DoD eases rules for health care approvals after contractor 'failure'

Friday - 5/10/2013, 6:00am EDT

Jared Serbu, DoD reporter, Federal News Radio

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Beneficiaries of the Defense Depatment's managed health insurance program in the western United States have endured "inordinate" delays in receiving treatment from specialty providers over the past month, prompting DoD to take emergency measures to bypass its normal referral requirements.

The unusual step came as the result of the TRICARE contractor's "failure to meet the contract requirements for referral and authorization management," Dr. Jonathan Woodson, the assistant secretary of defense for health affairs wrote in a memo to the military services' top personnel officials.

The vendor in question is UnitedHealthcare Military & Veterans, which won a six- year, $20 billion DoD contract in March 2012 to service military beneficiaries in the system's 21-state western region, one of three geographic areas in the TRICARE system.

Problems began almost as soon as the new contractor assumed responsibility on April 1 of this year, said Rep. Doug Lamborn (R-Colo.), who quickly began hearing from providers and military members in and around the military bases he represents in the Colorado Springs area.

"Claims were not getting referred, they had errors that kept them from being processed, legitimate claims were getting turned down, providers who were supposed to be in the system were told they were not in the system. There were just so many glitches," said Lamborn, who is a member of the Armed Services and Veterans Affairs committees, in an interview.

Slowed to a trickle

Lamborn said providers in his district noticed the issue right away. Some of them rely on TRICARE for up to half of their business and saw that pipeline of military patients quickly slowed to a trickle.

Neither UnitedHealthcare Military & Veterans nor DoD's TRICARE Management Activity responded to requests for interviews, but the contractor's parent company, UnitedHealth Group, said in a statement on its website that since the contract's April 1 start date, the company had seen a volume of claims and referrals that "exceeded historical norms and related challenges processing them in a timely manner."

The statement did not elaborate on the reasons behind the delays.

"UnitedHealthcare has committed the full resources of the company — at all levels and in all areas — to provide beneficiaries, care providers and military treatment facilities with high-quality service and support," said Lori McDougal, the company's CEO. "We understand issues have arisen that need immediate improvement, and we are taking aggressive actions to fix them. We sincerely apologize for any delay in services that TRICARE beneficiaries and care providers are experiencing as a result of these challenges."

In the meantime, for western region beneficiaries, DoD is eliminating the requirement for TRICARE Prime beneficiaries to obtain preauthorizations from the insurance company before they seek specialty care.

"As a result of these extraordinary circumstances, and in order to provide needed assistance to TRICARE beneficiaries affected by this current situation, it is necessary for the Department of Defense to make a limited, temporary change to the existing rule for (primary care manager) referral authorizations," Woodson wrote.

Only a written referral is needed

Until the waiver expires on May 18, patients only will need to obtain a written referral for specialty care from their primary physicians, who are being told to use a special form letter provided by UnitedHealthcare.

The waiver of the preauthorization requirement could be extended if problems persist.

The new procedure does not apply to beneficiaries of TRICARE Standard, DoD's fee- for-service health care plan. Members enrolled in that option already can receive specialty care without a preauthorization, as long as the care is covered by the plan.

UnitedHealthcare won the contract to serve western region military members, families and retirees last year, assuming responsibility for a beneficiary population that had been served by 16 years by the then-incumbent, TriWest Healthcare Alliance.

TriWest decided to call it quits after the Government Accountability Office ruled against its contract protest in July, ending a complicated string of awards and protests that lasted for years under TRICARE's third generation of contracts, known as T-3.

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