Military Health Care Reform Details Released by Senate 

Now that the Senate Armed Services Committee has approved its version of the defense authorization bill for fiscal 2017, we have a clearer picture of what direction they are taking with respect to military health care reform. A press release from the committee said that their version of the NDAA “initiates a comprehensive reform to modernize the military health system and provide beneficiaries with higher quality care, better access to care, and a better experience of care.  Critically, the NDAA’s reform initiatives adhere to a simple guiding principle: that beneficiaries should only be asked to pay more into a military system that delivers greater value.”The Senate’s bill would consolidate TRICARE into two plans:  TRICARE Prime which would remain the MTF-centered managed care plan and TRICARE Choice, a combination of Standard and Extra that would utilize a network of civilian providers.  The Senate also adds a TRICARE supplement for beneficiaries who have other health insurance.Unlike the House bill, the Senate’s version does not include any enrollment fees for active duty personnel.  It does, however, institute increases in health care fees for military retirees not eligible for Medicare.Fees for retirees choosing TRICARE Prime would increase $68 annually from $282.60 to $350.60 for singles and $135 from $565.20 to $700.20 for family coverage. Retirees electing TRICARE Choice would pay $150/$300 (single/family) increasing over five years to $450/$900 (single/family). The bill would eliminate existing cost-shares for services provided under TRICARE Choice and replace them with fixed co-payments. Pharmacy costs would also rise.  The Senate committee supported the Pentagon’s plan to incrementally increase co-pays for prescriptions obtained at retail pharmacies and brand-name medication ordered by mail.  However, prescriptions would still be available at military treatment facilities at no cost and generic medication would be available at no cost if ordered through the mail.The Senate’s bill would also: 

• Expand the full range of telehealth services available to beneficiaries.
• Initiate a fine for beneficiaries who miss their medical appointments.
• Authorize lower co-payments for high-value pharmaceuticals and medical services.
• Eliminate the requirement for pre-authorization for specialty care referrals.
• Require a plan to improve pediatric care and related services.
• Incentivize participation in disease management programs.
• Authorize enrollment of eligible beneficiaries in federal dental and vision insurance programs managed by the Office of Personnel Management.
• Expand and improve access to care by requiring a standardized appointment system in military treatment facilities.
• Create local high-performing military-civilian integrated health delivery systems in which military treatment facilities would form strong partnerships with civilian health systems and the Department of Veterans’ Affairs to provide integrated health services for beneficiaries.
• Create specialized care centers of excellence at major military medical centers to model specialized care delivery in high-performing health systems like the Cleveland Clinic.
• Authorize a pilot program to give commercial health insurance coverage to reserve component members and their families.
• Expand eligibility for care in military treatment facilities to veterans and certain civilians. Establish performance accountability for military healthcare leaders throughout the military health system.
• Establish rigorous criteria for selection of military treatment facility commanders and minimum lengths of tours of duty for military treatment facility commanders.
• Realign the medical command structure of the Department of Defense and shrink headquarters staffing.

Other non-health care related items in the Senate bill include:

• A 1.6 percent pay raise instead of the 2.1 percent approved by the House.
• End strength levels requested in the DoD budget.  The House voted to increase troop levels.
• A requirement that both males and females to register for the draft.
• A 25 percent cut in 4-stars and other flag and general officers.
• Permanent authority to pay the Special Survivor Indemnity Allowance for SBP-DIC survivors. 
• A 25 percent reduction in Senior Executive Service civilians.
• Authorization for an increase of $40 million for reimbursement rates for the TRICARE Comprehensive Autism Care Demonstration program.
• Authorization of $25 million in supplemental impact aid to local educational agencies with military dependent children and $5 million in impact aid for schools with military dependent children with severe disabilities.
• Numerous enhancements to military whistleblower protections.
• Authorization for $2.6 billion for the procurement of Army aircraft including 52 AH-64 Apaches, 36 UH-60 Blackhawks, and 22 CH-47 Chinooks.
• Authorization for $1.2 billion for upgrades to M1 Abrams tanks, M2 Bradley infantry fighting vehicles, and Stryker armored combat vehicles.

The Senate’s defense policy bill authorizes funding at the level of the president’s fiscal year 2017 budget request, and includes $602 billion of discretionary spending for national defense – $543 billion for base functions in the Department of Defense and for nuclear functions within the Department of Energy and $59 billion for Overseas Contingency Operations funding for the Defense Department.  Similar to the president’s budget submission, $5 billion of the Overseas Contingency Operations (OCO) funding supports functions traditionally supported through the base budget.The one major area that the Senate’s bill differs from the House version is the House plan to shift funds from the OCO account to pay for items they added in the defense authorization bill’s base budget. Use of OCO money means that the OCO account, which is exempt from budget caps, would only have enough money to fund overseas operations for half a year, requiring the next president to come back to Congress seeking additional funds for the remainder of fiscal 2017.The budgetary maneuver has drawn a veto threat from the White House.Senate Armed Services Committee Chairman John McCain, R-Ariz., said that he plans to seek a boost in overall defense spending when the measure goes to the Senate floor rather than shift the funds from the OCO account.

What’s next:  

The House’s version of the fiscal 2017 National Defense Authorization Act is on the floor for debate and a vote this week.  Details of their bill can be found here. Senate Majority Leader Mitch McConnell said this week that the defense policy bill would be on the floor for debate and passage next week.  Once the chambers have passed their respective bills, a conference committee will be appointed to hammer out the differences.