[Federal Register Volume 65, Number 69 (Monday, April 10, 2000)]
[Notices]
[Pages 18979-18980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8720]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Office of the Secretary


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

AGENCY: Office of the Secretary, DoD.

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

-----------------------------------------------------------------------

SUMMARY: This notice is to advise interested parties of a two-site 
implementation of the Pharmacy Redesign Pilot Program 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 pilot program will extend access 
to a system-wide drug benefit for approximately 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 pilot program is to assess the feasibility and cost 
of a system-side pharmacy benefit for Medicare eligible MHS 
beneficiaries. The pilot program 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 $200 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 pilot program 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 
by June 1, 2000 with Delivery of services by July 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 formula 
across its pharmacy programs. Furthermore, GAO recommended that a 
system-wide pharmacy benefit be granted to

[[Page 18980]]

Medicare-eligible retirees who are excluded from the contractor retail 
network and NMOP pharmacy systems.

B. Description of Project

    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 to 
and implement the system-wide redesigned benefit at two sites for 
Medicare-eligible beneficiaries.
    An eligible beneficiary for the pharmacy redesign pilot program 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, (d) resides in an implementation area, and (e) the 
requirement to be enrolled in Medicare Part B shall not apply in the 
case of an individual who at the time of attaining the age of 65 lived 
within 100 miles of the catchment area of a military medical treatment 
facility.
    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 pilot program, (b) an assessment of he extent to 
which the implementation of such system satisfies the requirements of 
the eligible individuals for the health care services available under 
TRICARE, (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.
    The DoD component responsible for the conduct of this project is 
the TRICARE Management Activity.

    Dated: April 3, 2000.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, DoD.
[FR Doc. 00-8720 Filed 4-7-00; 8:45 am]
BILLING CODE 5001-10-M