MILITARY UPDATE
Uniform formulary's co-payment structure three-tiered
Military Update focuses on issues affecting pay, benefits and lifestyle of active and retired servicepeople. Its author, Tom Philpott, is a Virginia-based syndicated columnist and freelance writer. He has covered military issues for almost 25 years, including six years as editor of Navy Times. For 17 years he worked as a writer and senior editor for Army Times Publishing Co. Philpott, 49, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.
By Tom Philpott
Military prescription holders should be more inclined to use base pharmacies or their mail-order drug option, rather than the TRICARE retail network, under the uniform formulary initiative to take effect next year, said Army Col. William Davies, director of the TRICARE pharmacy benefits division.
Davies, in an interview, said a higher co-payment of $22 to be set on drugs not screened for full discounts, will discourage patients from relying on more costly drugs when cheaper, equally effective alternatives are available.
But corralling military drug costs, which will hit $3 billion this year, isn't the only goal of the uniform formulary, he said. Patients who use base pharmacies or the National Mail Order Pharmacy Program will see a broader selection of drugs than now available. Also, Davies explained, for the first time since TRICARE began, officials will manage the pharmacy benefit using best business practices from the private sector.
The concern of some military associations that drugs will become "more restrictive" are unfounded, Davies said. He acknowledged, however, that some of the more popular drugs will have the co-pay rise from $9 to $22. That should encourage using cheaper medicines, Davies said, or the mail-order plan where, for the same co-pay, patients can get a three-month rather than one-month supply.
The Department of Defense's Prescriptions & Therapeutics Committee that determines what drugs are available in mail order, will be re-chartered to set the standards for mail order and the retail network. Co-pays of $3 for generic and $9 for brand drugs will remain, but the third tier of $22 will apply to some other drugs.
Davies said the process of reviewing and categorizing drugs wouldn't begin before next summer. Each drug will be re-evaluated on medical effectiveness and cost.
Most of 20 to 30 drugs now available only in the retail network will be added to the mail-order inventory, Davies said, but many could be at the higher co-pay.
DoD's P&T Committee also will expand what is called the basic core drugs for base pharmacies. Prescriptions will be filled on base at no charge if in stock. The basic core list of 160 to 170 drugs now accounts for 70 percent of prescriptions filled on base. Local P&T committees supplement that core with medicines routinely prescribed by staff specialists such as cardiologists.
Congress ordered the changes in 2000, Davies said, "because we needed the ability to manage the benefit." With the TRICARE retail network virtually uncontrolled, attempts to manage costs through base pharmacy or mail-order operations were thwarted.
Davies called the $22 co-pay "extremely reasonable"' compared with commercial and Medicare HMO pharmacy plans. Also, the $22 is intended to encourage beneficiaries to use mail order.
Concurrent receipt
The Senate Armed Services Committee has agreed with House colleagues to restore over five years, full-retired pay to roughly 82,000 career retirees who have post-retirement VA disability ratings of 60 percent or higher.
But senators added a couple of twists to the House concurrent receipt initiative as they worked on the 2003 defense authorization bill.
The House bill would begin to restore retired pay on Oct. 1 this year. Senators want a start date of Jan. 1, 2003, to comply with their accounting rules.
A second difference is in the phase-in formula. In the first year, under the House plan, 100-percent disabled retirees would get $750 a month in retired pay restored on top of their VA compensation. Ninety-percent disabled would get $500, 80 percent and 70 percent $250, and 60 percent $125 a month. After year one, the House formula has lawyer-like complexity. In year two, for example, retired pay would be raised to equal the amount paid in year one, plus 23 percent of difference between that amount and full-retired pay.
Senators want something more simple: 30 percent of the retired pay offset restored in January, moving to 45 percent a year later, 60 percent in year three, 80 percent in year four and 100 percent by January 2007.
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