TRICARE as a Viable Player in the Local Philippine Health Care Industry (Closed Network)

It is well known that the TRICARE Management Activity (TMA) was not prepared to administer the TRICARE Overseas Program (TOP) when it first implemented the program and opened the door to fraud. Given the combination of lack of any local on the ground TMA support or U.S. military bases and the second largest overseas population of TRICARE beneficiaries in the world, it was not unexpected that the Philippines would be a prime target for fraud. To compound the problem TMA failed to act for many years, maybe hoping the problem would go away. All of this is well documented in multiple DODIG reports.

Only after pressure was applied from the DODIG, DCIS and the United States Attorney for the Western District of Wisconsin did they act. A workgroup consisting of this group was formed to determine the appropriate actions; see TRICARE Overseas Program (TOP) Fraud. TMA’s first actions were focused on more draconian and punitive measures with little regard to access to care for beneficiaries. This wasn’t unexpected since TMA staff made it clear to more than one military retiree that they felt most of their problems was the fault of military retirees. The other members of the group, on the other hand, were also concerned with beneficiary access to care and recommended the development of a local network of providers and suggested using a local medical group as an approach where a readymade network was already in place and already operating under a local reasonable cost schedule.

Given that TMA staff had spent no time in the Philippines, while the other workgroup members had spent many months on the ground, a reasonable person would think that their recommendations might have been followed. But reasonable is not something that TMA tends to understand. So instead they decided to expend large sums of tax dollars to hire U.S. corporations to reinvent the wheel in the Philippines. The plan is to create a network of providers in the image of a U.S. network of American providers with all the normal complex rules that are in place in the U.S. Of course this is being done in total disregard for the local countries medical industry standards and practices with the expectation that all local providers can’t wait to be forced to recreate their billing processes for less than 0.01% of the local population.

This grandiose plan is called the “Closed Network” and is designed to force TRICARE Standard patients into an extremely limited network of providers in violation of the traditional freedoms associated with Standard and without any cost benefit to the beneficiary. Basically a lose-lose situation for beneficiaries from the start.

To get a better idea of how this foreign and forced system compares to the alternative that everyone else recommended we will do a comparison of the attributes of a Philippine PPO network vs. TMA’s Closed Network. We base our understanding of a local network on experiences some of our members currently have or had when using these local networks through their or their wife’s employment. Not one of our members, who have used one of these networks in lieu of TRICARE, has wanted to go back. We also base our understanding on lengthy conversations with local network senior staff who worked with us when we were looking at creating our own policy with them due to lack of access to care through TRICARE. We base our understanding of the Closed Network on the policy guidance TMA has published on its design, requirements and input on the current status of the network combined with years of studying the local medical industry and conversations with many providers.

Criteria	Local PPO/HMO	TRICARE
Acceptance by Providers	Well accepted and part of almost all local practices. Local providers know and understand the local practices and standards of payment which are simple and don’t require complex claims or accounts receivable.	Unknown and looked at with suspicion by most. Distrust of TMA and ISOS based on past actions. Dislike being required to abandon local standards and practices and the need to manage two distinct collection processes plus add accounts receivable and employees while being paid less in many cases compared to their local cash patients.
Time frame to add providers	Local plans can add a physician in 1 week and a hospital in 1 month. Most local groups could add a totally new city with hundreds of providers to their network in 30 – 60 days according to discussions with them.	After 6 months of searching for providers in 4 major areas the contractor says they have between 30 and 40 providers. It is unlikely they will ever find more and even more unlikely the few they found will remain once they fully understand the extensive changes they will have to make to their practices and losses they will be required to absorb.
Discounts	Industry standard, 10% discount off local professional fees, 20% discount off hospital fees and 5% discount on selected prescriptions. Translates into savings for the group and in lower co-pays for beneficiaries.	None. The program fails to meet any local standards of a PPO. Providers are expected to agree to the arbitrary decisions of TMA as to what they will pay and local providers can expect to find that up to 50% of their typical normal inpatient professional fees will not be paid. Instead of using locally accepted pricing TMA has built a convoluted pricing table modeled after U.S. billing standards which fail to reflect actual local pricing. The providers will also have to expect to lose a significant portion of co-pays as well to collection costs and those that just don’t pay or have left the area.
Handling of payment for outpatient care	Patient shows membership card and signs a simple form. The standard local outpatient fee, minus discount and co-pay is deposited in the provider’s bank account weekly.	The provider must hire an employee to prepare a U.S. style claim with coding and costing as required in the U.S. Then submit the claim and wait about 60 days for payment.
Handling of payment for inpatient care	Patient shows group provided debit card. Hospital calls the group who places the required deposit in the debit card which the hospital withdraws. Group continues to add money as needed. Hospital continues business as usual with no additional overhead.	The hospital must hire an employee to prepare U.S. style claims with coding and costing as required in the U.S. Then submit both the hospital and professional fees and wait about 60 days for payment. Based on previous attempts by hospitals and past practice the majority of the claims will be denied.
Co-pays	Collected at time of care	Providers will be required to implement an accounts receivable bookkeeping process and employ someone to attempt to collect co-pays after TMA processes and pays the claim. Since mail is not a viable process they will have to use phone calls and visits to the beneficiary to collect the co-pay. This expense will be required even for co-pays of $2.50 which will cost more than the collected amount.
Acceptance of group staff visits	Welcomed by the providers and clerks alike and occurs weekly on a known day.	Local contractor comes unannounced because they are afraid of hostile reactions for providers in the area that know they are coming.
Add providers at request of beneficiary	If a beneficiary wants a specific physician the PPO will add them as long as the provider meets minimum standards.	The program has no provisions to accommodate beneficiary wishes. Unlikely provider would agree due to excessive requirements.
Availability of providers near where the beneficiary lives and in all specialties	Limited only by the number of providers and specialties in the area.	Most providers are suspicious of TMA and ISOS and have heard the stories where others have lost very large sums of money to denied payment of legitimate claims. The vast majority of providers will not agree to meet all the U.S. billing and accounts receivable requirements. This will severely limit the availability of network providers.
Alternative when a needed provider is not part of the group or the beneficiary prefers to see someone else.	Beneficiary sees a provider of choice pays the standard fees and submits the receipt to the group and is reimbursed within two weeks.	There are no reasonable provisions for a beneficiary to see a provider of their choice. If there are no network providers in the specialty the beneficiary is required to see only the single provider dictated by TMA and their contractor or pays for the care themselves. Even then, they are required to pay the provider and then attempt to get reimbursed by submitting a claim and waiting about 60 days. If TMA decides they don’t want to pay the local standard fee then the beneficiary will be held responsible.
Beneficiary interaction with the group	Friendly and receptive to suggestions. Hold frequent meetings with beneficiaries to insure they are happy with the program and understand group policies.	Never seek beneficiary input. Ignore beneficiary inquires and suggestions and put barriers in place to shield themselves from beneficiaries. Are afraid to meet with beneficiaries for fear of angry beneficiaries and fear of possible violence.
Ability of beneficiaries to see providers, access to care or wait times	The group offers a large base of participating providers which a beneficiary can choose from with little waiting.	Waiting times will be excessive. Given the limited number of providers, 8 physicians, 1 hospital, 1 pharmacy, in each of the initial 4 areas approximately 3,500 to 4,000 beneficiaries will have to be absorbed into already full practices. Waiting times could be weeks. Because of the extremely limited number of providers in an area like Manila, travel times will take up to 6 hours round trip to see a doctor or fill a prescription for some beneficiaries.

It is obvious that the better and cheaper option would be to contract with a local HMO/PPO to provide our care through their network. The contract benefits would be identical to current TRICARE benefits and at a lower cost to the taxpayer and much higher beneficiary satisfaction. TMA pays a fixed amount to the group, monthly, quarterly or however they work it out. The group pays the providers like they do for all their other beneficiaries and beneficiaries pay the standard co-pay. TMA also benefits from not spending large sums for the ISOS contract which is not capable of developing a realistic Philippine provider network and they also benefit from the local standard discounts offered to local HMO/PPOs. Beneficiaries get lower co-pays also due to the discounts and don’t have to pay upfront or process claims. And they would also have a nationwide network of providers, hospitals and pharmacies no matter where we go instead a mix and match system of some areas with a closed network and others under the current system as envisioned by TMA.

It’s a win-win situation, TMA saves tax dollars, fraud is minimized and beneficiaries gain access to care that they don’t have now and no longer have to pay up front and submit claims. What’s not to like? Nothing and that is probably why TMA will never consider the recommendation of those that actually spent time on the ground here and know better than TMA how to reduce fraud while maintaining access to care. The same people that are afraid to meet with beneficiaries because they know they have created a terrible mess, cost lives and financial hardship and limited access to care to levels unheard of before. The question is when will someone step up to the plate and force TMA to do the right thing.