DoD recently announced the award of a five year, $487 million contract to Wisconsin Physician Service Insurance Corporation (WPS) to process claims, assist customers and provide administrative assistance to customers and provide administrative support for the 1.5 million beneficiaries dually eligible for Medicare and TRICARE.

The contract will be implemented in Region 11 (Northwest) beginning April 1, 2004, and will gradually expand to other regions in the months following.

The new contract marks a departure from existing TRICARE For Life (TFL) contracts, in which contracts are managed regionally with separate companies responsible for administration and claims processing. By instituting a single national contractor for TFL, DoD hopes to streamline the procedures for claims processing across the country.

When implemented, the contract will also advance a long-sought goal for dual-eligible Medicare/TRICARE beneficiaries under age 65. Currently, these beneficiaries must fill out and submit cumbersome paper claims. But with the new contract, claims for all Medicare-eligibles, regardless of age, will be transmitted electronically between Medicare and TRICARE.

Over the next month DoD will award a number of other TRICARE contracts, including under-65 healthcare (separated into North, South, and West regions), customer service, and a national retail pharmacy contract. These changes are scheduled to occur in mid-2004, will significantly alter the management of military healthcare by reducing the number of TRICARE regions from the present eleven, to three.