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Over-65 Health Care Demonstration Almost Here

By Douglas J. Gillert
American Forces Press Service

WASHINGTON, Feb. 10, 1998 – A long-awaited demonstration of DoD's plan to provide health care to military retirees 65 and older is finally going to happen, officials told delegates to the worldwide TRICARE conference here Feb. 9.

One week earlier, DoD, the Health Care Finance Administration, Office of Management and Budget, and Department of Health and Human Services formally agreed on how DoD will demonstrate the plan, called Medicare Subvention. Defense Secretary William Cohen signed and sent a memorandum of agreement to HHS Secretary Donna Shalala for final approval.

Navy Rear Adm. Thomas Carrato announced the pending approval to 1,400 military medical professionals attending the annual conference. He said Shalala's approval could come within days, and the first demonstrations could begin in six months.

Carrato, who serves as chief operating officer of the new TRICARE Management Activity in Denver, said the demonstration will be limited to six locations but added the locations to be announced following final approval. He said the sites were carefully selected to involve each service branch in the demonstration.

Subvention is the means by which DoD facilities receive reimbursement for care they provide "dual eligible" patients -- people eligible for health care in military facilities who, because they are 65 or older, are also eligible for Medicare.

Since TRICARE began in 1992, over-65 retirees have complained about not being able to receive care in military facilities. DoD has tried repeatedly to gain legislative authority for subvention. Without Medicare reimbursement, officials said, the department simply can't afford to care for elderly patients except on a space-available basis.

The demonstration features two plans, TRICARE Senior and Medicare Partners. The "Senior" option will work like TRICARE Prime, with enrollees paying the same annual fee as other military retirees ($230 single/$460 family) plus co-payments for various in- and outpatient services. Senior Prime enrollees also will receive the same priority as other retirees enrolled in TRICARE Prime.

Medicare Partners will provide access to care in military facilities to over-65 beneficiaries who don't elect the Senior Prime option. DoD will fund these services through agreements with civilian health plans. Carrato said details will follow approval of the demonstration.

TRICARE Senior and Medicare Partners will derive reimbursement from the Health Care Finance Administration, the federal agency that administers Medicare. Reimbursements to DoD will not diminish the already strained Medicare Trust Fund, the admiral said, and participating DoD hospitals will spend their own money first before Medicare reimbursement kicks in.

After the demonstration project is approved, TRICARE officials must modify existing managed care support contracts to accommodate dual-eligible patients. Then, the TRICARE Senior demonstration will be phased in, beginning at two of the selected sites about six months from the date the agreement is signed. Medicare Partners also will be phased in but no earlier than 90 days after TRICARE Senior begins.

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