Military Health System Reform: Military Treatment Facilities

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.

Background

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.

Why is DOD planning to restructure

MTFs?

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.

How did DOD develop this plan?

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.

What is DOD’s plan to restructure

MTFs?

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.

https://crsreports.congress.gov

Military Health System Reform: Military Treatment Facilities

Table 1. MTF Restructure Decisions

Future-State Category

Upgrade Trauma Center

# of

MTFs

Future-State Description

MTF to enhance capabilities for a higher-level trauma designation.

1

Hospital-to-Clinic

(no urgent care)

MTF to eliminate inpatient services and provide outpatient care only with ambulatory

surgical services.

1

Hospital-to-Clinic

(with urgent care)

MTF to eliminate inpatient services and provide outpatient care only with ambulatory

surgical services and 24-hour urgent care services.

1

No-Surgery Clinic

MTF to eliminate ambulatory surgical services and provide outpatient care only.

3

Active Duty Care Clinic

MTF to support active duty servicemembers only with primary care and limited specialty

care services. Active duty family members may be seen on a space-available basis.

37

Occupational Health Clinic

MTF to support occupational health, industrial hygiene, and preventative medicine

requirements for military installation employees only. Primary care services may be offered

to active duty servicemembers and family members on a space-available basis.

1

Recapitalization

DOD to develop recapitalization plan for restructuring MTF assets with a potential military

medical construction project.

1

MTF to eliminate all health care services and close.

5

Closure

Source: CRS analysis of DOD, Restructuring and Realignment of Military Medical Treatment Facilities, February 19, 2020.

Note: Future-state categories based on DOD’s description of MTF restructure decisions. Certain active duty care clinics are to continue to

offering pharmacy services for eligible beneficiaries. For the full list of DOD’s MTF restructure decisions, see pp. 7-11 of the report.

DOD estimates that MTF restructuring activities will begin

in FY2021 and occur over a 2-5 year period. The

Department also intends to evaluate additional MTFs for

future restructuring opportunities.

Military Readiness

 How will MTF restructuring improve clinical readiness

requirements for military medical providers and

maintain a medically ready force?

When did DOD last restructure its

MTFs?

Cost Implications

 What implementation costs are associated with

restructuring MTFs?

 Does DOD anticipate cost-savings when restructuring

activities are complete?

As military requirements and health care demand shifts

over time, DOD uses a dynamic process to periodically

review and modify its military medical capabilities—

including its MTFs. Since 2001 for example, DOD has

conducted at least two assessments with recommendations

for MTF restructuring: the 2005 Base Realignment and

Closure Commission Report and the 2015 MHS

Modernization Study Team Report. DOD has since

implemented many of those recommendations and

continues to assess MTFs to optimize resources and support

clinical readiness requirements.

Considerations for Congress

DOD provides periodic, informal briefings on MHS reform

to the congressional armed services committees. The

following lines of inquiry may assist Congress in

overseeing DOD’s planning, resourcing, and

implementation of the 703 Report recommendations.

Implementation Activities

 What is DOD’s implementation timeline for MTF

restructure activities?

 How will DOD coordinate MTF restructure activities

with ongoing MHS reform efforts?

Impacts of MTF Restructuring

 As MTFs restructure, what is DOD’s plan to reassign or

reshape the medical workforce?

 How will restructure activities impact beneficiary

satisfaction and access to care?

Relevant Statutes and Policies

10 U.S.C. §§1073c, 1073d, 1077a

DOD Directive 6010.04, Healthcare for Uniformed Services

Members and Beneficiaries, updated June 1, 2018

DOD Instruction 6000.19, Military Medical Treatment Facility

Support of Medical Readiness Skills of Health Care Providers,

February 7, 2020

CRS Products

CRS In Focus IF10530, Defense Primer: Military Health System,

by Bryce H. P. Mendez

CRS In Focus IF11273, Military Health System Reform, by Bryce

H. P. Mendez

Other Resources

DOD, Restructuring and Realignment of Military Medical

Treatment Facilities, February 19, 2020

DOD, Military Medical Treatment Facilities, June 23, 2018

DOD, Military Health System Modernization Study Team Report,

May 29, 2015

Bryce H. P. Mendez, Analyst in Defense Health Care

Policy

https://crsreports.congress.gov

Military Health System Reform: Military Treatment Facilities

IF11458

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