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The automatic, across-the-board budget cuts known as sequestration would restrict Tricare's ability to pay its health care providers, the Pentagon's top budget official said Thursday.
Defense Department Comptroller Robert Hale said the Defense Health System budget would drop by about $3 billion under the cuts, due to take effect in January if Congress does not reach an alternative deficit reduction agreement.
Those left holding the bag, in addition to physicians and health care providers, would be Tricare regional contract managers, who oversee the system's provider networks, billing and customer service. On Wednesday, a spokeswoman for Health Net Federal Services, the Tricare North Region manager, said the company is "evaluating options" regarding sequestration.
"Our two guiding principles will be ensuring beneficiaries are taken care of and working in close concert with the government," she said.
Humana Military Healthcare Services deferred questions on sequestration plans to Tricare Management Activity.
Neither TriWest, which recently lost the contract for Tricare's West Region, nor UnitedHealth Military and Veterans Services, which will assume the contract April 1, 2013, responded to questions about the impact of sequestration on beneficiaries.
Even Hale said the department is not thinking about what programs or services would be cut as the result of sequestration.
"We have looked at impact assessments on Tricare, among others, and they would be seriously hurt. But we are not planning for [sequestration]," he said.
Pentagon and White House officials have said they will use their authority to exempt military personnel programs from the effects of sequestration, but troops could still feel the effects through impacts on other programs, such as Tricare.
Officials said other effects could include reductions in commissary hours and delays in maintenance and repairs to military housing and other facilities.