2023 May Bring Change for TRICARE Contractors

2023 May Bring Change for TRICARE Contractors
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Editor’s Note: This article by Patricia Kime is part of MOAA’s 2022-23 TRICARE Guide, brought to you by MOAA Insurance Plans, administered by Association Member Benefits Advisors (AMBA). A version of the guide appeared in the November 2022 issue of Military Officer magazine.


Come next year, active duty family members, retirees, and dependents in the Military Health System may be served by a new TRICARE contractor, or not, depending on the outcome of the next generation contract decisions expected in November.


Humana Military has managed TRICARE’s East Region for the past five years, while HealthNet Federal Services has overseen the West since 2018. Those contracts, which were worth up to $58 billion over six years, will expire by Dec. 31. DoD is slated to announce its decision on the next contract, known as T-5, any minute.


The new contracts will ensure TRICARE continues to be an integrated part of the Military Health System, providing networks of physicians and specialists for beneficiaries who use TRICARE Prime, Select, and other TRICARE programs. But the new contracts also aim to implement industry best practices such as patient-centered medical homes, which call for a team based approach to care, advanced care management for those with complex medical needs, incentives to encourage providers to embrace innovation, and partnerships with civilian facilities to ensure patients have access to top-notch specialty care.


[RELATED: Navigating TRICARE Programs for Family Members]


While DoD has pledged that the contractor transition will be seamless to patients, previous changeovers have been anything but easy. A 2009 contract award dragged on for more than three years following multiple bid protests, and in 2016, when the Defense Health Agency (DHA) consolidated TRICARE regions down to two, United Healthcare, which lost a contract and a region in the process, slow-rolled the transition, resulting in a backlog of referrals, loss of payment information for 224,000 beneficiaries, and 15,000 patients inadvertently dropped from TRICARE.


The contracts are especially critical as DHA pursues efforts to treat more beneficiaries in the civilian sector via TRICARE.


“Among the most important strategies we’re pursuing is the development of effective TRICARE contracts that deliver high value patient centered care that integrates military and private sector care,” DHA Director Lt. Gen. Ronald Place told members of the House Defense Appropriations Subcommittee in May.


MOAA joined other military service organizations last year to encourage DHA to work to minimize disruptions to patients during the transition and make sure new contractors have adequate networks to care for beneficiaries.


[RELATED FROM 2021: What You Need to Know About the Next-Generation TRICARE Contract]


The groups raised concerns that the contracts’ emphasis on value-based care, which relies on incentives, preventive services, and rewards to encourage better outcomes, could have up-front costs that may be passed along to beneficiaries.


“The T-5 contracts represent significant change to the purchased care component of the Military Health System,” wrote Jack Du Teil, president of The Military Coalition, to members of Congress last year. “At the same time, the organization and governance of the direct care component of military hospitals and clinics is also being dramatically altered. Our focus has always been — and continues to be — on ensuring these changes do not create obstacles or disruptions that hinder the ability of our members to access quality and affordable health care.”


Patricia Kime is a reporter who covers military health care issues in the Washington, D.C. area.



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