Understanding the TRICARE Medical Benefits Program ____________________________

1. Understanding the TRICARE Medical Benefits Program ____________________________

2. The TRICARE-Military Health System • TRICARE-MHS is funded by the Defense Health Program with oversight at three levels: • ASD(HA)- Policy and Strategic Planning (Political Appointments) • TRICARE Management Activity- Field Agency Implementation • Services- Service Chains- Direct Care System Implementation • The TRICARE piece (formerly CHAMPUS) is the purchased care program governed by Federal Statute at 10 U.S.C. §1079; administered by Managed Care Support Contractors working under regional Lead Agents • The MHS piece is the direct care system of military hospitals & clinics, governed by §’s 1076 and 1077

3. REGION 1 REGION 5 REGION 11 EUROPE TRICARE CENTRAL REGION 5 REGION 10 (MAY 98) REGION 2 REGION 9 REGION 3 REGION 4 REGION 12 REGION 6 TRICARE Pacific LATIN AMERICA Existing TRICARE Regions

5. Basis for TRICARE Program Benefits • Part I: The Evolution of Healthcare Benefits • TRICARE strives to be a uniform program nationwide in contrast to Medicare or Medicaid which have larger regional variation • Advances in medicine become benefits when proven • Part II: The Evolution of Programmatic Benefits • Statutory or Discretionary program changes • Determines scope of benefits & methodologies • Part III: Status of Programs for Children

6. Entitlement versus Insurance Programs Direct Care versus Purchased Care Programs Purchased Care Benefits Development Process: Medical Benefits Office/TRICARE Medical Directors Special and Emergent Provision Rare Diseases Provision Factual Appeals Process Experimental Therapy and Clinical Trials Part I: Evolution of Healthcare Benefits

7. TRICARE purchased care is an entitlement program governed by: Statutes--Title 10, §1079 32 Code of Federal Regulations (CFR), Part 199 Policy, Ops and Data Processing Manuals New benefits come into the program as soon as determined to be medically appropriate; i.e. Proven This may differ from “Customs” of Care Title 10 excludes or constrains experimental (Unproven) therapy depending on bene category, and direct or purchased care programs Entitlement/Insurance

8. There are benefit differences between direct care and purchased care systems Direct care does not have all of the same limitations as purchased care Direct care does not have to define the benefits through Federal Regulation (32 CFR) and policy Purchased care cannot provide services that are prohibited by Title 10/32 CFR 32 CFR has the force of law Direct Care/Purchased Care

9. Treatments/procedures must be medically necessary and appropriate by standards of practice in the USA Cannot be unproven or excluded by Title 10/32 CFR Hierarchy of Reliable Evidence Prioritization, funding, contract modification, coding, implementation can take up to 1-2 years Special and Emergent Provision protects vulnerable TMA determines the purchased care benefits, not contractors, the MTFs or services TRICARE Purchased Care Benefits Development Process (What we will buy)

10. 1. Well controlled studies with clinically meaningful endpoints, published in refereed medical literature 2. Published formal technology assessments 3. Published reports of national professional medical associations 4. Published positions of medical policy organization 5. Published reports of national expert opinion organizations TRICARE HIERARCHY OF RELIABLE EVIDENCE (32 CFR)

11. A procedure is established as proven, safe and effective Incorporation into contracts requires funding and contract modification A beneficiary has a emergent need for the new procedure The MCSCs identify the need and apply to TMA for separate funding for the procedure Funding provided via non-at-risk procedures Special and Emergent Provisions

12. A rare disease is defined as one which affects fewer than 1 in 200,000 Americans; not NORD definition Definition is under review at this time Coverage for treatment is still dependent upon evidence which demonstrates that the proposed treatment is safe and effective The standard of proof is less rigorous because there may be insufficient clinical material to perform well-controlled clinical trials A single uncontrolled trial or case report may be sufficient RARE DISEASES

13. MCS Contractor denies Rx as unproven Beneficiary/provider appeals denial to MCSC MCS Contractor issues Reconsideration Denial Appealing party submits request for formal review to TMA Appeals and Hearings Division A&HD sends to Medical Benefits Division for review Coordination with Medical Directors Appeals and Hearings Division issues formal review decision Formal proceedings with hearing officer on request FACTUAL APPEAL PROCESS

14. 10 U.S.C. covers payment for health care across by the Defense Health Program budget Different components of the law apply to CHAMPUS beneficiaries and ADSMs and to purchased care (TRICARE) and direct care (MHS) §1079 prohibits use of CHAMPUS $’s to pay for research except for trials sponsored/approved by the NIH at ASD discretion subject Interagency Agreement (IA) DoD/NCI Clinical Trials Phase II/III cancer treatment and prevention program, 1996 Experimental Therapy & Clinical Trials

15. §1074 permits supplemental care funds to be used for ADSMs enrolled in civilian clinical research trials; an IA is not necessary However participation is governed by DoD directives relating to human use & experimentation, and services must assure institutional studies meet these parameters §1076 and §1077 govern care within MTFs and broadly include whatever is deemed to be clinically indicated by providers, including research Mandatory compliance with DoD Directives via IRB Children may participate only if there is intended benefit for the children HUGE Issue Experimental Therapy & Clinical Trials

16. Experimental Therapy & Clinical Trials • Funding for all research comes from the same ultimate source as funding for proven, safe and effective therapies • Without additional annual appropriation, funding for research and for proven care are thus in competition • Science, pragmatics, politics and economics all contribute to the decisions

17. Part II: Evolution of Programmatic Benefits • Most, but not all, programmatic benefits are driven by the annual National Defense Authorization Act (NDAA) • Because these benefits affect the way we provide care they are generally subject to interagency and public review/comment via process of regulation (rule) publication: 32 CFR Chapter 199 • Interim Final Rule >>>> Final Rule • Implements statutory language explicitly • Proposed Rule >>>> Final Rule • Implements discretionary aspect of legislation and other self generated concepts

18. Program DevelopmentFrom Legislation to Implementation • Post-Legislation Planning: 1-2 months; analysis/interpretation, strategies, necessity for regulation (IFR or PR) leading to Final Rule • Rule Publication Activities (if necessary): 12-15 months; draft and coordinate internally, obtain IGCE, Obtain HA Policy Decisions, OMB approval, first publication, public comment period (60 days), analysis of comments & modification, internal coordination/signatures, final OMB approval, final publication; rule effective after 30 days

19. Program DevelopmentFrom Legislation to Implementation • Contract Modification Preparatory Activities:3-4 months; develop policies and instructions, final IGCE, CMB approval/program funding, contract language preparation • Contract Modification: Bilateral negotiation 3-5 months • Contractor Implementation Lag: 2-4 months (with exceptions); systems modifications/coding changes, contractor staff training • Total Time from Legislation to Implementation: 15-24 months

20. NDAA 02 Key Programs • Non-Availability Statement Elimination • Skilled Nursing Facility- PPS • Home Health Care- PPS • ECHO (Enhanced PFPWD) • Custodial Care Definition Change -- Elimination of ICMP-PEC -- Custodial Care Transition Program (CCTP) -- Custodial Care Contractor At-Risk

21. Elimination of Non Availability Statements • Scheduled Implementation: 28 December 2003 • Proposed Concept: • Except for in patient mental health, NAS requirements eliminated • ASD(HA) may waive the NAS elimination requirement with exception of OB • ASD(HA) waiver will require notification to the beneficiaries and Committees on Armed Services of the House and the Senate • Major Issues: • Should we seek legislative action to adjust NAS elimination implementation dates? • ASD(HA) policy as regards waivers to statute until TNEX • ASD(HA) policy as regards selected exceptions to statute after implementation of TNEX

22. Implementation of Skilled Nursing Facility Benefit & Prospective Payment System • Key Issues • SNF Benefit under TRICARE Program unlimited and based upon billed-charges • With implementation of TFL this is a huge potential financial liability • NDAA-02 directs our benefit to mirror Medicare benefit except the Medicare 100-day SNF benefit limit • Mandatory 3 night hospitalization prior to SNF admission • SNF admission to be within 30 days of hospital discharge • Prospective Payment System (PPS) methodology for reimbursement • TRICARE will implement the SNF benefit changes and PPS • For TFL, TRICARE will be secondary to Medicare until the 100-day limit is exhausted • Most SNF admissions for <30 days • Results in reduced financial liability for our program as regards TFL • PPS not applicable to children under 10; billed-charges

23. Implementation of Home Health Agency Prospective Payment System • Key Issues: • TRICARE HHC Benefit under the basic program is unlimited • Reimbursed based on CMAC billed-charges methodology • Except for ICMP-PEC very few TRICARE benes require extensive HHC • Huge financial liability for our program with implementation of TFL • NDAA requires adoption of Medicare PPS for HHC • 28 (35) hours maximum of part-time and intermittent care reimbursed based upon fixed case-mix and wage-adjusted 60-day episode amount • Renewable for 60-days at a time • Includes home health aides as providers (excluded under TRICARE) • Adopting Medicare benefit reduces TRICARE liability for TFL benes • However: • Abbreviated OASIS assessments will be required for beneficiaries who are under the age of eighteen or receiving maternity care • How shall we provide services for benes requiring more than 28 (35) hours/wk? TRICARE ECHO PROGRAM

24. Implementation of Extended Care Benefits for Active Duty Dependents • Scheduled Implementation: T-NEX contracts • Proposed Concept: • Modified and enhanced PFPWD with: • Name change - Extended Care Health Option (ECHO) • Monthly standard benefit increase from $1,000 to $2,500 • Respite Care for all enrolled beneficiary families • Extended home health care (EHHC) • Coverage of custodial care in addition to skilled services • Permits coverage of home health aide services • Major Issue: A great enhancement for ADSM families, but does not apply to retirees and their family members

25. Bene Needs Skilled Professional Care at Home 28 hrs PT/Intermittent HHC under Basic Program Needs more than HHC limit SNF Benefit under Basic Program Retiree or NAD Dependent* AD Dependent* Doesn’t want SNF SSI/Medicaid for additional home care ECHO for: 1. Additional HHC subject to cap 2. Respite benefit Need Custodial Care** SSI/Medicaid *Some benes may also have OHI which may provide some services in the home ** Not coincident with skilled or respite care

26. Comprehensive medical, surgical and mental health services and associated ancillaries Speech, PT/OT Dental care via TRICARE Dental Program Subscription-based Only 60% of subscribed children use the services Home health care services Skilled nursing facility services DME, prescription medications Residential treatment facility care Special programs for children Part III: Status of Programs for Children

27. Program for Persons with Disabilities; PFPWD For dependents of ADSMs only Transition to TRICARE ECHO Spring 04 Individual Case Management Program for Persons with Extraordinary Conditions; ICMP-PEC Exceptional Family Member Program; EFMP Women, Infants and Children’s Program; WIC Special Programs for Children

28. Purpose: Remove access-to-care barriers resulting from state residency requirements A financial assistance program to reduce burden of: Moderate to severe mental retardation (DSSMD) Serious physical disability of chronic duration to exceed a minimum of 12 months Requires public facility utilization where available Applies mostly to use of school resources when children are under IEP unless such services are inadequate to meet the requirements. Program for Persons with Disabilities (PFPWD--ECHO)

29. Medical, rehabilitative interventions, equipment, prosthesis, orthopedic braces and appliances Educational services Residential care in public or private, nonprofit settings when protective custody, custodial care or training in residential setting appropriate Transportation to and from facilities to receive care Durable equipment and durable medical equipment and maintenance PFPWD--ECHO

30. Training when required for use of assistive technology devices and vocational training Training for parent/guardian or siblings to provide assistance with home administered interventions Assistive communication services (interpreters, translators, readers for the blind) Equipment adaptation Does not include structural alteration of residences, services providedunder IDEA, dental care, deluxe accommodation, computers PFPWD--ECHO

31. Services must be provided by TRICARE authorized providers or in the case of educational services, state licensed or authorized providers Government cost-share limited to $1000 per month Will change to $2500 Spring 04 Statutory changes permit us to require enrollment in EFMP program as a requirement Special needs repository concept under development PFPWD--ECHO

32. Waiver of benefits limits program to provide skilled nursing care in home setting for “custodial care” benes Under “olde” TRICARE definition “custodial care” patients were entitled to only 1 hour per day of skilled care for the custodial condition ICMP-PEC: Provided all necessary skilled nursing care Program terminated with NDAA 2002 Definition now- Activities of Daily Living (Industry standard) “Custodial Care” benes get all services via basic program & TRICARE ECHO Program Individual Case Management Program for Persons with Extraordinary Conditions

33. One definition: Clinical services that require professional qualifications of a nurse and are based upon a special knowledge of anatomy, physiology, chemistry and pharmacology Another definition: Services which may only be provided by licensed professionals in accordance with jurisdictional statute or regulation In between these two definitions there is a lot of white space! See AAP Guidelines for Pediatric Home Health Care; c. 2002; especially Chapter 8 What are Skilled Nursing Services?

34. An assignments program, not a medical program Any family member with special needs (educational, medical, rehabilitative) identified to the system Active Duty Service Member (ADSM) assignments coordinated to provide access to appropriate services as best as possible Does not remove ADSM from deployments or remote tours but provides stability and umbrella for family members Exceptional Family Member Program

35. Though a mandatory program there is little administrative consequence for not enrolling Viewed by some as a career “limiter” Critically important for overseas assignments Medical record reviews assist with identification Results in concentrations of special needs children in focused locations near metro areas Exceptional Family Member Program

36. The DoD’s WIC program which enhances nutrition support and education for vulnerable beneficiaries overseas, not in CONUS Modeled on state programs under Dept of Agriculture Nutritional and financial parameters Provides screening, education and nutrition support similar to state programs Highly successful and lauded by line & communities Women, Infants and Children’s Program

37. Understanding the TRICARE Medical Benefits Program ____________________________