[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Proposed Rules]
[Pages 16510-16513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8611]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199


Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); TRICARE Program; Nonavailability Statement Requirements

AGENCY: Office of the Secretary, DoD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule revises certain requirements and procedures 
for the TRICARE Program, the purpose of which is to implement a 
comprehensive managed health care delivery system composed of military 
medical treatment facilities and CHAMPUS. Issues addressed in this 
proposed rule include priority for access to care in military treatment 
facilities and requirements for payment of enrollment fees. This 
proposed rule also includes provisions revising the requirement that 
certain beneficiaries obtain a non-availability statement from a 
military treatment facility commander prior to receiving certain health 
care services from civilian providers.

DATES: Comments must be received on or before June 6, 1997.

ADDRESSES: Forward comments to Office of the Civilian Health and 
Medical Program of the Uniformed Services (OCHAMPUS), Program 
Development Branch, Aurora, CO 80045-6900.

FOR FURTHER INFORMATION CONTACT: Steve Lillie, Office of the Assistant 
Secretary of Defense (Health Affairs), telephone (703) 695-3350.
    Questions regarding payment of specific claims under the CHAMPUS 
allowable charge method should be addressed to the appropriate CHAMPUS 
contractor.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

A. Congressional Action

    Section 712 of the National Defense Authorization Act for Fiscal 
Year 1996 revised 10 U.S.C. 1097(c), regarding the role of military 
medical treatment facilities in managed care initiatives, including 
TRICARE. Prior to the revision, section 1097(c) read in part, 
``However, the Secretary may, as an incentive for enrollment, establish 
reasonable preferences for services in facilities of the uniformed 
services for covered beneficiaries enrolled in any program established 
under, or operating in connection with, any contract under this 
section.'' The Authorization Act provision replaced ``may'' with 
``shall'', which has the effect of directing priority access for 
TRICARE Prime enrollees over persons not enrolled.
    Another statutory provision relating to access priority is 10 
U.S.C. 1076(a), which establishes a special priority for survivors of 
sponsors who died on active duty: they are given the same priority as 
family members of active duty members. This special access priority is 
not time-limited, as is the special one-year cost sharing protection 
given to this category under 10 U.S.C. 1079.
    The National Defense Authorization Act for FY 1997, section 734 
amended 10 U.S.C. 1080 to establish certain exceptions to requirements 
for nonavailability statements in connection with payment of claims for 
civilian health care services. First, the Act eliminates authority for 
nonavailability statements for outpatient services; NASs have been 
required for a limited number of outpatient procedures over the past 
several years. Second, the Act eliminates authority for NAS 
requirements for enrollees in managed care plans, which has the effect 
of eliminating NAS requirements for TRICARE Prime enrollees. Finally, 
the Act gives the Secretary authority to waive NAS requirements based 
on an

[[Page 16511]]

evaluation of the effectiveness of NAS in optimizing use of military 
facilities.
    The National Defense Authorization Act for FY 1996, section 713 
requires that enrollees in TRICARE Prime be permitted to pay applicable 
enrollment fees on a quarterly basis, and prohibits imposition of an 
administrative fee related to the quarterly payment option.

B. Provisions of the Proposed Rule

    1. Access Priority (proposed revisions to section 199.17(d)). This 
paragraph explains that in regions where TRICARE is implemented, the 
order of access priority for services in military treatment facilities 
is as follows: (1) active duty service members; (2) family members of 
active duty service members enrolled in TRICARE Prime; (3) retirees, 
their family members and survivors enrolled in TRICARE Prime; (4) 
family members of active duty service members who are not enrolled in 
TRICARE Prime; and (5) all others based on current access priorities. 
For purposes of access priority, but not for cost sharing, survivors of 
sponsors who died on active duty are to be given the same priority as 
family members of active duty service members. This means that if they 
are enrolled in TRICARE Prime, they have the same access priority as 
family members of active duty service members, or if not enrolled in 
TRICARE Prime, they have the same access priority for military 
treatment facility care as family members of active duty service 
members who are not enrolled in TRICARE Prime.
    The proposed rule also includes a provision explaining that 
enrollment status does not affect access priority for some groups and 
circumstances. This provision would allow the commander of a military 
medical treatment facility to designate for priority access certain 
individuals, for specific episodes of health care treatment. Such 
individuals may include Secretarial designees, active duty family 
members from outside the MTF's service area, foreign military and their 
family members authorized care through international agreements, DoD 
civilians with authorizing conditions, individuals on the Temporary 
Disability Retired List, and Reserve and National Guard members. 
Additional exceptions may be granted for other categories of 
individuals, eligible for treatment in the MTF, whose access to care is 
needed to provide a clinical case mix to support graduate medical 
education programs, upon approval by the Assistant Secretary of Defense 
(Health Affairs).
    2. Enrollment Fees (proposed revisions to section 199.17(o) and 
199.18(c)). These revisions would eliminate the requirement for a 
TRICARE Prime enrollee to pay an additional maintenance fee of $5.00 
per installment for those TRICARE Prime enrollees who elect to pay 
their annual enrollment fee on a quarterly basis. Additionally, these 
revisions would permit waiver of enrollment fee collection for 
retirees, their family members, and survivors who are eligible for 
Medicare on the basis of disability. This group is eligible for 
TRICARE/CHAMPUS as a secondary payor if they are enrolled in Part B of 
Medicare, and pay the applicable monthly premium.
    3. Nonavailability Statements (proposed revisions to section 
199.4(a)). Revisions to this section modify our exiting requirements 
for beneficiaries to obtain nonavailability statements (NASs). The 
requirement for beneficiaries to obtain an NAS for selected outpatient 
procedures is eliminated. Beneficiaries who choose to obtain outpatient 
care, including ambulatory surgery, from civilian sources remain 
subject to current TRICARE/CHAMPUS cost sharing rules, but the 
requirement that the beneficiary obtain an NAS prior to TRICARE/CHAMPUS 
sharing in the civilian health care costs has been removed.
    The requirement for beneficiaries enrolled in TRICARE Prime to 
obtain an NAS for inpatient care is also eliminated. TRICARE was 
designed so that the military treatment facility is the first source of 
specialty care, with TRICARE Prime enrollees having access priority 
before non-enrolled beneficiaries. In general, TRICARE Prime enrollees 
obtain care from civilian network providers only when the military 
treatment facility cannot provide the care because it does not have the 
capability, or because the enrollee cannot be seen within time frames 
required by TRICARE Prime access standards. Since the Health Care 
Finder must authorize all non-emergency specialty care obtained from 
civilian sources, the NAS requirement for this category of beneficiary 
is redundant.
    Lastly, the revisions would eliminate the requirement that a non-
enrolled beneficiary must obtain an NAS for inpatient hospital 
maternity care before TRICARE/CHAMPUS shares in any costs for related 
outpatient maternity care. Some diagnostic tests, procedures, or 
consultations from civilian sources may be required during a course of 
maternity care and this allows TRICARE/CHAMPUS to share in the costs of 
the civilian care without requiring the beneficiary to obtain all 
maternity related care in a civilian setting.
    4. Revisions to the Uniform HMO Benefit. We are contemplating minor 
changes in the copayment structure of the Uniform HMO Benefit, which is 
used in TRICARE Prime. The proposed rule includes two revisions, which 
would eliminate copayments for preventive services and for ancillary 
services. Current provisions include copayments for ancillary services 
unless they are provided as part of an office visit. This has resulted 
in multiple copayments in cases where beneficiaries are sent to 
multiple sites for diagnostic testing pursuant to a visit, which we 
regard as unfair.
    Suggestions for additional minor changes to the Uniform HMO benefit 
will be considered. We will need to maintain compliance with the 
statutory requirements of overall budget neutrality and for reduced 
beneficiary out-of-pocket costs.
    5. Other provisions. The proposed rule also includes new provisions 
regarding two issues. The first is the inapplicability of the TRICARE 
Prime annual catastrophic cap to out-of-pocket costs incurred under the 
TRICARE Prime point-of-service option. This is at section 199.18(f)(2). 
Also, a restatement of current policy, at section 199.17(a)(7), records 
DoD interpretation of two statutory provisions preempting state laws in 
connection with TRICARE contracts.

C. Regulatory Procedures

    Executive Order 12866 requires certain regulatory assessments for 
any ``significant regulatory action,'' defined as one which would 
result in an annual effort on the economy of $100 million or more, or 
have other substantial impacts.
    The Regulatory Flexibility Act (RFA) requires that each Federal 
agency prepare, and make available for public comment, a regulatory 
flexibility analysis when the agency issues a regulation which would 
have a significant impact on a substantial number of small entities.
    This is not a significant regulatory action under the provisions of 
Executive Order 12866, and it would not have a significant impact on a 
substantial number of small entities.
    This proposed rule will impose no additional information collection 
requirements on the public under the Paperwork Reduction Act of 1980 
(44 USC 3501-3511).
    This is a proposed rule. Public comments are invited. All comments 
will be considered. A discussion of the major issues raised by public 
comments will be included with issuance of the final rule, anticipated 
approximately 60

[[Page 16512]]

days after the end of the comment period.

List of Subjects in 32 CFR Part 199

    Claims, Handicapped, Health insurance, and Military personnel. 
Accordingly, 32 CFR Part 199 is proposed to be amended as follows:

PART 199--[AMENDED]

    1. The authority citation for part 199 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 10 U.S.C. Chapter 55.

    2. Section 199.2(b) is proposed to be amended by revising the 
definition of ``nonavailability statement'' to read as follows:


Sec. 199.2  Definitions.

* * * * *
    (b) * * *
    Nonavailability statement. A certification by a commander (or a 
designee) of a Uniformed Services medical treatment facility, recorded 
on DEERS, generally for the reason that the needed medical care being 
requested by a non-TRICARE Prime enrolled beneficiary cannot be 
provided at the facility concerned because the necessary resources are 
not available in the time frame needed.
* * * * *
    3. Section 199.4 is proposed to be amended by removing paragraphs 
(a)(9)(i)(C) and (a)(9)(v)(B) and the note following paragraph 
(a)((9)(vi), by redesignating paragraph (a)(9)(i)(D) as paragraph 
(a)(9)(i)(C) and paragraph (a)(9)(v)(A) as paragraph (a)(9)(v), and by 
revising paragraphs (a)(9) introductory text, (a)(9)(i)(B), and 
(a)(9)(ii) and by adding new paragraph (a)(10)(vi)(E) to read as 
follows:


Sec. 199.4  Basic program benefits.

* * * * *
    (a) * * *
    (9) Nonavailability statements within a 40-mile catchment area. In 
some geographic locations, it is necessary for CHAMPUS beneficiaries 
not enrolled in TRICARE Prime to determine whether the required 
inpatient medical care can be provided through a Uniformed Services 
facility. If the required care cannot be provided, the hospital 
commander, or designee, will issue a Nonavailability Statement (DD form 
1251). Except for emergencies, a Nonavailability Statement should be 
issued before medical care is obtained from a civilian source. Failure 
to secure such a statement may waive the beneficiary's rights to 
benefits under CHAMPUS.
    (i) * * *
    (B) For CHAMPUS beneficiaries who are not enrolled in TRICARE 
Prime, an NAS is required for services in connection with nonemergency 
inpatient hospital care if such services are available at a facility of 
the Uniformed Services located within a 40-mile radius of the residence 
of the beneficiary, except that a NAS is not required for services 
otherwise available at a facility of the Uniformed Services located 
within a 40-mile radius of the beneficiary's residence when another 
insurance plan or program provides the beneficiary primary coverage for 
the services. This requirement for an NAS does not apply to 
beneficiaries enrolled in TRICARE Prime, even when those beneficiaries 
use the point-of-service option under section 199.17(n)(3).
* * * * *
    (ii) Beneficiary responsibility. A CHAMPUS beneficiary who is not 
enrolled in TRICARE Prime is responsible for securing information 
whether or not he or she resides in a geographic area that requires 
obtaining a Nonavailability Statement. Information concerning current 
rules and regulations may be obtained from the Offices of the Army, 
Navy, and Air Force Surgeons General; or a representative of the 
TRICARE managed care support contractor's staff, or the Director, 
OCHAMPUS.
* * * * *
    (10) * * *
    (vi) * * *
    (E) The beneficiary is enrolled in TRICARE Prime.
    3. Section 199.17 is proposed to be amended by adding paragraph 
(a)(7) and revising paragraphs (d)(1) and (o)(3) to read as follows:


Sec. 199.17  TRICARE program.

    (a) * * *
    (7) Preemption of State laws. Pursuant to 10 U.S.C. 1103 and the 
fourth proviso of section 8025 of the Department of Defense 
Appropriations Act, 1994 (Pub. L. 103-139), any state or local law 
relating to a health insurance, prepaid health plans, or other health 
care delivery, administration, and financing methods is preempted and 
does not apply in connection with TRICARE regional contracts. Any such 
law, or regulation pursuant to such law, is without any force or 
effect, and State or local governments have no legal authority to 
enforce them in relation to the TRICARE regional contracts. (However, 
the Department of Defense may, by contract, establish legal obligations 
on the part of the TRICARE contractors to conform with requirements 
similar or identical to requirements of State or local laws or 
regulations.)
 * * * * *
    (d) * * *
    (1) Military treatment facility (MTF) care. (i) In general. All 
participants in Prime are eligible to receive care in military 
treatment facilities. Participants in Prime will be given priority for 
such care over other beneficiaries. Among the following beneficiary 
groups, access priority for care in military treatment facilities where 
TRICARE is implemented as follows: Active duty service members; active 
duty service members' dependents who are enrolled in TRICARE Prime; 
Retirees, their dependents and survivors who are enrolled in TRICARE 
Prime; Active duty service member's dependents who are not enrolled in 
TRICARE Prime; and Retirees, their dependents and survivors who are not 
enrolled in TRICARE Prime. For purposes of this paragraph (d)(1), 
survivors of members who died while on active duty are considered as 
among dependents of active duty service members.
    (ii) Special provisions. Enrollment in Prime does not affect access 
priority for care in military treatment facilities for several 
miscellaneous beneficiary groups and special circumstances. These 
include Secretarial designees, NATO and other foreign military 
personnel and dependents authorized care through international 
agreements, civilian employees under workers' compensation programs or 
under safety programs, members on the Temporary Disability Retired List 
(for statutorily required periodic medical examinations), members of 
the reserve components not on active duty (for covered medical 
services), active duty dependents unable to enroll in Prime and 
temporarily away from place of residence, and other beneficiary groups 
as designated by the ASD(HA). Additional exceptions to the normal Prime 
enrollment priority access rules may be granted for other categories of 
individuals, eligible for treatment in the MTF, whose access to care is 
necessary to provide an adequate clinical case mix to support graduate 
medical education programs or readiness-related medical skills 
sustainment activities, to the extent approved by the Assistant 
Secretary of Defense (Health Affairs).
* * * * *
    (o) * * *
    (3) Quarterly installment payments of enrollment fee. The 
enrollment fee required by Sec. 199.18(c) may be paid in quarterly 
installments, each equal to one-fourth of the total amount. For any 
beneficiary paying his or her enrollment

[[Page 16513]]

fee in quarterly installments, failure to make a required installment 
payment on a timely basis (including a grace period, as determined by 
the Director, OCHAMPUS) will result in termination of the beneficiary's 
enrollment in Prime and disqualification from future enrollment in 
Prime for a period of one year.
* * * * *
    4. Section 199.18 is proposed to be amended by revising paragraphs 
(d)(2)(i) and (f), and by adding paragraph (c)(3), to read as follows:


Sec. 199.18  Uniform HMO benefit.

* * * * *
    (c) * * *
    (3) Waiver of enrollment fee for certain beneficiaries. The 
Assistant Secretary of Defense (Health Affairs) may waive the 
enrollment fee requirements of this section for beneficiaries described 
in 10 U.S.C. 1086(d)(2) (i.e., those who are eligible for Medicare on 
the basis of disability or end stage renal disease and who maintain 
enrollment in Part B of Medicare).
    (d) * * *
    (2) * * *
    (i) For most physician office visits and other routine services, 
there is a per visit fee for each of the following groups: dependents 
of active duty members in pay grades E-1 through E-4; dependents of 
active duty members in pay grades of E-5 and above; and retirees and 
their dependents. This fee applies to primary care and specialty care 
visits, except as provided elsewhere in this paragraph (d)(2) of this 
section. It also applies family health services, home health care 
visits, eye examinations, and immunizations. It does not apply to 
ancillary health services or to preventive health services described in 
paragraph (b)(2) of this section.
* * * * *
    (f) Limit on out-of-pocket under the uniform HMO benefit. (1) Total 
out-of-pocket costs per family of dependents of active duty members 
under the Uniform HMO Benefit may not exceed $1,000 during the one-year 
enrollment period. Total out-of-pocket costs per family of retired 
members, dependents of retired members and survivors under the Uniform 
HMO Benefit may not exceed $3,000 during the one-year enrollment 
period. For this purpose, out-of-pocket costs means all payments 
required of beneficiaries under paragraphs (c), (d), and (e) of this 
section. In any case in which a family reaches this limit, all 
remaining payments that would have been required of the beneficiary 
under paragraphs (c), (d), and (e) of this section will be made by the 
program in which the Uniform HMO Benefit is in effect.
    (2) The limits established by paragraph (f)(1) of this section do 
not apply to out-of-pocket costs incurred pursuant to paragraphs 
(m)(1)(i) or (m)(2)(i) of Sec. 199.7 under the point-of-service option 
of TRICARE Prime.
* * * * *
    Dated: April 1, 1997.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 97-8611 Filed 4-4-97; 8:45 am]
BILLING CODE 5000-04-M