NELSON WARNS SUDDEN SHIFT IN TRICARE PAYMENTS COULD JEOPARDIZE PATIENT CARE

November 21, 2008 - Today Nebraska’s Senator Ben Nelson and 56 of his Senate colleagues sent a letter to Defense Secretary Robert Gates, urging him to reevaluate the Department’s proposed adoption of Medicare reimbursement rules for the military health plan – TRICARE - to avoid jeopardizing health services to millions of elderly patients.

“With more and more of our servicemen and women relying on the TRICARE health care system, we must make sure that any changes made to the program are reasonable and won’t disrupt critical care,” said Senator Nelson. “I am concerned that many Nebraskans could see disruptions in critical care services if the changeover is too abrupt.

“Any transition must be made over a period of several years to allow for hospitals to absorb the changes and still deliver quality health care.”

According to the U.S. Census Bureau, Nebraska currently has 83,000 military health care beneficiaries. Nationwide, there are nearly 11 million recipients that could potentially be adversely affected by an immediate transfer of TRICARE to Medicare fee schedules.

In 2002, Congress required the Department of Defense (DoD) to move to Medicare rates “to the extent practicable.” The proposed plan, outlined in the Federal Register on April 1, 2008, would adopt Medicare’s current fee schedule for reimbursements to hospitals. The plan, however, does not provide for a broad, mulit-year transition period that is necessary for hospitals offering TRICARE services to deal with the lower payments.

The text of the letter is below:

Dear Secretary Gates:

We are writing to express our concerns regarding the transition in the U.S. Department of Defense's (DoD) proposed rule for TRICARE to adopt Medicare's prospective payment system for hospital outpatient services (OPPS).

We support TRICARE's efforts to adopt reimbursement rules which are, to the extent practicable, in accordance with the same reimbursement rules used by Medicare. However, we are concerned that DoD's proposal, as outlined in the AprilÂ 1, 2008, Federal Register, lacks a broad, effective transition that would cushion all hospitals serving TRICARE beneficiaries from disruptive reductions in payments across all services.

Sudden and severe shifts in payments as have been proposed by DoD could jeopardize providers' ability to care for TRICARE patients. To prevent such disruptions to quality of and access to care, it is crucial that such new payment policies be implemented with a meaningful transition period.

For example, when Medicare implemented its current OPPS, the agency included a robust transition over several years, providing crucial transition payments to all hospitals suffering losses. This transition was instrumental in helping hospitals absorb significantly lower payments and still continue to deliver health care to seniors.

Moreover, TRICARE provided a sustained transition over several years for physicians when adopting Medicare's physician fee schedule. This seamless transition serves as an important precedent and a practical, effective alternative to what TRICARE has proposed. We strongly urge DoD to consider a similar transition for hospitals.

As the TRICARE system harmonizes payment methodologies with Medicare, we believe it is important that a period of transition apply to all TRICARE network hospitals, and be sustained over a multi-year period. Thank you for your consideration of this important matter. We look forward to hearing from you.

Sincerely,

Senator Benjamin Nelson et al.

###



	Press Release	November 21, 2008
NELSON WARNS SUDDEN SHIFT IN TRICARE PAYMENTS COULD JEOPARDIZE PATIENT CARE November 21, 2008 - Today Nebraska’s Senator Ben Nelson and 56 of his Senate colleagues sent a letter to Defense Secretary Robert Gates, urging him to reevaluate the Department’s proposed adoption of Medicare reimbursement rules for the military health plan – TRICARE - to avoid jeopardizing health services to millions of elderly patients. “With more and more of our servicemen and women relying on the TRICARE health care system, we must make sure that any changes made to the program are reasonable and won’t disrupt critical care,” said Senator Nelson. “I am concerned that many Nebraskans could see disruptions in critical care services if the changeover is too abrupt. “Any transition must be made over a period of several years to allow for hospitals to absorb the changes and still deliver quality health care.” According to the U.S. Census Bureau, Nebraska currently has 83,000 military health care beneficiaries. Nationwide, there are nearly 11 million recipients that could potentially be adversely affected by an immediate transfer of TRICARE to Medicare fee schedules. In 2002, Congress required the Department of Defense (DoD) to move to Medicare rates “to the extent practicable.” The proposed plan, outlined in the Federal Register on April 1, 2008, would adopt Medicare’s current fee schedule for reimbursements to hospitals. The plan, however, does not provide for a broad, mulit-year transition period that is necessary for hospitals offering TRICARE services to deal with the lower payments. The text of the letter is below: Dear Secretary Gates: We are writing to express our concerns regarding the transition in the U.S. Department of Defense's (DoD) proposed rule for TRICARE to adopt Medicare's prospective payment system for hospital outpatient services (OPPS). We support TRICARE's efforts to adopt reimbursement rules which are, to the extent practicable, in accordance with the same reimbursement rules used by Medicare. However, we are concerned that DoD's proposal, as outlined in the AprilÂ 1, 2008, Federal Register, lacks a broad, effective transition that would cushion all hospitals serving TRICARE beneficiaries from disruptive reductions in payments across all services. Sudden and severe shifts in payments as have been proposed by DoD could jeopardize providers' ability to care for TRICARE patients. To prevent such disruptions to quality of and access to care, it is crucial that such new payment policies be implemented with a meaningful transition period. For example, when Medicare implemented its current OPPS, the agency included a robust transition over several years, providing crucial transition payments to all hospitals suffering losses. This transition was instrumental in helping hospitals absorb significantly lower payments and still continue to deliver health care to seniors. Moreover, TRICARE provided a sustained transition over several years for physicians when adopting Medicare's physician fee schedule. This seamless transition serves as an important precedent and a practical, effective alternative to what TRICARE has proposed. We strongly urge DoD to consider a similar transition for hospitals. As the TRICARE system harmonizes payment methodologies with Medicare, we believe it is important that a period of transition apply to all TRICARE network hospitals, and be sustained over a multi-year period. Thank you for your consideration of this important matter. We look forward to hearing from you. Sincerely, Senator Benjamin Nelson et al. ###