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An additional tool in managing care has been the PPO (preferred provider organization) option (entitled Extra under the CRI contract) which further encourages beneficiaries to secure care through the network of high quality providers who have agreed to discount their billing rates. We have estimated that approximately 300,000 beneficiaries are accessing the PPO option. It should be noted that the new RFP does not provide for a PPO option.

In conclusion, Foundation believes that the current CRI contract is an attractive benefit package and has been demonstrated to be beneficial to the beneficiaries and MTF commanders. Our routine surveys indicate an extremely high beneficiary satisfaction (97 percent in the most recent survey) and a high acceptance rate (96 percent) of MTF commanders. We also believe that the objectives of securing significant cost reductions and/or cost avoidance have been achieved through the CRI efforts and have been documented by RAND.

Therefore, it is our belief that the CRI design works and meets the goals of the Department of Defense.

Thank you for inviting me to this hearing. I am ready to answer any

questions you may have.

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• Largest IPA-model HMO in California 300,000 members

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Over 1.6 million beneficiaries, including 860,000 military dependents and retirees

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