[Federal Register Volume 64, Number 177 (Tuesday, September 14, 1999)]
[Notices]
[Pages 49775-49776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23818]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE/The Civilian Health and Medical Program of the Uniformed 
Services (CHAMPUS); Pharmacy Redesign Demonstration

AGENCY: Office of the Secretary, DoD.

ACTION: Notice of two-site implementation of the Pharmacy Redesign 
Demonstration.

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SUMMARY: This notice is to advise interested parties of a two-site 
implementation of the Pharmacy Redesign Demonstration for certain 
military health system (MHS) beneficiaries who are 65 years of age or 
older, pursuant to the requirements in the Strom Thurmond National 
Defense Authorization Act for fiscal Year 1999. Specifically, Section 
723 of this act mandates the pharmacy redesign to incorporate private 
sector ``best business practices'' in providing pharmacy services in 
the MHS, including both military medical treatment facilities (MTFs) 
and the mail-order and retail pharmacy benefit under TRICARE. It is 
projected that participation in this demonstration will extend access 
to a system-wide drug benefit for up to 6,000 over-age 65 DoD eligible 
beneficiaries that has not been available until now. In the past, 
Medicare-eligible MHS beneficiaries' access to pharmacy benefits has 
generally been limited to the MTFs; therefore, the purpose of this 
pharmacy redesign demonstration is to assess the feasibility and cost 
of a system-wide pharmacy benefit for Medicare eligible MHS 
beneficiaries. The demonstration is limited to two sites where up to 
three thousand eligible beneficiaries will be enrolled at each site. A 
random selection process resulted in Fleming, Kentucky and Okeechobee, 
Florida as the pilot sites.
    The pharmacy benefit under this demonstration will require an 
annual $250 enrollment fee. The TRICARE retail network pharmacies will 
provide up to a 30-day supply of medications for a 20% co-payment with 
each prescription. The beneficiaries will also have access to the 
National Mail-Order Pharmacy Program (NMOP) where quantities up to a 
90-day supply will be dispensed for a flat fee of $8 for each 
prescription.
    The pharmacy redesign demonstration is projected to last for three 
(3) years and will be evaluated by an independent entity outside the 
Department of Defense.

EFFECTIVE DATE: Enrollment in the demonstration is projected to begin 
on or after March 1, 2000 with Delivery of services on April 1, 2000.

FOR FURTHER INFORMATION CONTACT: CAPT Charles Hostettler, Office of the 
Assistant Secretary of Defense (Health Affairs), TRICARE Management 
Activity, (703) 681-1740.

SUPPLEMENTARY INFORMATION:

A. Background

    In June 1998, the General Accounting Office (GAO) testified before 
the Subcommittee on Military Personnel, Committee on Armed Services, 
House of Representatives, that over the past several years, concern 
about the costs and quality of DoD's pharmacy benefit has surfaced. GAO 
recommended that DoD establish a more system-wide approach to managing 
its pharmacy benefit by establishing a uniform, incentive-based 
formulary across its pharmacy programs. Furthermore, GAO recommended 
that a system-wide pharmacy benefit be granted to Medicare-eligible 
retirees who are excluded from the contractor retail network and NMOP 
pharmacy systems.
    In response to the June 1998 GAO report, the FY 1999 Strom Thurmond 
National Defense Authorization Act for Fiscal Year 1999 (Pub. L. 105-
261) directed DoD to develop a system-wide pharmacy redesign plan and 
to implement the system-wide redesigned benefit at two sites for 
Medicare-eligible beneficiaries.
    An eligible beneficiary for the pharmacy redesign demonstration is 
a member or former member of the uniformed services as described in 
section 1074(b) of title 10; a dependent of the member described in 
section 1076(a)(2)(B) or 1076(b) of title 10; or a dependent of a 
member of the uniformed services who died while on active duty for a 
period of more than 30 days, who meets the following requirements: (a) 
65 years of age or older, (b) entitled to Medicare Part A, (c) enrolled 
in Medicare Part B, and (d) resides in an implementation area.
    The pharmacy redesign implementation will be evaluated by an 
independent entity outside the Department of Defense. The evaluation 
shall include: (a) An analysis of the cost of the pharmacy redesign 
implementation under TRICARE, and also to the eligible individuals who 
participate in the demonstration, (b) an assessment of the eligible 
beneficiaries' satisfaction with the redesigned pharmacy benefit, (c) 
an assessment of the effect, if any, on military medical readiness, (d) 
a description of the rate of participation, and (e) an evaluation of 
any other matters that the Department considers appropriate.

[[Page 49776]]

    The DoD component responsible for the conduct of this project is 
the TRICARE Management Activity.

    Dated: September 8, 1999.
L.M. Bynum,
Alternate OSD Federal Register Liaison, Department of Defense.
[FR Doc. 99-23818 Filed 9-18-99; 8:45 am]
BILLING CODE 5001-10-M