[Federal Register Volume 65, Number 157 (Monday, August 14, 2000)]
[Rules and Regulations]
[Pages 49491-49493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20471]


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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); Enhancement of Dental Benefits Under the TRICARE Retiree 
Dental Program

AGENCY: Office of the Secretary, DoD.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule implements section 704 of the National 
Defense Authorization Act for Fiscal Year 2000, to allow additional 
benefits under the retiree dental insurance plan for Uniformed Services 
retirees and their family members that may be comparable to those under 
the Dependents Dental Program. The Department is publishing this rule 
as an interim final rule in order to comply timely with the desire of 
Congress to meet the needs of retirees for additional dental coverage. 
Public comments are invited and will be considered for possible 
revisions to this rule at the time of publication of the final rule.

DATES: Effective August 14, 2000. Comments must be received on or 
before October 13, 2000.

ADDRESSES: Forward comments to: TRICARE Management Activity (TMA), 
Special Contracts and Operations Office, 16401 East Centretech Parkway, 
Aurora, CO 80011-9043.

FOR FURTHER INFORMATION CONTACT: Linda Winter, Special Contracts and 
Operations Office, TMA, (303) 676-3682.

SUPPLEMENTARY INFORMATION:

I. Background

    The TRICARE Retiree Dental Program (TRDP), a voluntary dental 
insurance plan completely funded by enrollees' premiums, was 
implemented in 1998 to provide benefits for basic dental care and 
treatment based on the authority of 10 U.S.C. 1076c. Under the enabling 
legislation, the benefits that can be provided are limited to ``basic 
dental care and treatment, involving diagnostic services, preventative 
services, basic restorative services (including endodontics), surgical 
services, and emergency services.'' Accordingly, the implementing 
regulation, 32 CFR 199.22, limited coverage to the most common dental 
procedures necessary for maintenance of good dental health and did not 
include coverage of major restorative services, prosthodontics, 
orthodontics or other procedures considered to be outside of the 
``basic dental care and treatment'' range.
    Although the program was viewed as a major advance in offering 
dental coverage to retired members of the Uniformed Services and their 
family members at a very reasonable cost, there were still concerns 
that the enabling legislation was too restrictive in scope and that 
there should be expansion of services to better meet the needs of 
retirees.
    Congress responded to these concerns by amending 10 U.S.C. 1076c 
with section 704 of the National Defense Authorization Act for Fiscal 
Year 2000, Pub. L. 106-065, to allow the Secretary of Defense to offer 
additional coverage. Under provisions of the amendment, the TRDP 
benefits may be ``comparable to the benefits authorized under section 
1076a'' of title 10, the Dependents Dental Plan, commonly known as the 
TRICARE Family Member Dental Plan. Thus, in addition to the original 
basic services described above, which continue to be mandated, coverage 
of ``orthodontic services, crowns, gold fillings, bridges, complete or 
partial dentures, and such other services as the Secretary of Defense 
considers to be appropriate'' [10 U.S.C. 1076a(d)(3)] may be covered by 
the TRDP.
    The language of section 704 of the National Defense Authorization 
Act for Fiscal Year 2000 is permissive and does not mandate such 
coverage. However, because of the many requests for additional TRDP 
coverage regardless of the inevitable increase in premiums, the DoD is 
proposing to expand the current coverage through a contractual 
arrangement. The premium cost of the enhanced coverage will remain the 
responsibility of the enrollees.

II. Provisions of the Interim Final Rule for Enhancement of TRDP 
Benefits

    This interim final rule allows expansion of the TRDP benefits to be

[[Page 49492]]

comparable to the coverage under Active Duty Dental Plan at 32 CFR 
199.13, commonly known as the TRICARE Family Member Dental Plan. It 
maintains the original basic TRDP coverage, with the original initial 
and renewal enrollment periods, until contractual arrangements are in 
place for the additional benefits. Enrollment in the original basic 
plan will be superseded by enrollment in the enhanced plan. Effective 
with the implementation of an enhanced plan, new enrollments for basic 
coverage will cease. Enrollees in the basic plan at that time may 
continue their enrollment for basic coverage, subject to the applicable 
premium and eligibility provisions, as long as the contract 
administering that coverage is in effect. Enrollees in the basic plan 
will be allowed an enrollment option at the time the enhanced plan is 
implemented.

III. Other Provisions of the Interim Final Rule

    One of the aims of the interim final rule is to allow flexibility 
in the design of an enhanced benefit structure that will help keep the 
increase in premiums within a reasonable range with the addition of the 
major dental coverage. This takes into account the increase in premiums 
not only for the increased benefits but the potential increase due to 
the risk of adverse selection. Adverse selection is the tendency for 
people who have a greater-than-average likelihood of needing treatment 
to seek coverage more than those who have a lesser likelihood of 
needing treatment. Accordingly, the interim final rule provides for 
renewal enrollment periods of up to 12 months per period for the 
enhanced benefits, thereby allowing the risk to be spread over a 
greater period of time than the month-to-month continuing enrollment 
for the basic coverage. Renewal for the basic program continues to be 
on a monthly basis. To offset the longer renewal periods, the rule 
allows a flexibility in the initial enrollment period for the enhanced 
benefits by permitting it to be in the range of from 12 to 24 months, 
the exact length to be determined through contractual arrangement. The 
initial enrollment period for the basic program will continue to be 24 
months.
    In addition, the interim final rule allows the establishment of an 
alternative course of treatment policy as in the TFMDP, adds a 
provision for orthodontic lifetime maximum should an orthodontic 
benefit be offered, and removes the specific dollar limit on the non-
orthodontic annual benefit maximum while retaining the requirement for 
an annual maximum benefit amount. These changes are being made to 
permit more flexibility in the design and implementation of an enhanced 
TRDP benefit structure and allow ways to mitigate the increased risk 
for adverse selection and unacceptably high premiums that are likely to 
occur with the addition of major coverage.
    Recognizing that occasionally some enrollees experience ``buyer's 
remorse'' shortly after enrolling in the program, this rule adds a 30-
day grace period that allows new enrollees to terminate a TRDP 
enrollment immediately after enrollment provided no benefits have been 
used. This is consistent with the legislative mandate that the retiree 
dental plan be voluntary and provides enrollees an opportunity to 
further consider their dental needs before they are obligated for the 
initial enrollment period.

IV. Rulemaking Procedures

    Executive Order 12866 requires certain regulatory assessments for 
any ``significant regulatory action,'' defined as one that would result 
in an annual effect 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 rule 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 rule will not impose additional information collection 
requirements on the public under the Paperwork Reduction Act of 1995 
(44 U.S.C. Chapter 35). The TRICARE Retiree Dental Program Enrollment 
Form currently in use received approval from the Office of Management 
and Budget (OMB) in January 1998 under OMB Number 0720-0015. That 
approval expires January 31, 2001.
    To implement enhanced benefits in the retiree dental program in a 
timely manner, this rule is being issued as an interim final rule, with 
comment period. This is an exception to our standard practice of 
soliciting public comments prior to issuance. The Assistant Secretary 
of Defense (Health Affairs) has determined for good cause that 
following the standard practice in this case would be impracticable, 
unnecessary, and contrary to the public interest. This determination is 
based on several factors. First, the government has no financial 
interest at stake that could be impacted by rulemaking. The TRDP is 
distinctly different and administratively separate from other TRICARE 
programs. It is open to all Uniformed Services retirees regardless of 
age and is completely funded by enrollees' premiums. Secondly, although 
no appropriated funds are involved in this program, the Department 
maintains a fiduciary duty to act in the best interest of the intended 
beneficiaries (retirees). Retirees will be financially disadvantaged by 
delay in adding coverage of the major dental procedures to the TRDP. 
The more quickly this rule is put into effect, the more quickly 
retirees can receive the additional coverage at a reasonable premium 
rate. Lastly, this change directly implements a statutory amendment 
enacted by Congress expressly for this purpose. Interested persons are 
invited to comment on this rule during the 60-day public comment 
period. All written comments timely received will be carefully 
considered prior to finalization of this rule. A discussion of the 
major issues received by public comments will be included with the 
issuance of the final rule, anticipated approximately 90 days after the 
end of the comment period.

List of Subjects in 32 CFR Part 199

    Claims, Dental Health, Health insurance, Individuals with 
disabilities, Military personnel.

    Accordingly, 32 CFR Part 199 is 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 199.22 is amended by revising paragraphs (b)(1), (d)(4), 
(d)(5), (f) introductory text, (f)(1) introductory text, (f)(2), and 
paragraph (g) and adding paragraph (f)(3) to read as follows:


Sec. 199.22  TRICARE Retiree Dental Program (TRDP).

* * * * *
    (b) * * *
    (1) At a minimum, benefits are the diagnostic services, preventive 
services, basic restorative services (including endodontics), oral 
surgery services, and emergency services specified in paragraph (f)(1) 
of this section. Additional services comparable to those contained in 
Sec. 199.13(e)(2) of this part may be covered pursuant to benefit

[[Page 49493]]

policy decisions made by the Director, OCHAMPUS, or designee.
* * * * *
    (d) * * *
    (4) Enrollment periods.
    (i) Enrollment period for basic benefits. The initial enrollment 
for the basic dental benefits described in paragraph (f)(1) of this 
section shall be for a period of 24 months followed by month-to-month 
enrollment as long as the enrollee remains eligible and chooses to 
continue enrollment. An enrollee's disenrollment from the TRDP at any 
time for any reason, including termination for failure to pay premiums, 
is subject to a lockout period of 12 months. After any lockout period, 
eligible individuals may elect to reenroll and are subject to a new 
initial enrollment period. The enrollment periods and conditions 
stipulated in this paragraph apply only to the basic benefit coverage 
described in paragraph (f)(1) of this section. Effective with the 
implementation of an enhanced benefit program, new enrollments for 
basic coverage will cease. Enrollees in the basic program at that time 
may continue their enrollment for basic coverage, subject to the 
applicable provisions of this section, as long as the contract 
administering the coverage is in effect.
    (ii) Enrollment period for enhanced benefits. The initial 
enrollment period for enhanced benefit coverage described in paragraph 
(f)(2) shall be established by the Director, OCHAMPUS, or designee, 
when such coverage is offered, to be a period of not less than 12 
months and not more than 24 months. The initial enrollment period shall 
be followed by renewal periods of up to 12 months as long as the 
enrollee chooses to continue enrollment and remains eligible. An 
enrollee's disenrollment from the TRDP during an enrollment period for 
any reason, including termination for failure to pay premiums, is 
subject to a lockout period of 12 months. This lockout provision does 
not apply to disenrollment during an enrollment grace period as defined 
in paragraph (d)(5)(ii) of this section or following completion of an 
initial or renewal enrollment period. Eligible individuals who elect to 
reenroll following a lockout period or a disenrollment after completion 
of an enrollment period are subject to a new initial enrollment period.
    (5) Termination of coverage.
    (i) Involuntary termination. TRDP coverage is terminated when the 
member's entitlement to retired pay is terminated, the member's status 
as a member of the Retired Reserve is terminated, a dependent child 
loses eligible child dependent status, or a surviving spouse remarries.
    (ii) Voluntary termination. Regardless of the reason, TRDP coverage 
shall be cancelled, or otherwise terminated, upon written request from 
an enrollee if the request is received by the TRDP contractor within 
thirty (30) calendar days following the enrollment effective date and 
there has been no use of TRDP benefits by the enrolled member, enrolled 
spouse, or enrolled dependents during that period. If such is the case, 
the enrollment is voided and all premium payments are refunded. 
However, use of benefits during this 30-day enrollment grace period 
constitutes acceptance by the enrollee of the enrollment and the 
enrollment period commitment. In this case, a request for voluntary 
disenrollment before the end of the initial enrollment period will not 
be honored, and premiums will not be refunded.
* * * * *
    (f) Plan benefits. The Director, OCHAMPUS, or designee, may modify 
the services covered by the TRDP to the extent determined appropriate 
based on developments in common dental care practices and standard 
dental programs. In addition, the Director, OCHAMPUS, or designee, may 
establish such exclusions and limitations as are consistent with those 
established by dental insurance and prepayment plans to control 
utilization and quality of care for the services and items covered by 
the TRDP.
    (1) Basic benefits. The minimum TRDP benefit is basic dental care 
to include diagnostic services, preventive services, basic restorative 
services (including endodontics), oral surgery services, and emergency 
services. The following is the minimum TRDP covered dental benefit 
(using the American Dental Association's The Council on Dental Care 
Program's Code on Dental Procedures and Nomenclature):
* * * * *
    (2) Enhanced benefits. In addition to the minimum TRDP services in 
paragraph (f)(1) of this section, other services that are comparable to 
those contained in Sec. 199.13 (e)(2) may be covered pursuant to TRDP 
benefit policy decisions made by the Director, OCHAMPUS, or designee. 
In general, these include additional diagnostic and preventive 
services, major restorative services, prosthodontics (removable and 
fixed), additional oral surgery services, orthodontics, and additional 
adjunctive general services (including general anesthesia and 
intravenous sedation). Enrollees in the basic plan will be given an 
enrollment option at the time the enhanced plan is implemented.
    (3) Alternative course of treatment policy. The Director, OCHAMPUS, 
or designee, may establish, in accordance with generally accepted 
dental benefit practices, an alternative course of treatment policy 
which provides reimbursement in instances where the dentist and TRDP 
enrollee select a more expensive service, procedure, or course of 
treatment than is customarily provided. The alternative course of 
treatment policy must meet the following conditions:
    (i) The service, procedure, or course of treatment must be 
consistent with sound professional standards of generally accepted 
dental practice for the dental condition concerned.
    (ii) The service, procedure, or course of treatment must be a 
generally accepted alternative for a service or procedure covered by 
the TRDP for the dental condition.
    (iii) Payment for the alternative service or procedure may not 
exceed the lower of the prevailing limits for the alternative 
procedure, the prevailing limits or dental plan contractor's scheduled 
allowance for the otherwise authorized benefit procedure for which the 
alternative is substituted, or the actual charge for the alternative 
procedure.
    (g) Maximum coverage amounts. Each enrollee is subject to an annual 
maximum coverage amount for non-orthodontic dental benefits and, if an 
orthodontic benefit is offered, a lifetime maximum coverage amount for 
orthodontics as established by the Director, OCHAMPUS, or designee.

    Dated: August 8, 2000.
L.M. Bynum,
Alternate OSD Federal Register Liaison, Officer, Department of Defense.
[FR Doc. 00-20471 Filed 8-11-00; 8:45 am]
BILLING CODE 5001-10-M