1. TRICARE Briefing to Navy Medicine Flag Officers October 6, 2009 RADM C.S. Hunter, MC, USN Deputy Director TRICARE Management Activity

2. 2 TRICARE Overview 9.5 million beneficiaries eligible to use TRICARE as a health plan –3.5 million TRICARE Prime enrollees (MTFs and clinics) 949,711 enrollees at Navy Facilities –1.5 million TRICARE Prime enrollees (contractor networks) 499,308 DON enrollees in the contractor networks –1.8 million TRICARE for Life –Others are TRICARE Standard or TRICARE Reserve Select –Purchased care managed through regional contracts (North, South, West) –Retail and mail order pharmacy managed separately via Express Scripts MTFs – 63 hospitals & medical centers, and 414 health clinics 347,673 individual network providers Selected volume indicators per week –2.48 million prescriptions –2,380 births –1.6 million outpatient visits

3. 3 TRICARE Management Activity Near-Term Priorities New Domestic and Overseas TRICARE Contract Implementation Support to Wounded Warriors and Families Improving Access to Care Defining/Refining Medical Home Model Enhancing Health IT and Knowledge Management Ensuring Cost-Effectiveness Co-Locating Medical Headquarters under BRAC Ready – Responsive – Reliable

4. 4 “T-3” Managed Care Support Contracts New Managed Care Support Contractors Selected –Awards announced on July 13, 2009 –Awardees: Aetna, United Health, TriWest –Protests – Resolution Nov. 1? –Minimum 10-month transition period –Current contractors provide care in interim Total $55 billion over five years, with annual option periods No significant change in covered services Improved focus on preventive health, case management, quality outcomes, coordination of care, and consistent communication

5. 5 TMA Deputy Director’s “Top 10” Focus Areas to Ensure a Smooth Transition 1. TRICARE Prime Availability – “Prime Service Areas” 2. Wounded Warrior Programs 3. Continuity of Care 4. National Guard/Reserve 5. Clinical Support Agreements and External Resource Sharing Agreements 6. Information Security 7. Claims Processing 8. Provider Relations 9. Health Information Exchange 10. Simultaneous Transition of Overseas Contract

6. 6 Global Coverage for All Beneficiaries TRICARE Overseas Contract 3 TRICARE Overseas Regions: Latin America-Canada, Eurasia-Africa, Pacific 432,061 beneficiaries living overseas Patients receive primary care at MTFs, specialty care available in host nation 6 current contracts covering enrollment, claims, medical care, dental care, and emergency care in remote areas (TGRO) New contract assumes all functions, plus responsibility for host nation provider relations, and some MEDEVAC functions Anticipated announcement of vendor: Fall 2010 Approximately a 10-month transition Transition Risks –Coordination of 6 contracts transitioning out –One vendor for global coverage –Change in customary business practices in Pacific

7. 7 Our Ultimate Goal Readiness Pre- and Post-deployment Family Health Behavioral Health Professional Competency/Currency Quality Outcomes Healthy service members, families, and retirees A Positive Patient Experience Patient- and Family-centered Care, Access, Satisfaction Cost Responsibly Managed Readiness

8. 8 Access is Complex Parking MTF Age Traffic / Drive Time Hours of Operation Follow-Up Appointment TRICARE Service Center Enrollees MCSC Prime UCC TRICARE Network Call Back Busy System Dropped from Queue MTF Doesn’t Return Call No Apts on TOL Patient Appointment System Training Service TRICARE On-Line Front Desk NA / LPN / RN LAB RAD Medical Treatment Facility PCSing Relocation Enrollee To MCSC Seek Care Bounce Out Provider Cap Enrolls to Provider Cap Referrals 30% Not Activated Referrals PCM Provider Pharmacy

9. 9 Military Medical Home Patient is the center of the Medical Home Population Health Patient-Centered Care Refocused Medical Training Patient & Physician Feedback Advanced IT Systems Access to Care Team-Based Healthcare Delivery Decision Support Tools Model adapted from the NNMC Medical Home Medical Home Model Medical Home Model Emphasizes: –Access –Continuity –Coordination of Care –Comprehensiveness –Preventive Care –Disease Management Enhances Beneficiary’s Relationship with Provider Includes Principles of: –Patient- and Family-Centered Care (Navy) –Enhanced Access (Army WTU) –Competency and Currency (AF FHI)

10. 10 Navy: Shifting the Model PhilosophyModelHow to ResourceIncentives Help people when they need help Episodic care – manage trade-offs between cost, quality and access Historic Fee for services (RVUs/RWPs) Help people stay healthy Continuous support for the health of a population – Readiness plus the Triple Aim Based on needs of population served Performance based budgeting New Approach Current Approach

11. 11 Navy: Population Based Business Planning Determine population to be managed Set up patient- and family-centered primary care and optimize performance around: Generate RVU and RWP “revenue” by keeping specialists and IP busy with both enrollee and space available workload (Standard/Extra or other people’s Prime) Challenge – choosing the right measures of success Enrollment/ Provider Access to Care Satisfaction HEDIS ER Visits Continuity Readiness Production of RVUs and RWPs

12. 12 Embrace Emerging Opportunities How can we utilize T-3 in support of the MTF Medical Home? How can we incentivize Medical Home style practices for the 1.5 million network enrollees? How do we align business planning and financial incentives with Medical Home goals? How do we synchronize efforts at the MTF-network interface?

13. 13 Shaping T-3 Implementation to Support the Medical Home Enhanced disease & case management More emphasis on prevention More access to data for managing a patient population –Health information exchange for claims and encounters Opportunities for enhancements –Urgent care capability –Novel arrangements to encourage surge capability and maintain continuity of care –Innovative after-hours care Enhancing bi-directional provider communication

14. 14 Business Planning at the MTF-Network Interface 1.Redefining reimbursement and workload −Enrollment accountability, partial capitation 2.Focus on improving health −Healthcare Effectiveness Data and Information Set (HEDIS) 3.Implementing best practices −Quality, Safety, Disease Management, embedded behavioral health 4.Blended team to anchor for continuity −Access, Utilization, Reducing no shows and ER visits 5.Care is rewarding to patient and healthcare teams −Satisfaction, Retention, Staff turnover 6.Synchronize direction and incentives for TRO/MTF/ Regional Commander

15. 15 Partnering for Capacity Planning NH Bremerton Primary Care: Abundance of PCMs in this PSA Specialty Care − There are no shortfalls − Behavioral Health Medicine Management wait currently 30-45 days (community standard); additional capacity with Tele-BH program − Only two endocrinologists in the area, one outside drive-time standard (by approx. 25 miles) to Gig Harbor − Targeting additional pediatric OT due to high demand; Harrison Hospital (seven miles away) and Holly Ridge (two miles away, children up to 3) available − Everett Naval Station reporting difficulty accessing OB/GYN; list of providers accepting new patients for maternity given to MTF at Sep 9 PSAEC meeting − Four urgent care centers located within 30-minute drive time of NHB

16. 16 NH Camp Pendleton Primary Care: Abundance of PCMs in this PSA Specialty Care − There is an abundance of specialty providers for this PSA; there are no access to care issues − There are six urgent care centers in the PSA Partnering for Capacity Planning

17. 17 NH Camp Lejeune Primary Care − Current Excess PCM Capacity: 37,700 enrollees − Sufficient network PCM capacity Specialty Care − Surgical Specialty providers insufficient in PSA − However, network providers are available in surrounding areas, particularly Wilmington Partnering for Capacity Planning

18. 18 Primary Care: Civilian network enrolled to 18% capacity − 120 PCMS contracted within 20 miles of Naval Hospital Pensacola − Network has ability to enroll 29,181 additional beneficiaries − PCM Overflow: Not utilized Specialty Care: All specialty care available Report includes 0038-NH Pensacola, 0260-NBHC NAS Pensacola, 0262- NBHC NATTC Pensacola & 0513-NBHC NTTC Pensacola NH Pensacola Partnering for Capacity Planning

19. 19 Primary Care: Civilian network enrolled to 20% capacity − 333 PCMS contracted within 20 miles of Naval Hospital Jacksonville − Network has ability to enroll 103,907 additional beneficiaries − PCM Overflow: Not utilized Specialty Care: All specialty care available Report includes 0039-NH Jacksonville & 0266-NBHC NAS Jacksonville NH Jacksonville Partnering for Capacity Planning

20. 20 Agree on common goals for MCSC enrolled and MTF enrolled Select up to six sites to pilot new methodologies during FY10 –Refine methods for measurement –Look at alternate reimbursement schemes and periodic performance review Use this method to revise FY11 planning guidance Next Steps

21. 21 Posing strategic questions: –Alternate delivery and finance models –Opportunity for federal partnerships –Individual choice and financial responsibility –Need for global coverage and products for diverse populations –Rapid adoption of best practices, knowledge management –Advances in science and technology, individualized medicine –Scope of benefit Ensuring we maintain: –Patient- and family-centered care ethics –Robust direct care system for force projection –Coordination of care for individual and family readiness –Focus on health rather than health care –Stakeholder enfranchisement Health System Design for the Long-Term “T-4 Study Group”