

Additionally, last July, DHA announced new TRICARE support contracts so three regions (North, South and West) are reorganized into two (East and West). Health Net Federal Services of Rancho Cordova, Calif., will replace United Healthcare in managing the West, a contract valued at $17.7 billion. Humana Government Business of Louisville, Ky., will consolidate northeastern and southeastern states into East Region under a contract worth $40.5 billion.

To make a complex situation more clear to patients and providers, DHA got authorization from Congress to time the start of key TRICARE reforms to coincided with the new contracts, moving the contracts’ effective date for delivering health care from Oct. 1, 2017, to Jan. 1, 2018, Bono said.

One key TRICARE change is to replace two legs of the current benefit -- TRICARE Standard, the fee-for-service insurance option, and Extra, the preferred provider option -- with TRICARE Select. Select will combine features of both. Meanwhile, the managed care option, TRICARE Prime, will not change.
Health Net and Humana will establish networks of providers to serve both Prime and Select. Under Prime, enrolled beneficiaries will continue to be assigned to primary care managers in designated Prime Service Areas, which aren’t changing. Those provider networks must meet certain access standards.

Under TRICARE Select, patients can choose their own providers but if they use a non-network provider, they will incur higher out-of-pocket costs. Cost-sharing will revert to a percentage of TRICARE’s allowable charge. TRICARE Select patients using non-network providers also will have a higher deductible to pay.

Select also will differ from TRICARE Standard by introducing a “fixed fee” for care received from a network provider. For example, if an active duty family member seeks primary care from a network provider, they will pay $15 as a fixed fee versus 15 percent of the allowed TRICARE charge. This is expected to simplify cost sharing for both beneficiary and provider. Retirees will have different fees.

TRICARE Select, unlike Standard, also will require an enrollment fees but only for service members and families who enter active duty on or after Jan. 1, 2018. Beneficiaries who currently use Standard or Extra will be grandfathered from TRICARE Select enrollment fees at least through 2019.

In areas where Prime is not offered, TRICARE will expand networks to reach at least 85 percent of the U.S.-based beneficiary population, up from an estimated 82 percent of the population having network access today.

TRICARE also will test the concept of value-based health care by customizing networks to include high-performing providers who use high-value reimbursement incentives to deliver quality care, facilitate greater access and encourage their patients to more actively participate in healthcare decisions.

Bono said DHA is consulting Congress to prioritize adoption of many reforms ordered, focusing first on those that better serve patients. For example, a mandate that by Oct. 1, 2018, urgent care clinics on base be kept open until 11 p.m., might be impractical at the sprawling Quantico Marine Corps Base in Northern Virginia, given that most family members live off base and many miles away the clinic.

“In that situation we’re having conversations like, ‘Should we put something right outside the base?’ Or, ‘Maybe we partner down in Fredericksburg [with civilian providers’] because that’s where the patients are.”

DHA by Jan. 1 will adopt other changes like ending a requirement that Prime users must get referrals from primary care doctors before using a neighborhood urgent care facility. On some reforms, like standardizing appointment scheduling across the military, DHA will build on progress already made in its Enhanced Multi-Service Markets, areas where two or more services operate medical facilities and have adopted new scheduling systems. DHA will be choosing the best of those as a temporary solution, but also eyeing the enhanced appointment scheduling system to be delivered through MHS Genesis, Bono said.

DHA also will be implementing provisions passed to better measure military physician productivity, to shorten hold time for patients trying to set appointments in single phone calls, and to incentivize TRICARE contractors to improve beneficiary access and care outcomes.

Congress considered but rejected the idea of dismantling medical headquarters of the Army, Navy and Air Force. But it diminished their authority and expanded the power of DHA to standardize and streamline health operations.

“I had oversight of the managed care support contract and the network. Now, with [passage of] NDAA, there’s authority for a single budget authority for the direct care system. Now we actually have the ability to fully integrate direct and purchased care health services as well as integrate and interoperate the capabilities and functions each of the services bring into the MHS,” Bono said.

Beneficiaries will see these and many more changes, Bono said. She wants to hear from them on the changes and also fresh ideas to enhance their care.

“We are totally in receive mode [for] their suggestions, ideas, feedback on what we can do to make their military health system better,” she said.

Beneficiaries can engage with Vice Admiral Bono on Twitter at @DHADirector ( and on Facebook through the Defense Health Agency (

To comment, write Military Update, P.O. Box 231111, Centreville, VA, 20120 or email or twitter: @Military_Update.

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Tom Philpott has been breaking news for and about military people since 1977. After service in the Coast Guard, and 17 years as a reporter and senior editor with Army Times Publishing Company, Tom launched "Military Update," his syndicated weekly news column, in 1994. "Military Update" features timely news and analysis on issues affecting active duty members, reservists, retirees and their families.

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