U.S. Military Retirees of the Philippines Group

Tricare Philippines Newsletter 14004

DODIG: Contractor Driven Price Increases in the Philippines are Not Worthy of Review
International SOS (ISOS) has a long history of questionable activities in the Philippines to include using the CMAC’s grossly overstated outpatient rates to entice businessmen to set up physician groups which were certified but without even one physician working in the group. These groups paid local physicians cash at rates from P250 to P500 and then used their certified status to bill TRICARE for $50 or more and were routinely paid $35 or more.
So when we found that for the better part of a year they were not successful in recruiting providers into the Demonstration but then started to have some success we predicted in writing to TRICARE Management Activity (TMA), now Defense Health Agency (DHA), personnel that it was likely they were using the overstated outpatient rates as a bribe. This is an extract from the email dated 2 October 2012:
“ISOS may have even told them they should charge P1,500 for Tricare patients because that is what TMA allows, instead of P600. (By the way a local PPO would get that P600 visit for P540 not P1,500 like TMA is probably going to pay.)”
As everyone in the Demo areas now know that prediction came true with rates between P1,000 and P2,000 being reality. Providers and senior staff at the medical facilities openly admitted to beneficiaries that they were told by ISOS that TRICARE policy required they charge higher rates.
Initially we tried to address this fraud and violation of policy to DHA. ISOS as usual denied any involvement or knowledge of the increases but they are known for misrepresenting the truth so that was expected. DHA, in a complete and total
policy reversal, claimed price increases of 4 fold were common practice and expected worldwide. This includes violating 32 CFR, Part 199.9 that ISOS is required to insure certified and approved providers sign a document acknowledging they are aware of these provisions which state that a provider will not charge a TRICARE beneficiary more than they charge the general public.
After finding that TMA refused to believe us and preferred to defend their contractor we took our evidence and sent it to the DODIG. We did this because their audit plan showed a pending 2014 investigation on
“Negotiated Rates for the TRICARE Overseas Program”. Our thought was they would find these price increases of particular interest but we were dead wrong. In February 2014 we received an email from the DODIG stating they were not going to investigate our complaint but referred it to the DHA IG for any action they deemed appropriate. Our attempt to contact the DHA IG showed that no such office existed. So we contacted the DODIG pointing out their mistake. They responded that what they called their “Hotline coordinator” at DHA was provided with the complaint. We contacted them and were told their sole responsibility was to file the complaint away and only if they were directed by the DODIG would they take any action so it was filed and forgotten.
In April 2014 the DODIG audit of Negotiated Rates for the TRICARE Overseas Program came out, DODIG-2014-052. After reading the report it was obvious to us why the DODIG decided to ignore the fraud and increased prices in the Philippines; there was absolutely no mention of them in the audit or even an indication they visited the Philippines. But they did try to use the policies currently in effect in the Philippines as a good tool for DHA to implement around the world to lower cost and obviously if those polices were creating access to care issues and the contractor was recruiting providers by suggesting they should charge more it would have seriously weakened their position.
Of interest is the response from DHA to this. In part they said,
“Though these cost containment measures [in the Philippines and Panama] have dramatically reduced the TRICARE purchased care costs in those two countries, it has had a negative impact on TRICARE Standard beneficiaries” access to quality health care and out-of-pocket expenses.” They also stated, “The DoD does not have a large permanent presence (assigned ADSMs and ADFMs) in Panama and the Philippines, and TRICARE pays billed charges for health care provided to those ADSMs and ADFMs.” One has to wonder, if their CMAC is really accurate and fair, why does it not apply to everyone but only to retirees and their families in the Philippines?
The DODIG response was the DHA claims of loss of access to quality care and increased costs to retirees and their families in the Philippines was mostly ignored or dismissed by stating,
“However, TMA officials did not have documentation to support these reasons." We provided that evidence to TMA staff quite some time ago in a focused study on access to care as well as our blog article, Proof We are Treated as Second Class TRICARE Beneficiaries Using DHA”s Own Data, that expanded on the access to care issues we endure.
Because the DODIG decided not to include the relevant issues of price increases in the Philippines in what appears to be an attempt to hide these facts because they would weaken their push to force similar change on TRICARE beneficiaries in other countries we decided to make the evidence public so all will know the truth behind these increases and the DODIG agenda.
DODIG Complaint. We removed the names of those beneficiaries that talked to various providers and staff from this copy but not from the copy sent to the DODIG in November 2013.

What’s Next?
As we gather more information from DHA, the contractor and beneficiaries we will continue to send out newsletters but generally not more than once a month.
What we continue to see is rapidly put together policy that sometimes changes within a few days only to be changed again. These in turn raise new issues or other unforeseen problems surface. To keep up with these we will post shorter topic specific updates and notices on our blog,
TRICARE Overseas Philippines Blog. Recommend those interested in keeping informed on Philippine TRICARE Standard and the Demonstration check it frequently or alternately add your email address and click “Follow” about midway down the front page and on the right. This will automatically email you a link to each new entry.
Archived Newsletters
Previous Newsletters can be accessed by going to
U.S. Military Retirees of the Philippines Group TRICARE Newsletter Archive.

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