Capital Health Services, Inc.; JSA Healthcare Corporation, B-

Capital Health Services, Inc.; JSA Healthcare Corporation, B- BNUMBER: B-281439.3; B-281439.4 DATE: March 23, 1999 TITLE: Capital Health Services, Inc.; JSA Healthcare Corporation, B- 281439.3; B-281439.4, March 23, 1999 ********************************************************************** DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Matter of:Capital Health Services, Inc.; JSA Healthcare Corporation File: B-281439.3; B-281439.4 Date:March 23, 1999 Victor G. Klingelhofer, Esq., and John J. O'Brien, Esq., Cohen Mohr, for the protesters. Karl E. Hansen, Esq., TRICARE Management Activity, for the agency. Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. The Military-Civilian Health Services Partnership Program, 10 U.S.C. sec. 1096 (1994)--which authorizes the use of resource sharing agreements between the military's medical treatment facilities and civilian health care providers to deliver health care services to active duty service personnel and other military-related beneficiaries--is not a procurement statute for purposes of General Accounting Office (GAO) bid protest jurisdiction. However, GAO will take limited jurisdiction over the award of such agreements where the protester alleges that the agreements have been improperly used to avoid the requirements of the procurement statutes. 2. Protesters' contention that resource sharing agreements were an improper attempt to avoid the requirements of the procurement statutes is denied where the agreements were clearly within the authority granted by the statute, and within the scope of the underlying contract for managed health care services. DECISION Capital Health Services, Inc. and JSA Healthcare Corporation protest a decision by the TRICARE Management Activity (TMA) to add the operation of two existing NAVCARE outpatient medical clinics in San Diego, California, to TMA's ongoing contract with Foundation Health Federal Services, Inc. The protesters argue that the operation of the two clinics is beyond the scope of Foundation's contract, that the agency was required to hold a competition for the operation of the clinics, and that the agency's use of resource sharing agreements to convey operation of the clinics to Foundation violated the regulations applicable to the use of such agreements. We deny the protests. BACKGROUND The TRICARE Program The Department of Defense (DOD) maintains an extensive network of military medical treatment facilities (MTF) to provide direct care to active duty service personnel and, on a space-available basis, to other military-related beneficiaries, including dependents of active duty personnel and military retirees and their dependents. The direct care provided by the MTFs is supplemented by care paid for by DOD, but provided in civilian facilities. DOD has implemented a managed health care system, called the TRICARE program, to control the costs associated with providing health care to those eligible to receive it.[1] The TRICARE program uses a managed care contractor to coordinate the access of health care beneficiaries to MTFs and to supplemental civilian sector health care providers. 32 C.F.R. sec. 199.17(a)(1) (1998). TMA is the DOD office that directs the TRICARE program. When the TRICARE program is implemented in a given area, the official announcement identifies the geographical area covered by the program. Id. at sec. 199.17(a)(5). The geographic area at issue in this case encompasses Southern California, and is referred to as TRICARE Region 9. Within TRICARE's Region 9 are a number of MTFs, each of which is responsible for providing health care (on a space-available basis, and with certain priorities) to all eligible beneficiaries within a geographical subset of the region, called the MTF's catchment area. Id. The most significant MTF within Region 9 is the Naval Medical Center San Diego (NMCSD). NMCSD's care, as well as that of the other Region 9 MTFs, is supplemented by the region's managed care support contractor, Foundation. The TRICARE program offers three options for health care: (1) a health maintenance organization-type plan, called TRICARE Prime; (2) a network of preferred providers, called TRICARE Extra; and (3) a standard fee-for-service plan, called TRICARE Standard. All active duty military personnel are automatically enrolled under TRICARE Prime; all other TRICARE-eligible beneficiaries are automatically covered under the TRICARE Standard or Extra options, unless they select enrollment in the TRICARE Prime program. 32 C.F.R. sec.