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[H.A.S.C. No. 108–6]



FOR FISCAL YEAR 2004—H.R. 1588






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MARCH 27, 2003




JOHN M. McHUGH, New York, Chairman
TOM COLE, Oklahoma
JIM SAXTON, New Jersey
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
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VIC SNYDER, Arkansas
MARTY MEEHAN, Massachusetts
JIM COOPER, Tennessee

John D. Chapla, Professional Staff Member
Michael R. Higgins, Professional Staff Member
Lynn W. Henselman, Professional Staff Member
Debra S. Wada, Professional Staff Member
Dudley L. Tademy, Professional Staff Member
Mary Petrella, Research Assistant



    Thursday, March 27, 2003, Fiscal Year 2004 National Defense Authorization Act—Budget Request for the Defense Health Program and the Next Generation of TRICARE Contracts and TRICARE Retail Pharmacy Contracts

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    Thursday, March 27, 2003



    McHugh, Hon. John M., a Representative from New York, Chairman, Total Force Subcommittee

    Snyder, Hon. Vic, a Representative from Arkansas, Ranking Member, Total Force Subcommittee


    Cowan, Vice Adm. Michael L., Surgeon General of the Navy

    Hanson, Capt. Marshall, USNR (Ret.), National Military Veterans Alliance

    Holleman, Deirdre Parke, Esq., National Military Veterans Alliance

    Kanof, Marjorie, M.D., Director, Clinical and Military Health Care, U.S. General Accounting Office
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    Peake, Lt. Gen. James B., The Surgeon General, U.S. Army, Commander, U.S. Army Medical Command

    Schwartz, Sue, DBA, RN, Co-Chair, The Military Coalition's Health Care Committee

    Taylor, Lt. Gen. George P., Jr., Surgeon General of the Air Force

    Vann, LTC. David B., USA (Ret.), Military Retiree Grass Roots Group

    Washington, Robert Sr., Co-Chair, The Military Coalition's Health Care Committee

    Winkenwerder, Hon. William Jr., MD, MBA, Assistant Secretary of Defense for Health Affairs


[The Prepared Statements can be viewed in the hard copy.]

Baker, David J., President and CEO, Humana Military Healthcare Services

Cowan, Vice Adm. Michael L.
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Fleet Reserve Association

Kanof, Marjorie, M.D.

McAndrews, Lawrence A., President and CEO, National Association of Children's Hospitals

Nelson, David R., President, Sierra Military Health Services, Inc.

Peake, Lt. Gen. James B.

Taylor, Lt. Gen. George P., Jr.

The Military Coalition (TMC), presented by Robert Washington, Sr., and Sue Schwartz, DBA, RN

The Military Retiree Grass Roots Group, Health Care White Paper Group, presented by LTC David B. Vann

The National Military and Veterans Alliance, presented by Marshall Hanson, CAPT, USNR (Ret.) and Deirdre Parke Holleman, Esq.

Winkenwerder, Hon. William Jr.

Woys, James E., President, Health Net Federal Services, Inc.

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[There were no Documents submitted.]

[The Questions and Answers submitted can be viewed in the hard copy.]

Dr. Gingrey
Mr. Hayes
Mr. Acevedo-Vilá


House of Representatives,
Committee on Armed Services,
Total Force Subcommittee,
Washington, DC, Thursday, March 27, 2003.

    The subcommittee met, pursuant to call, at 1:55 p.m., in room 2118, Rayburn House Office Building, Hon. John M. McHugh (chairman of the subcommittee) presiding.


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    Mr. MCHUGH. We call the hearing to order. Good afternoon. Thank you for being here. Today's hearing is an opportunity to review and assess the Defense Health Program that is about to begin a period of transition to the next generation of TRICARE contracts. From past experience we all know that the proceeding transitions have without fail brought with them periods of tension and frustration for the beneficiaries, the managed care support contractors as well as the department itself.

    Thus, we are must interested in hearing today from the department as to how it will make this transition, especially with regard to the restructuring from 12 TRICARE regions to three, the plan for a new retail pharmacy contract, and how the new plan to govern the three regions will affect the local support and resource sharing contracts.

    With the ongoing war in Iraq and thousands of military personnel deployed in the Persian Gulf, I am particularly disturbed by the emerging results of recent General Accounting Office reviews that show the force health surveillance programs conducted by the military services do not comply with either the department's or Congressional guidelines.

    And all of us wish to understand why this situation exists more than a decade after Desert Storm and years after Congress mandated the establishment of such a force health surveillance system for deploying service members.

    We will also, I hope, explore today issues surrounding TRICARE Standard and assertions that users, especially military retirees, are having difficulty in finding providers.

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    Finally, we have continuing concerns about health care for mobilized reservists, the security of TRICARE beneficiary information, and the apparent desire of the Department of Defense to restore the requirement that all TRICARE Standard users obtain non-availability statements before obtaining care from civilian providers.

    And with that, before I introduce our first panel, let me yield to our ranking member, a gentleman with whom we have fought many battles and sometimes very successfully. And when they were not, not because of his failure—he is been a real lion in support of these programs. And I appreciate him being here today. Dr. Vic Snyder?


    Dr. SNYDER. Well, thank you, Mr. Chairman. Thank you for your kind words. Ironically, gentlemen, I am using my time to apologize because I am not going to be able to stay here. And the bigger irony is because of my own personal health situation. So I am going to cut out on you. But as you all know, I am a family doctor and care greatly about these issues. And I have a couple staff members here to follow along. But thank you all for being here on this very, very important topic.

    Mr. MCHUGH. Thank you. And appreciate all you have done. And take care of yourself. You are awful important to us.

    And with that, let me welcome our first panel. And by way of introduction, I am not sure which order they are in. But I am going to read them as they are listed here.
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    The Honorable William Winkenwerder, MD, MBA, Assistant Secretary of Defense for Health Affairs, Lieutenant General James B. Peake, the Surgeon General of the United States Army, Commander of the U.S. Army Medical Command, Vice Admiral Michael Cowan, Surgeon General of the Navy, Lieutenant General George P. Taylor, Jr., Surgeon General of the Air Force. The statements gentlemen, that you have submitted and for the record will be entered in their entirety without objection to that record.

    Phil, do you have any objections?

    Dr. GINGREY. No.

    Mr. MCHUGH. No. Good. Well, without objection, that is so ordered. And I appreciate Dr. Gingrey's consideration there.

    I should note also for the record in addition we have received statements for the record from David R. Nelson, President of Sierra Military Health Services, Incorporated, David J. Baker, President and CEO of Humana Military Health Care Services, James E. Woys, who is President of Health Net Federal Services, Incorporated and Lawrence A. McAndrews, President and CEO, National Association of Children's Hospitals and finally, the Fleet Reserve Association. Without objection, those statements, too, will be entered in their entirety into the record.

    [The prepared statement of Mr. Nelson, Mr. Baker, Mr. Woys, and Mr. McAndrews along with the statement from the Fleet Reserve Association can be viewed in the hard copy.]
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    And I do not believe we are lined up as I read them. In fact, I know we are not. But we are going to stick with the program as I did read them.

    So, Dr. Winkenwerder, thank you, sir, for being here. And our attention is yours. And we look forward to your testimony, sir.


    Dr. WINKENWERDER. Great. Let me make sure the microphone is on. It sounds like it is. Fine.

    Mr. Chairman, distinguished committee members, it is an honor to have this opportunity to address you and to report on the military health system and the opportunities and challenges that lie ahead for us. With your permission, I will summarize my written statement.

    I want to begin by adding my personal condolences to those of President Bush and Secretary Rumsfeld for the families of those that have been injured, captured or those who have died since operations began late last week. Each of these families and the individuals are in our prayers.

    Our country's ultimate weapon against any enemy—and I think we have seen this in the conflict so far—is a valor, the bravery of the men and women in our armed forces who serve the cause of freedom. They are the most powerful force on earth. But in this case, they are a force for peace and for the liberation of the Iraqi people. On behalf of all the men and women in medical service to our forces at sea, in the air and on the ground, I want to recognize the cause for which many have now given their lives and for the ongoing safety of everyone engaged in this conflict.
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    The courage, skill and discipline of our military medical personnel is matched only by their swift high quality and effective medical care which is unlike any armed force in the world. You have already seen reports by the embedded media of heroic acts of the U.S. armed forces medics to save lives. For example, the rescue missions of medical evacuation (MedEvac) crews and Ford surgical teams. And these have been truly, truly impressive.

    I think we can all be assured that such acts will continue until our final mission is complete. In Operation Iraqi Freedom, we have more than sufficient capability to move casualties from their point of wounding to any level of care that might be required. We have more than sufficient medical supplies, including blood supplies for all of our troops operating in the field.

    Our medics and soldiers are trained, equipped and prepared to operate in a contaminated environment if necessary with equipment, decontamination materials and medical antidotes. We are prepared for what Saddam Hussein might attempt to deliver to the United States forces.

    As the Assistant Secretary of Defense for Health Affairs, my highest priorities are protection of the U.S. forces and ensuring the highest quality health care services for all of our beneficiaries and effective management of the Defense Health Program.

    The budget put forward for the 2004 Defense Health Program is again, in my view, a realistic assessment of our financial requirements. The president's budget request anticipates a nine percent cost increase in private sector health care costs for the department and a 15 percent growth rate for pharmaceutical costs. Both of these are in keeping with what we are seeing in the rest of the health care economy in the country.
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    With respect to medical protection to U.S. forces, my office and the service medical departments have taken several important steps in providing greater medical protection for our service members just over the past year. In June, 2002, we resumed the anthrax immunization program.

    To date, more than two million doses of anthrax vaccine have been safely given to more than 600,000 service members. There are those that work with General Peake's staff that support this directly. And they have just done an outstanding job, in my view and have rectified many of the problems that others have cited in the past.

    In December, 2002, President Bush announced the federal plan to resume smallpox immunization for selected civilian and military personnel. In just three months, the Department of Defense (DOD) has vaccinated more than 350,000 service members against smallpox. And we have instituted a very aggressive safety program. We have seen only a few significant or severe side affects. And in fact, all of these individuals have been successfully treated and are returning to duty.

    Force health protection extends well beyond these vaccination programs. Our measures provide layers of protection to our forces, from chemical, biological and radiologic exposures. We have instituted polices for pre and post deployment assessments. I am pleased with the increasing level of cooperation between DOD and Veterans' Affairs Department to protect and care for our deployed forces and veterans. I am confident that our forces in the field are the best protected fighting force in the world.

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    In order to sustain our medical readiness posture and to attract and retain the best qualified Americans for military service, we continue to work to improve our high quality, worldwide military health care system. We remain vigilant regarding access to care for all of our beneficiaries. We continuously monitor the adequacy of civilian networks that we work with.

    And we are particularly focused on this issue today as military medical deployments increase and our direct care system is required in some cases to refer care to providers in our civilian networks. Although there are a few instances where access has been impacted by current operations, overall access remains very good.

    The department has introduced several initiatives to provide an easier transition to TRICARE for the growing number of reserve component members and their families called to active duty. We made some permanent changes to the entire health benefit package just a couple of weeks ago. And would be glad to go into that later and answer any questions you might have relative to that. It was all very well received by the reserve community.

    Last August, we issued requests for proposals for a new generation of TRICARE contracts. We have worked on this very hard over the last year. In January, we received competitive bids for each TRICARE region. There is good competition in every region. We are now evaluating those bids.

    As we approach the implementation of our newly designed TRICARE contracts, I assure you, Mr. Chairman, that the surgeons general and I are committed to a seamless transition and to improve service for our beneficiaries. We do not want to let the good and improving track record we have achieved slip in any way. In fact, we are looking to further improve it.
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    We are exercising regular oversight of this process. We will apply the lessons of previous transitions to test our systems and to ensure that our contractors adequately staff for transition efforts. The transition to TRICARE for Life (TFL) was good. This one is bigger. It is more complicated. It must be better. Our lead agent offices will have a critical role in this transition as well.

    For 2003 and early 2004, we will have fully operational TRICARE contracts that continue to utilize the lead agent staffs in overseeing contractor performance. As new contracts are awarded, there will be a migration of lead agent staff responsibilities to the regional and local health care market management teams. Lead agent market management offices are all located in areas of significant military medical capability and sizable beneficiary populations.

    Ensuring we maintain skilled staff across the Military Health System (MHS) remains a top priority for me. And I am pleased that we are able to use to the critical skills retention bonus this year to retain a significant number of medical personnel in critical specialties. Thank you for providing the department with that flexibility.

    It was important to our efforts. The Military Health System is incorporating new technology into all aspects of our operation. And the systems we are putting into place will put us in the forefront of medical care systems and health care delivery worldwide.

    Electronic sharing of health information provides really great opportunities and great advances in patient safety, reduced errors in claims processing and improved customer service. But there are risks in electronic communications that must be identified and measures implemented to prevent or manage those risks.
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    The criminal theft of personal patient identification information from one of our TRICARE contractors in December that came to light serves as a stark reminder of this risk. I think we learned a lot of lessons from that, and we are applying those lessons to ensure that that does not happen again.

    We are establishing DOD standards beyond those commonly seen in the private sector to protect the privacy and confidentiality of all patient information. I am pleased with DOD's relationship with the Department of Veterans Affairs (VA) and the increasing levels of cooperation to protect and care for deployed forces.

    We have reached a number of agreements that will increase sharing in joint planning, a significant role in our networks for the VA. And we are more closely collaborating on issues like deployment health and even things like future planning of medical facilities.

    Mr. Chairman, our responsibility to provide a world class health system for our service members, our broader military family and to the American people has always been recognized and supported by the Congress. On behalf of the men and women in the U.S. armed forces and each of those who provide military medical care throughout the world, we are grateful for your continued support of the Military Health System.

    That concludes my remarks. And I along with the surgeons will be prepared after, I think, they give their comments to answer any questions you might have.

    [The prepared statement of Dr. Winkenwerder can be viewed in the hard copy.]
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    Mr. MCHUGH. Thank you very much, Mr. Secretary. And thank you again for being here.

    General Peake, welcome, sir. And we look forward to your comments.


    General PEAKE. Mr. Chairman, Congresswoman Sanchez, Congressman Gingrey, it seems that each time that I come before you as the Army Surgeon General, I am talking about the extraordinary times that we are in and the extraordinary change since the last visit. And last year in the post 9-11 events, even Afghanistan had begun.

    Our Army medics were distinguishing themselves on the battlefield there in the same traditions they had for 227 years. And this year we are engaged in a major operation. And again, Army medicine in the joint and coalition context is part of the most forward combat formations that are advancing on Baghdad as we sit here.

    We are with the special operators. We are with the units that came out of Europe. It is a medical force of active and guard and reserve, truly the Army, as General Shinseki always talks about total force. Forward surgical teams that we did not have in Desert Shield, Desert Storm are now standard and are with the forward brigades as they advance.

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    EMTB, Emergency Medical Technician Basic Level trained medics with 16 weeks training, not ten as it used to be are now in the ranks of our combat medics. Collective protection in the form of a Humvee mounted chemical, biological protective shelter and chemically protected hospital sets provide an environment where the medical mission can continue in the face of contaminated environments are fielded. And they did not exist during Desert Shield, Desert Storm.

    The payoff from all of this kind of thing comes from a kind of an e-mail I got from General Waitman, our medical general officer on the ground this morning. It talked about a Marine, multiple gunshot wounds, operated on by the forward surgical team. Bleeding was controlled by ligating the artery behind the knee, the popliteal artery.

    Within an hour, a cardiothoracic surgeon at the 86th Combat Support Hospital where the patient was transported to had repaired the damaged artery—his vein, bypassed graft. And 12 hours later, the Marine had a viable leg and not an amputation.

    Well, all these changes in structure and equipment and training do not come overnight, but with years of work by your uniformed military medical folks whose quality base comes from the direct peer system. That is where we train, and that is where we retain the medical men and women of our force.

    It is where the shared culture with those we serve really is bonded. It is where the trust and confidence of the soldiers and the soldiers' family and their medical system is built. It is the base for our ability to mobilize the force, medically, and to maintain our institutional continuity of care even when the family doc is off to join his deployed unit.
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    TRICARE and its network of contractors has given us a great tool to assist in this complicated mission. TRICARE Prime Remote for active duty family members and the application to our mobilized reservists has been a great step forward in the uniform benefit. I am excited about the opportunities that we see in the revision of the TRICARE contracts. There is lots of work to be done in the transitions. But we will get the health care focus where it is done locally where it belongs.

    Quite frankly, it is your support for those things as mundane as direct hire authority for our civilian medical specialties to ensuring our ability to do military relevant trauma research and chem/bio research to providing a benefit that has restored the trust and confidence of our retirees to your unwavering support for the systems that provide, not just adequate and austere care, but rather the very best of people and equipment that we put forward on the battlefield just as we are doing today.

    And so I thank you for that and for the opportunity to be here today.

    [The prepared statement of General Peake can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you very much, General. And we appreciate your being here today and for your continued service.

    Next we look forward to the comments of Vice Admiral Michael Cowan, as I have said, Surgeon General of the Navy. Admiral, welcome to you, sir. Good to see you.

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    Admiral COWAN. Thank you, sir.

    Mr. MCHUGH. And our attention is yours.

    Admiral COWAN. Thank you, Chairman McHugh and distinguished members. I am happy to have the opportunity to share with you Navy medicine's accomplishments and our plans for the future. I am pleased to have the chance to serve this Nation in uniform during this time of challenge and to speak about our successes and future direction.

    Of course, foremost on our minds is the U.S. global war on terrorism and our current military efforts in Iraq. These are momentous times. And I confess that the responsibility is sometimes an awesome and daunting experience.

    Navy medicine carries out these responsibilities through a program called force health protection, which means fielding a healthy and fit force, protecting that force against all possible hazards, providing world class restorative care for sickness or injury from the fox hole to the ivory tower and providing quality health care for life for our retirees.

    We are doing all of that today. Navy medicine joins Air Force and Army medicine and our TRICARE partners in joint operations throughout the theater in the war in Iraq and wherever our troops deploy.

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    A Marine general eloquently commented on the importance of Navy medicine saying no Marine ever took a hill out of the sight of a Navy corpsman. At the same time, our military medical treatment facilities, medical reserve forces and TRICARE partners at home are providing health care to the families left behind as well as retirees who bore the Nation's past fights.

    To these, Navy medicine is family centered. The health of an individual depends on the health of his family or her family. And health is more than the absence of infirmity or disease. It is a complete state of physical, mental and social well being. And that is why we are entered this era that we call family centered care to promote the health and welfare of the whole family as paramount to the health of the service member.

    Accordingly, military medicine has made moves and investments from a system that provided mostly periodic and reactive health care to one that has invested its portfolio heavily in health, health promotion, disease prevention and family centered care.

    And I tell you with no sense of irony that services such as family-centered perinatal care, having a baby, are readiness and retention issues. One might think combat support and having babies are worlds apart. But they are not. Our warriors love their families foremost. We understand that, and we are therefore, there for all the health needs of the entire family.

    As we move into this new millennium, our service members are going to be challenged to respond to a greater variety of challenges worldwide. This means flexibility of our deployable medical assets capable of responding to the full spectrum of missions. And that is now more important than ever. Navy medicine is more flexible now than we were a few short years ago. But the exigencies of the world continue to move, and the world we live in makes this a work in progress.
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    Finally, I would take the opportunity to note that the global war on terrorism has been a watershed for military medicine as well as American medicine in general. The aftermath of the terrorist attacks of 2001 have shown us that Americans are vulnerable in our homeland and that the very nature of threats against us has changed.

    We understand conventional violence and are now learning to understand biological and chemical violence. American doctors are good at dealing with germs as disease. And now we must learn to cope with germs as weapons.

    And finally, the military must learn to protect the citizenry of the United States, not only by deploying overseas to fight our Nation's battles, but to protect our people even in their own homes. America's medical and public health infrastructure will need to become part of a defensive weapon system in ways never before imagined.

    And in partnership with other federal medical agencies and the medical system of the Nation, military medicine will be an important part of that shield that will serve America well in these uncertain times.

    I still wear the cloth of my Nation after more than 30 years of service. And one reason I do so is the opportunity on a daily basis to associate with some of the finest men and women this Nation has ever produced, Army, Navy and Air Force.

    We can all be proud of all of them as they provide selfless and courageous life saving services at home and abroad and wherever American interests are served. Thank you, sir.
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    [The prepared statement of Admiral Cowan can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you very much, Admiral.

    Last, we are delighted that General George Taylor has been able to join us, Surgeon General of the Air Force. And with that, sir, we look forward to your comments.


    General TAYLOR. Mr. Chairman and members of the committee, it is a pleasure to be here today for the first time. It is also my very great privilege to be representing the Air Force Medical Service, a total force, active, guard and reserve dedicated to providing outstanding force health protection to our armed forces.

    Our military finds itself engaged in war on multiple fronts. In fact, a greater percentage of our troops are deployed in more locations for longer periods of time than at any time since the Vietnam War. But I assure you we are ready for this.

    The Air Force medical service brings important capabilities to support any operation or contingency and provides agile combat support to the Nation's air expeditionary forces, our sister services and allied forces, both at home and abroad. And we have been transforming for many years. Since the first Gulf War, we have achieved improvements in every step of the deployment process, from improving pre-deployment health to post-deployment screening and counseling. We believe in a life cycle approach to health care that starts with accession and lasts as long as the member is in uniform and beyond.
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    As we deploy, we are now sending a more fit and healthy fighting force for which we will have the best fitness and health baseline ever. Our medical personnel are also more prepared than ever. Training such as our advanced trauma training and readiness skills verification programs assure our wartime skills are current.

    Expeditionary medicine has enabled us to move our medical forces forward rapidly as in the initial deployment during Operation Enduring Freedom and now during Operation Iraqi Freedom. The capabilities we bring to the fight today provide troops a level of care that was unimaginable ten years ago, capabilities that make us a lighter, smarter, faster, much faster medical service.

    Our preventive medicine teams go in on the very first airplanes into a new location. This small team of experts gives us vital food and water safety capability. They begin then collecting environmental and hazard data, work closely on tent city site selection and provide basic health care.

    Now we may not beat CNN to every scene, but our surgical units are light, highly mobile, expeditionary medical units, EMEDS, will be on the ground shortly thereafter, perhaps within as little as three to five hours. EMEDS are comprised of rapidly deployable medical teams that can range from large, tented facilities with sub specialty care to five person teams with backpacks. These five person, mobile field surgical teams or MFS, travel far forward with 70 pound backpacks. In them is enough medical equipment to perform ten life saving surgeries anywhere, anytime, under any conditions.

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    During a six month rotation in Operation Enduring Freedom, one of these MFS teams performed 100 in the field surgeries. Thirty-nine of these were combat surgeries. When our sick or injured troops must be removed from theater and transported to definitive care, we have a state-of-the-art air medical evacuation system.

    Our newly created patient support pallets are rolled onto any cargo or personnel transport aircraft, unfolded, unpacked and within minutes, convert that aircraft into an air medical evacuation platform, a monumental advancement from our traditional use of dedicated aircraft like the C-9 or the need to perform extensive reconfiguration of our other lift aircraft. This saves cargo space. But most importantly, it saves lives.

    Once aboard the aircraft, our professional, highly trained active, guard and reserve air medical evacuation crews assure a safe flight envelope for our injured troops.

    Another major advance since the Gulf War has been our ability to move large numbers of critically injured patients. Our critical care air transport teams can attend to the patient throughout flight providing life saving intensive care in the air.

    And while en route, we now rely on a DOD automated system called traces to track the patient from point of pickup to point of delivery in real time. In fact, last year in support of Operation Enduring Freedom, we transported 1,352 patients of whom 128 were critically ill or injured.

    It is important to note that these new programs can be woven seamlessly into the joint medical capability. This joint service interoperability was demonstrated during the crash of an Army Apache helicopter in Afghanistan last year. The two pilots had massive facial and extremity fractures. The injured pilots were treated and moved by Air Force para-rescue men who had been delivered to the site by our Army special forces helicopter crew. The two were then stabilized by an Army forward surgical team, transferred to a waiting C–130 and evacuated out of theater by a C–17. In flight, they were restabilized by an Air Force critical care transport team and landed safely at a military base in the European theater, all within 17 hours.
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    This is just one seemingly unbelievable but in fact, increasingly routine example of our integrated medical operations. Today the three medical services have built an interlocking system of care for every airmen, soldier, sailor, Marine and Coast Guardsmen in harm's way.

    While our troops are in theater, their health surveillance continues. We have fielded data capture mechanisms to extend and enhance our force health protection efforts. Using automated systems, we have documented and centrally stored more than 11,600 deployed patient records since 9-11.

    Tools are now in place to collect relevant environmental health data and forward them for centralized analysis. This linkage between individual patient encounters and environmental data is critical to ongoing and future epidemiologic studies.

    Another crucial element of protecting our deployed troops is assuring peace of mind that their families are in good hands in their absence. In addition to the fine care delivered throughout the military health care system, we have TRICARE networks in place to support our hospitals and clinics when needed to ensure the Air Force family is well cared for.

    We continue to optimize the care we provide in our facilities to more than one million TRICARE prime patients and 1.5 million TRICARE for Life patients. We are doing this in many ways by ensuring providers have enough support staff, that our processes are efficient and that the buildings in which we provide care are adequate.

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    Congress's support for these endeavors have made a huge difference. A challenge we continue to face is medical professional recruiting and retention. I believe the solution to this is twofold.

    First, incentives such as loan repayment, accession bonuses and increased specialty pay are beginning to make a real difference. And again, we appreciate your critical support and crucial support for this.

    Second, I believe the optimization and facility improvement projects that I mentioned will create a first-class environment of care for our outstanding, well trained and highly talented staff.

    In conclusion, as we face the many challenges of our missions at home and abroad, your Air Force Medical Service remains committed to offering our families quality, compassionate health care and to supporting our troops as they protect and defend our great Nation. I thank you for your support, your vital support that you provide for your Air Force, for our families. And I look forward to your questions.

    [The prepared statement of General Taylor can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you, General. And gentlemen, thank you all very much for your comments and as I said previously, for your presence here today.

    I want to ask a couple of questions before I yield to my colleagues. And let me preface that by saying that all of us, I know, respect, admire and deeply appreciate the job that you and those who you work with are doing.
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    We have all seen the images on, I would say, Fox News first, because that is what I watch first, but CNN and all of those networks and channels that are covering the ongoing action. And let me certainly echo the secretary's comments that our hearts, thoughts and prayers go out to all the brave men and women who are there serving now, but particularly to those who have lost loved ones and have loved ones and others that they care about so deeply who have been injured in that action. And I know as well that you are doing a terrific job. And I know also you want to do the best job possible. And that is why we are all here today.

    You heard me in my opening comments mention the General Accounting Office (GAO) which will present testimony on the second panel. And one of the several areas that they focused on had to deal with the force health protection and deployment health programs.

    We have a six year old law now that was passed in 1997 that set up a standard. And that was followed on by DOD's regulations to the department's credit to implement that to ensure a better process of pre and post-deployment health care tracking and health care in general.

    And the GAO, as I know you are aware because it is my understanding that you have all been briefed as to their findings is somewhat critical of the department's and the services themselves the throwing the entire intent of that in both the active as well as the reserve components. And parochially in the interest of full disclosure, the 10th Mountain Division, which is in my district, was used for a portion of those assessments. So I have a personal interest as well.

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    I guess the question is simply how might you respond to those GAO findings here today. And to the extent that you feel policy responses and changes are necessary, what you might be doing to meet those concerns some six years later. And Mr. Secretary, I would start with you, sir.

    Dr. WINKENWERDER. Yes. We appreciate your bringing up this issue because it is an important issue. We were pleased that the GAO gave us this information, even though they had not yet completely finished their report. It was valuable to have a heads up, and we thank them for that so that we can begin to take action.

    In fact, action had already begun to be taken on the basis of some preliminary site visits that my staff and I believe folks from General Peake's staff and maybe others had done to assess now that we are beginning to have lots of deployments how it was going. And in fact, I think the data does show it is not data that I would quibble with in terms with its relative accuracy that there were some problems with compliance with respect to the provision of the pre-deployment health assessment and post-deployment health assessments.

    So since that time, I think the word has gone out from General Peake—he can describe that to you in a moment. But I have made it clear that I expect at or about 100 percent compliance on this and nothing less than that.

    And it is very important. I will say this that with respect to the issue of compliance, and with respect to the actual information that is obtained, even though they are both important, from my perspective what is more important is on the post-deployment side. And the reason for that is we have a pretty good baseline of information.
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    We have a very good baseline of information actually on people before they deploy that is based on their prior medical history. And it is already there. And people are obviously healthy to begin with or they would not be able to serve and deploy. I think in this conflict in particular what is most important is on the back end after people are out of conflict and harm's way and are either back to home station or on their way back that we get a very high level of compliance. We are taking a look at our process literally as we speak.

    Over the last couple of weeks, I have asked a group of people representing all the services and my area of force health protection to look at that process and to ensure that it will be done, exceptionally, and done in a way that makes us all feel good, not just ourselves, but makes the service members and their families feel good six months, nine months a year or two years from now. That is the standard we need to set.

    So with that, let me turn to General Peake who I know is also on top of this issue.

    Mr. MCHUGH. Yes. And thank you, Mr. Secretary. I appreciate that. And it is comforting at least from my perspective to hear that you have sent that word out. I trust, I feel confident it has been received. But let me say to the military folks who are about to respond: The secretary's absolutely right. GAO has not totally finalized that yet, but I think we have a pretty good flavor of what their comments are.

    If all we have is GAO's comments before the subcommittee and ultimately the committee, we are likely to take those as fact, which may be totally appropriate. GAO is a great organization and done great work for this subcommittee. But if you had points of contention, I would urge you to voice them. That does not necessarily mean you are right. It does not mean you are wrong. But I think it is important to have those on the record. You may not.
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    There is a certain level of frustration, as I am sure all of you—Mr. Secretary, I know you understand that after seven years or six years, there still seems to be a failure to comply. We do not hold ourselves and Congress to that standard, but we expect all of you to do much better. So with that not rather brief preface, I would be delighted to hear from General Peake.

    General PEAKE. Chairman, I do not want to be in contention with the GAO. You know, we actually had our people join them at Drum. They were looking at Operation Enduring Freedom (OEF) and the Balkans. And what I have invited as they go to Fort Campbell to look at these, I said instead of just looking at that, how about taking a look at what we have been doing more recently with the deployments as we were informed by the earlier experience at Drum.

    And I hope that will—I am convinced that will tell a better story. But it is frankly—and it is one that we have to do a better job of. But we do have a central agency that collects this information, digitizes it, scans it in. We have the ability to collect that centrally as we were required to do. And what we are doing now, part of it, sir, is a flawed process.

    It is a paper form that then has to be mailed. And so it takes a while for the mail to catch up. I mean, now we are getting literally thousands. People would sit on them and not move them. We are correcting that aspect of it with direction to the field. The commanders are engaged. And I think as this current operation unfolds and we get all those scanned in, we are changing the process so that they can be, instead of having to be scanned in, they can be digitally collected and then transmitted.
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    And then the next piece of that, sir, is by 1 May that will be available to providers through the basically over-a-Web system to wherever the soldier is. A provider will be able to call up that form.

    And it will be essentially the first page of a digital record for us. God bless you, ma'am. And so, you know, I think that we are improving the process that will help us to be better rather than just flogging a process.

    The other thing, sir, is we have 30 million samples in our serum repository now. And we, since 1998, have been collecting extra serum sample. If somebody's going overseas and had not had one for 12 months, that is part of our HIV surveillance program. And that, I think, is working quite well.

    We are pushing to make sure that that is disciplined as well. But again, these are things that we did not have before, during Desert Shield, Desert Storm really in place.

    I do appreciate the fact that when you look at the information that we are not in compliance with, and we are making significant steps to change that.

    Mr. MCHUGH. Well, that is good to hear. And I am also glad that I kind of commented on the rather low standard sometimes we hold ourselves to in Congress. Because I just exceeded or came under that low standard. Mr. Chapla has informed me the GAO, just so they will stop writing and get in a panic, GAO is not going to testify in this particular issue. They are going to testify on the adequacy of provider networks. But we are aware of this issue, and it obviously continues to be important.
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    So Admiral Cowan, any comments from you, sir?

    Admiral COWAN. Only this, sir. Looking back at the deployment of the Gulf War, if I could use a metaphor, we sort of flew the human airplane until the engine broke. And then we went and fixed it. We have developed a cyclical and overlapping system of maintenance and repair of this human weapon system that is not just deployment questionnaires.

    But as General Peake said, serums, surveys, routine and periodic physical examinations, deployment assessments that the Navy does for all deploying forces and a variety of other screening and then protective measures during deployment. We follow through deployments now with clinical practice guidelines.

    It used to be that if the human airplane broke, every mechanic had his own approach to it. Now we approach them all in a systematic way so that we can reconstruct cause and affect in meaningful ways in real time.

    Our daily difficulty in work is certainly with execution. When we begin to deploy, deploying forces have a lot of things to do. And we constantly press and push and attempt to measure to make sure that we are doing these things as close to 100 percent as possible.

    Mr. MCHUGH. Thank you.


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    General TAYLOR. Mr. Chairman, I think you are going to be hard pressed to find any greater zealot for this than me. I was in Europe during the Kosovo campaign, the air war over Serbia. General Jumper and I would not let anybody depart their forward base until they had completed a survey to ensure that they did not have to stabilize their health and bring up any health issues that the medics could handle and document before they left. So I am a great zealot of this effort.

    The Air Force, as Admiral Cowan said, we have periodic health exams every year. The health of every airman is evaluated to ensure that they are, not only their record reviewed, by they are also questioned in terms of any new findings between the last year and this year.

    I am very confident that the Air Force has policies in place that match all of the Department of Defense instructions in this area. And in fact, the secretary of the Air Force's Inspector General (IG) inspects this process when they do their every three year inspection of our bases. So I think we will have an ongoing monitoring system in place through the independent IG in the Air Force to help us feel comfortable that we are on top of this process.

    Mr. MCHUGH. General, have you seen the—were you briefed by GAO?

    General TAYLOR. No, sir, not yet.

    Mr. MCHUGH. Not yet?

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    General TAYLOR. I understand what the findings are, though.

    Mr. MCHUGH. Any comments as of the findings? And I appreciate all of your responses in respect to what you are doing. But GAO has found that regardless of the positive intents of that, that it still does not meet up to the expectations.

    General TAYLOR. Sir, we have an execution problem that we are going to continue to stress and work through.

    Dr. WINKENWERDER. Mr. Chairman, if I might also stress——

    Mr. MCHUGH. Mr. Secretary.

    Dr. WINKENWERDER [continuing]. Actually one of the requirements in a law—and it is another element that has not been, candidly, fully complied with is the establishment of quality assurance system. And in my experience, a good quality assurance system is the best way to ensure good compliance because you have an ongoing way to keep people informed of whether there is a gap in performance or not.

    You are not waiting for the GAO to come along every couple of years to tell you if you are doing it right. That is being established. And so I think we are going to have on a regular, real time basis for each of the services as well as at an aggregate level a look into how performance is going. And that ought to keep us on track.

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    Mr. MCHUGH. Well, I know we all appreciate your words of assurances. There will come an opportunity when GAO does report that perhaps we will have the chance to discuss this further. And I know that you do not need me to say that we would certainly encourage your active participation in meeting those concerns, as I know your objective is to do the best job possible in the pre and post-deployment health monitoring area.

    I know I said I was going to ask two questions, but that first one took a bit longer than I expected. It was an important issue, and I appreciate your comments. I am just going to begin to yield to my colleagues.

    And according to the committee and subcommittee rules—in order to be recognized, Dr. Gingrey?

    Dr. GINGREY. Well, thank you, Mr. Chairman. I appreciate so much you all being here today and the testimony that you have given.

    Dr. Winkenwerder, I wanted to ask you at the outset of your remarks you talked a little bit about the smallpox immunizations that I think you said some 350,000 had been accomplished, and yes, some side affects. But they were minimal and quickly recovered.

    You know, we are having, as you know a very difficult time getting our first responders, our emergency room folks to buy into the president's program and to get vaccinated. And of course on a voluntarily basis we are trying to deal with some concerns about who is responsible if you have a real adverse reaction, you are out of work for an extended period of time. And we are going to address that in the Congress very soon. But I was a little, as a physician Member of Congress, a little disturbed by a recent report—and this is sort of anecdotal—of people who actually had suffered heart attacks after getting smallpox vaccinations. And maybe I could get you to comment on that.
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    But my sense is that if you can take 350,000 troops and vaccinate them and have minimal adverse reaction, then it may be an overstatement to suggest that we are jeopardizing people, adults, older, yes, granted. But some of those heart attack situations may be people—and we have physicians here testifying—they went into that situation and got that vaccination, and maybe they had a 90 percent blockage of their left anterior descending artery.

    And it had absolutely nothing to do with the vaccination. So people can panic pretty quickly and really wreck a program that I think is extremely important in this time. And maybe you could comment on that.

    And Mr. Chairman, if I have any more time, I will ask another question.

    Dr. WINKENWERDER. I appreciate your asking that question. I think this is a very important issue. We believe we have a lot of useful and good information to add to this discussion, to this national discussion about smallpox vaccination efforts and how best to conduct them.

    My understanding of the two cases that have been identified by the Centers for Disease Control (CDC) that involved individuals who suffered heart attacks within a couple of weeks' period of time following smallpox vaccinations, my understanding of those cases is that in both instances, the individual had underlying risk factors that would have made it not unlikely that they might have had a heart attack.

    I also in my conversations just as recently as yesterday with the director of the CDC who I stay in regular touch with—we communicate on this effort and how the program is going. It has been a mutually supportive effort.
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    My sense from that discussion is that they obviously want to do the right thing. They are concerned that there not be an overreaction to these couple of cases, that we do not have any conclusive evidence that there is any kind of causal relationship here, that it is a temporal of time relationship. But we do not know or do not have any reason to believe that there is a causal relationship.

    So it is unfortunate. I think that nonetheless, in spite of all those caveats I have just said that it does make sense that there be an additional level of screening as the CDC is recommending until more information is available. And my understanding is that they are suggesting that those with risk factors may be over a certain age.

    I am not entirely sure of all their criteria that they are planning to use. But it has been suggested that those people be deferred. That does not mean that they could not receive a vaccination, but just be deferred for the time being. And I think that is a sensible approach.

    I do not think it would make sense to stop the program or for anybody to conclude that, as some have said, that smallpox vaccine is a dangerous vaccine. I think that is an unfair characterization of this vaccine. And I think our experience proves that.

    I think our experience also proves that with a lot of careful screening on the front end—and we have excluded as many as five to 10 to 15 percent of people for medical reasons—that that combined with a lot of careful education to people about what to do post receiving the vaccine, you can really dramatically cut down on the historically reported adverse events.
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    We have actually got—our whole experience has been sent to a medical journal. It is being reviewed right now. And as you know, when it is peer reviewed, you are not supposed to comment on it. But they hopefully will let us know about that. And pending that review, we will be able to share our whole experience with the country. And we look forward to that. We hope we can do that soon, like within the next couple of weeks.

    Dr. GINGREY. Thank you. Mr. Chairman, I had one other, but I will be glad to defer to——

    Mr. MCHUGH. I appreciate that. I would ask the other members of the panel that perhaps what we ought to do is just go through and then come back if that meets everyone's agreement. I am the chairman, Mr. Chairman. Thank you very much. You are the ranking member right now, Ms. Sanchez.

    But may I say, Mr. Secretary—and I understand what you said about your compiling data and such. But you are not aware at this time of any correlation between the military inoculation process and coronary results? Is that true?

    Dr. WINKENWERDER. No, we have had no heart attack cases. We have had some cases, and this has been reported in the press. And we have shared this information with the CDC of an inflammatory reaction around the heart called pericarditis, or an inflammatory reaction that involves the heart muscle called myocarditis. And in all of those cases—and there has been a handful of them—the persons presented with chest pain, which would be normal for that condition.
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    That is usually the presenting symptom. And they were generally in the hospital for a couple of days, two or three days, usually treated with analgesics and anti-inflammatory medication, and all have resolved, and all are healthy and doing well.

    Mr. MCHUGH. That is good.

    Dr. WINKENWERDER. And that has actually been seen in earlier times and studies of military recruits. Actually there is a study from Finland that shows that that happened. So, that has been our experience so far.

    Mr. MCHUGH. Thank you. Thank you very much, Mr. Secretary.

    With that, I would be happy to yield to the gentlelady from California, Ms. Sanchez.

    Ms. SANCHEZ. Thank you, Mr. Chairman. And thank you, doctors, I guess, all of you for being here before us today. It is a shame Dr. Snyder is not here because I am sure he would be asking some more detailed questions. But I do want to go back to the initial issue that our chairman asked about. And it really stems from the fact that we know after we deploy, especially in conflicts, that when our men and women come back, they tend to have health problems. And I have never been around in the Congress to face the issues that come from that. But I know that they are very trying times.

    And so this whole question of are we assessing each soldier, airmen, seamen, woman, whatever, when we send them over, and are we recording what they might come up against, and are we bringing them back and then checking them again. I mean, it is really a three-fold process. And that is what this policy of almost seven years now says we should be doing.
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    So I would ask the surgeons, the generals, admiral, first I am going to ask you three questions. And, you know, I know you tried to answer the question before, but I did not really get a sense of are we really doing an okay job, are we doing not so good a job, or are we 100 percent there. So I would really like to know are you—first of all, the policy requires that the services implement pre-deployment, post-deployment health assessments, TB screen, DNA samples, immunizations, blood, et cetera. Are those requirements being met? Are we almost there? Are we not really there on those two things?

    Second, how are we doing for each of those services with respect to intervention and deployment health assessments as the policy says to include that in a member's record? Are we meeting the requirements? How close are we? Well, those would be those first two questions. And then I have one for our undersecretary.

    General PEAKE. I think we are not 100 percent, but we are, I think, better than when the GAO was assessing, as the chairman said, with this particular deployment. I think there has been a lot of pressure and a lot of focus really across all the services, ma'am, to comply. And it has to do with this form is one piece of it because you go through the form, and then it is reviewed.

    And then if there is something that pops out of it, that you go ahead and you deal with, you know, it sets a referral process, and it puts them into the health delivery system as opposed to just the health screening system, if you will. But I think that we are really doing a lot better job of that.

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    Part of that, the DNA, we are not at absolutely 100 percent. But I think we are very, very close with that. And we store those here. And frankly, that will be something later on that will be archived with where we are going with science and genomics and prodiomics and so forth. That will be something that we will be able to query as well as the serum samples that we are collecting and have a history on of every soldier, sailor, airman, Marine that has one of those HIV tests that we do on a periodic basis.

    We do have the regular physical examinations. In honesty, we are not 100 percent there either. People let them lapse, as happens in the civilian world, too. But in fact, you know, we have a system that looks at that. And we are starting to measure that as a metric so that we can keep track of it. I think that as we work to improve the processes, it will actually get better over time. And as we get into a digital patient record, then access to all of that information will be a lot easier.

    General Taylor mentioned about our environmental surveillance. That is something that we were sort of doing a little bit from scratch, you know, back in Desert Shield, Desert Storm.

    Ms. SANCHEZ. Yes.

    General PEAKE. We went back and we relooked and tried to redefine where the environmental hazards were. Now we all have teams that are integral to the formations that go in early and are collecting information. As a matter of fact, I was on the e-mail earlier today about, you know, we had the sand storm. Well, we are collecting the particulates because that is something that we want to make sure we will test it for heavy metals. And we will see if there is anything in it that is different than what we know. We know that there are some differences in the oil in the south and the oil in the north.
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    But, you know, we have come to that level of sophistication so that, you know, fortunately we have not had that many oil well fires. But we had a team poised, ready to go to go in and sample just for those kinds of things so that we can characterize the areas where we put our soldiers, sailors, airmen in harm's way. And then we will be able to make those kind of correlations depending on what we get from the post-deployment screening and the follow-up after that even.

    Ms. SANCHEZ. That collection being done in the field, if you will, is that being done electronically? Is that being done by paper? How are we recording this?

    General PEAKE. In the Army, we did not have the Center for Health Promotion and Preventive Medicine back 12 years ago. We have an organization that is up at Aberdeen that actually collects this data and archives this data and can do modeling with the data to actually be predictive. So, you know, again we have been informed by our previous experience. And, you know, that is not in the law or anything. But that is sort of that holistic picture that Admiral Cowan was talking about that we are all trying to build that is even further than what the law requires. But it is complimentary to it, to be honest with you.

    Ms. SANCHEZ. Admiral.

    Admiral COWAN. Congresswoman, I do not have too much to add to that. I would say that I am very confident that when we execute well, we have a very coherent system that, not only protects the individual, but then with the questionnaire, which is really an only one point in time updates upon deployment, I am very proud of our surveillance in the field and our ability to collect and extract data, identify hazards.
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    We have actually moved state-of-the-art detectors and environmental protective mechanisms into the field that nobody has had before. We put biological, bacteriological, serological laboratories that are the rival of CDC.

    Where we worry is with the fog of war and not yet having the information systems that are under development fully in place to give us scaleable information in real actionable time. We are developing theater medical information program that will be the extension of our CHCS, composite health care system, our computer system within our hospitals that will link up and allow us management visibility in real time so that where execution is not being done then we can intervene in real time. But frequently we do not have that. So I think I am simply echoing what General Peake said.

    Ms. SANCHEZ. Thank you, Admiral.

    General TAYLOR. You know, I do look forward to reviewing in detail the GAO report to figure out where the gaps are between what the policies that are in place, the findings of the GAO and to go back and look at the findings of our IG teams in this very area to see where the gaps are and acting on them expeditiously.

    We do have—as health concerns arise, they may not immediately arise after a deployment. As you know, most of the illnesses after the Gulf War were years later, months or years later. And having an ongoing system within the military to look for illnesses, and then if they are suspected to be linked to a deployment, we have a common guideline for how to evaluate those, document it to begin to build the epidemiologic base that we need to find a cause and affect relationship so we can affect the outcome of any disease if we can determine an exact cause, an exact mechanism of illness. So I believe that is very important. And I think we have the systems in place across the three services. And we just need to continue to focus on executing those.
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    I can tell you that when airmen deploy, when they get a deployment order, they get an extensive, preventive medicine briefing, their records are reviewed. Before they get on the plane to depart, they know where they are going.

    There is a public health team that tells them the hazards. We get information from the Army's—as well as the Air Force's so they know the hazards that exist in the field. And then as they deploy back, they get a similar debriefing on the way back to understand what hazards there are, what transition back to their families is going to be like and then understanding the medical requirements we have on them to ensure that we follow them up. But I eagerly look forward to seeing the GAO report and looking for those gaps and ways to improve the system.

    Ms. SANCHEZ. Thank you.

    Mr. Secretary, you talked about working on and implementing a quality assurance program. That was included in the original legislation that we passed. Why is it still being implemented if it has been six years? I mean, where are we with that? Because that quality assurance program was supposed to check and see if in fact our services are doing these other three things.

    Dr. WINKENWERDER. That is exactly right. What I am here to tell you is that it did not get done. It should have. Upon learning that it was not being done, I immediately took action to get it done. And that is what we are doing. There is nothing else to say. I am not going to try and varnish what is the facts of the situation.
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    Ms. SANCHEZ. Thank you, Mr. Chairman.

    Mr. MCHUGH. I thank the gentlelady. And to the extent that certainly, General, you know if you have not yet been briefed—and perhaps others of you have not either on this particular issue, it was my information you had. But if that has not occurred, so be it. And without trying to—Mr. Secretary, I appreciate your last comments very much. But just to give you gentlemen, I think, an idea of the dimension of the challenge you are facing—and I am just going to cite one set of statistics, and the GAO preliminary report has many.

    But using Fort Drum, as I mentioned, through three deployments of Operation Enduring Freedom, Operation Joint Guard and two Air Force deployments, Enduring Freedom out of Travis, I believe they are mostly airlifters and Operation Enduring Freedom out of Hurlburt. Those are special operators.

    Fort Drum and Enduring Freedom, those who had both pre and post-deployment health assessments, 46 percent. Operation Joint Guard out of Fort Drum, 53 percent. Travis did a better job on their OEF, 62 percent. And Hurlburt for the special operators in Enduring Freedom, 39 percent. That is deplorable.

    And so, the secretary's comments about getting this done are exactly to the point. So, we certainly, as I am sure you have heard here today, have an ongoing concern about that. And we look forward to your continued work.

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    And with that, I would be happy to yield to the vice chairman of the committee, the gentleman from Oklahoma, Mr. Cole.

    Mr. COLE. Thank you very much, Mr. Chairman. Gentlemen, first just thank you for your service to your country. I really do not have any questions right now, Mr. Chairman. I would like to, with your permission, just yield my time to Dr. Gingrey who I understand had some follow-up questions.

    Mr. MCHUGH. The gentleman is recognized.

    Dr. GINGREY. Thank you, Mr. Cole. And thank you, Mr. Chairman. Mr. Chairman, I have not had an opportunity to see that GAO report either. And I look forward to that. And I am sure there are some real concerns there. And I understand that. So when I make this statement, I do not want it to be an overstatement.

    But, you know, when General Peake was telling us about that Marine that would get to go home with a leg instead of a stump because of the wonderful care that he received in the field by great surgeons serving the military, I think that is something that makes me feel extremely proud of. And I cannot help but feel that that is more important than knowing how much fissile phosphate might be in that sand that is blowing in our troops faces over in Iraq. Now again, I do not want to overstate this, but I clearly feel that someone needs to speak up for what is good and what we should be proud of. And I just wanted to make that statement to you, General.

    I wanted to ask General Taylor. General Taylor, you made a comment, and this is something that really bothers me about the fact that medical teams in every instance do not beat CNN camera crews to the scene. And I am really concerned about that. I am concerned about the over reporting that is going on, quite honestly, the several thousand news men and women that are embedded with the troops.
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    And I do not think that they should ever, ever get to a scene before our medical response team is there. It would be just like a family coming upon a motor vehicle accident scene and seeing their loved one laying there in the middle of the interstate having received no medical care. I am concerned about that, and I would be interested in your comments about it.

    General TAYLOR. Yes, Dr. Gingrey. I mean, I would share your same concerns. And I am sure for the record, we can get the department to give you the rules that these reporters operate under. And I am sure that that kind of operation is addressed in the rules. And for the record, we will get that information back to you from the department.

    But the specific rules, there are reporting rules for all these embedded reporters. They have specific rules that they operate under because they work directly for the commander. And I cannot imagine that the situation you described is not addressed in those rules. And I am sure we can get back to you on that with the detail to set your mind at ease.

    [The information referred to can be viewed in the hard copy.]

    Dr. GINGREY. Thank you.

    I wanted to ask the secretary in regard—you were talking, going back to the smallpox issue that you had mentioned to the chairman that indeed there were some cardiac events, even with the young, healthy troops that were vaccinated. And you mentioned things like, I think you said myocarditis or pericarditis.
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    Dr. WINKENWERDER. Right.

    Dr. GINGREY. And I recognize those as being fairly serious reactions. And I wondered we have not had a case of smallpox in a long, long time in the world. And I do not know all of the symptoms and signs of even as a physician. I do not know that I would recognize a case of smallpox if I saw it.

    But are any of those cardiac events part of the smallpox syndrome? And we all know, I think, that the cure rate for someone who is afflicted with smallpox is 70 percent. There is no treatment. It just happens that 30 percent die and 70 percent, with the support of care, survive. But are some of those deaths of the 30 percent, are they cardiac related because of what the virus may do to the heart muscle? Or are these reactions that are cardiac in nature related in some way to the adjument, what is in the vaccine?

    Dr. WINKENWERDER. My understanding is that the reactions that occur with the vaccine, which is the vaccinia virus that is used in the vaccine, are due to an inflammatory response, you know, not unlike the inflammatory response you get in your arm or local inflammation, some swelling of lymph nodes, et cetera. And I do not know that anybody knows this for sure, but as a physician, I would hypothesize that maybe that affects in a very small number of people, you know, one out of many tens of thousands the pericardium.

    With respect to your second part of your question that relates to the death rate occurring from those who are affected with the variola virus, the smallpox virus, separate from the vaccine virus, I am not aware of any of those deaths ever having been attributed to cardiac causes. My understanding is that that is due to more of total body system failure due to overwhelming infection and the like, but not in any way related to cardiac problems.
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    Dr. GINGREY. Thank you.

    And Mr. Chairman, that is all the questions I had.

    Mr. MCHUGH. Thank the gentleman. We do have another panel.

    Ms. SANCHEZ. I have one more question.

    Mr. MCHUGH. Well, I do, too. I will go first. No, you can go first. I yield to Ms. Sanchez.

    Ms. SANCHEZ. I am sorry. I thought you were going to go to the next panel. So, I just——

    Mr. MCHUGH. Well, I was going to say but before we do that, I am going to—so, please.

    Ms. SANCHEZ. Okay. My question was we are hearing some grumblings that in this supplemental, the $75 billion supplemental that the president sent a couple of days ago to us, that there may not be enough to get your job done. Is that true? Do you need more funds?

    Do you know what funds are included there for all this extra medical situations that are going on, not just out there, but also as we hopefully get through this battle and what we need to have in place and for the Iraqi people? What are you all thinking? And I guess I would direct it to the three heads of the services.
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    Dr. WINKENWERDER. With all due respect to my colleagues, let me try to take that one because there is an administration issue here.

    No, you cannot. Well, I must. Let me just say——

    Ms. SANCHEZ. But you are going to tell them not to tell me the truth.

    Dr. WINKENWERDER. We have requested additional funds in the supplemental that would pay for all of the medical care that will be provided to the reservists who have been called up and their families. And that is a sizable number, I think, in the range of $300 million. I do not believe the supplemental includes some other costs that we think could be associated with the war. And we are working with our own comptroller and with the Office of Management and Budget (OMB) to identify those costs and would surely want our own internal leadership to know about what we think those costs are. We have no inhibition about expressing what we think our costs are going to be.

    It is in everybody's interest to identify those and to get the funding to pay for it. But we do not have numbers on that just yet. But there could be some other costs that will relate to a variety of issues.

    Ms. SANCHEZ. So do your comments then basically tell these three gentlemen that whatever the costs that they are expending and making sure that they are providing the medical care they have to in this arena that it is in their budget already?
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    Dr. WINKENWERDER. We believe that our budget, other than the possible costs associated with the war is adequate and that we are well funded, fully funded for this current fiscal year for 2003. But we have some additional costs associated with the war.

    Ms. SANCHEZ. And those are included in the supplemental? Are you sure, do not really know if they are—that is in there?

    Dr. WINKENWERDER. Some of them are. I have tried to put them into two buckets. One is the bucket that is associated with the costs of caring for all the reservists and guardsmen that are called up. And that is a real cost. And that may be the biggest single component. It is about $300 million, we believe. And we put that forward. And my recollection is that is part of our supplemental request.

    There are probably some additional costs that we are working through and trying to figure those out what they are. For example, the fact that if there is not enough capacity in the direct care system, we have to refer some people into the network. That might cost more money. But we are trying to identify those. We are in the active process of doing that right now. And we will be making that information known so that we are sure that we are fully funded.

    Ms. SANCHEZ. Yes. And I assume you gentlemen all agree with him?

    Dr. WINKENWERDER. With that, I would welcome my colleagues to comment further.
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    General PEAKE. Well, all of the military is forward funding this war, as you know, ma'am. And there are costs certainly beyond what Dr. Winkenwerder said, as he said, beyond just the care of the reservists.

    I mean, when you give folks 90 days of medications to take forward, I mean, that alone is a chunk of money that was not in our programmed budget, just as an example. So there are a number of things like that, the increased security, all of those things that go along with this forward funding of the war that we look forward to the supplemental and look forward to finding out what is in it.

    Admiral COWAN. I would only add we are a team in the Defense Health Program (DHP) in that we build our budget together, and we have a single budget. So we provide our input into Dr. Winkenwerder's office. And the supplemental for health care goes forward in that lane.

    Each of the services for its deployment and war fighting, including war fighting medical so that the expenses that we incur in Iraq, for example, come through Navy supplemental. So we submit our supplemental requirements for Navy that way for the Defense Health Program through this way. And they are both works in progress.

    General TAYLOR. That is exactly right. You know, we do not know what the final costs are. The department has done its best to estimate the war fighting costs. And the doctors that are operating forward, their medical supplies, the cost of transportation, those things are all captured in the supplemental.
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    The Defense Health Program costs are captured, as Dr. Winkenwerder supplied to you. And we are continuing to gather the data to find out what the affect of the war, the global war on terrorism is on the department.

    Ms. SANCHEZ. So you are planning, basically, on a second supplemental is what you are telling us, Doctor?

    General TAYLOR. Well, no. I cannot speak for the Department of Defense. Look, we are in ongoing discussions with our comptroller. They want to work with all components of DOD to put together one comprehensive, sensible package for OMB and the Congress to consider. And we will be working with them. I can assure you we will be seeking to represent our interests. We would be crazy if we did not.

    Ms. SANCHEZ. Okay. Thank you. And thank you, Mr. Chairman, for your indulgence.

    Dr. WINKENWERDER. Thank you for your interest and support.

    Mr. MCHUGH. I cannot speak for the department and the administration, either. But I would not be stunned to see another supplemental to cover this war cost and obviously the time after. And certainly would expect that DHP be an important part of that.

    A whole host of questions, many of which were mentioned in my opening comments, many of them were alluded to in your comments, gentlemen, that we wanted the reservists care and the availability of health care and the challenges that had been faced there and the direct new national pharmacy benefit and how that all is going to work. But we are going to, with your cooperation, we will submit those in written form for the record. But I would like to ask one more question because I think it is of such all encompassing concern.
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    I did mention that every time we have had this kind of transition in the military health care system as we are ongoing now, there have been problems. And I do not say that with any great shock. I mean, this is a big job. And it would be a big job to the next generation of TRICARE TNEXT if that is all you were doing.

    And obviously when you are out in the Middle East and some of the other places doing the most important part of your job, and that is attending to those men and women in uniform who are in battle situations or just generally deployed, that is the most important thing you can do. So it becomes particularly challenging.

    First, I guess a technical question. That is, do you expect the next generation of TRICARE contracts to meet the current June, 2003 time frame? And if not, how long do you think the actual award process might be delayed?

    And, second, of all, can you just give us a thumbnail sketch as to what you are attempting to do to smooth out the challenges that have to occur, particularly to the beneficiaries with respect to that upcoming, substantially different TNEXT round? And whomever would like to start first. Can I get a volunteer?

    Mr. Secretary, you are a good soldier, airmen, Marine, Coast Guard.

    Dr. WINKENWERDER. Well, with respect to the June 2003 date, I would not have you hold your breath for that date. We are working hard to stay on track. I would anticipate some additional time beyond that at which point we would obviously hope to make contract awards.
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    What is most important, we believe, in this particular point in time is a process of evaluation that is fair and is not challengeable on the basis of the way we have approached the various bidders. So we are seeking to be very careful and scrupulous with respect to careful evaluation of each of the bids and bidders. But that said, we have to keep on track. And we are pushing to do that. I have established with respect to, not only that piece of this entire process, which is the contract award and the contract transition aspect of this entire transition, but the many components to it.

    I have established a transition team, a transition management team and transition management process that breaks the transition down into about four large components. Each of those components has a leader. We have a leader organizing the whole effort, Retired General Nancy Adams, very talented administrator. And she has been brought into the organization just for this purpose.

    And so, there are lots of details. And those details need to be managed very actively, aggressively and early on. And my goal is that when we are within 60 to 90 days of the actual transition taking place, that everything is done or most all the work is done. So, we are hard at work even now on this process. And each of the services and each of the surgeons has been very involved in it. I welcome any comments they have on how we are doing this.

    I would agree, sir, that we are definitively engaged in trying to figure out how to get this thing done right. You start looking at what the potential advantages are to our people. One of the things I am sure you heard is the problem with portability that we have had. You know, we are nomads. You know, and every time you shift around and have to shift contract, well now we will have three instead of the multiplicity that you alluded to in your opening remarks.
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    We will have a common pharmacy opportunity so that it does not matter whether you are temporary duty (TDY) or on leave or traveling around. If you need your medications, you can get them. And it will all wash back in a common pharmacy approach. So, I mean, there are some real advantages to us if we get this thing done right. And so, we are all attuned to that.

    And then, making sure that the contract support wraps around and supports the MTF, the military treatment facility, you know, at the Drum or wherever. In getting the people at that level that are really able to work closely with the local community. And I think it really has an opportunity for making us better.

    Mr. MCHUGH. Admiral or General, anything to add? Do either of you disagree with the secretary?

    Admiral COWAN. No, sir. I would have nothing to add.

    General TAYLOR. I think we are very comfortable with the processes in place. Obviously during the middle of the transition, all of our medical treatment facilities will be on high alert looking for any problems in the implementation. But we have a very good running start and a great history of having done these contracts in the past and the issues that arise. And I am confident that these teams will pick up issues ahead of time and have battle plans in place to take care of them.

    Mr. MCHUGH. General.
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    General PEAKE. Just going back to Ms. Sanchez' point is that, you know, we are in an industry that has a cost growth. And there are transition costs. And we are going to have to figure out how to get all of that lined up. Many of the functions are coming back to the direct care system that I talked about in my remarks. And, you know, we are going to have to make sure that we have the ability to do the things that come to us as part of this transition. And as we get programmatic about it, I think we will be able to do that.

    Mr. MCHUGH. Well, I appreciate that comment. And obviously, we are going to want to keep a close eye on that. I mentioned it is a big, big job. And General Peake alluded to some of the benefits increased, enhanced benefits that can go to the beneficiaries. And I would like to think that is our primary intent. But you have a lot of work in front of you, and I wish you all the best on that.

    Also one other question for the record that we want to get to. It has to do with the issue of the data, personal data invasions, revelations—and such. And this is not an issue that you face alone. I mean, that kind of challenge is prevalent across the entire society now anywhere where you use a computer to register background on credit cards, bank accounts, health care records. And I think all of us understand health care records are particularly sensitive. So, appreciate your paying particular attention to that question.

    But we are approaching two hours, and you have all been very gracious with your time. I do not want to press or you all may need medical care here if we make you stay any longer. So gentlemen, thank you for your service. Thank you particularly for the great job you do out in that battle field and with those deployments. And we look forward to working with you to help you do an even better job. Thank you.
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    Dr. WINKENWERDER. Thank you.

    Mr. MCHUGH. With that, we would respectfully dismiss the first panel and welcome the members of our second panel who I hope are still with us.

    Ladies and gentlemen, thank you for joining us. Thank you for your patience. We welcome you and look forward to your comments. And let me, before we do get down to those comments, introduce the distinguished members of this panel.

    First, we have Ms. Sue Schwartz, DBA, RN, Co-Chair of The Military Coalition's Health Care Committee, Robert Washington, Sr., Co-Chair of The Military Coalition's Health Care Committee, Marshall Hanson, Captain, United States Navy Reserve Retired, National Military Veterans Alliance, Deirdre Parke Holleman, Esquire, National Military Veterans Alliance, Lieutenant Colonel David B. Vann, United States Army Retired, Military Retiree Grass Roots Group and Marjorie Kanof, MD, Director, Clinical and Military Health Care for the U.S. General Accounting Office. Thank you, as I said, so much for being here.

    And Dr. Schwartz, we will start with you and then proceed down in the order that I have read them. Welcome.


    Dr. SCHWARTZ. Thank you. Mr. Chairman, Congresswoman Sanchez and distinguished members of the subcommittee, The Military Coalition appreciates this opportunity to present our views on the Defense Health Program. The Coalition would like to express our unwavering support for the Defense Health Program and for our medical service corps' men and women who are serving in harm's way in support of the war on terrorism as they fulfill the military's readiness mission.
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    Today I would like to reiterate our appreciation for the landmark health care initiatives that this subcommittee has initiated over the past few years, especially for Medicare eligibles and for active duty family members. The Coalition urges the subcommittee to now turn their attention to revitalizing the TRICARE Standard Program because complaints from those in Standard far exceed those in Prime. We ask you to distinguish between standard and prime in your efforts to improve TRICARE.

    The Prime benefits certainly deserves its success stories. However, continued focus on Prime only serves to obscure the very real and chronic problems with the standard benefit. Based on executive and legislative branch requests, the Military Officers' Association conducted a Web-based survey to examine the extent to which standard beneficiaries are having difficulties accessing primary and specialty care and where they are having these problems. The preliminary results of the survey are presented in our written statement for your review.

    Respondents to the survey expressed their frustrations about difficulties finding providers who will accept new TRICARE patients, inaccurate participant provider lists, the impact that low reimbursement, claims processing and administrative hassles have upon provider participation, the lack of understanding on the part of providers about the TRICARE Standard benefit and lack of adequate support to assist them in finding a provider who will care for them.

    Another factor that became apparent from the survey is the large number of respondents who are forced to pay the entire amount of the bill up front at the time of service. This places a significant financial burden on these beneficiaries as they finance the benefit out of their own pockets.
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    More disturbing, it appears that some of these beneficiaries are unaware that they can submit their own claims to TRICARE standard to receive partial reimbursement based on TRICARE maximum allowable charges. Simply stated, Standard beneficiaries are neglected by DOD. No effort is made to reach out to these beneficiaries, to educate them about the extent of the standard benefit or support them in locating a provider.

    And The Coalition sees no solution on the horizon. The new TRICARE round of contracts contains no requirement or incentives to assist standard beneficiaries, recruit standard providers or provide up to date Standard provider lists, thus leaving beneficiaries on their own to use the yellow pages as a handbook to determine if providers are willing to accept Standard patients.

    We believe DOD has the same obligation to Standard beneficiaries as they do Prime to assist in locating providers and providing beneficiary education.

    To address this problem, The Coalition urges the subcommittee to take action to require DOD to develop and fund a program to educate beneficiaries about the Standard benefits, to assist TRICARE Standard beneficiaries in locating a provider and tell them what DOD will do to assist them if they cannot find a provider who will accept them as a TRICARE Standard patient, develop and fund a program to educate civilian providers about TRICARE Standard, recruit Standard providers and develop and maintain resources to indicate which providers are and are not accepting new Standard patients.

    Despite the numerous initiatives that this subcommittee has promoted, members in many areas still have difficulty in finding providers willing to accept TRICARE because of low and slow payments and burdensome administrative requirements. TRICARE rates are tied to Medicare fees that have been declining despite rising provider costs.
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    As more providers are refusing to take new Medicare patients or dropping out of the program, they are even more reluctant to be TRICARE providers based on tax difficulties with TRICARE and CHAMPUS. We appreciate the recent action that this Congress has taken to prevent further cuts in Medicare and TRICARE payment rates. Our TRICARE beneficiaries deserve the best health care our Nation has to offer, not the cheapest available.

    We ask the subcommittee's support of any means to raise TRICARE Medicare rates and to reduce or remove administrative impediments to provider participation. New requirement in last year's authorization act to make TRICARE forms and procedures match Medicare is a good example of the needed action.

    The Coalition urges the subcommittee to consider additional steps to improve provider participation. Specifically, we hope you will urge DOD to use their existing authority to raise TRICARE reimbursement as necessary to attract providers and to further reduce TRICARE administrative requirements.

    We ask the subcommittee to consider authorizing a demonstration project where we can test if raising fees for Standard providers can actually increase participation in certain areas.

    Mr. Chairman and distinguished members of the subcommittee, we thank you for your strong, continued efforts to meet the health care needs of the entire uniformed services community. My colleague, Bob Washington will share with you additional Coalition priorities.

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    Mr. MCHUGH. Thank you. And before Mr. Washington, we hear from you, let me just state for the record—I erred to do so—that we have all of your testimony as prepared in its entirety. And without objection it will be entered in its entirety into the record. So we have six panelists here, and I know all of your time is valuable. So if you could summarize your written statements, that would be helpful.

    And Mr. Washington, we thank you for being here, sir.


    Mr. WASHINGTON. Thank you, Dr. Schwartz, Mr. Chairman, Congresswoman Sanchez and distinguished members of the subcommittee. Again, thank you for allowing us to present our views. There is still work to be done with TRICARE, and we ask for your support.

    The Coalition believes funding for this year's Defense Health Program is adequate. However, it does not address the growing requirement to support the deployment of our forces. We ask the subcommittee's oversight to ensure full funding of the direct and purchased care systems.

    We believe that Prime beneficiaries should not be delayed access because Military Treatment Facility (MTF) staff members are deployed. These families are already supporting the war effort in many countless ways. We ask the subcommittee to guarantee that the promise made to service members and their families when they enroll in Prime are honored.

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    Despite Congress's clear intent to limit the requirement for non-availability statement, DOD affirmed in the president's fiscal year 2004 budget their intent to pursue the use of these statements. This means DOD will continue to support denying Standard beneficiaries who accept higher co-pays and deductibles in return for the freedom of choice of their own providers.

    The Coalition is most appreciative of the action this subcommittee took last year to provide TRICARE Prime eligibility for dependents living in remote location when their sponsors' follow-on orders are unaccompanied. However, in order to retain the benefit, the family must continue to reside at the remote duty station. This can raise problems with dependents who may wish to go back home to live with their family or relocate to another area where they can best wait for the service member to return.

    We ask the subcommittee to permit families to retain a Prime benefit when making a government funded move to another remote area and there is no reasonable expectation that the service member will return to former duty station. The Coalition asks the subcommittee to turn their attention to addressing an inequity in the treatment of remarried surviving spouse whose second or subsequent marriage ends in death or divorce.

    Except for health care, these survivors have their military ID cards, commissary and exchange privilege restored. This inequity in the treatment of military was further highlighted by the Veterans Benefit Act of 2002 which reinstated certain benefits for survivors of veterans who died of service connected causes—eligibility is restored if the re-marriage ends in death or divorce.

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    The Coalition urges the subcommittee to restore equity for military widows by reinstating the TRICARE benefit. The Coalition is pleased to hear Dr. Chu's announcement that activated guard and reserve families will be eligible for prime and prime remote when called to active duty for 30 days.

    We urge the subcommittee to authorize TRICARE coverage options for reserve and national guard members before mobilization. In some cases, reserve and guard families have no coverage when not activated. In others, families experience considerable problems when they have to switch from civilian coverage to TRICARE and back to civilian coverage again when deactivated.

    During this time of enhanced mobilization of the guard and reserve, providing improved continuity of care is not only a matter of equity, but a recruitment and retention issue as well. Another possible alternative to achieve such continuity would be to have the department reimburse active and reservists for part or all of the civilian health premium as we do now for DOD civilian reservists who have Federal Employee Health Benefits Program (FEHPP).

    Another concern is the Medicare eligible under age 65. In order to keep TRICARE benefits, they must participate in Medicare Part B. The problem is that DOD makes no effort to educate these beneficiaries about the need to take Part B. As a result, these deferrable beneficiaries have only Medicare Part A, no Part B, and lose their TRICARE benefit until they can sign up for Part B in the next enrollment season.

    Mr. Chairman, it is unfair to require Part B yet make no effort to inform the beneficiary of the requirement. Mr. Chairman, thank you for the opportunity to present The Coalition's views on these critical and important issues. And I stand ready to answer your question.
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    [The prepared statement of The Military coalition (TMC) presented by Dr. Schwartz and Robert Washington can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you very much.

    Mr. Hanson, if we could proceed with you, please.


    Captain HANSON. Thank you. Mr. Chairman, Ms. Sanchez, members of the committee, our Nation's brave young men and women are fighting in Iraq. As predicted by the Abram's Doctrine, the public has personally been drawn into the war because our warriors include members of the guard and reserve.

    Because almost every American knows at least someone who knows a mobilized reservist, the public recognizes his or her contributions. Because of its close tie to the fight, the public is now also concerned with the welfare of the members of the guard and reserve as well as the active duty members.

    The National Military Veterans Alliance and the National Association for Uniformed Services thanks you for the chance to testify on behalf of the 880,000 selected reservists most affected by medical readiness.

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    We too, would like to thank the efforts of the Office of the Secretary of Defense and the TRICARE Management Activity for revising health affairs policy 96018 for TRICARE Prime and Prime Remote. But while this policy change is applauded, we have concerns about other DOD policies looming on the horizons.

    The Pentagon is transforming the roles of the guardsmen and reservists. They see a future where a reservist may be called upon to serve the needs of a service component. They want to make it easier to bring a reservist on active duty and later return him or her to reserve status. They are calling this the continuum of service.

    DOD also seeks a fighting force that is immediate and adaptive. If the call up for Iraq is reflective, the Pentagon is expecting instant warriors. Under the Cold War model, a guardsman or reservist might have 45 to 90 days before call up. For Iraq, some of our people have been called in hours rather than in months. This has caused medical readiness problems. Medical and dental standards that are acceptable for a reservist are not acceptable to pass the pre-mobilization screening for active duty.

    Pre-mobilization screening has become an assembly line of quick fixes for treatments that are rushed or members are being sent back home as physically unfit. One major factor for this state of medical unreadiness is that the financial burden of medical care is placed on the backs of the reservists themselves.

    While active duty members are treated at military treatment facilities, guardsmen and reservists must invest their own money on health programs. While an active member may pay $460 per year for TRICARE Prime, a reservists may be paying that much if not more per month for personal insurance. The government's own studies indicate that between 20 to 25 percent of reservists are without health care plans.
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    Medical costs are a key factor. If our Nation's military has matured from being a total force to a one force, why is the Pentagon investing differently into the medical coverage of active and reservists when both are viewed as human weapons systems?

    Yet the Pentagon still expects reservists to subsidize readiness by paying for their own medical treatment. What the Alliance asks is that if we have a continuum of service that utilizes the guard and reserve, why is there not also a continuum of medical health care as well? Our alliance of 26 associations would like to see medical assistance to guardsmen and reservists as they prepare for mobilization, when they are out in the field and when they are returned home.

    We again thank the committee for the opportunity to testify. And we further would like to thank this committee for its ongoing oversight of and dialogue with the Office of The Secretary of Defense on the mobilization of the members of the reserve component and the care of their families. Details of our concerns are included in our written statements. I stand by for questions.

    Mr. MCHUGH. Thank you, Captain Hanson. If we could, we will just proceed through the testimony.

    So Ms. Holleman, would you go next, please?

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    Ms. HOLLEMAN. Thank you. Mr. Chairman, Ms. Sanchez, members of the committee, it is indeed an honor to testify before you concerning military health care. It is a joy to thank you again for the enormous improvements that have been seen in the last two years with the creation of TRICARE for Life, the senior pharmacy plan, TRICARE Prime Remote and the Medicare eligible retiree health care fund. And it is a comfort to join my colleagues in reiterating the need to improve TRICARE Standard.

    Some improvements in TRICARE Standard should be easy to implement. Some will be difficult. But all are necessary if this last wing of Military Health Care is to reach a level of service that our military families and retirees deserve. The most obvious and simple improvement is to require that all TRICARE Standard beneficiaries are contacted at least once a year and told about their basic benefit and of any program changes that have occurred. More than once a year would indeed be far better.

    TRICARE contractors should also be required to help TRICARE Standard beneficiaries to find willing health care providers. At this time, as was previously said, the only tool these beneficiaries have for finding a health care provider is the yellow pages.

    Additionally, non-availability statements (NAS) should be abolished for TRICARE Standard which was created after all as a fee for service plan. The beneficiary pays higher co-pays and deductibles and should be allowed to truly choose his or her provider. Congress made the first step toward this goal in the last session when you focused on maternity NAS'. The Alliance hopes we can move forward toward ending this practice.

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    In much of the country, TRICARE Standard has become a phantom benefit. If providers find that the payments are too low and slow and find the billing system too cumbersome, they will not accept this insurance. That is what is happening in many places. While the Alliance is well aware that change in TRICARE payment levels that are wedded to Medicare payment levels is a very difficult thing indeed, the Alliance firmly believes that this is where the solution lies.

    We were very pleased with corrections in Medicare reimbursement levels that Congress tackled this year. And again, we hope that this was the first step toward correcting this long-term and serious problem. In the meantime, this committee should require DOD to lessen the administrative burdens and complications in filing TRICARE standard claims.

    While it is clear that TRICARE for Life (TFL) has been a real success for numerous Medicare eligible retirees, their families and survivors, one group has not experienced one of the chief improvements. Medicare eligibles under the age of 65 have yet to receive electronic claims processing.

    These beneficiaries qualify for Medicare due to serious disabilities. Medical care is obviously crucial for them. If their claims were electronically handled as TFL claims are, they would only have to find a health care provider who participates in Medicare.

    The provider would send the bill to Medicare. Medicare would pay its portion and send the remainder to TRICARE. Unfortunately, they still need to find a provider who also will actively participate in TRICARE and will send in a separate paper claim. This group of beneficiaries need to obtain medical care as easily as possible. This problem should be solved now and not delayed until full implementation of the new TRICARE contracts.
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    Finally, there are two new proposals that the Alliance asks you to consider. One is that DOD contribute to the present TRICARE retiree dental plan (TRDP). If the department paid a government co-share for this insurance, the change from active duty to retiree would be seamless. Most retirees could afford the transfer into the TRDP which would be a great benefit for their long-term health.

    The second proposal is to finally create an FEHBP option for uniformed services retirees. Even if Congress adopted all our suggested improvements in TRICARE Standard, there are many beneficiaries scattered throughout the country that will never be able to use their TRICARE benefits. There are no health care providers in their area that will accept it.

    For these few people, the Alliance believes it is time to give them the opportunity to enroll in FEHBP in the same manner that their civilian counterparts do. The premiums are substantial, and we believe that few will sign up. But for those with no other workable option, this could literally be a lifesaver.

    Mr. Chairman, distinguished members, thank you for your unceasing work in improving health care for the uniformed services family. And thank you for listening to our thoughts and suggestions.

    [The prepared statement of The National Military and Veterans Alliance presented by Captain Hanson and Ms. Holleman can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you very much, Ms. Holleman. I apologize to all the panel and to my colleagues for having stepped out. But I hope you understand I did have to take that call.
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    The next representative as I introduced earlier is here on behalf of the Military Retiree Grass Roots Group, Colonel David B. Vann, U.S. Army retired. Welcome, Colonel.


    Colonel VANN. Thank you, Mr. Chairman. Congresswoman Sanchez, Congressman Cole, Congressman Gingrey, I would like to thank you for this invitation to speak as a member of the health care White Paper Group on behalf of many members of the Military Retiree Grassroots Group. We deeply appreciate the past work of Congress enacting TRICARE for Life based on Grass Roots' efforts together with the stellar work by the associations represented here. We hope our efforts will continue to improve military health care.

    My testimony is based on our white paper, which was hand carried last year to all 535 congressional offices. I hope to encourage your attention to the one group that has seen no measurable improvement in health care, retirees and their families under age 65, especially those on TRICARE Standard, the only option for many.

    The Department of Defense has focused improvements on TRICARE Prime while TRICARE Standard is the major source of beneficiary dissatisfaction. Essential improvements that merit attention are covered in my written testimony such as benefits claims administration and the lack of communication to beneficiaries. Most severe are in access and choice. Reimbursement rates are so far below congressional intent that the program does not pay enough to attract doctors.

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    TRICARE is rejected by many providers who accepted CHAMPUS. Balanced billing is not uncommon. Low rates combined with billing and other frustrations make TRICARE not cost effective for them. In some areas, even Medicare rates are higher.

    Nothing better illustrates the serious unintended consequences of choice denied in TRICARE standard than the non-availability statement. I offer my personal experience as an example in exhibit one. The non-availability statement compels unwilling patients under age 65 to use military treatment facilities or be faced with no reimbursement from either TRICARE or supplemental insurance.

    TRICARE Standard participants pay higher deductibles and co-payments in exchange for that choice. It is not a true fee for service plan as advertised. It is one thing to send me to war and ask me to give my life. But it is quite another to force my wife to assume the same risk for graduate medical education. We view the protection of our family as important as the protection of our country. Retaining the non-availability statement does nothing to advance either.

    Many people believe military health care problems should have been solved by adopting FEHBP. Congress expressed its intent in 1966 that military retirees be provided health care equivalent to Blue Cross, Blue Shield high option at less cost than for federal civilians in recognition of career sacrifices and lower military compensation. That intent forms the basis of our recommended legislation for TRICARE improvements in the FEHBP.

    FEHBP option at a reduced rate would allow retirees to have access to doctors who reject TRICARE and would provide choice and needed competition with TRICARE Standard. We propose using existing FEHBP plans for basic health care, less the drug feature of those plans and combine it with the highly successful existing DOD pharmacy program.
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    We consider such a proposal particularly attractive since both are already proven successful programs, eliminating the need for any tests. The rationale for replacing the reasonably successful non-profit system called CHAMPUS with the for profit system called TRICARE was solely cost reduction. Yet GAO has found the per capita cost of the system is 23 percent higher than that of FEHBP.

    The expenditures of our earned health benefit are not identified separately from the cost of the system, which includes R&D, readiness. We believe disclosure about how much is being spent per TRICARE Standard beneficiary is essential to evaluate the success of the program.

    Since health care for military families does not compete well with readiness, we propose that funding be placed in a trust fund in the entitlement portion of the federal budget. TRICARE for life established a good precedent as a funding model similar to what is done for federal civilian retirees.

    I would be remiss not to bring to your attention the depth of feeling about the uncertainty among retirees who have been left behind as a result of reliance on TRICARE. That uncertainty centers on the phrase keeping the health care promise. We believe that uncertainty would be eliminated if the meaning of that promise were documented.

    It is noteworthy in the military there is no greatest generation since we all bleed the same blood for the same country for the same freedoms just at a different hour. The same health care promise was made to the Vietnam generation and those who followed as recently as Desert Storm. Failure to honor that promise impinges on the honor, dignity and respect of military retirees who were promised more for noble service. We hope that our recommendations will help avoid that same uncertainty for those now in the sands of the Middle East proudly keeping their promise.
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    Thank you for the privilege of appearing today. I would like to acknowledge those members whose collective expertise formed the basis of the white paper and this testimony. And I would be pleased to answer any questions.

    [The prepared statement of The Military Retiree Grass Roots Group, Health Care White Paper Group presented by Colonel Vann can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you very much, Colonel. We appreciate your presence here today. And I believe this is the first time your organization has appeared before the subcommittee. And we greatly value your input.

    Next to testify is Dr. Marjorie Kanof, as I introduced earlier who is Director of Clinical and Military Health Care for the General Accounting Office. I also mentioned earlier, but I think it bears repeating that GAO has been enormously helpful to this subcommittee and to subcommittees across the entire spectrum of Congress.

    So, Dr. Kanof, thank you so much for being here. We look forward to your comments.


    Dr. KANOF. Good afternoon, Mr. Chairman and members of the subcommittee. I would be remiss if I did not accept your acknowledgment of the work that the GAO has done. And I will share that back with David Walker.
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    My testimony this afternoon, though, is really going to be addressing the TRICARE civilian provider network.

    Mr. MCHUGH. Dr., forgive me for interrupting you. And it may be because that microphone has drifted a little way from you, if you can just, if it is possible to pull it in closer. I think that would help all of us.

    Dr. KANOF. Is that better?

    Mr. MCHUGH. It is much better. Thank you.

    Dr. KANOF. Okay. Currently more than 8.7 million active duty personnel, retirees and dependents are eligible to receive care through TRICARE. Military treatment facilities or MTF's supply most of the health care service that TRICARE beneficiaries receive.

    The Department of Defense does contract with four health care companies to develop and maintain a civilian provider network. This network is designed to compliment the availability of care through the MTF's. In response to beneficiary and provider complaints, you requested us to review DOD's oversight of the adequacy of the TRICARE civilian network. Our work focuses on TRICARE Prime, the managed care component of TRICARE.

    Nearly half of all eligible beneficiaries enroll in TRICARE Prime. Other beneficiaries may choose between TRICARE Extra, a preferred provider organization and, as you have heard, TRICARE Standard, a fee for service program. My remarks are going to summarize our findings to date. Our written testimony goes into these findings in greater detail. And we will be issuing a formal report later this year.
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    To oversee the adequacy of the civilian provider network, DOD established standards designed to ensure that the network has a sufficient number and mix of providers, both primary care and specialists.

    In addition, DOD has standards for appointment wait, office time and travel time. DOD representatives use this information provided by the contractors along with beneficiary complaints in regular meetings with MTF and contractor representatives to oversee this network.

    However, we found that DOD's ability to effectively oversee the adequacy of the TRICARE civilian provider network is hindered in several ways. First, the measurement they use to determine if there are a sufficient number of providers does not actually always account for the number of beneficiaries in a given area. In some cases, this may result in an underestimation of the number of providers needed in an area.

    Second, incomplete contractor reporting on access to care makes it difficult for DOD to assess compliance. We found that contractors reported less than half of the required information on access standards. No contractor reported complete access information.

    Finally, DOD does not systemically collect and analyze beneficiary complaints. This is a significant problem because DOD officials told us that since information on access standards is not fully reported, they monitor compliance by receiving beneficiary complaints. Because beneficiary complaints are often handled informally on a case by case basis and not centrally evaluated, it is difficult for DOD to assess the extent of any systemic access problems.
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    You also asked that we describe the factors that might affect network adequacy. DOD and their contractors have reported three factors that may contribute to potential network inadequacy, and we have heard many of them this afternoon.

    One is geographic location such as regional shortages for certain providers, low reimbursement rate and administrative requirements. However, while reimbursement rate and administrative requirements may create dissatisfaction among providers, it is just not clear to us how much these factors have affected network adequacy because the information the contractors provide to DOD are not sufficient to measure network adequacy.

    DOD cannot generally pay providers more than they would be paid under the Medicare fee schedule. However—and again, this is under the prime—in certain situations in which DOD has determined that access is impaired, it does have the authority to pay up to 150 percent of the Medicare rate for network providers. Since 2000, DOD has increased reimbursement rates above the Medicare rate three times.

    As we have also heard this afternoon, DOD's new contracts for providing civilian health care called TNEXT are expected to be finalized sometime after June, 2003. Although we have heard reference to DOD's plans for oversight, the specific mechanisms DOD and the contractors will use to ensure network adequacy are not known at this time.

    TNEXT may reduce two administrative burdens that providers have complained about, credentialling and referrals. However, according to the contractors' new requirements, such as the requirement that 100 percent of network claims submitted by providers are filed electronically could discourage provider participation. Currently, only about 25 percent of such claims are submitted electronically.
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    Another concern that has been raised by beneficiary groups and alluded to this afternoon extend beyond the network and potentially impact beneficiaries who use TRICARE Standard. TNEXT will no longer require contractors to provide information to all beneficiaries about providers participating in their area and to assist them in accessing care. Beneficiary groups are clearly concerned about this omission.

    Mr. Chairman, this concludes my prepared statement. I, too, would be happy to answer any questions.

    [The prepared statement of Dr. Kanof can be viewed in the hard copy.]

    Mr. MCHUGH. Thank you, Dr. Kanof. And I know you are probably relieved to hear me correct my statement about your testimony with respect to force health surveillance.

    Dr. KANOF. We are prepared, if need be.

    Mr. MCHUGH. Oh, are you? Well, we will not go there today because that was not the game plan.

    You sat here, as I, and heard the representatives of the various coalition groups talk about provider access and availability. And you commented to it both in your written and your spoken testimony. I believe this first question is in your written testimony.

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    But while you alluded to the fact, I do not think you mentioned the analysis of the results with respect to the three occasions where DOD has in fact accessed their opportunity under Prime to increase above 100 percent. What were the results in terms of increased provider availability when those increases did indeed go into affect?

    Dr. KANOF. Two of them were in Alaska. One was initially in the rural parts of Alaska. And the last one that was in for Alaska completed the whole state. And there was really not a general increase in provider participation.

    But, in fact, it is unclear to know whether that has to do with TRICARE or the provider community in Alaska because rendering care to the TRICARE community is not all that different from the difficulties that others encounter in getting health care in Alaska.

    The most recent one was in the state of Idaho. And that was in fact just, I think, in January, 2003. So it has been too soon to know the impact of that increase.

    Mr. MCHUGH. You mentioned that—and let me get you to comment on this for the record just so we are clear. Your testimony and GAO study is not necessarily making the determination that an increase in reimbursement rates would not increase provider accessibility and participation. You are saying, is it not correct, that instead the data collection systems are not allowing you as they currently exist to make that determination one way or another. Is that fair?

    Dr. KANOF. That is correct.

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    Mr. MCHUGH. What kinds of things would be necessary to structure a database to allow you to make that? Is it very complicated, worth the effort? Are you able to make any conclusions in that regard?

    Dr. KANOF. I think that nothing is ever simple. But having said that, I think there are items that are done in other managed care plans, both within some required in the Medicaid plans, some within the managed care plans and Plus C and also some within private industry that could be applied to DOD.

    And, in fact, they ask those standards, but they are not really looking to see that. And I think clearly one of those are the ratios of your providers that you have in your network to your beneficiaries. And I think that that is a ratio that is well recognized as having some validity in terms of knowing do you have a network that is adequate for your population. But to do that, it is really very critical.

    One, you cannot assume a certain provider participation. So you cannot assume that if I have a member of your network contract as a physician that I will be accepting new patients, or that I will be accepting 20 percent of the TRICARE beneficiaries in that area. So it is very imperative that not only do you count the numbers, but you also understand how much of a provider's practice would be available to TRICARE.

    The other very critical point that in fact the first panel alluded to is you really need to understand the total number of beneficiaries in the area that the civilian provider network might be providing care to, which can include, not only those individuals that are registered within or enrolled in the civilian provider network, but you also need to understand the military treatment facility capability so that you can then better understand the number of providers you need for that area. So that is a very long answer to your question. But it is doable.
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    Mr. MCHUGH. Thank you for that summary. It started out sounding easy, and then it became somewhat more problematic.

    Dr. KANOF. But doable.

    Mr. MCHUGH. Pardon me?

    Dr. KANOF. But doable.

    Mr. MCHUGH. That is why I appreciated your final analysis. Let me ask you one final question before I yield to my colleagues. And I would ask if perhaps the other panelists would respond to their reaction of the suggestion. It is interesting because in years past, including past year, it was really the Standard that had the problem, not Prime or the other way around, I guess. Prime had the—yes, Prime. It now has evolved into more of a challenge in Standard.

    Is it not a problem, or is it a problem the fact you do not have registrations under standard so that they become—pardon me?

    Enrollment. And thereafter it is hard to assess exactly what is needed because you are not really sure who is in it where. If you were to have enrollment, would that be helpful in terms of addressing some of these problems? Or would it be a superfluous current of exercise?

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    And I certainly would be interested in hearing the other panelists because I suspect a lot of the folks who choose not to enroll and get into standard is in fact because they like the simplicity of it and the option of it. And they may view enrollment as something of a disincentive.

    Dr. KANOF. Well, I think to have enrollment of the beneficiary would be very helpful from both a perspective of knowing the number, but also more importantly, knowing their location so that you can one, do better education of the beneficiary so they know how the system works.

    And you can also have a contractor understand better the potential provider needs within that area. I mean, the dual sword here is that you also do not have a yearly provider enrollment in TRICARE as you do with Medicare. So enrollment would very much be helpful from a health care delivery system perspective.

    Mr. MCHUGH. Thank you.

    Dr. Schwartz.

    Dr. SCHWARTZ. The Military Coalition has not taken a position on this as yet. But we plan to shortly. And we take a formal position. One of the things that is obvious at face value if I do not register, how do you know to send me my booklet because we do not give booklets. There are other ways to do that. You could take the Prime population and then go to and do a data run. And then the people that are not in Prime are in Standard. So that is one simple way to do it.
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    The objections that we have heard from our members is what are you going to do with that information. This is a very skeptical population. And I think some people are somewhat fearful—excuse me, Prime for Standard, are you going to lock me in for a year. Are you going to say I can only have Standard and that I cannot maybe go to Prime?

    And then is the next step you are going to say I cannot go to the VA. So that is the skepticism that we see on the part of the beneficiaries. But personally, if I can enroll and that means I get a booklet, that would be great. But we have not taken a formal position. That is my personal opinion.

    Mr. MCHUGH. Well, I appreciate that. And believe me, I understand skepticism amongst people when it comes to government at all levels. And it is hard to—that. In fact, I share some of those concerns. But obviously the beneficiary information process is important. But I think, as we have heard from the GAO testimony, that those data would be particularly helpful in addressing some of the other concerns. And I do not know the answer to this.

    Dr. SCHWARTZ. Mr. Chairman, if I could interject one thing. If we were to sign up, then in turn have DOD educate us, have them contact us.

    Mr. MCHUGH. Yes. Yes.

    Dr. SCHWARTZ. And make them obligated to take that step forward from here.
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    Mr. MCHUGH. Well, I would agree. I mean, and I have no idea if this is a step we would take. But if we were, and that would be one of the primary, not standard, objectives. But it also becomes—I promise you we will get to everybody.

    But it becomes more than just an education issue. And it becomes a means by which we can hopefully compile data to address some of these very real concerns that many of you expressed. It is just a thought.

    Yes, Ms. Holleman.

    Ms. HOLLEMAN. Indeed they are very real concerns. And the Alliance, with proper protections for the skepticism indicated, would be comfortable with an enrollment. Indeed since we were calling for contacts, and we were calling for education, it seems that that is rather an inevitable road to have that.

    To have it would be a real substantial benefit. And indeed, some people do not even know they qualify for TRICARE Standard. And this would at least educate them on that with the proper provisos and protections that The Coalition is concerned about. We would find this acceptable and inevitable.

    Mr. MCHUGH. Sir?

    Captain HANSON. Thank you, Mr. Chairman.

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    For guardsmen and reservists, there is a unique situation and a distinct line of demarcation because when a reserve member retires, it can be between five to 15 years of minimal contact between that individual and the service. And 18 months before their 60th birthday, they will get a letter informing them they have to request their retirement payments.

    And with this packet would be an ideal time to include information about enrollment because also in the reserves, many individuals go until their 65th birthday not realizing that from a period of age 60 to 65 their families qualify for TRICARE Standard or TRICARE Prime.

    Mr. MCHUGH. Thank you, Captain.

    Yes, sir.

    Colonel VANN. Mr. Chairman, I would like to first piggy back on what Dierdre said a moment ago about enrollment and agree with those who think that there should be an annual enrollment. From my point of view, I have had no communication. Those in our group from the Grass Roots have had no communication in TRICARE Standard in over five years in anything other than EOB.

    So it is difficult to get information to them if you do not even know who they are. But commenting also on the issue of provider participation, raising reimbursement rates, to us—is the entire problem is nothing new to those of us in the Grass Roots. It has been there since TRICARE started, has only gotten worse. And raising reimbursement rates, although it is a vital part of it is only—I would not want to say tinkering around the edges.
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    But it is kind of like stopping the bleeding when there are many other aspects which have already been mentioned, from claims processing. The word was out when TRICARE started about TRICARE Standard and has been since CHAMPUS was dropped. Many of those providers initially dropped TRICARE Standard that were CHAMPUS providers. They see no incentive to return. And there has been no effort to contact them to ask them to return, many of who we would have like to have had continue.

    The problem is partially structural since certain areas of the country were intentionally designed to be TRICARE standard only. There is no Health Maintenance Organization (HMO), so that is the only option. For instance, last year I remember there was a Dr. Storyguard that testified about an area centered around Little Rock that had a problem. Well, outside Little Rock, I can cite an example of there was one area that has 115 providers. Only seven of those accept TRICARE Standard. And only one of those seven is a general practitioner. And that doctor is not even licensed or does not even practice at the local hospital. He has no privileges. That is one example. But we do not find the problem uncommon just to Arkansas.

    We have had complaints from Europe, from the Far East, all across the country. There is certain, I guess, a few states, Minnesota and North Dakota have not been mentioned as problems. But by and large, it is all across the country and is not new to us.

    I could cite my own example of three years ago when my wife had surgery. She was referred to a GI doctor. And we went to the doctor and asked if they were taking TRICARE. She said they just stopped taking it.

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    They always took TRICARE or always took CHAMPUS feeling that since those serving their country deserved the very best in health care, that they could no longer afford to take TRICARE because there were just too many hassles.

    The reimbursement rates were too low. And a few days ago, I called that same provider. I figured three years later I would check and see what her attitude was now. And I said what would it take for you to start taking TRICARE standard now. And her answer was four things: better customer service—every time they call, they get a different answer, which claims are based on. There is no single authoritative source, so the patient and provider both know where they stand. The rules, regulations, contracts change frequently. Neither the beneficiary nor the provider is informed of those often. I could cite my own example of last year, physical therapy. I think it was September, October.

    The requirements changed in the contract for physical therapy. That word was never put out to the beneficiaries. I happened to find out about it in April when I was involved in getting some myself.

    The second thing is timely payments. She said payments continue to be not timely from what she had heard. The reimbursement rates, even if they were raised ten percent or on a one time basis, if there is no mechanism or means for adjusting them, then they are going to go right back down. And so there is some hesitation to return because of that.

    Mr. MCHUGH. All right. So I take it your answer is you would enroll? Thank you. I did not in any way mean to suggest that my question to the good doctor about enrollment—and by the way, now that I think about it, a social registration is not a better word. Because as Dr. Schwartz said, enrollment by its own definition would at least suggest you are excluded from any other option, including VA benefits. So there. Maybe we should change the word.
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    Colonel VANN. To the rest of the original question, my answer would be we encourage enrollment. We see value in it.

    Mr. MCHUGH. Versus registration? No,——

    Ms. SANCHEZ. Let's take a vote.

    Mr. MCHUGH. I appreciate that. Let me yield to my colleagues.

    Ms. Sanchez.

    Ms. SANCHEZ. Mr. Chairman, you are doing a good job.

    Thank you all. I know the hour is getting late. And I thank you for coming and testifying. I guess, you know, in listening to the testimony and reading some of it, I did not get through all of it, I will have to admit. It almost seems to me like the same problems that we face in the civilian workplace with respect to access and knowledge and requirements and paper work of a provider. It seems to be the same ones that I am hearing coming out of our system here for our military. This question is to Dr. Schwartz and to Mr. Washington.

    With respect to the survey and the specific areas that you have seen that beneficiaries are having difficulty with with their providers, what would you say is different than the problems that we see in the regular work force of civilians and their providers?

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    Dr. SCHWARTZ. Well, the difference between—TRICARE does mirror the civilian health care system. In a town that has only one gastroenterologist, someone in Blue Cross, Blue Shield is probably going to have the same problem as a TRICARE beneficiary.

    Where we have limited access to providers in general, a provider can pick or choose who he or she wishes to see, and may not choose to participate in any kind of a managed care product or any kind of—you know, just take cash only. So that is consistent with the private sector.

    And the other issue is with the TRICARE program, our folks are scattered to the wind. When you retire from the military, in essence you can go to your home of record, you can go to all 50 states. And there are many areas where we do not have a high concentration of military beneficiaries. And I think if you look through our survey and some of the information, some of the zip codes are some very geographically remote areas.

    Ms. SANCHEZ. I saw that. Yes, we saw that. Very dispersed and sparse.

    Dr. SCHWARTZ. Yes, very dispersed. And this is a survey. This is not a——

    Ms. SANCHEZ. That was the other question I was going to ask you.

    Dr. SCHWARTZ. Yes. The survey is self selected. Okay?
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    Ms. SANCHEZ. So you are really hearing from people who are pretty upset about the system——

    Dr. SCHWARTZ. Yes. We are hearing from people—

    Ms. SANCHEZ [continuing]. Versus the ones that like the system?

    Dr. SCHWARTZ. Yes, ma'am. These are from people who are having problems with the system. So the problems with TRICARE, I feel, are provider reimbursement. Because I feel if we did pay providers enough, they would join the program. But we do not pay the providers enough. And then we do not reach out and educate our Standard beneficiaries on how to find the providers once they have them. Even if they had providers, the bennies do not know how to get them. In our testimony is a story from Plano, Texas.

    Well, Plano is just down the street from Dallas. And this poor man's wife is having a stroke, and he does not know what to do. Well, if he would have had an 800 number to call, and if he would have known to call that 800 number, I am sure someone from the managed care support contractor would have said 25 miles down the road is Dallas Medical Center. Go there.

    So there is this disconnect where the beneficiaries do not know what to do and yet, there is still no effort to recruit and bring in the providers into the Standard benefit. So there are a couple of things going on at the same time.

    Ms. SANCHEZ. And Mr. Washington.
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    Mr. WASHINGTON. I would have to agree with Dr. Schwartz. Is that a lot of the problems is once you retire and you go to these remote areas where there are no MTF's around, the provider situation is pretty much scarce. And again, with the low reimbursement rate for TRICARE Standard, they do not want to get in the network so they would have to worry about reimbursement, claims and so forth and so on.

    So I have to—as a matter of fact, her association is the one that did the outstanding job on the survey. So, it is a very good instrument to follow when it comes to certain areas where you have to look for providers. But the whole problem is that reimbursement and the hassle of trying to get paid.

    Ms. SANCHEZ. And then this question would be for everyone on the panel. Although I do not know that Dr. Kanof would necessarily have to answer this one.

    All of you have made a lot of recommendations about what we need to do to fix this situation. If each of you can answer to me what would be the top three things if you sat on this committee that you would want to change if you could. And how would you change that?

    Dr. SCHWARTZ. The first thing I would do is educate Standard providers. I happen to be in Blue Cross, Blue shield through my employer sponsored program. Attempting to get TRICARE to be a second-payer. But we can testify to that another time.

    I receive a benefits book every year from Blue Cross, Blue Shield with a list of providers in my area, along with a zip code. You know, by zip code I can find a provider. So number one, contact the beneficiaries and give them a book.
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    Number two, recruit standard providers. There is no incentive right now to recruit Standard providers because they are trying to build the Prime network. DOD wants to encourage people to be in the Prime HMO product. So they go out and they recruit providers for the Prime because it is more cost effective for them. They can discount Medicare.

    And number three, I think we really need to look at the provider reimbursements. You cannot tell me if you pay them more, you know, they cannot be a little bit more willing to take our patients. FEHBP does pay more in certain areas. For the under 65s, the FEHBP model does pay higher in areas where they do need to get providers. So those are my three recommendations. And thank you for the question.

    Ms. SANCHEZ. Mr. Washington.

    Mr. WASHINGTON. My number one source would be raising the reimbursement level to a more comfortable level that it would attract providers into the TRICARE network.

    Number two, it would also be to educate the beneficiaries about the Standard benefit because again, I do not think there is a lot of retirees, even active duty family members out there that do not know anything about the Standard benefit.

    And third of all, is to also provide an education point for providers so they, too, can understand the Standard benefit.

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    Ms. SANCHEZ. Thank you.

    Captain HANSON. Since my testimony was addressing the specifics for guard and reserve health care, in an ideal world what I would give the highest priority to would be a continuum of medical care. But because this is a very difficult, complex and expensive program that is yet to be fully explored, for a more immediate priority, I would be looking at those who are being mobilized.

    And the aspect would be to provide them with a continuity of health care service so that people coming from civilian care could quite easily go into military care, in some cases be supported ongoing by their existing physician. And then during demobilization, get a sufficiently long coverage, not necessarily tied to the years of active duty that they have had in their past to allow them to transition back into civilian community.

    Ms. SANCHEZ. I have a sort of a follow-up question to that because I am trying to understand where the real problem lies in that, let's say that I am a reservist, and I am working, and I am a police officer. And at least my police officers, when they get called up, and they get shipped out, they continue to receive the same paycheck from the public agency.

    And so then the question is well, if they are going to be gone for 18 months, are you saying that the agency does not continue to pay the individual health care premium that they do because they are not considered employed, and therefore, they may not be receiving it.

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    I do not really know about this stuff; or, are you talking more about the reservists who do not make the money that they do in their regular jobs because their employer is not able to or does not pay for that and therefore, their insurance would lapse, and they would, you know, transition over into the military side of the health care system?

    Captain HANSON. I would like to say that the policemen that are your constituents have some very generous public agencies to provide them with the coverage that they are provided. Be they public servants or working in the private sector, both health care and pay are basically determined by the employer on how generous they will be.

    The only legal coverage that they have is the fact that when they complete or transition from the civilian community and have orders of 30 days or more, they are covered by, initially, TRICARE Standard. And then as the various health care providers gear up for enrollment, they are eligible within a period of time to go to TRICARE Prime with their families if they wish to.

    And then, currently as the law states that if they have less than six years of active service when they get demobilized, they are covered by 60 days worth of continued health care in transition. If they have over six years of active duty accumulated, they have up to 120 days for themselves. And because of a special demonstration project provided by the Pentagon, for their families as well.

    But for what they are guaranteed, there are none. So there are many corporations out there that are being patriotic and providing additional health care. We know DOD has provided continuation of premiums to allow federal employees to keep their health care. There are a lot of people who are contributing to the war efforts. But it varies from person to person.
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    Ms. SANCHEZ. Okay. Thank you.

    Ms. HOLLEMAN. To cheat a little and jump in on Marshall's area of expertise, I have heard anecdotally from several military doctors that they are concerned about families going back into their civilian programs after service and finding that they now have a pre-existing condition, and they are not being allowed to enroll back in.

    It has been anecdotal, but they have been worried about that and concerned and hoping that perhaps it could be made an option to either go into to try to qualify for TRICARE Prime or to perhaps be able to have, just as the federal government has FEHBP continue, to have their pay for their civilian plans to continue be an option for the family, which might be a very good way to do it. It would be a very hard thing to get done right away, to plan that. But that would be a thing to look at.

    As far as your question for me, I agree with Dr. Schwartz that perhaps education of the standard, both beneficiaries and providers, which is another way of saying recruiting. Because if they had more education, felt more comfortable, felt they could get proper answers, they would, I think, be more willing and happy to join.

    Second would be the abolition of the non-availability statements. And I do agree also with Dr. Schwartz if you pay them, they will come. And that if you did increase the payments, I am sure that would be of some help. Thank you.

    Ms. SANCHEZ. Thank you.
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    Captain HANSON. I certainly agree with the education. I would hope that it goes along with all three of my top recommendations, Congresswoman Sanchez. Number one would be, and most important, eliminate the non-availability statement immediately without any waivers.

    It is not a fee for service plan as advertised. It does not offer choice. And we are paying for insurance we cannot even use. So that, in my opinion, should be eliminated immediately. And it should be a largely resource neutral recommendation.

    And the second and third I would put equally because they go hand in hand. And that would be my proposal or our proposal for offering FEHBP, as we indicated in our written testimony. And at the same time, raising reimbursement rates to—I would not say Medicare levels.

    I would say to the original congressional intent of Blue Cross, Blue Shield High Option at less costs than federal civilians. And if that were done, I think that would significantly improve TRICARE standard. But the two working hand in hand would give competition and accomplish a first class health care program for retirees.

    Mr. MCHUGH. May I interrupt? Would the gentlelady yield?

    Ms. SANCHEZ. Yes, Mr. Chairman.

    Mr. MCHUGH. You just dazzled us with a reference to the Blue Cross, Blue Shield levels. Does anybody know what percentage that that—because that is how we deal with things. The prime allows for 115 percent. What would that be above the prime level of reimbursement?
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    Captain HANSON. I could not give a percentage. My understanding is that it is equivalent to the typical, local rate that is paid, the average rate for each area.

    Mr. MCHUGH. Yes.

    Captain HANSON. The reasonable charges. Eighty percent is what CHAMPUS used to pay. And it has now changed to 75 percent under TRICARE. So I do not know if that answers the question. That would be the closest—can come.

    Mr. MCHUGH. And Dr. Kanof looks as though she wanted to weigh in, if the gentlelady would continue to yield?

    Ms. SANCHEZ. I am done except that I think that this whole issue of the reservists and the continuity is very important; our committee should——

    Mr. MCHUGH. It is a very important one.

    Ms. SANCHEZ [continuing]. Look at.

    Mr. MCHUGH. And GAO in fact has done some work for us in that area. And I appreciate the gentlewoman's concern. And we will have an opportunity, hopefully, to address that issue. It is certainly something that we heard a great deal about when I took a—of four other members to Europe specifically to meet with guard and reservists. And it is a big issue. And we are looking at a number of different options. So we look forward to working with you.
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    Yes, that was the—that the congresswoman pulled out of at the last minute. We are all broken hearted that she did. But we know she will be there when we do the work.

    But Dr. Kanof.

    Dr. KANOF. There are two things. One to just follow-up on Ms. Sanchez's question. I think it is important to note because in fact, it is work that we are doing also at your request that there are still some very significant burdens, hassles within claims processing that for a physician who might only be submitting a few TRICARE claims a year really will need to be addressed if you wish to sort of facilitate their participation. So I think that is an important point to add to the other comments that have been made.

    In addition, though, to go back to your comment about reimbursement, while I can say there is no plan, but paying physicians their reasonable charges through a health insurance program is probably very rare at this time.

    And the fact that a physician who wants to accept a TRICARE beneficiary and take the Medicare rate plus 115 percent above that, although they have to get that money directly from the beneficiary, that should pretty much meet what is going on in their community at large.

    So, a question of I do not know, number one, if they are aware of that. And number two, it is the difficulty of actually getting the reimbursement directly from a beneficiary as opposed to going through a third party insurer.
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    Mr. MCHUGH. Thank you, Dr., very much. And the gentlelady yields back?

    Ms. SANCHEZ. Yes, I do.

    Mr. MCHUGH. And I thank her for her participation, as always.

    Mr. Cole.

    Mr. COLE. Just briefly, thank you, Mr. Chairman. The hour is late, and we have covered a lot of ground. But, Captain Hanson, let me pick up actually on the point a couple of my colleagues made. I am particularly interested in your concerns about reservists and guardsmen and the quality of care that they have as they enter in.

    I had the occasion recently to talk to a commander at Fort Sill, and they were going through a mobilization process. And I asked him what are your two biggest problems. And he said number one, the amount of time that these people are being given notification which you made reference to in your comments.

    And he said number two, teeth. He said I have learned more about teeth in the last couple of months that I thought I would learn in a lifetime just in terms of what the dental quality is.

    So a couple of questions for you. One, do you have any idea what percentage of our guardsmen and reservists have pre-existing insurance, medical care, if you will as they report and what the percentage of uninsured is? Does it mirror the population or better, worse?
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    Captain HANSON. The GAO study that was published indicates 21 percent of guardsmen and reservists are uninsured for health care.

    Mr. COLE. Have there been any discussions to your knowledge of providing those people, again, at least TRICARE Standard, something so if you did not already have medical insurance?

    Because, obviously, cost here is the main problem. And you do not want to duplicate if you have a private provider already through an employer, that might not be a bad thing, but at least something to begin to fill that gap.

    Captain HANSON. There is dialogue going on. Ironically, I speak on the behalf of The Coalition being a former member. And their Guard and Reserve Committee is exploring this and talking to some of the offices here on the Hill about that where they view the model for the dental plan to be a good example of how you might be able to implement a TRICARE Standard program whereby the individual reservist would be subsidized in part by the government because of the fact that they are being viewed as this instant warrior.

    And then their family would be eligible at cost to the family to have coverage as well. And then upon time of mobilization, the family would transition over for the same type of coverage than an active duty member would have.

    Mr. COLE. And finally, one last question. Do you have any idea if any percentage of guardsmen or reservists that show up that literally do not meet the physical qualifications ultimately?
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    Captain HANSON. We are inquiring to see what type of numbers we have. Like yourselves, we are getting anecdotal information back about the dental situation. Recently, the dental plan premiums did go up. And what they are finding is a lot of the younger members have been foregoing getting coverage, which gives the reserve chiefs the conflict.

    Because on one hand, they would love this to be mandatory and encourage the junior members to participate. On the other hand, they know by charging these people premiums to participate they cannot really force them to do this.

    Unfortunately, I do not have a percentage. We can pass this on back to the committee if we get that information. But like your own, we are hearing stories of individuals who are being called up, going to active duty dentists in preparation for mobilization who are literally pulling teeth rather than filling to prepare these people to go overseas.

    Mr. COLE. That is exactly what I have heard. Well, thank you very much for your testimony. I would appreciate any additional information you do uncover.

    Captain HANSON. Yes, sir.

    Mr. COLE. Thank you, Mr. Chairman.

    Mr. MCHUGH. I thank the gentleman.

    As Ms. Sanchez said, the hour is getting late. And you good folks have been here since the beginning. And we deeply appreciate that. We particularly appreciate, not just your participation here today, but your concern on these issues and the various organizations and coalitions, committees that you represent.
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    And another deep word of appreciation and kudos to GAO. I can assure you all of the issues that you spoke about are of greatest concern. We also utilize these hearings to try to give those who attend, particularly in this case from the military, the opportunity to hear about those concerns so hopefully they can go back and ponder them.

    But as we continue to begin our work on the 2004 authorization bill, I assure you we are going to take a very hard focus on this area. We can have on paper the best system in the world. But if the docs are not there, and if the people cannot participate, and they are not getting the care, the paper does not mean a whole lot. So we have some pretty good paper out there.

    We have to work a little bit harder to make sure that it helps those folks who have earned this benefit. And with your help and support and cooperation, I am hopeful we can take some strides toward progress.

    So thank you all very much.

    Colonel VANN. Thank you, Mr. Chairman.

    Dr. KANOF. Thank you, Mr. Chairman.

    Mr. MCHUGH. And with that, the subcommittee is adjourned.

    [Whereupon, at 4:41 p.m., the subcommittee was adjourned.]
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