[Federal Register Volume 67, Number 53 (Tuesday, March 19, 2002)]
[Rules and Regulations]
[Pages 12472-12473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6542]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

RIN 0720-AA62


Civilian-Health and Medical Program of the Uniformed Services 
(CHAMPUS); Partial Implementation of Pharmacy Benefits Program; 
Implementation of National Defense Authorization Act for Fiscal Year 
2001

AGENCY: Office of the Secretary, Department of Defense.

ACTION: Interim final rule; administrative corrections.

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SUMMARY: On October 23, 2000 (65 FR 63202), the Department of Defense 
published a final rule concerning the Civilian Health and Medical 
Program of the Uniformed Services (CHAMPUS) TRICARE Dental Program. 
This document is published to correct an administrative error in those 
rules for clarity.

EFFECTIVE DATE: This rule is effective April 1, 2001.

FOR FURTHER INFORMATION CONTACT: Tariq Shahid, Medical Benefits and 
Reimbursement Systems, TRICARE Management Activity, Office of the 
Assistant Secretary of Defense (Health Affairs), telephone (303) 676-
3801.

SUPPLEMENTARY INFORMATION: The final rule had an effective date that 
began during the Presidential Moratorium on Rules, therefore, the rule 
was republished on March 1, 2001 (66 FR 12855), exactly as previously 
published, to change the effective date to April 1, 2001. In the 
interval between publication and republication of the final rule on 
TRICARE Dental Program, on February 9, 2001 (66 FR 9651), the 
Department of Defense also published an interim final rule concerning, 
among other issues, partial implementation of the Pharmacy Benefits 
Program and amended 32 CFR part 199 by adding a new section 199.21, 
Pharmacy Benefits Program to replace the previously reserved section 
199.21. On February 15, 2001 (66 FR 10367) and March 26, 2001 (66 FR 
16400), DoD published corrections to the interim final rule changing 
the effective date to April 1, 2001, and making other administrative 
changes. Unfortunately, republication of the TRICARE Dental Program 
final rule on March 1, 2001, amending 32 CFR part 199 to remove section 
199.21 (thereby intending to remove section 199.21, TRICARE Selected 
Reserve Dental Program, as stated in the Supplemental Information 
section of the final rule) resulted in a technical error removing 
section 199.21, Pharmacy Benefits Program which was added by the 
Pharmacy Benefits Program interim final rule to become effective April 
1, 2001.

List of Subjects in 32 CFR Part 199

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

    Accordingly, 32 CFR part 199 is amended as follows:
    1. The authority citation continues to read as follows:

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

    2. Section 199.21 is added to read as follows:


Sec. 199.21  Pharmacy Benefits Program.

    (a) In general.--(1) Statutory authority. 10 U.S.C. 1074g requires 
that the Department of Defense establish an effective, efficient, 
integrated Pharmacy Benefits Program for the Military Health System. 
This law is independent of a number of section of title 10 and other 
laws that affect the benefits, rules, and procedures of CHAMPUS/
TRICARE, resulting in changes to the rules otherwise applicable to 
TRICARE Prime, Standard, and Extra. Among these changes is an 
independent set of beneficiary co-payments for prescription drugs.
    (2) Partial implementation during interim period. Beginning April 
1, 2001, 10 U.S.C. 1074g is partially implemented to coincide with the 
start of the TRICARE Senior Pharmacy Program and substantial cost 
sharing changes for active duty dependents enrolled in Prime. Some 
authorities and requirements of Section 1074g, such as the 
classification of drugs as formulary or non-formulary under a ``uniform 
formulary of pharmaceutical agents,'' are not yet implemented. In this 
section, references to ``interim implementation period'' mean the 
period beginning April 1, 2001.
    (b) Program benefits. During the interim implementation period, 
prescription drugs and medicines are available under the otherwise 
applicable rules and procedures for military treatment facility 
pharmacies, TRICARE Prime, Standard, and Extra, and the Mail Order 
Pharmacy Program. There is not during this interim implementation 
period a ``uniform formulary'' of drugs and medicines available in all 
of these parts of the system. All cost sharing requirements for 
prescription drugs and medicines are established in this section for 
pharmacy services provided throughout the Military Health System.
    (c) Providers of pharmacy services. There are four categories of 
providers of pharmacy services: military treatment facilities (MTFs), 
network retail providers, non-network retail providers, and the mail 
service pharmacy program. Network retail providers are those non-MTF 
pharmacies that are a part of the network established for TRICARE Prime 
under Sec. 199.17. Non-network pharmacies are those non-MTF pharmacies 
that are not part of such a network.
    (d) Classifications of drugs and medicines. During the interim 
implementation period, a distinction is made for purposes of cost 
sharing between generic drugs and non-generic (or brand name) drugs.
    (e) TRICARE Senior Pharmacy Program. Section 711 of the Floyd D. 
Spence National Defense Authorization Act for Fiscal Year 2001 (Public 
Law 106-398, 114 Stat. 1654) established the TRICARE Senior Pharmacy 
Program for Medicare eligible beneficiaries effective April 1, 2001. 
These beneficiaries are required to meet the eligibility criteria as 
prescribed in Sec. 199.3. The benefit under the TRICARE Senior Pharmacy 
Program includes the Basic Program pharmacy benefits as found under 
Sec. 199.4(d) and the pharmacy benefit and cost sharing as found under 
this part. The TRICARE Senior Pharmacy Program applies to prescription 
drugs and medicines provided on or after April 1, 2001.
    (f) Cost sharing. Beneficiary cost sharing requirements for 
prescription drugs and medicines are based upon the generic/non-generic 
status and the point

[[Page 12473]]

of sale (i.e., MTF, network pharmacy, non-network pharmacy, mail 
service pharmacy) from which they are acquired. For this purpose, a 
generic drug is a non-brand name drug. A non-generic drug is a brand 
name drug. In the case of a brand name drug for which there is no 
generic equivalent, the non-generic cost share applies.
    (1) Military treatment facilities. There are no cost sharing 
requirements for drugs and medicines provided by MTF pharmacies.
    (2) Retail pharmacy network program. There is a $9.00 co-pay per 
prescription required under the retail pharmacy network program for up 
to a 30-day supply of a non-generic drug or medicine, and a $3.00 co-
pay for up to a 30-day supply of a generic drug or medicine. There is 
no annual deductible for drugs and medicines provided under the retail 
pharmacy network program.
    (3) Mail service pharmacy program. There is a $9.00 co-pay per 
prescription required under the mail service pharmacy program for up to 
a 90-day supply of a non-generic drug or medicine, and a $3.00 co-pay 
for up to a 90-day supply of a generic drug or medicine. There is no 
annual deductible for drugs and medicines provided under the mail 
service pharmacy program.
    (4) Non-network retail pharmacies. There is a 20 percent or $9.00 
(whichever is greater) co-pay per prescription required for up to a 30-
day supply of a drug obtained from a non-network pharmacy. A point of 
service cost-share of 50 percent applies in lieu of the 20 percent 
copay for TRICARE Prime enrollees who obtain their prescriptions from a 
non-network retail pharmacy without proper authorization. In addition, 
these TRICARE Prime enrollees are subject to higher deductibles as 
provided in Sec. 199.17(m)(1)(i) and (m)(2)(i). For prescription drugs 
acquired from non-network retail pharmacies, beneficiaries other than 
Prime enrollees (including TRICARE Senior Pharmacy Program 
beneficiaries) are subject to the $150.00 per individual or $300.00 
maximum per family (or for dependents of sponsors in pay grades below 
E-5, $50 per individual or $100 per family) annual fiscal year 
deductible.
    (g) Effect of other health insurance. The double coverage rules of 
Sec. 199.8 are applicable to services provided under the Pharmacy 
Benefits Program. For this purpose, to the extent they provide a 
prescription drug benefit, Medicare supplemental insurance plans or 
Medicare HMO plans are double coverage plans and will be the primary 
payor.
    (h) Procedures. The Director, TRICARE Management Activity shall 
establish procedures for the effective operation of the Pharmacy 
Benefit Program. Such procedures may include restrictions of the 
quantity of pharmaceuticals to be included under the benefit, 
encouragement or requirement of the use of generic drugs, 
implementation of quality assurance and utilization management 
activities, and other appropriate matters.

    Dated: March 13, 2002.
L.M. Bynum,
Alternate OSD Federal Register Liaison, Department of Defense.
[FR Doc. 02-6542 Filed 3-18-02; 8:45 am]
BILLING CODE 5001-08-M