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United States Military Retiree Activities Office Davao City, Philippines

Archive for the 'Tricare' Category


Posted by Service Officer on 19th June 2008

A former health care executive was sentenced 17 JUN to five years in prison for helping his Philippines-based company swindle nearly $100 million from the U.S. military health insurance program. Thomas Lutz, 41, said in federal court he took responsibility for the six-year scheme in which Health Visions Corp. bilked $99.9 million from the military’s Tricare program through inflated and fraudulent claims. U.S. District Judge Barbara Crabb said the five-year sentence was modest given the extent of the fraud, but it was the longest she could impose under Lutz’s plea deal. Health Visions and Lutz were initially charged in a 75-count indictment in 2005. He pleaded guilty in 2006 to a single count of conspiracy to pay kickbacks and agreed to cooperate with prosecutors, a deal Crabb called “a huge break” for Lutz. “It’s just horrifying that you were able to take as much money as you did,” Crabb told Lutz. Prosecutors said the company routinely inflated claims by more than 230%, operated a phony insurance program and billed for medical services never delivered.

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Posted by Service Officer on 8th June 2008

Most Tricare users are aware that Tricare by law is always the last payer over any other type of medial care insurance (including Medicare) that a user has. However, this does not apply to Medicaid. Medicaid is essentially a welfare program, providing medical benefits for people under various state welfare programs (such as Aid to Families with Dependent Children) or who qualify by reason of being determined to be “medically indigent” based on a means test. Congress enacted P.L. 97-377 with the intent that no class of Tricare beneficiary should have to resort to welfare programs; therefore, Medicaid was exempted from these double coverage provisions. Whenever a Tricare beneficiary is also eligible for Medicaid, Tricare is always the primary payer. Medicaid can supplement Tricare. [Source: Washington Times Sgt Shaft article 19 May 08 ++]

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Posted by Service Officer on 17th May 2008

Budgetary rules forced a House subcommittee to take the unprecedented step of creating a new Tricare preventive health care program that does not apply to 1.5 million Medicare-eligible retirees and their families in the Tricare for Life (TFL) program. Rep. Susan Davis (D-CA), chairwoman of the House Armed Services military personnel panel, said the plan, approved 7 APR as part of the 2009 defense authorization bill, is aimed at cutting the military’s long-term health care costs by providing preventive care. The personnel portion of the defense policy bill, approved by voice vote and with no debate, includes:

• A 3.9 percent military pay raise.

• Increases in Army and Marine Corps active-duty personnel and in Army National Guard and Army Reserve support personnel on full-time active duty.

• A tuition assistance program for military spouses.

• Permission for a Pentagon-proposed experiment under which active-duty members could take a break of up to three years in their military career.

Davis said her subcommittee rejected a Pentagon request for a $1.2 billion increase in Tricare health and pharmacy fees but wants to look for other ways to hold down costs, which is why expanding preventive care is attractive. She called the initiative “preferable” to the Pentagon’s proposed increase in Tricare fees. The preventive care plan would waive co-payments for certain treatments such as vaccinations, smoking cessation help, and breast and colorectal cancer screening. It would apply to Tricare Standard, Tricare Select and Tricare Reserve beneficiaries — but, because of budgetary procedures, not TFL. Aides named two areas in which TFL beneficiaries would be treated differently than other Tricare users: shingle vaccinations and MRIs for mammograms. Younger retirees would receive these services for free, but TFL users would have to pay, either directly or by buying supplemental Medicare insurance, aides said. Rep. John McHugh of New York, the subcommittee’ s ranking Republican, said this would be the first instance of differences in what is covered under Tricare, and also promised to work to try to find funding to offset that action.

There are two kinds of spending in the defense budget: discretionary, which applies to personnel, operating and acquisitions costs and construction programs; and mandatory, also known as direct spending, for programs such as retired pay, GI Bill benefits for reservists, and some health care expenses, including TFL. Davis said only congressional leaders can resolve the funding problem because direct spending involves programs such as Social Security, Medicare, Medicaid and federal civilian retired pay that fall outside the jurisdiction of the armed services committee. Congressional leaders could agree to an offset by cutting other direct spending or could find another way to fund preventive care, subcommittee aides said. Steve Strobridge, government relations director for the Military Officers Association of America, said he understands the dilemma facing the subcommittee and agrees that what they did “is certainly preferable to not doing anything.” “We have been very supportive of preventive care programs,” he said. “It only makes common sense that if you come up with programs like smoking cessation that it is going to save money in the long run.” [Source: NavyTimes Rick Maze article Posted 7 May 08 ++]

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Posted by Service Officer on 17th May 2008

Every year, the federal government tweaks the elaborate system that determines the amount doctors get paid for care and procedures, known as “reimbursement rates”. Those changes, in turn, translate into changes in cost shares, or co-pays, for Tricare beneficiaries. Payment for inpatient hospital stays in specified locations outside the 50 United States and the District of Columbia, are made utilizing the lesser of (a) billed charges or (b) the prospectively determined per diems adjusted by a country specific index (CSI). The per diem rates are developed into reimbursement groupings by utilizing diagnosis codes as contained in the International Classification of Diseases, 9th Revision, and Clinical Modification (ICD-9-CM). The per diem rates are the maximum allowable amounts that Tricare shall reimburse and the amount on which patient cost-shares are calculated. The National U.S. per diem rate is multiplied by a unique CSI factor which adjusts the National U.S. per diems for the applicable country. The country specific hospital per diem, for those specified locations outside the 50 United States and the District of Columbia is the product of the National U.S. per diem and the CSI. This payment system applies to all hospitals providing hospital inpatient services and professional provider reimbursements in the Philippines, Panama, and other overseas areas as designated by the Government.

The CSI is a factor obtained from the World Bank’s International Comparison Program. The index factor is based on a large array of goods and services or market basket within the specific country which is then standardized and weighted to a U.S. standard and currency. The use of the CSI enables a conversion and therefore creates parity between the U.S. and the specific country in the purchasing of the same amount and type of medical services. Tricare is utilizing a two year phase in approach for the implementation of the World Bank’s International Comparison Program CSI. Per change 77 dated 7 APR 08 to the Tricare Reimbursement Manuel for the Philippines and Panama, the first year of the CSI phase in has been set at 0.52 and 0.70 through 28 FEB 08. The second year of the CSI phase in has been set at 0.229 for the Philippines and 0.60 for Panama effective 1 MAR 09. However, their is a requirement that all providers that submit bills to Tricare and are effected by the changes must be given at least 100 days notice so it is likely that the changes will not take effect until AUG 08 and AUG 09 respectively. The change equates to a 27.1point index reduction (52%) for the Philippines and a 10 point index reduction (15%) for Panama assuming nothing is done to reverse these reductions. For additional info refer to http://manuals.tricare.osd.mil. [Source: Tricare Reimbursement Manual 6010.55-M w/Change 77 Chap 1 Sect 34 & 35dtd 7 Apr 08 ++]

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Coming Soon Tricare For You Online

Posted by Service Officer on 17th May 2008

Coming soon to TRICARE4u.com

In July, 2008, Wisconsin Physicians Service (WPS) and TRICARE4u.com is proud to present to our valued TDEFIC and Foreign Providers a new feature that will provide claims processing information on a weekly basis to you as a registered Provider.

Every Monday morning you will receive an e-mail reminding you to check the web site for your claims information along with a link to the TRICARE4u web site for your convenience. Simply log-in to your account with your username and password. Once you log-in, you will have access to all of the claims processing information for the previous week on an easy to read report. For your convenience, you will have the ability to download this report into an Excel format. The report will not only provide you with the previous week s claims information, but also access to up to three weeks prior.

The new web service will provide you with the following advantages:

No need to call TRICARE Customer Service to find the status of claims. This information will be provided in the report Save time, money, and resources
Receive timely and accurate claims processing information without any effort on your end.

Ability to print off up to 4 weeks worth of claims information for your records. The report will provide you with the following TRICARE for Life and Foreign claims processing information:

In-processing Claims Information
Processed Claims with information showing if a check has been generated
Denied Claims with a link to the claim detail so you can find out why the claim was denied

We invite you to take advantage of this new free service being provided by WPS and TRICARE4u.com at a computer near you in July, 2008. We look forward to hearing your feedback as we strive to provide you with excellent service in return for the service that you provide to our beneficiaries.

Thank you for your time and we look forward to working with you in the future!

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Posted by Service Officer on 30th April 2008

One of the first things on a new retiree’s checklist after leaving active duty is health care. With the Tricare fee increase proposals the decision on where it will be obtained from is even more critical. Factors that must be considered are extent of family protection, cost, and whether or not supplemental insurance will be required. Many retirees start a second career and enroll in their new employer’s health care plan. Others stay with Tricare and are comfortable with the process. A prime consideration whether you are a new military retiree or a seasoned one is does your current or potential health care program cover all costs? For a number of years now DoD has drafted plans that will drastically increase Tricare enrollment fees and deductibles for 3 million retirees under age 65 and their families to help slow the government’s increasing cost of health care. One aim of these proposals is to encourage working-age retirees to enroll in an employer’s program or switch to other available plans.

If the proposals are approved some retirees will have no choice except to use the Tricare program. Others have options. As with any new program, the key is to get all the facts. Depending on your options Tricare may no longer be the best deal for you. It is recommended you get all the information you can on your own and compare prices. Some employer health care programs provide the employee with limited options. The following questions will guide you toward the best purchase:

• Must I meet a deductible before the plan begins to pay?

• Is there a maximum limit on benefits?

• Is there a pre-existing condition clause?

• Is there a waiting period before the policy becomes effective?

• Will the plan cover amounts beyond what Tricare allows?

• Does the plan pay for services that aren’t covered by the policy?

• Does the plan specifically not cover certain conditions?

• Must certain kinds of care be approved before treatment?

• Is inpatient care covered?

• Is there outpatient or long-term care coverage?

• Will the plan pay the outpatient deductible?

• Will a new plan pay the same as my cost-share under the Tricare diagnosis-related group payment system?

• Will the plan cover enrollment fees or co-payment?

• Does the plan offer reduced premiums or premium adjustments if I participate in managed health care plans?

• Does the plan convert to a Medicare supplement? If so, must it be in force for any specified length of time before conversion?

• Will the plan cover me overseas?

• How will the plan require premium payments? Monthly? Quarterly?

• Can premium payments be increased?

• Does the plan offer rates based on military retired status or based on an age scale?

• Does coverage continue for surviving spouses at no charge?

• What’s the time limitation, if any, for filing a claim?

• If I am a smoker, does the plan have higher rates?

The Defense Department has expressed concern over the recent influx of military retirees into the Tricare program and away from employer-provided health care. Certainly, this concern shouldn’t override the promise Congress made to its sons and daughters who wore the military uniform, protected our country, and gave their all when unique demands were placed upon them and their families. Unfortunately, our military retirees will have to dig deeper into their pockets. [Source: Air Force Times article by Alex Keenan MCPO USCG (Ret) 9 JAN 05 ++]

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Posted by Service Officer on 30th April 2008

The Department of Defense (DoD) and Tricare announced 15 MAR a demonstration project to care for active duty military dependents diagnosed with Autism. This program allows reimbursement for educational intervention services, such as Applied Behavior Analysis (ABA), delivered by paraprofessional providers. ABA is a systematized process of collecting data on a child’s behaviors and using a variety of behavioral conditioning techniques to teach and reinforce desired behaviors while extinguishing harmful or undesired behaviors. Time-limited, focused ABA methods have been shown to improve communication abilities, reduce or eliminate specific problem behaviors and teach new skills to some individuals with autism. Tricare is in need of ABA professionals, or supervisors, and paraprofessionals, or tutors, to provide services that will enhance the effectiveness of academic instruction and provide training in life skills (language, communication, self help, activities of daily living, etc.). DoD has been a leader in providing coverage for health and special education services for children with autism. Tricare is one of the very few health plans providing coverage for special education services. In recent years, the per month special needs benefit for qualifying active duty family members under Tricare’s Extended Care Health Option (ECHO) was increased from $1,000 to $2,500; however, Tricare beneficiaries still find it difficult to obtain services from authorized ABA providers.

Tricare authorized providers are currently limited to those recognized by the Behavior Analyst Certification Board (BACB). However, the professionalization of the field remains in its infancy and the number of BACB-certified behavior analysts is limited. These certified professionals are for the most part providing behavior analysis evaluation and intervention planning services rather than the one-on-one technical intervention that is the actual tool effecting behavior change in autistic children. This new field has yet to define the provider class that delivers the one-on-one technical services to children. ABA tutors will increasingly be asked to provide services to the many children being diagnosed with ASD. Tricare’s three Managed Care Support Contractors are building a referral network of ABA providers who will agree to be reimbursed for Tricare-eligible beneficiaries referred for care. Providers and beneficiaries wanting more information should contact:

• TRICARE North Region – Health Net Federal Services (877) 874-2273. This region provides health care services and support in Connecticut, Delaware, the District of Columbia, Illinois, Indiana, the Rock Island Arsenal area of Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, the St. Louis area of Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, the Fort Campbell area of Tennessee, Vermont, Virginia, West Virginia and Wisconsin.

• TRICARE South Region – Humana Military Healthcare Services (800) 444-5445. This region provides health care services and support in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, most of Tennessee and the eastern portion of Texas.

• TRICARE West Region – TriWest Healthcare Alliance (888) 874-9378. This region provides health care services and support in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa (except for the Rock Island Arsenal area), Kansas, Minnesota, Missouri (except for the St. Louis area), Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, the extreme western portion of Texas, Utah, Washington and Wyoming.

TRICARE Management Activity, the Defense Department activity that administers the health care plan for the Uniformed Services, retirees and their families, serves more than 9.2 million eligible beneficiaries worldwide in the Military Health System (MHS). The mission of the MHS is to enhance the Department of Defense and national security by providing health support for the full range of military operations. The MHS provides quality medical care through a network of providers, military treatment facilities, medical clinics, and dental clinics worldwide. For more info on what coverage is provided by Tricare for autistic children of active duty and retirees refer to one of the three Managed Care Support Contractors above. For more about the MHS refer to www.health.mil. For more information on neurological disorders such as autism or research programs funded by the National Institute of Neurological Disorders and Stroke refer to www.ninds.nih.gov. [Source: MHS News Release 15 Apr 08 ++]

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Posted by Service Officer on 30th April 2008

President Bush recently submitted a bill to Congress that would raise Medicare Part D premiums for seniors. The proposal would increase prescription drug premiums for individuals with incomes exceeding $82,000 and for couples with incomes greater than $164,000. Premiums would more than triple for individuals with incomes over $205,000 and couples with incomes over $410,000. Although fewer than 5% of people with Medicare drug coverage would be affected at first, increasing numbers of middle-income seniors and the disabled would pay higher premiums in the future. The President’s proposal also would freeze the income thresholds, with no annual adjustment. This would cause a problem similar to one currently affecting the taxation of Social Security benefits. When the tax was first enacted in 1983, the public was told that only higher income seniors would be affected. But because the income thresholds are not adjusted, and have remained at $25,000 for individuals and $32,000 for couples, middle-income seniors pay taxes on their benefits today.

The proposal comes in response to a forecast by Medicare Trustees that by 2013 more than 45% of Medicare’s spending will come from general tax revenue, as opposed to dedicated payroll taxes and premiums paid by beneficiaries. Under the 2003 Medicare drug law, the President must propose legislation to limit the government portion of Medicare spending and Congress is required to give the proposals expedited consideration. The law, however, does not force Congress to vote. The President’s Medicare bill does not include proposals to cut payments to hospitals or other health care providers. He did, however, submit an annual budget that would cut an estimated $481 billion from Medicare over the next ten years, according to the Congressional Budget Office. Despite the deep and widespread cuts, President Bush did not cut subsidies for private Medicare Advantage plans. The plans cost the government about 12% more than it pays for seniors enrolled in traditional Medicare. Since 2000, Social Security benefits have increased 22%, but Part B premiums have increased 111%.” [Source: New York Times article 16 Feb & CBO report 3 Mar 08 ++]

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Posted by Service Officer on 30th April 2008

The retired enlisted Association (TREA) has learned that some hospitals are playing games with Medicare and as a result, some Tricare users are ending up owing hospitals large amounts of money. The rule that if medical care providers accept Medicare they must accept Tricare apparently is not always applicable. It turns out that the hospitals still accept Tricare, and they still accept Medicare payments if the patient has previously been treated in that hospital. However, they are not accepting any new Medicare patients. Thus, if the Tricare insured has not previously been a patient at that hospital, the patient ends up having to pay the Medicare portion of the bill out of pocket. The Medicare portion for TFL beneficiaries is normally 80% but under these conditions payment under Tricare Standard should apply the same as it does for overseas users. They pay 25 % of the bill in addition to the $150 deductible since Medicare provides no coverage outside the USA. Although this seems very unfair and is really “playing games” with Medicare and with patients, it is legal. Accordingly, Medicare eligibles need to make sure anytime they are having scheduled hospitalization that the hospital will take both Tricare and Medicare if they are a new patient in that hospital. If not, verify with your Tricare regional office if Tricare Standard rules will apply. Also, it might be prudent to check with your local hospital what their policy is in the event you will have to use them for emergency treatment in the future. [Source: TREA Washington Update 18 Apr 08 ++]

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Posted by Service Officer on 30th April 2008

: A federal judge ordered a Philippines company to pay back $100 million (euro63 million) it swindled from the US military’s health insurance program. Health Visions (HV) Corp., which pleaded guilty to mail fraud, was ordered to liquidate all assets within 10 months and give the proceeds to the US government. Federal prosecutors say the company bilked the military’s Tricare program out of $99.9 million (euro63.35 million) between 1998 and 2004. The company routinely inflated claims by more than 230%, operated a phony insurance program and billed for medical services never delivered, court records showed, and the Pentagon moved slowly to uncover the scheme. Assistant US Attorney Peter Jarosz described Health Visions as the biggest violator yet in a long-running investigation into Tricare fraud in the Philippines. "This is basically a death sentence for the company. It will no longer exist and that will protect the Tricare program since it was the biggest violator," he said after the hearing. "We got what we needed out of this prosecution."

The US closed its military bases in the Philippines in 1992 and withdrew its active-duty forces, but thousands of retirees remained. Formed in 1997, Health Visions owned and operated hospitals and clinics in the Philippines and billed Tricare on behalf of other health care providers. On top of the $99.9 million (euro63.35 million) in restitution, US District Judge Barbara Crabb ordered the company to forfeit an additional $910,000 (euro577,000) and pay a $500,000 (euro317,000) fine. Health Visions will be required to sell off land, office buildings and hospitals in the Philippines and an airplane and houses in the US under Crabb’s order. The company has run into problems selling hospitals because of ownership disputes, and Jarosz said it was uncertain whether the U.S. government would ever recover the full amount. The company’s lawyer, Christopher Kelly, declined to comment. He told Crabb he had nothing to add beyond a plea agreement, which was unsealed on 24 APR. Health Visions and its former president, Thomas Lutz, were hit with a 75-count indictment in 2005. Lutz, a US citizen who turned 41 on 24 APR, has pleaded guilty to his role in a kickback scheme and could face up to five years in prison when he is sentenced. A date for that hearing will be scheduled shortly now that the company has been sentenced, Jarosz said. No word has been released yet on what action will be taken against the hundreds of military vets/dependents who knowingly aided and abetted this fraud. All were required to sign Tricare claim forms verifying treatment and all received EOB’s identifying what had been billed to Tricare by HV.

The case has been an embarrassment to the Pentagon, where different branches have blamed one another for allowing the company’s fraud to slip through the cracks. The fraud was so extensive that claims from the Philippines increased by 2,000% between 1998 and 2003 even as the number of Tricare beneficiaries remained the same. Payments to the country went up from less than $3 million (euro1.9 million) to more than $60 million (euro38.05 million) during that time. The Office of Inspector General has criticized Tricare’s managers for waiting years to cut off payments to Health Visions after suspecting the company of fraud. William Winkenwerder, former assistant secretary of defense for health affairs, said that the inspector general’s office was partly to blame because it refused his requests to send additional investigators to the country. He said he worked hard to stop the problems after they came to his attention in 2003. Asked how the company was able to defraud the program of $100 million (euro63.42 million), Winkenwerder said: "There were some very deceptive practices that were occurring. The fact that this was a faraway location did add to the challenge of uncovering problems. And they didn’t get away with it ultimately, which is the good news." The investigation has been handled by prosecutors in Wisconsin because WPS Health Insurance, a Madison company, is the subcontractor that handles most overseas claims. About three dozen others have been indicted to date, mostly US military veterans and Philippine doctors. [Source: AP Ryan J. Foley article 24 Apr 08 ++]

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