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                                                                                                  March 12, 2020

Military Health System Reform: Military Treatment Facilities


The Department of Defense (DOD) administers a statutory
health entitlement (under Chapter 55 of Title 10, U.S.
Code) through the Military Health System (MHS). The
MHS offers health care benefits and services to
approximately 9.6 million beneficiaries composed of
servicemembers, military retirees, and family members.
Health care services are available through DOD-operated
hospitals and clinics (i.e., military treatment facilities
(MTFs)), or through civilian health care providers
participating in DOD's health care program, TRICARE.

On February 19, 2020, DOD submitted a report to Congress
outlining its plan to restructure selected MTFs, herein
referred to as the 703 Report. DOD indicates that detailed
planning and implementation will begin within 90 days of
the report's submission, with restructure activities occurring
over the next several years.


Statute (10 U.S.C. §1073d) requires DOD to maintain
MTFs for the purposes of supporting the medical readiness
of the armed forces and the readiness of medical
personnel. There are three distinct categories of MTFs:
ambulatory care clinics, hospitals, and medical centers. In
FY2020, DOD administers 721 MTFs within the United
States and at overseas military installations. DOD entities
that administer MTFs include the Defense Health Agency
(DHA), Army Medical Command, Navy Bureau of
Medicine and Surgery, and the Air Force Medical Service.
By the end of FY2021, the administration and management
of all MTFs are to transfer to the DHA.



Congress directed numerous MHS reforms in the National
Defense Authorization Act for Fiscal Year (FY) 2017
(NDAA; P.L. 114-328) and subsequent NDAAs, including:

* transfer of MTF administration and management from
   the Service Surgeons General to the DHA Director
   (§702);
* reorganization of DHA's internal structure (§702);
* redesignation of Service Surgeons General as principal
   health advisors for their respective military service and
   as service chief medical advisors to DHA (§702); and
* restructuring or realignment of MTFs to best support
   military medical readiness and the readiness of medical
   personnel (§703).

The 703 Report fulfills the requirement, established in
section 703(d) of the FY2017 NDAA, that the Secretary of
Defense submit an implementation plan to restructure or
realign the military medical treatment facilities... In
addition, the FY2017 NDAA requires the Government
Accountability Office to provide a review of the 703 Report


to the House and Senate Committees on Armed Services no
later than 60 days after the report's submission.
Congressional approval of DOD's plan to restructure its
MTFs is not required.


After the enactment of the FY2017 NDAA, DOD
established a workgroup consisting of representatives from
the Office of the Assistant Secretary of Defense for Health
Affairs, DHA, Joint Staff, and the military departments.
The workgroup screened 343 U.S.-based MTFs to identify
where a transition of capabilities might be possible. The
screening applied the following criteria:
1. Readiness (is there enough clinical volume to
    support critical physician specialties and
    graduate medical education requirements?);
2. Network adequacy (can the TRICARE
    network absorb additional patients?); and
3. Cost-effectiveness (is it cheaper to provide
    care in the MTF than through the TRICARE
    network?).

If an MTF met at least one of the criteria, DOD
discontinued screening of the MTF and did not proceed
with the next phase. The initial screening identified 73
MTFs for further evaluation. Four other MTFs were added
at the request of the military departments.

For each of the 77 MTFs subject to additional evaluation,
DOD compiled a Use Case, (i.e., a compendium of health
care data collected from the MTF, TRICARE contractor,
military installation, and other stakeholders) for each
facility. Each Use Case also included a recommendation on
the MTF's future-state. The military departments reviewed
and provided comments to the workgroup on the Use Cases.
A senior transition leadership team, composed of senior
defense officials, reviewed and validated each Use Case
recommendation. The Secretary of Defense accepted the
leadership team's recommendations, which include 50
MTFs identified for restructure, 21 MTFs for no change,
and six MTFs deferred for further review.

-,,zk     DOD's            o
MT~s
The 50 MTFs identified for restructure are to transition to
one of the eight future-state categories (see Table 1).
DOD's next steps include developing estimates of
implementation costs and detailed implementation
planning beginning no later than May 2020.
Implementation plans are to include tasks that address care
coordination and case management, access to care,
TRICARE network adequacy, changes in MTF staffing,
and a communication strategy to inform stakeholders.


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