Demonstration Set for TRICARE Senior Health Plans

The DoD demonstration of Medicare subvention was confirmed Feb. 12 by Health and Human Services Secretary Donna Shalala and Defense Secretary William Cohen. The project will allow Medicare-eligible military retirees and family members to receive comprehensive health care through military health facilities.

Defense health officials hope the demonstration will show that DoD can cost-effectively provide Medicare-eligible beneficiaries health care treatment through military facilities. If the test is successful, the program is expected to eventually become available for military retirees everywhere.

The three-year demonstration will take place at six sites, some of which include more than one hospital, including:

• Keesler Air Force Base, Miss.;
• Brooke Army Medical Center, Texas; Wilford Hall Medical Center, Texas; Sheppard Air Force Base, Texas; and Fort Sill, Okla.;
• Fort Carson and Air Force Academy, Colo.;
• Madigan Army Medical Center, Wash.;
• Naval Medical Center San Diego; and
• Dover Air Force Base, Del.

Officials plan to begin enrolling participants at two sites this summer, most likely Madigan in Tacoma and Brooke and Wilford Hall in San Antonio. They then will phase in the remaining sites. Actual health care services will begin at each site 60 days after enrollment begins, officials said.

"This is a very significant step forward in our efforts to care for all military beneficiaries," Cohen said in a statement. "With our partners at Health and Human Services, I believe we can achieve a successful demonstration that will benefit everyone."

The Balanced Budget Act of 1997 authorized this demonstration to include two components. The first, TRICARE Senior Prime, will allow military health facilities in six sites to be treated as Medicare+Choice plans such as HMOs and provide a full range of comprehensive health care benefits to enrolled retirees. These military facilities must meet the same terms as HMOs serving Medicare.

Under TRICARE Senior Prime, DoD will spend the same amount of money it currently does for this group. Then, Medicare will pay DoD an amount equal to 95 percent of what it pays other health maintenance organizations, less the cost of medical education, special payments to hospitals serving large numbers of low-income patients, and some capital payments excluded because they're included in DoD's appropriations.

The second option, Medicare Partners, permits military retirees enrolled in a limited number of Medicare+Choice plans to receive Medicare services through military health care facilities. This demonstration also allows Medicare+Choice plans to contract with DoD to provide specialty and inpatient care to military retirees in those plans.

Participants in the demonstration must have received some care from military providers in the past or have become Medicare-eligible after Dec. 31, 1997. They also must be in the Medicare fee-for-service plan or switch from a Medicare HMO, continue to pay monthly Medicare Plan B premiums, and agree to receive all their care through the demonstration.

Participants in the TRICARE Senior Prime demonstration won't have to pay the annual TRICARE Prime enrollment fee.

DoD and HHS will jointly assess the results of the demonstration before making a recommendation for full implementation. In the meantime, the administration has proposed a similar demonstration for the Department of Veterans Affairs.