[Federal Register Volume 78, Number 103 (Wednesday, May 29, 2013)]
[Rules and Regulations]
[Pages 32126-32131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12642]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AN99


VA Dental Insurance Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) amends its regulations 
to establish rules and procedures for the VA Dental Insurance Program 
(VADIP), a pilot program that offers premium-based dental insurance to 
enrolled veterans and certain survivors and dependents of veterans. 
Under the pilot program, VA will contract with a private insurer, 
through the Federal contracting

[[Page 32127]]

process, to offer dental insurance to eligible individuals. The private 
insurer will be responsible for the administration of the dental 
insurance plan. VA will form the contract and verify the eligibility of 
individuals who apply for the private dental insurance.

DATES: This rule is effective June 28, 2013.

FOR FURTHER INFORMATION CONTACT: Kristin Cunningham, Director, Business 
Policy, Chief Business Office (10NB), Veterans Health Administration, 
Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 
20420, (202) 461-1599. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On March 1, 2012, VA published in the 
Federal Register (77 FR 12517) a proposed rule to amend VA regulations 
to establish VADIP, a pilot program that would offer premium-based 
dental insurance to enrolled veterans and certain survivors and 
dependents of veterans. Section 510 of title V of the Caregivers and 
Veterans Omnibus Health Services Act of 2010, Public Law 111-163 
(2010), requires VA to carry out a pilot program to assess the 
feasibility and advisability of providing a dental insurance plan to 
veterans and survivors and dependents of veterans. To comply with 
section 510(a), VA will contract with a private dental insurer to offer 
dental insurance coverage to the individuals identified in section 
510(b), specifically veterans enrolled in VA's system of annual 
enrollment under 38 U.S.C. 1705, and survivors and dependents of 
veterans who are eligible for medical care under 38 U.S.C. 1781. This 
final rule establishes rules and procedures for VADIP, in accordance 
with section 510(k), which requires VA to prescribe regulations.
    Interested persons were invited to submit comments to the proposed 
rule on or before April 30, 2012, and we received 28 comments. Many of 
the comments were supportive of VADIP, and did not suggest changes to 
the proposed rule. For the remaining comments, we have organized the 
discussion below accordingly.

Comments That Compared VADIP Insurance With VA Dental Benefits

    Certain commenters who expressed support for VADIP also seemed to 
advocate that VADIP is necessary because, by comparison, they believe 
that VA dental care under 38 U.S.C. 1712 (referred to in this preamble 
as ``VA dental benefits'') are not adequately administered to veterans. 
Specifically, these commenters contended that VADIP was necessary 
because only limited groups of veterans are eligible to receive VA 
dental benefits, or because VA staff do not understand or properly 
communicate the eligibility requirements for VA dental benefits. 
Generally, we respond that comments regarding veteran eligibility for 
VA dental benefits or the adequacy of VA dental benefits are beyond the 
scope of this rulemaking, because section 510 clearly distinguishes 
between VA dental benefits and VADIP insurance by requiring VA to 
contract with a private insurer to administer VADIP, and by requiring 
that VA maintain its statutory responsibility to furnish VA dental 
benefits to certain veterans even if those veterans also participate in 
VADIP. See Public Law 111-163, sections 510(e), 510(j). Therefore, we 
do not specifically respond to these comments because these issues are 
outside the scope of this rulemaking.
    However, we do respond to a few commenters who based their support 
for VADIP on misinterpretations of eligibility for VA dental benefits, 
because these misinterpretations seemed to also create confusion for 
the commenters regarding VADIP eligibility. For instance, multiple 
commenters misstated that only veterans with a service-connected 
disability rated at 100 percent are eligible to receive VA dental 
benefits, and consequently advocated that the rule should permit 
veterans with less than a 100 percent service-connection rating to 
enroll in VADIP. We do not make any changes to the rule based on these 
comments because Sec.  17.169(b)(1) makes clear that any veteran who is 
enrolled in the VA health care system in accordance with 38 CFR 17.36 
is eligible to enroll in VADIP, and enrollment under Sec.  17.36 is not 
solely based upon a veteran's service-connection rating, at any level. 
Additionally, we clarify that there are categories of eligibility for 
VA dental benefits that are based on dental conditions that are 
service-connected and compensable in degree, but not requiring an 
overall rating of 100 percent, as well as categories of eligibility 
that are based on criteria that are unrelated to any level of service-
connection. See 38 U.S.C. 1712, 2062; see also 38 CFR 17.160-17.166.

Comments Related to Veteran Family Member Eligibility for VADIP

    Some commenters who expressed support for VADIP also advocated that 
family members of veterans should be eligible to enroll in VADIP. We do 
not make any changes to this rule based on these comments. Section 
510(b)(2) limits VADIP eligibility for veteran family members to only 
those survivors and dependents of veterans who are eligible for medical 
care under 38 U.S.C. 1781, implemented as VA's Civilian Health and 
Medical Program (CHAMPVA). See 38 CFR 17.270-17.278. Consequently, 
Sec.  17.169(b)(2) limits VADIP eligibility for veteran family members 
who are eligible for medical care under 38 U.S.C. 1781 and 38 CFR 
17.271.
    One commenter asserted more specifically that VADIP insurance 
should be available to family members of veterans with a 100 percent 
service-connection rating before it is provided to family members of 
veterans with lower service-connection ratings, because VA dental 
benefits are only provided to 100 percent service-connected veterans. 
We reiterate that VADIP insurance is not VA dental benefits and is not 
comparable to VA dental benefits, and that VA dental benefits are not 
limited to only 100 percent service-connected veterans. With regard to 
the eligibility of family members of veterans for VADIP, we do not make 
any changes based on this comment. Only survivors and dependents of 
veterans who are eligible for CHAMPVA may be enrolled in VADIP. 
Although certain eligibility criteria for CHAMPVA benefits do consider 
whether a veteran has a service-connected disability or condition, 
CHAMPVA eligibility is not solely based on a veteran's service-
connection rating. See, e.g., 38 CFR 17.271(a)(3).
    Although this rule may not expand eligibility for VADIP to veteran 
family members beyond section 510(b)(2), we do not interpret any part 
of section 510 as preventing a private insurer, participating in VADIP, 
from providing a different type of dental insurance plan to veteran 
family members who may not be eligible for VADIP under section 
510(b)(2). Consequently, nothing in this rule prohibits a VADIP-
participating private insurer from forming non-VADIP contractual 
relationships with anyone. However, a VADIP-participating private 
insurer may not use any VA health information to which it is privy, by 
virtue of participating in VADIP, to solicit or market directly to any 
person who is not eligible to enroll in VADIP under section 510(b).

Comments Related to Geographic Areas in Which VADIP Will Be Offered

    Multiple commenters who expressed support for the rule additionally 
advocated that VADIP should be broadly available geographically. One 
commenter specifically stated that VADIP should be offered in all VA 
Integrated Service Networks (VISN),

[[Page 32128]]

instead of select VISNs. It is unclear why the commenter believed VADIP 
would be administered only in select VISNs; the proposed rule did not 
implement regional restrictions, and we do not intend that VADIP be 
administered only in certain VISNs. Therefore, we do not make any 
changes to the rule based on this comment. Although section 510(d) does 
state that the VADIP pilot program ``shall be carried out in such 
[VISNs] as the Secretary considers appropriate,'' we reiterate, from 
the proposed rule, that the intent is that VADIP insurance be provided 
as broadly as possible, given the insurer's coverage capabilities as 
determined during the Federal contracting process. See 77 FR 12518. 
Although VA cannot predict the breadth of geographic coverage, 
limitations will only be due to what insurers ultimately are able to 
provide. To this end, VA will attempt, via the Federal contracting 
process, to ensure that VADIP geographic coverage is broad.
    Some commenters advocated making VADIP available in the Philippines 
and Guam. We do not make any changes to the rule based on these 
comments. As noted above, the rule does not limit VADIP insurance from 
being provided in any particular VISN; both the Philippines and Guam 
are located in VISN 21. We note that the provision of VADIP insurance 
in areas outside the United States is controlled by section 510 and not 
by any other VA authorities to provide VA care outside of the United 
States, because VADIP insurance is not VA care and is not administered 
by VA as a medical benefit. We are not guaranteeing or advocating 
coverage in any specific geographic area, because coverage may be 
limited by multiple factors that are beyond VA's control. For example, 
insurers may be limited to providing VADIP coverage only in areas where 
they are licensed to provide insurance.

Comments Related to VADIP Costs for Enrollees

    As mandated by section 510(h)(3), Sec.  17.169(c)(1) requires that 
VADIP premiums and any copayments will be paid by the insured. Multiple 
commenters advocated that VA should ensure that these costs are 
affordable for VADIP enrollees, without specifically requesting changes 
to the rule except as noted below. First, we address the general 
concerns as expressed by commenters related to cost. Under section 
510(h)(1) and (h)(2), VA must establish VADIP premium amounts and 
adjust those amounts annually. Section 510 is silent about VA 
establishing copayment amounts, although section 510(h)(3) states that 
VADIP enrollees will be responsible for the full cost of any copayment 
amounts.
    Under Sec.  17.169(c)(1), both premium and copayment amounts will 
be determined through the Federal contracting process. To the extent 
that commenters may wish for VA to actually establish the costs of 
VADIP premiums and copayments in the rule, and further ensure that such 
costs are affordable, we will not know such costs until contracts with 
insurers are negotiated. We expect, through the Federal contracting 
process, to negotiate with insurers to establish multiple tiers of 
coverage within the comprehensive listing of dental care services in 
Sec.  17.169(c)(2). This will help ensure that VADIP enrollees have a 
choice to pay premium and copayment amounts proportionate to the 
services they want covered.
    Multiple tiers of coverage will prevent all VADIP enrollees from 
being required to pay higher premium amounts or copayments that would 
typically be associated with covering the full range of services listed 
in Sec.  17.169(c)(2). Establishing tiers of coverage in this manner is 
standard practice in the dental insurance industry, and will assist in 
keeping premium and copayment costs manageable for VADIP enrollees. 
Multiple tiers of coverage with varying premium and copayment amounts 
are also supported by section 510. See Public Law 111-163, sections 
510(h)(1), (h)(3) (indicating that multiple ``[p]remiums'' will be 
established and adjusted by VA, and that each individual covered by 
VADIP will be responsible to pay the full cost of any ``copayments''). 
We do not make any changes to the rule to set forth specific tiers of 
coverage, however, because such determinations are better suited to the 
contract negotiations that VA will conduct with insurers.
    We additionally note that for purposes of analyzing insurer risk, 
typically a large number of enrollees can assist with keeping premiums, 
copayments, and other administrative costs low. As reported in the 
proposed rule, VA anticipates that between 101,000 and 201,000 
individuals will apply to enroll in VADIP each year, based on the 
sizable groups of individuals eligible to enroll under section 510(b). 
See 77 FR 12520. We will conduct the Federal contracting process 
anticipating this large number of expected enrollees and attempt to 
secure reasonable premium and copayment pricing for VADIP plans.
    In relation to the scope of VADIP coverage and pricing, one 
commenter stated that veterans and their family members need coverage 
for ``all dental preventive and corrective care that is more affordable 
[than] the current Delta Dental Plan.'' This commenter further 
criticized ``the current Delta Dental Plan'' for instituting waiting 
periods for certain dental services, such that these services are not 
considered covered until after an insured is enrolled for a specific 
period of time. We are unsure of the specific plan to which the 
commenter intended to refer, but we interpret this comment to advocate 
that VA should ensure that VADIP provides more dental services at a 
less expensive price, and with fewer restrictions, than typically 
provided in an insurance plan that is offered by a large dental insurer 
like Delta Dental. We do not make any changes based on this comment.
    VA must contract with a private dental insurer to administer VADIP, 
and therefore the administration of VADIP will be subject to standard 
practices and market factors that are present in the dental insurance 
industry. For example, VA may not be able to negotiate a contract with 
a private insurer that does not institute waiting periods for certain 
services or procedures, if the standard practice in the dental 
insurance industry is to institute such waiting periods. VA must ensure 
that an insurer offers the coverage VA prescribes, that premiums are 
established and adjusted annually, and that certain other requirements, 
as mandated by section 510, are met. VA must also contract with dental 
insurers within the framework of the dental insurance industry to 
implement these requirements, and as such these dental insurers may 
administer VADIP according to certain standard industry practices that 
commenters expressed were objectionable. Consequently, VADIP coverage 
may not be priced less expensively than other comparable coverage 
typically offered in the dental insurance industry, and coverage may be 
subject to restrictions that typically exist in comparable dental 
insurance plans. We further note that dental benefits that must be 
offered under Sec.  17.169(c)(2) are comprehensive, and reiterate, as 
stated above, that VA will attempt to secure reasonable premium and 
copayment pricing through multiple tier options to allow enrollees to 
choose coverage that is appropriate and affordable for them.
    One commenter from the dental insurance industry recommended 
multiple options to include in VADIP plans that, in the commenter's 
opinion, would keep costs lower for VADIP enrollees. These options 
included instituting waiting periods for certain specific benefits; 
establishing fixed fees

[[Page 32129]]

that VA may charge for internal administrative needs related to the 
VADIP contracts; and instituting lock-out periods, a provision for 
those insureds who opt to leave VADIP, so that such individuals would 
be prevented from re-enrolling in VADIP before a specific period of 
time had passed. This commenter did not request that the rule should 
enact such options as mandatory provisions, but only that these options 
should be considered in the insurance plans themselves, which would be 
formed when VA contracts with private insurers to administer VADIP. VA 
will consider contract options with insurers to reduce costs for VADIP 
enrollees as part of the negotiation process, which may include some or 
all of the above suggestions.
    Although we interpret the cost-saving suggestions made by this 
commenter to relate to the contracting process rather than to the 
regulation, the suggestion to make re-enrollment subject to lock-out 
periods is a contract option that would be prevented if the regulation 
text is not changed. Section 17.169(d)(2), as proposed, alerted the 
public to a month-to-month enrollment option, after the 12-month 
initial enrollment period. This could be interpreted to mean that an 
insured may re-enroll at any time on a month-to-month basis regardless 
of any lock-out period in a VADIP contract. Lock-out periods are 
standard in most dental insurance contracts to discourage individuals 
from enrolling on an intermittent basis, only as services are needed. 
Continuous enrollment is thus incentivized, which helps ensure lower 
premiums for all insureds by increasing predictability of the insured 
group's size, and allowing for sufficient premiums to be collected to 
cover anticipated treatments costs. Therefore, we amend the language of 
Sec.  17.169(d)(2) from the proposed rule to make the month-to-month 
enrollment subject to a new paragraph (e)(5) in the rule. Paragraph 
(e)(5) will read ``[m]onth-to-month enrollment, as described in 
paragraph (d)(2) of this section, may be subject to conditions in 
insurance contracts, whereby upon voluntarily disenrolling, an enrollee 
may be prevented from re-enrolling for a certain period of time as 
specified in the insurance contract.'' This change reflects our 
original intent to consider cost-saving contract options.
    One additional option advanced by this industry commenter was to 
enable enrollees to use pre-tax dollars for premiums and copayments. We 
interpret this as a request that VA permit enrollees to treat premium 
payments and certain other VADIP costs as a pre-tax deduction, for 
purposes of reducing an enrollee's overall taxable income. Although not 
stated by the commenter, we interpret this suggestion as referring to 
``cafeteria'' insurance plans, which allow employers to offer or 
sponsor insurance plans that may provide tax savings to both employees 
and employers. See 26 U.S.C. 125. Enrollment in a ``cafeteria'' plan 
can create tax savings for an employee, typically because the employee 
will contribute a portion of his or her salary on a pre-tax basis to 
pay for the qualified insurance benefits. These contributions are 
usually made pursuant to salary reduction agreements between the 
employer and the employee. Because these contributions are reductions 
in salary and are not received by the employee, they are not considered 
wages for income tax purposes.
    VA is not offering VADIP plans as an employer, and therefore may 
not offer or sponsor VADIP as a ``cafeteria'' plan under 25 U.S.C. 125 
for the purposes of pre-tax treatment of insurance premiums. VA will 
not participate in the collection of premiums or otherwise establish 
automatic deduction mechanisms for the payment of premiums. Instead, 
under Sec.  17.169(c)(1), VADIP insureds will make premium and 
copayments in accordance with the terms of their VADIP insurance plan. 
We, therefore, do not make any changes to the rule based on this 
comment.

Comments Related to Federal Preemption of State Insurance Law

    A commenter from the dental insurance industry stated that ``[i]t 
is important that VA exercise Federal preemption similar to that of the 
[Department of Defense TRICARE Retiree Dental Program (TRDP)] and the 
Federal Employee Dental and Vision Insurance Program (FEDVIP).'' The 
commenter asserted that Federal preemption of State insurance law or 
regulation was necessary for VADIP to be successful, because such 
preemption would allow for the implementation of uniform benefits in 
all States and would reduce the overall cost of VADIP. We agree with 
the commenter that uniformity of benefits provided at a reasonable cost 
are important interests for VA to consider in implementing VADIP. 
Although we interpret that Congress intended to legislate about the 
business of insurance in several subsections of section 510, and in 
turn that certain provisions of this rule could have preemptive effect, 
we make no changes to the rule based on this comment. We intend to 
publish a separate direct final rule to address preemption in VADIP to 
ensure that all affected parties have notice of VA's intent to assert 
the preemptive effect of certain subsections of section 510, and to 
provide VA an opportunity to consult with States and State officials in 
compliance with Executive Order 13132, Federalism.

Comment Related to the Duration of VADIP as a Pilot Program

    Lastly, a commenter advocated that the duration of the VADIP pilot 
program should be extended from 3 years to 5 years, because this longer 
time frame would help ensure higher enrollment, would help spread 
initial administrative costs over a longer time, and would provide VA 
with more time to collect data on the administration of VADIP to 
determine if VADIP is feasible. Section 510(c) is clear that the 
duration of VADIP is to be no more than 3 years. Therefore, we do not 
make any changes to the rule based on this comment.

Nonsubstantive Changes Not Requested by Commenters

    Two nonsubstantive changes are being made that were not requested 
by commenters, to ensure consistency in VADIP administration. The first 
nonsubstantive change is to the headings of Sec.  17.169 and to Sec.  
17.169(a)(1), to remove the word ``Plan,'' so that VADIP is 
consistently known as the ``VA Dental Insurance Program,'' and not the 
``VA Dental Insurance Plan Program.'' The second nonsubstantive change 
is a renumbering of the paragraphs under Sec.  17.169(e), to properly 
distinguish between involuntary and voluntary disenrollment. 
Specifically, Sec.  17.169(e)(1) as proposed referred to both 
involuntary and voluntary disenrollment within one paragraph, and 
sought to set forth the various bases for voluntary disenrollment under 
Sec.  17.169(e)(1)(i) through (e)(1)(v). To ensure there is no 
confusion, we removed language related to voluntary disenrollment from 
Sec.  17.169(e)(1) as proposed and placed this language in the new 
Sec.  17.169(e)(2), and renumbered Sec.  17.169(e)(2) and (e)(3) as 
proposed to Sec.  17.169(e)(3) and (e)(4), respectively. We also 
corrected the reference to voluntary disenrollment procedures in 
renumbered Sec.  17.169(e)(3), to refer to paragraphs (e)(2)(i) through 
(e)(2)(v).
    Based on the rationale set forth in the proposed rule and in this 
document, VA is adopting the provisions of the proposed rule as final 
with changes to Sec.  17.169(a)(1), (d)(2) and (e).

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
final

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rulemaking, represents VA's implementation of its legal authority on 
this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance must be read to conform with 
this rulemaking if possible or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507) requires 
that VA consider the impact of paperwork and other information 
collection burdens imposed on the public. Under 44 U.S.C. 3507(a), an 
agency may not collect or sponsor the collection of information, nor 
may it impose an information collection requirement unless it displays 
a currently valid Office of Management and Budget (OMB) control number. 
See also 5 CFR 1320.8(b)(3)(vi).
    This final rule will impose the following new information 
collection requirement: Applications are needed so that individuals can 
voluntarily participate in VADIP. Procedures for voluntary 
disenrollment, as well as appeals of disenrollment decisions, are 
needed to ensure that enrollment remains voluntary, and that 
disenrollment determinations are timely. As required by the Paperwork 
Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA has submitted this 
information collection to OMB for its review. OMB approved the new 
information collection requirement associated with the final rule and 
assigned OMB control number 2900-0789.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. Only dental insurers, certain veterans and their survivors and 
dependents, which are not small entities, will be affected. Therefore, 
pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this final rule have been examined, and it has been 
determined not to be a significant regulatory action under Executive 
Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.009 Veterans Medical Care 
Benefits and 64.011 Veterans Dental Care.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jose D. 
Riojas, Interim Chief of Staff, approved this document on May 13, 2013, 
for publication.

List of Subjects in 38 CFR Part 17

    Dental health, Government contracts, Health care, Health 
professions, Health records, Veterans.

    Dated: May 22, 2013.
William F. Russo,
Deputy Director, Regulation Policy and Management, Office of the 
General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA amends 38 CFR part 17 as 
follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read as follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.


0
2. Add Sec.  17.169 after Sec.  17.166 to read as follows:


Sec.  17.169  VA Dental Insurance Program for veterans and survivors 
and dependents of veterans (VADIP).

    (a) General. (1) The VA Dental Insurance Program (VADIP) provides 
premium-based dental insurance coverage through which individuals 
eligible under paragraph (b) of this section may choose to obtain 
dental insurance from a participating insurer. Enrollment in VADIP does 
not affect the insured's eligibility for outpatient dental services and 
treatment, and related dental appliances, under 38 U.S.C. 1712.
    (2) The following definitions apply to this section:
    Insured means an individual, identified in paragraph (b) of this 
section, who has enrolled in an insurance plan through VADIP.
    Participating insurer means an insurance company that has 
contracted with VA to offer a premium-based dental insurance plan to 
veterans, survivors, and dependents through VADIP. There may be more 
than one participating insurer.
    (b) Covered veterans and survivors and dependents. A participating 
insurer must offer coverage to the following persons:
    (1) Any veteran who is enrolled under 38 U.S.C. 1705 in accordance 
with 38 CFR 17.36.
    (2) Any survivor or dependent of a veteran who is eligible for 
medical care under 38 U.S.C. 1781 and 38 CFR 17.271.
    (c) Premiums, coverage, and selection of participating insurer. (1) 
Premiums.

[[Page 32131]]

Premiums and copayments will be paid by the insured in accordance with 
the terms of the insurance plan. Premiums and copayments will be 
determined by VA through the contracting process, and will be adjusted 
on an annual basis. The participating insurer will notify all insureds 
in writing of the amount and effective date of such adjustment.
    (2) Benefits. Participating insurers must offer, at a minimum, 
coverage for the following dental care and services:
    (i) Diagnostic services.
    (A) Clinical oral examinations.
    (B) Radiographs and diagnostic imaging.
    (C) Tests and laboratory examinations.
    (ii) Preventive services.
    (A) Dental prophylaxis.
    (B) Topical fluoride treatment (office procedure).
    (C) Sealants.
    (D) Space maintenance.
    (iii) Restorative services.
    (A) Amalgam restorations.
    (B) Resin-based composite restorations.
    (iv) Endodontic services.
    (A) Pulp capping.
    (B) Pulpotomy and pulpectomy.
    (C) Root canal therapy.
    (D) Apexification and recalcification procedures.
    (E) Apicoectomy and periradicular services.
    (v) Periodontic services.
    (A) Surgical services.
    (B) Periodontal services.
    (vi) Oral surgery.
    (A) Extractions.
    (B) Surgical extractions.
    (C) Alveoloplasty.
    (D) Biopsy.
    (vii) Other services.
    (A) Palliative (emergency) treatment of dental pain.
    (B) Therapeutic drug injection.
    (C) Other drugs and/or medications.
    (D) Treatment of postsurgical complications.
    (E) Crowns.
    (F) Bridges.
    (G) Dentures.
    (3) Selection of participating insurer. VA will use the Federal 
competitive contracting process to select a participating insurer, and 
the insurer will be responsible for the administration of VADIP.
    (d) Enrollment. (1) VA, in connection with the participating 
insurer, will market VADIP through existing VA communication channels 
to notify all eligible persons of their right to voluntarily enroll in 
VADIP. The participating insurer will prescribe all further enrollment 
procedures, and VA will be responsible for confirming that a person is 
eligible under paragraph (b) of this section.
    (2) The initial period of enrollment will be for a period of 12 
calendar months, followed by month-to-month enrollment, subject to 
paragraph (e)(5) of this section, as long as the insured remains 
eligible for coverage under paragraph (b) of this section and chooses 
to continue enrollment, so long as VA continues to authorize VADIP.
    (3) The participating insurer will agree to continue to provide 
coverage to an insured who ceases to be eligible under paragraphs 
(b)(1) through (2) of this section for at least 30 calendar days after 
eligibility ceased. The insured must pay any premiums due during this 
30-day period. This 30-day coverage does not apply to an insured who is 
disenrolled under paragraph (e) of this section.
    (e) Disenrollment. (1) Insureds may be involuntarily disenrolled at 
any time for failure to make premium payments.
    (2) Insureds must be permitted to voluntarily disenroll, and will 
not be required to continue to pay any copayments or premiums, under 
any of the following circumstances:
    (i) For any reason, during the first 30 days that the beneficiary 
is covered by the plan, if no claims for dental services or benefits 
were filed by the insured.
    (ii) If the insured relocates to an area outside the jurisdiction 
of the plan that prevents the use of the benefits under the plan.
    (iii) If the insured is prevented by serious medical condition from 
being able to obtain benefits under the plan.
    (iv) If the insured would suffer severe financial hardship by 
continuing in VADIP.
    (v) For any reason during the month-to-month coverage period, after 
the initial 12-month enrollment period.
    (3) All insured requests for voluntary disenrollment must be 
submitted to the insurer for determination of whether the insured 
qualifies for disenrollment under the criteria in paragraphs (e)(2)(i) 
through (v) of this section. Requests for disenrollment due to a 
serious medical condition or financial hardship must include submission 
of written documentation that verifies the existence of a serious 
medical condition or financial hardship. The written documentation 
submitted to the insurer must show that circumstances leading to a 
serious medical condition or financial hardship originated after the 
effective date coverage began, and will prevent the insured from 
maintaining the insurance benefits.
    (4) If the participating insurer denies a request for voluntary 
disenrollment because the insured does not meet any criterion under 
paragraphs (e)(2)(i) through (v) of this section, the participating 
insurer must issue a written decision and notify the insured of the 
basis for the denial and how to appeal. The participating insurer will 
establish the form of such appeals whether orally, in writing, or both. 
The decision and notification of appellate rights must be issued to the 
insured no later than 30 days after the request for voluntary 
disenrollment is received by the participating insurer. The appeal will 
be decided and that decision issued in writing to the insured no later 
than 30 days after the appeal is received by the participating insurer. 
An insurer's decision of an appeal is final.
    (5) Month-to-month enrollment, as described in paragraph (d)(2) of 
this section, may be subject to conditions in insurance contracts, 
whereby upon voluntarily disenrolling, an enrollee may be prevented 
from re-enrolling for a certain period of time as specified in the 
insurance contract.
    (f) Other appeals procedures. Participating insurers will establish 
and be responsible for determination and appeal procedures for all 
issues other than voluntary disenrollment.

(Authority: Sec. 510, Pub. L. 111-163)


    (The Office of Management and Budget has approved the 
information collection requirement in this section under control 
number 2900-0789.)

[FR Doc. 2013-12642 Filed 5-28-13; 8:45 am]
BILLING CODE 8320-01-P