[Federal Register Volume 76, Number 188 (Wednesday, September 28, 2011)]
[Notices]
[Pages 60007-60008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24901]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE Demonstration Project for the Philippines

AGENCY: Department of Defense, Office of the Secretary of Defense 
(Health Affairs)/TRICARE Management Activity.

ACTION: Notice of a TRICARE demonstration project for the Philippines.

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SUMMARY: This notice is to advise interested parties of a Military 
Health System demonstration project entitled ``TRICARE Demonstration 
Project for the Philippines.'' The purpose of this demonstration is to 
validate an alternative approach to providing healthcare services for 
those beneficiaries covered under the TRICARE Standard option in the 
Philippines, controlling costs, eliminating any balance billing issues, 
and ensuring that the billing practices comply with regulatory 
requirements. Under this demonstration, the overseas contractor in the 
Philippines will establish a dedicated list of providers in the 
Philippines who will file their claims with the contractor and be 
reimbursed under an established fee schedule. The providers will adhere 
to the quality of care requirements of the overseas contract. The 
beneficiaries will have overall lower costs because these providers 
will no longer require payments at the time of service nor will they 
subject beneficiaries to balanced billing of charges. Because of the 
geographic conditions in the Philippines and the realization that 
providers of the required specialties are not available in all areas, 
the contractor will not be required to develop a list of providers in 
all areas. However, in those areas where the contractor is able to 
develop a sufficient list of providers then all TRICARE Standard 
beneficiaries residing in those areas of the Philippines will be 
required to use these providers in order for their claims to be paid. 
Notice will be provided to the beneficiaries informing them of the 
areas participating and not participating in this demonstration.

DATES: Effective Date: Effective November 28, 2011.

ADDRESSES: TRICARE Management Activity (TMA), TRICARE Policy and 
Operations Directorate, 5111 Leesburg Pike, Suite 810, Falls Church, VA 
22041-3206.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Talisnik, Office of the ASD 
(HA)--TMA, (703) 681-8723.

SUPPLEMENTARY INFORMATION:

A. Background

    TRICARE has recognized the unique circumstances existing in the 
Philippines which made the provision of medical care to TRICARE 
beneficiaries through the TRICARE Overseas program operated in other 
overseas locations challenging. TRICARE has experienced dramatic 
increases in the amount billed for healthcare services rendered in the 
Philippines from $15 million in 1999 to $59 million in 2009 while the 
number of beneficiaries has remained constant. Administrative controls 
such as the validation of providers, implementation of a fee 
reimbursement schedule, duplicate claims edits and the impact of the 
cost-shares and deductibles have limited actual TRICARE expenditures to 
$17 million in 2009 for only approximately 11,000 beneficiaries.
    In addition to these administrative controls, fraud and abuse 
activities in the Philippines have been a growing concern that 
necessitated prompt investigation and actions to reduce the number of 
fraudulent or abusive incidences. Measures were taken to prevent or 
reduce the level of fraud and abuse against TRICARE while concurrent 
investigations and prosecutions were conducted. In April 2008, 
seventeen individuals were convicted of defrauding the TRICARE program 
of more than $100 million.
    As a result, prepayment review of claims is conducted to identify 
excessive charges and aberrant practices. Prepayment review is a tool 
typically used on a limited basis. Nevertheless, these efforts alone 
are not expected to control and eliminate the rising costs in the 
Philippines.
    Because of this concern, the purpose of this demonstration is to 
validate an

[[Page 60008]]

alternative approach to providing healthcare services for those 
beneficiaries covered under the TRICARE Standard option in the 
Philippines, controlling costs, eliminating any balance billing issues, 
and ensuring that the billing practices comply with regulatory 
requirements.

B. Description of Demonstration Project

    TMA proposes, utilizing the new overseas contract as the vehicle, 
to conduct a demonstration in the Philippines to validate that use of a 
well-certified and limited set of approved providers in overseas 
locations will result in a significant reduction in the level of claims 
billing issues, including beneficiaries being liable for balanced 
billing amounts and fraud by providers, while ensuring beneficiaries 
have sufficient access to high quality care. The demonstration would be 
conducted under 10 U.S.C. 1092.
    Under the demonstration, the overseas contractor will establish an 
approved list of providers and inpatient facilities. The contractor 
will select these providers on the basis of their quality of care, cost 
of services, and lack of past fraudulent billing practices. The 
overseas contractor will apply the quality standards under the new 
overseas contract to providers seeking to be on the approved list. To 
be included on the approved list, a provider must agree to accept 
reimbursement at the lower of the usual and customary charges and the 
established fee schedule. They must agree to submit their claims to the 
overseas contractor for reimbursement and to charge TRICARE 
beneficiaries only the normal Standard deductible and copayment 
amounts. They must acknowledge they can be removed from the approved 
list and will have the right to appeal their removal to the Director, 
TRICARE Management Activity (TMA) or designee using a format and 
process determined by the Director, TMA.
    TRICARE Standard beneficiaries who choose to access providers from 
the approved list will pay only their TRICARE annual deductible and 
cost-share amounts. Beneficiaries choosing to use a health care 
provider not on the approved list will, unless first obtaining an 
approved waiver from the overseas contractor, be responsible for all 
charges and will not be reimbursed by TRICARE.
    TMA will provide the overseas contractor a list of those locations 
in the Philippines where eligible Standard beneficiaries reside and 
will specify areas where the contractor must establish an approved list 
of providers for them. To the extent practical, the overseas contractor 
will be required to ensure that Standard beneficiaries have access to 
primary care, specialty care, and inpatient services. A waiver process 
will be available for areas where the contractor is unable to find 
sufficient primary and/or specialty providers to care for the 
beneficiaries. Additionally, beneficiaries may seek waivers from the 
overseas contractor for care from providers not on the approved list.
    This demonstration is not an expansion of the Prime benefit and 
beneficiaries are not entitled to benefits not otherwise payable under 
the TRICARE Standard program. Specifically, the overseas contractor 
will perform no beneficiary enrollment functions, no referral 
management services for specialty care, and no care authorizations for 
inpatient admissions except for the normal utilization management, 
benefits review and pre-authorizations required by all contractors for 
all Standard beneficiaries. The overseas contractor will merely develop 
the list of approved providers from which the beneficiaries may make 
their selection. The overseas contractor will also approve any waivers 
of the requirement to use providers on this list when approved 
providers are not available in a particular geographic location and 
will process and pay claims submitted by providers.
    The government will require the overseas contractor to submit an 
implementation plan 180 days before the start of health care delivery 
under the demonstration. The implementation plan will consist of the 
contractor's strategy to develop a list of approved providers, 
including providers in all of the locations specified by the 
government; a quality assessment program which will meet, at a minimum, 
the requirements set forth by the overseas contract, and a description 
of the requirement to access only approved providers to be used for 
educating beneficiaries and providers regarding this initiative. The 
plan will list the number of providers (primary, specialty, and 
institutional), by location, the contractor intends to place on the 
approved list. The contractor's plan will also include the use of 
requests for waivers of the demonstration requirements for any areas on 
the Government's specified list where an approved provider list must be 
established. In those areas where the contractor will not have 
providers on the approved list, the contractor will provide the 
geographical areas where waivers will be granted. The contractor will 
provide TMA the approved list of providers by 120 days before the start 
of health care delivery under the demonstration. The Government, in 
conjunction with the contractor, will develop and implement a 
communication plan to inform and educate beneficiaries about the 
demonstration at least 60 days before the demonstration commences.

C. Implementation

    This demonstration will begin 240 days after publication of the 
demonstration notice and will run for three years after implementation.

D. Exclusion to the Demonstration Project

    This demonstration is limited to TRICARE Standard beneficiaries 
residing in the Philippines.

E. Evaluation

    This demonstration will be evaluated using a combination of 
administrative and survey measures to determine adequacy of the access 
to health care by the beneficiaries. In addition, a cost analysis will 
be conducted to determine the impact to the costs for both the 
beneficiaries and the government. TRICARE beneficiaries will be asked 
to comment on the quality of their experiences getting the health care 
that they need. Costs under the demonstration will be compared to costs 
in the Philippines before implementation of the project. A review of 
the occurrence of fraudulent claims submitted by providers on the 
approved provider list compared to fraudulent claims submissions before 
the demonstration will be conducted.

    Dated: September 23, 2011.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2011-24901 Filed 9-27-11; 8:45 am]
BILLING CODE 5001-06-P