MANAGED HEALTH CARE NETWORKS.

SEC. 712. MANAGED HEALTH CARE NETWORKS. (a) Authorization of Such Networks.—Section 1079 of title 10, United States Code, is amended by adding at the end the following new subsection: “(n) The Secretary of Defense may enter into contracts (or amend existing contracts) with fiscal intermediaries under which the intermediaries agree to organize and operate, directly or through subcontractors, managed health care networks for the provision of health care under this chapter. The managed health care networks shall include cost containment methods, such as utilization review and contracting for care on a discounted basis.”. (b) Delivery of Health Care Services in the Tidewater Region of Virginia.—(1) Using the authority provided in section 1092 of title 10, United States Code, and section 1079(n) of that title (as added by subsection (a)), the Secretary of Defense shall undertake a program to provide for the delivery of health care services to members of the Armed Forces serving on active duty and covered beneficiaries under chapter 55 of that title in the Tidewater region of Virginia. Such program shall— (A) incorporate the primary features of managed health care with cost containment initiatives, including utilization review, preadmission screening, establishment of provider networks, and contracting for care with civilian providers on a discounted basis; and (B) shall be based on the catchment area management demonstration projects required by section 731(a) of the National Defense Authorization Act for Fiscal Years 1988 and 1989 (Public Law 100–180; 101 Stat. 1117). (2) The Secretary of Defense shall ensure that— 105 STAT. 1403 (A) the delivery of services under the program required by this subsection begins not later than September 30, 1992; and (B) all funds appropriated for the delivery of health care services in the Tidewater region of Virginia, including those funds appropriated for services provided in that region under sections 1079 and 1086 of title 10, United States Code, shall be allocated to the local manager of the program.