Plans for Defense Health Program COVID-19 Spending

Key Takeaways

• The Defense Health Program will receive $4.4B for COVID-19 response.
• The DHP’s needs will include medical staff, personal protective equipment, janitorial and cleaning services, and vaccine testing support.
• DHP also intends to procure a big data capability to provide COVID-19 Common Operating Picture situational awareness.
• Commodity IT providers should be on the look out for DHP commodity IT procurements to provide enhanced telehealth, telework, and electronic health record management.

Members of Congress have not been shy about criticizing the Department of Defense’s response to the novel coronavirus pandemic, complaining that despite being given $10.6B in March, as of June the DOD had spent only a fraction of that total. Now, with Defense contractors facing an avalanche of costs and declining revenue from idled workforces, the DOD finally released a plan for spending the funds it received. The new “Department of Defense Spend Plan For Funding Received in the--Coronavirus Aid, Relief, and Economic Security ‘CARES’ Act” provides a detailed outline of what the DOD’s different components will spend in the coming months.

Among the activities funded is the Defense Health Program (DHP), which is slated to receive $4.9B for COVID-19 response. That funding breaks out as follows, but it also includes a deduction of $252M that DOD will reprogram for other purposes thanks to unused and unneeded emergency medical facilities set up immediately in the wake of the COVID-19 outbreak.

As for the other funding categories, each contains a basic description of the activities planned by the DHP that may provide industry with a sense of the requirements into which dollars will be flowing.

Medical Care

These funds will be spent at DOD Medical Treatment Facilities (MTFs) for equipment, supplies, labor and other material support to ensure adequate healthcare delivery to non-Medicare eligible DOD beneficiaries. Funding will also go to contracts for additional medical staff, for travel and lodging for military medical staff recalled to work in MTFs, for increased cleaning, laboratory testing supplies, and potential bed expansion plans. In addition, $315M will be used to purchase pharmaceuticals and equipment to facilitate increased social distancing between patients and staff.

Diagnostics and Medical Research

This funding will support vaccine development, including testing, materials, clinical trials, and laboratory costs.

TRICARE Managed Care Support Contract Shortfalls

Section 13002 of the CARES Act dictated that DOD receive this funding for TRICARE Operations and Maintenance. Specific activities are not defined. The law directs that the DHP spend this $1.1B by the end of fiscal year 2020, so within the next four months.

Medical Countermeasures

DHP plans to spend funding under this category on medical supplies, equipment to conduct public health surveillance, operational support, and patient movement, as well as additional personnel (probably contracted) to conduct contact tracing and screening at all DOD installations. In addition, the DHP will expand small scale testing capabilities, such as Biofire film array and enterprise-wide capabilities, such as the Joint Pathology Center, to review and digitize COVID-19 related tissue samples.

Lastly, but important for information technology providers, this funding will also support the development and deployment of a COVID-19 Common Operating Picture application to be integrated within the existing Project Maven Smart System. The COVID COP will provide situational awareness for DOD by using algorithm-based technology.

Medical Personal Protective Equipment at Medical Treatment Facilities

To protect personnel working at Defense MTFs, funding in this category will procure N95 respirators, exam gloves, medical gowns, face shields, and surgical masks.

Military Health Care System Direct Care Capacity

These funds will be used to modify DOD MTFs to increase social distancing, screening, and COVID-19 patient treatment. Procurement of plastic screening, curtains, and moveable walls will probably be required.

Operations

Finally, funding for DHP operations will be used to procure the hardware, software, and services required to provide enhanced telehealth, telework, and electronic health records management and overtime for Defense Health Agency and contract staff. IT providers should look for contract opportunities to provide the DHP with the required equipment and capabilities.