Lawmakers say they are losing patience with the Defense Health Agency’s continuing fiscal mismanagement, and that it has gone unaddressed for years. Members of the Senate Armed Services personnel subcommittee heard testimony Wednesday from auditors about DHA’s fiscal practices and ways those practices could be made more efficient.
Sen. Elizabeth Warren (D-Mass.), the chairwoman of the subcommittee, said she is appealing to the Defense Department to address some of the fiscal problems in the agency.
“I sent a letter to DoD and the DHA asking both agencies to improve oversight and transparency around current TRICARE spending, and put new rules in place to prevent price gouging of our military families in the future,” she said.
The letter, sent Tuesday to Secretary of Defense Lloyd Austin and DHA Director Army Lt. Gen. Telita Crosland, said “The failure to protect taxpayer funds is unacceptable, particularly given recently imposed Congressional spending caps.”
The complaints about DHA range from poor customer service to lax record keeping and insufficient oversight of its acquisition process. At the hearing, Warren said DHA has allowed contractors to overcharge DHA for years.
“The Defense Health Agency provides the reimbursements for medical procedures, services, supplies — whatever is purchased. TRICARE is allowing rampant price gouging by health care providers, driving up costs for beneficiaries and ripping off taxpayers,” said Warren.
In one instance, Warren said the DHA purchased breast pumps for service members at a cost of about $1,500 each, when the same pump could be purchased at Walmart for $192. In another case, TRICARE, the health care system that contracts out care for military veterans and dependents, reimbursed care providers $1,848 for vaccines sold commercially for $127.
Michael Roark, deputy inspector general at the DoD office of the inspector general, said that when his office reported on the breast pumps and vaccines in 2018, it concluded that if DHA had followed the report’s recommendations, the agency could have saved about $100 million.
“First, we asked them to seek voluntary repayments for instances where very high prices had been charged for services or items. In other cases, we asked them to recoup money for instances where they did not enforce the [price] cap,” Roark said.
The report said just over $718,000 was ultimately recouped. While the agency declined to ask vendors to voluntarily pay back money from overcharges, it agreed with some of the recommendations to review and change policies.
Elizabeth Field, director of defense capabilities and management at the Government Accountability Office (GAO), said the Defense Logistics Agency (DLA) and the Defense Threat Reduction Agency (DTRA) achieved significant savings after they started reviewing contracts. Under the review practice recommended by GAO, the agencies would look at what they required and whether they could consolidate any contracts before trying to buy new goods and services.
“When [DLA and DTRA] did this, they saved hundreds of millions of dollars — and those are millions for just the two small components,” Field said.
In addition to financial issues, Senators were concerned about the quality and availability of health services. Both the House and Senate versions of the 2024 National Defense Authorization Act (NDAA) address expanding mental health care for the services. Sen. Tim Kaine (D-Va.) said service members and their families report difficulties in accessing mental health care.
“We’ve had a raft of military suicides at the mid-Atlantic regional maintenance center in Norfolk and in ships that are in drydock for extended periods. Often the availability of mental health services is weak. One of my staffers went on a carrier recently — there were two mental health psychologist positions for this huge group of people, and one was vacant,” Kaine said.
In some areas, DHA struggles to provide basic health services. In Japan, DHA restricted health care appointments to acute non-recurring health problems last September for more than 6,000 civilian DoD employees. Provisions in the House version of the 2024 NDAA seek to address some of those healthcare accessibility issues.