Cuts could impact TRICARE users

Low reimbursements are the top reason physicians say they turn away beneficiaries who use TRICARE Standard, the military’s fee-for-service insurance option, or TRICARE Extra, the preferred provider option, according to TRICARE health care provider surveys.

Access to health care for these two groups of beneficiaries could become an even bigger challenge thanks to the convoluted deficit-reduction deal hammered out last weekend between the Obama administration and leaders in Congress.

The Budget Control Act of 2011 establishes a two-step process toward reducing deficit spending by $2.4 trillion over the next decade. Step one directs Congress to cut discretionary spending by $917 billion to include $350 billion from defense budgets base on priorities set by a roles and missions study.

Step two has Hill leaders establishing a 12-member committee of lawmakers, to be divided evenly between Democrats and Republicans. They are to identify an additional $1.5 trillion in reductions from entitlements and tax reforms.

This bipartisan committee is to report out legislation agreed to by at least seven of its members by Nov. 23 to produce the required cuts. The full Congress then must vote on the recommendations by Dec. 23.

With Republican leaders already vowing to assign to the committee only lawmakers rigidly opposed to revenue increases of any sort, including any tax bump for the wealthy or loophole closing for corporations, and Democrats vowing to protect Medicare, Medicaid and Social Security, the likelihood of stalemate seems quite high.

That’s where the risk surfaces regarding access to health care for beneficiaries who rely on TRICARE Standard or Extra. If the committee of 12 can’t agree or the full Congress votes down their plan, the Budget Control Act inflicts its own formula: automatic cuts of $1.2 billion, half to come out of future defense budgets and the other half from entitlement programs.

“The deal includes an automatic sequester on certain spending programs to ensure that — between the Committee and the trigger — we at least put in place an additional $1.2 trillion in deficit reduction by 2013,” a White House fact sheet on the arrangement explains.

The arbitrary cut “would be divided equally between defense and non-defense programs, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.”

This last sentence, underlined and made bold in the White House fact sheet, ignores the likelihood beneficiaries still would be hurt as more doctors, feeling underpaid, turn away Medicare and TRICARE patients.

Any cut in Medicare provider fees would tighten access to care for TRICARE beneficiaries too because, for the past 20 years, TRICARE physician fees, by law, have been linked to fees allowed under Medicare. If Medicare reimbursements are slashed, doctors who accept TRICARE Standard and Extra patients feel the same financial pain.

Retired Air Force Col. Mike Hayden, deputy director of government relations for Military Officers Association of America, said TRICARE users clearly have reason to worry if the 12-member committee fails to reach a deal.

“Anything that lowers payments to providers will negatively impact beneficiary access to both TRICARE and Medicare,” Hayden said.