[Federal Register Volume 66, Number 214 (Monday, November 5, 2001)]
[Notices]
[Pages 55928-55930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27680]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Nationwide TRICARE Demonstration Project

AGENCY: Office of the Secretary, The Department of Defense

ACTION: Notice of a nationwide TRICARE demonstration project.

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SUMMARY: This notice is to advise interested parties of a demonstration 
project in which the Department of Defense will test the Military 
Health System's (MHS's) ability to address unreasonable impediments to 
the continuity of healthcare encountered by family members of 
Reservists and National Guardsmen called to active duty in support of a 
national emergency. This TRICARE Reserve Family Demonstration Project 
seeks to show that the MHS, with certain flexibility in operation, can 
ensure timely access to healthcare during a national crisis, maintain 
clinically appropriate continuity of healthcare to family members of 
activated reservists and guardsmen, appropriately limit the out-of-
pocket expenses for those family members, and remove potential barriers 
to healthcare access by families in order to improve the morale and 
retention of reservists and guardsmen. In this Project, for family 
members of activated reservists and guardsmen, the Department of 
Defense will authorize an increase in the TRICARE payment for 
healthcare services received from non-participating providers under 
TRICARE Standard up to 115 percent of the TRICARE maximum allowable 
charge less the appropriate patient copayment; waive the TRICARE 
Standard annual deductible; and, waive the requirement for nonemergency 
inpatient care to be provided by a facility of the uniformed services 
(when the facility is located within a 40-mile radius of the residence 
of the patient and the services are available at that facility) in 
order for the patient to have continuity of healthcare from a civilian 
healthcare provider. At the end of this Project, the Department of 
Defense will conduct an analysis of the benefits and costs of the 
program in improving the welfare of Service members and their families 
when called to active duty during a national emergency. Information and 
experience gained as part of this demonstration project will provide 
the foundation for longer-term solutions in the event of future 
national emergencies. This demonstration project is being conducted 
under the authority of 10 U.S.C. 1092.

EFFECTIVE DATE: This demonstration project applies to all covered 
health care services provided on or after September 14, 2001. In view 
of the declaration of a national emergency and the immediacy of the 
call of reservists and guardsmen to active duty in support of 
deployment to conduct operational missions, the Department of Defense 
is waiving the regulation (32 CFR 199.1(o)) requiring at least 30 days 
notice of a demonstration project prior to its effective date. Waiver 
of the notice period is deemed necessary to avoid delay in implementing 
program changes

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to address obstacles faced by family members of reservists and 
guardsmen from the onset of the call to active duty. In view of the 
fact that this demonstration project will accrue to the benefit of the 
participants by relieving certain restrictions on access to healthcare 
and will directly contribute to the effectiveness of the activated 
reservists and guardsmen in responding to the national emergency, 
failure to adhere to the normal notice period will not place any 
participant at a disadvantage.

FOR FURTHER INFORMATION CONTACT: LTC Pradeep G. Gidwani, Office of the 
Assistant Secretary of Defense for Health Affairs, TRICARE Management 
Activity, (703) 681-3636.

SUPPLEMENTARY INFORMATION:

A. Background

    On September 14, 2001, President Bush signed Executive Order 13223 
under which members of the Reserve and National Guard may be called to 
active duty in support of the Nation's response to the terrorist 
attacks of September 11, 2001. The declaration of a national emergency 
by the President, the immediate nature of this call to active duty in 
support of deployment to conduct operational missions, and the 
potential 24-month period of active duty impose significant challenges 
to family members of reservists and guardsmen. For example, an absence 
from civilian employment by a reservist or guardsman may result in the 
loss of employer-sponsored health insurance and the immediacy of the 
call-up limits the flexibility for alternate arrangements. Therefore, 
to support the families during this period of transition, the 
Department of Defense will exercise those authorities necessary to 
address the potential for lack of access to, or disruption in the 
continuity of, required health care services for the affected family 
members. A key component of the Department's efforts will be a 
nationwide TRICARE Demonstration Project.
    Current law provides health care coverage under TRICARE Standard 
for family members of reservists and guardsmen who are activated for a 
period of more than 30 days. For those reservists and guardsmen called 
to active duty for a period of 179 or more days, their family members 
may, alternatively, elect to enroll in TRICARE Prime, which provides 
excellent, cost-effective coverage. However, some will opt to remain 
under TRICARE Standard in order to retain their current health care 
providers. In other cases, reservist families will have no option other 
than TRICARE Standard because they live far from military facilities in 
areas not supported by TRICARE provider networks. By regulation, 32 CFR 
199.14(h), TRICARE limits payment for healthcare services furnished by 
professional providers to the TRICARE Maximum Allowable Charge (TMAC). 
If a patient obtains care from a TRICARE participating provider, that 
provider must accept the TMAC and the patient's copayment as payment in 
full. Some doctors, however, do not participate in TRICARE Standard, 
and by law may balance bill the patient for an additional amount up to 
15 percent above TMAC. Therefore, family members of reservists and 
guardsmen covered by TRICARE Standard could face undue financial 
hardships if they use such providers.
    A military family eligible for TRICARE Standard is also required by 
law (10 U.S.C. 1079(b)(2) and (3)), to pay up to $300 in a deductible 
for outpatient care each fiscal year. Therefore, if a reservist or 
guardsmen is called to active duty for a period of more than 30 days 
prior to October 1, 2001, his or her family will have an out-of-pocket 
expense of up to $300 for TRICARE outpatient care received during the 
month of September 2001 and another out-of-pocket expense up to $300 
for TRICARE outpatient care received after October 1, 2001. These 
payments of TRICARE deductibles pose an undue financial hardship for 
families, including those who may have already paid an annual 
deductible for the same period of time under their previous health 
insurance. The inequity of this situation was thought to be corrected 
by enactment of 10 U.S.C. 1095d, in which a waiver was authorized for 
the annual deductible for families of reservists called to active duty 
for a period of less than 1 year. However, the inequity remains for 
those families of reservists called to active duty for 1 year or more, 
especially if the activation order results in the accrual of multi-
fiscal year deductibles within the 1-year period.
    In addition, the law (10 U.S.C. 1079(a)(7)) requires that non-
emergency inpatient care be provided by a facility of the uniformed 
services located within a 40-mile radius of the residence of the 
patient. As previously noted, some family members of activated 
reservists or guardsmen may opt to remain under TRICARE Standard in 
order to retain their current health care providers. In the absence of 
a waiver of the requirement to obtain care from a facility of the 
uniformed services, continuity of healthcare by the patient's civilian 
healthcare provider may be disrupted even when clinically appropriate.
    Accordingly, the Secretary of Defense has authorized a 
demonstration project under 10 U.S.C. 1092 to address these identified 
impediments to, and disruptions in, access to healthcare under 
established patient-doctor relationships by families of activated 
reservists and guardsmen.

B. Description of Demonstration Project

    (1) Location of Project: The limited nature of the Reserve/National 
Guard call to active duty will only affect small numbers of families in 
any given geographical area. Therefore, to achieve a level of 
participation sufficient to test new strategies, this demonstration 
project will occur nationwide. Demonstration participants will be 
limited to families of Reserve and National Guard members ordered to 
active duty for periods of more than 30 days in support of operations 
that result from the terrorist attacks of September 11, 2001, under 
Executive Order 13223, 10 U.S.C. 12302, 10 U.S.C. 12301(d), or 32 
U.S.C. 502(f). Such operations include for example, Operation ENDURING 
FREEDOM and Operation NOBLE EAGLE.
    (2) Project Components: The demonstration project will consist of 3 
separate components.
    (a) Waiver of TMAC under TRICARE Standard. Title 32, Code of 
Federal Regulations, Section 199.14(h) shall be waived to authorize 
TRICARE payments up to 115 percent of the TRICARE maximum allowable 
charge (TMAC), less the applicable patient copayment, for care received 
from a provider that does not participate (accept assignment) under 
TRICARE to the extent necessary to ensure timely access to care and 
clinically appropriate continuity of care. This component of the 
demonstration project shall cover all healthcare received by an 
eligible participant prior to November 1, 2003. Because balance billing 
in excess of 15% above the TMAC is prohibited, the effect of increasing 
the TMAC for services covered by the demonstration project is to limit 
beneficiary out-of-pocket costs to the normally applicable per-service 
copayment of 20% of the TMAC.
    (b) Waiver of TRICARE Standard Annual Deductible. Title 32 Code of 
Federal Regulations, Part 199.4(f)(2), as it implements 10 U.S.C. 
1079(b)(2) and (3), to require an annual outpatient deductible up to 
$300 shall be waived for all eligible demonstration participants. This 
component of the demonstration project shall cover all outpatient 
health care received by an

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eligible participant prior to November 1, 2003.
    (c) Waiver of Non-Availability Statement (NAS) Requirement for 
Nonemergency Inpatient Care. Title 32, Coded of Federal Regulations, 
section 199.4(a)(9), as it implements 10 U.S.C. 1079(a)(7), to require 
the issuance of an NAS before nonemergency inpatient care can be paid 
under TRICARE Standard is waived for all eligible demonstration 
participants. This component of the demonstration project shall cover 
all non-emergency inpatient care received by an eligible participant 
prior to November 1, 2003.

    Dated: October 30, 2001.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, DoD.
[FR Doc. 01-27680 Filed 11-2-01; 8:45 am]
BILLING CODE 5001-08-M