TRICARE administrator floats pay cuts to health care providers
The private company contracted by the federal government to administer TRICARE – the health insurance program for active duty and retired service members and their families – for the western region of the country, briefly raised the possibility that it would cut reimbursement rates for services, two local health care providers told the Kitsap Sun.
The status of the cuts is unclear.
Kitsap Children’s Speech Therapy owner Sara Campbell said Health Net Federal Services, the TRICARE administrator based in Rancho Cordova, California, floated a 25% reimbursement cut to her last month but said she was also told that she would have an opportunity to negotiate the reduction. She was also told the new payment rate would go into effect April 1 and that she was part of a group of about 2,000 providers in Washington state whose rates whose rates would be changed.
“Dropping my reimbursement, that large of a proportion of my practice, would kind of kill me,” she said in an interview. “I simply cannot afford that.”
She’s since been notified by the group that they would maintain her rate “at this time,” though she wonders if perhaps the reprieve will only be temporary.
“Any reduction from the current rate will simply make it impossible to meet our expenses,” she wrote.
Health Net Federal Services spokesperson Nolan Sundrud offered a statement from the company: “As part of our responsibility to manage the network of providers that support TRICARE patients seen outside of military hospitals and clinics, we regularly review TRICARE reimbursement rates as they compare to market rates and the demand for services, and may propose rate adjustments.
“This does not reflect an overall change in TRICARE reimbursement rates and is part of our charter to align medical costs with the goals of our military health care system. We are honored to partner with the Department of Defense to ensure our military and their families receive high-quality health care at reasonable costs.”
The Defense Health Agency didn’t respond to a request for comment for this story.
Health Net Federal Services was awarded the TRICARE contract for the western half of the country in 2018. The federal government announced in December that it was awarding a new, $65.1 billion contract for services in the region starting in 2024 to TriWest Healthcare Alliance, based in Phoenix, Arizona, but after Health Net Federal Services protested the bid award, in February, the company told the Military Times that it had received “positive news that the Department of Defense will reevaluate its previous award decision and will make a new award decision for the Tricare West Region T-5 contract."
More:Why changes to military insurance may affect all healthcare consumers in Kitsap
After Silverdale pediatrician and Kitsap Sun columnist Dr. Niran Al-Agba heard from Campbell about the possibility of cuts, her practice reached out to Health Net Federal Services to inquire about the changes and was told that the practice was on a list to contact. A cut of 15-20% was on the table, Al-Agba said. But then, as with Campbell, the company then backed away and reported that it would hold her rates “for now,” she said.
“If this goes through for me, I will no longer accept new TRICARE families, and I really don’t like doing that, because that’s not fair,” she said. “I want the TRICARE families to know why, I want them to understand, this is not a decision that I take lightly or that anyone else takes lightly, but we do have to still pay staff, I have retirement for them and vacation pay, those things are important to keep staff members and to support their families. That’s the decision some of us are having to make, do we support our long-time employees or do we keep taking TRICARE families and go under?”
In a statement provided to the Kitsap Sun, U.S. Rep. Derek Kilmer, D-Gig Harbor, said that constituents had brought the issue to his attention last month and said his team was reaching out to stakeholders for more information.
He continued: “And beyond TRICARE, I’m still engaged on the broader issue of the worsening health care climate in Kitsap we’ve been seeing for years – including repeatedly calling on the Defense Health Agency to end downsizing at Naval Hospital Bremerton and fighting to ensure service members and their families don’t experience a further decline in the quality of care available to them locally.”
By: Nathan Pilling
Source: Kitsap Sun