Testimony of the Retired Enlisted Association

Before the House Appropriations Committee Subcommittee on Defense

Presented by: Steven L. Garrett, Deputy Legislative Director

Date: March 28, 2001

DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS

The Retired Enlisted Association does not currently receive, has not received during the current fiscal year or either of the two previous years any federal money for grants or contracts. All of the Association’s activities and services are accomplished completely free of any federal funding.

Biography of Steven L. Garrett

Deputy Legislative Director

The Retired Enlisted Association

Steven L. Garrett began his legislative career in January 1999 with the late U.S. Senator Paul D. Coverdell (R-GA). He served as the senator’s staff assistant handling mailroom duties and legislative correspondent handling military affairs. As a legislative correspondent he researched and drafted responses to constituent mail regarding veteran and defense issues.

Mr. Garrett attended Young Harris College and later graduated from the University of Georgia with a Bachelor of Social Science Education concentrating in world history in 1999.

In late June 2000 he accepted the legislative assistant position with The Retired Enlisted Association where he assisted Mark Olanoff with legislative research and strategy. In January 2001 he was promoted to Deputy Legislative Director where he serves as TREA’s lobbyist. In this role he meets with congressional offices to advocate their support for the issues important to TREA members.

He is married to Tracy Garrett, a deputy communications director, for U.S. Senator Bill Frist. They live in Washington D.C.

INTRODUCTION

The Retired Enlisted Association (TREA) would like to thank the chairman and distinguished members of the House Defense Appropriations subcommittee for the opportunity to come before you to discuss funding issues as they relate to our members’ needs. We extend our appreciation for the funding levels of last year as they pertain to health care, retirement benefits, and pay. In addition, we are requesting increased levels to meet the needs of military retirees, guard and reserve as well as active duty and their dependents.

TREA has over 110, 000 members and auxiliary representing all branches of the Armed Services, retired, active duty, guard and reserve whose continuing concerns over constrained funding levels for the Department of Defense for military personnel issues impact their daily lives from the healthcare they receive to the retirement check they receive in the mail. Medical care, adequate pay and inflation protected retired pay are concerns of the entire military community.

Immediate Priorities

(1.) FY 2002 Short fall

According to Rear Admiral J. Jarrett Clinton, MD, MPH, Acting Assistant Secretary of Defense for Health Affairs, the current short fall for FY 2001 military healthcare is $1.385 billion. Clearly this is a concern for TREA as well the rest of the military community.

In a recent press conference Sen. Pete Domenici, the chairman of the Senate Budget Committee, pledged $18 billion over 10 years for military healthcare. Adopting such a proposal here on the House side will greatly alleviate, if not eliminate, the need for supplemental budget requests in the future.

(2.) TFL funding

As you know the FY 2001 Defense Authorization Act included a health care provision commonly referred to as TriCare-for-Life (TFL). This historic legislation provides much of the free healthcare promised to our military retirees. I am sure you aware that the funding of the program does not begin until FY 2003. This leaves FY2002 completely unfunded. The Retired Enlisted Association requests that you appropriate money for FY2002 as the authorization begins on October 1, 2001 (FY 2002).

(3.) Medicare Part B Waiver For TFL eligible

The recently passed TFL requires the participant to be on Medicare Part B. Most retirees who settled near a military treatment facility (MTF) were counseled by MTF advisors not to enroll in Part "B" because the MTF would provide their free health care. These retirees should not be punished with late enrollment fees due to the fact that the local MTF has closed. TREA is requesting that this committee will work with your colleagues to help authorize and then appropriate the waiver of the penalty for not enrolling in Medicare Part "B" for Medicare-eligible military retirees

TREA believes that this small investment will enable retirees to enroll in health care programs, which require Medicare Part B for eligibility such as, and most importantly, TriCare-for-Life, as well as TriCare Senior Prime, and the Fee-for-Service Option plans in FEHBP. Currently, we have military retirees that either are paying a high penalty for Medicare Part B, or just cannot enroll because it is too costly.

(4.) Lowered Catastrophic Caps Funding

Additional funding is required to cover the lowered catastrophic caps for TriCare users. FY 2001 DoD Defense Authorization Act lowered the cap from $7,500 to $3,000 but there is currently no funding to pay for it. DoD’s request that TriCare participants keep the documentation, ask their carriers to wait until DoD pays them is unfortunate. The lowered cap is law and TREA requests that it be funded.

Healthcare

TRICARE

In order to ensure the viability of TRICARE for all eligible beneficiaries to the program, it is necessary that TRICARE funding reflect the number of beneficiaries eligible for military health benefits, not just the ever-declining number of people able to use the military system the previous year.

TRICARE Standard (CHAMPUS) reimbursement levels are still much too low to attract quality health care providers. There are also unreasonable delays in reimbursement for TRICARE Standard (CHAMPUS) claims. Members have reported that in the more rural areas, and even some urban areas, where providers do not depend on a military patient base, health care providers have become increasingly unwilling to accept TRICARE Standard (CHAMPUS) patients at all. TREA feels that de-linking the CMAC (CHAMPUS maximum allowable charge) from the Medicare Schedule and authorizing higher payments to providers as necessary will improve access to quality care for our beneficiaries. The FY 00 Defense Authorization Act gave the Secretary of Defense the authority to go over the current CMAC rates to bring in providers into TRICARE networks, but TREA still see this being implemented.

The current claims processing system for TRICARE needs to be revamped in order to reduce the hassles of claims payment for physicians and beneficiaries. The beneficiaries end up getting caught in the middle when they receive collection notices from their creditors, even after they were told the TRICARE subcontractor would pay the claim. The FY 00 Defense Authorization Act moved to allow TRICARE contractors to use electronic processing for claims and streamlining the information flow, this being two pieces of the claims puzzle to be fixed. DoD has the authority to bring the claims system to "the best industry standard", and TREA understands that DoD is currently working to implement improvements effective October 2002. As stated in a December 11, 2000 TriCare press release, “the TriCare Management Activity (TMA), DoD’s designee for evaluating the new rule, has formed a group of experts from its staff and uniformed services into an Integrated Program Team (IPT). The IPT is currently studying how best to apply these standards to the eight administrative transactions used routinely in health care administration, including claims processing.” TREA appreciates this effort and requests that this committee continues to stay abreast to this work in progress.

As we review the TRICARE program, the issues of low reimbursement rates and claims processing continue to be a disincentive for providers to sign up with a Prime network or to be a provider to accept TRICARE Standard. We will continue to work with this committee to address these issues, as well as the shortfalls in the overall TRICARE program too.

TriCare Standard Improvements:

TRICARE Standard, the fee-for-service option, needs improvement to at least equal the quality and standard of care as provided under FEHBP standard fee-for-service by:

· Eliminating the need for Non-availability statements (NAS) from military treatment facilities and clinics and completely eliminate the requirement for pre-authorization.

· Eliminating the 115% billing limit when TRICARE Standard is second payer to other health insurance.

CARE FOR THE DISABLED

The statute which authorizes the CHAMPUS program prohibits the military health care system from delivering "custodial care." The statute does not provide a definition of the term. Originally, DoD interpreted the exclusion in a manner consistent with other federal health programs and how the term is understood in the health care industry generally. However, eleven years after Congress created the exclusion with no change in the statute or related legislative history, DoD reinterpreted the term "custodial care" in a manner, which excludes care for those with permanent disabilities from the military health system.

DoD’s definition excluded custodial care encompassing medically complex skilled care. This approach is not found in other federal health programs with this statutory exclusion. Further, Federal courts have rejected this approach.

The FY00 Defense Authorization Act and the FY00 Defense Appropriations Act ordered changes in DoD’s policy and regulations regarding the disabled. As of yet, DoD has not fully implemented these changes, nor has it provided the public an opportunity to participate in redefining the "custodial care" term as required by law. There is concern that DoD will not provide meaningful change without further Congressional legislation and oversight. Therefore, this committee should require DoD to redraft the definition for custodial care consistent with other Federal health plans and related case law.

TREA asks this committee to require DoD to, at a minimum, provide military families with the same amount of basic health services that are available through FEHBP. DoD should not continue to send dependents of service men and women into welfare programs in order to relinquish their responsibility to pay for needed skilled nursing care.  

Other Personnel issues

CONCURRENT RECEIPT

TREA would like to thank the members of this Committee who appropriated the necessary funding last year to begin the special pay program for the most severely disabled military retirees. This payment, which provides certain military retirees rated 70% disabled or higher by the Department of Veterans Affairs (VA) with a special pay ranging from $100 - $300, will be of great assistance to these disabled veterans.

Additionally, TREA strongly supports H.R.303, The Retired Pay Restoration Act of 2001; this legislation will free military retirees with a longevity retirement to receive their promised retired pay and their duly earned disability pay without an offset. TREA understands that the members of this committee are not the authorizers, but we earnestly ask you to work with the Armed Services Committee to see that this important bill is authorized and then appropriated.

SURVIVOR BENEFITS

TREA members, as well as all military retirees who have invested in the Department of Defense sponsored Survivor Benefit Plan (SBP), are frustrated by the offset faced by survivors of military retirees once they reach the age of 62. Currently, a survivor of a military retiree would receive 55% of a military retirees retirement pay per month, if the retiree opted for full SBP. However, that amount will be reduced to 35% once the survivor becomes eligible for Social Security, regardless of whether or not they have earned Social Security from their own work experience. With the average enlisted retiree earning $16,000 per year, a Social Security-eligible survivor is left with only $6,600 in income from their spouse’s military service.

TREA, along with several other military retiree organizations, has worked closely with several members of Congress recently to eliminate this offset. Last year, the Senate included legislation, which would increase the amount a survivor receives from the current 35% to 45% over a five-year period. TREA strongly endorsed this language and was very disappointed when it was not included in the FY 2001 National Defense Authorization Act Conference Report.

We are currently working with members of both the House and Senate Armed Services Committees to include legislation eliminating or reducing the Social Security offset. It is our hope that, finally, it will be included in the Conference Report of the National Defense Authorization Act. We request that this committee will have the resources to implement it.

Another issue of concern regarding SBP is the implementation of the paid-up SBP program. Slated to begin in 2008, this program will allow those retirees who have been paying into SBP for 30 years and have reached the age of 70 to cease making payments but still keep their spouses covered. While we applaud this program, it is TREA’s desire to move the start date up to 2003, as called for in the original bill. As the program is currently set up, those retirees who enrolled in SBP when the program started in 1972 will pay far more than 30 years. We are currently working with members of Congress to have the paid-up program begin as early as possible. However, this committee would again have to appropriate the necessary dollars to implement it.