[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Proposed Rules]
[Pages 62506-62508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24233]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[DOD-2013-HA-0164]
RIN 0720-AB61


TRICARE; Coverage of Care Related to Non-Covered Initial Surgery 
or Treatment

AGENCY: Office of the Secretary, Department of Defense.

ACTION: Proposed rule.

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SUMMARY: The Department of Defense (DoD) is publishing this proposed 
rule to allow coverage for otherwise covered services and supplies 
required in the treatment of complications (unfortunate sequelae), as 
well as medically necessary and appropriate follow-on care, resulting 
from a non-covered incident of treatment provided pursuant to a 
properly granted Supplemental Health Care Program waiver. This proposed 
rule is necessary to protect TRICARE beneficiaries from incurring 
financial hardships due to the current regulatory restrictions that 
prohibit TRICARE coverage of the treatment of complications resulting 
from non-covered medical procedures, even when those procedures were 
provided while the beneficiary was an active duty member and were 
authorized by the Director, TRICARE Management Activity (TMA), based on 
a determination that a waiver authorizing the original non-covered 
surgery or treatment was necessary to assure adequate availability of 
health care to the Active Duty member. Additionally, with respect to 
care that is related to a non-covered initial surgery or treatment, the 
proposed rule seeks to eliminate any confusion regarding what services 
and supplies will be covered by TRICARE and under what circumstances 
they will be covered.

DATES: Comments must be received on or before December 23, 2013. Do not 
submit comments directly to the point of contact or mail your comments 
to any address other than what is shown below. Doing so will delay the 
posting of the submission.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulatory Identification Number (RIN) and title, by any of the 
following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Federal Docket Management System Office, 4800 Mark 
Center Drive, East Tower, Suite 02G09, Alexandria, VA 22350-3100.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing on the 
Internet at http://regulations.gov as they are received without change, 
including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Thomas Doss (703) 681-7512.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

1. Purpose of Regulatory Actions

a. Need for Regulatory Actions
    Under the TRICARE private sector health care program, certain 
conditions and treatments are excluded from coverage. For example, any 
drug, device, medical treatment, or procedure whose safety and efficacy 
has not been established by reliable evidence is considered unproven 
and excluded from coverage. This exclusion includes all services 
directly related to the unproven drug, device, medical treatment or 
procedure. Specifically, benefits for otherwise covered services and 
supplies that are required in the treatment of complications 
(unfortunate sequelae) resulting from a non-covered incident of 
treatment, are generally excluded from TRICARE coverage pursuant to 
title 32 of the Code of Federal Regulation (CFR) section 199.4(e)(9), 
unless the complication represents a separate medical condition such as 
a systemic infection, cardiac arrest, and acute drug reaction. TRICARE 
also excludes any needed follow-on care resulting from a non-covered 
condition or initial surgery or treatment pursuant to Sec.  
199.4(g)(63).
    There is currently one exception to this general exclusion, 
published in the Federal Register [76 FR 57642] on September 16, 2011, 
to allow coverage of otherwise covered services and supplies required 
in the treatment of complications (unfortunate sequelae) resulting from 
a non-covered incident of treatment provided in a Military Treatment 
Facility (MTF), when the initial non-covered service has been 
authorized by the MTF Commander and the MTF is unable to provide the 
necessary treatment of the complications. This current exception 
recognizes that in order to support Graduate Medical Education and 
maintain provider skill levels, MTF providers are required to perform 
medical procedures that may be excluded from coverage under the TRICARE 
private sector program. The final rule at 32 CFR199.4(e)(9)(ii) was 
viewed as necessary to protect TRICARE beneficiaries from incurring 
financial hardships in such cases.
    Currently, Active Duty Service members (ADSMs) may receive non-
covered TRICARE private sector health care services under the 
Supplemental Health Care Program (SHCP) if a waiver is submitted 
through the Service and approved by the Director, TMA, or designee, in 
accordance with Sec.  199.6(f). While the Department wants to ensure 
that Service members have access to the latest, promising medical 
technologies and procedures, there must be assurance that the care is 
safe and effective, and that members are not subjected to undue risk, 
or rendered unfit for continued service, due to complications suffered 
as a result of unproven medical care. Consequently, requests for non-
covered procedures and treatments, including unproven care, are 
carefully reviewed in conjunction with other available, proven 
treatments, if any exist, to determine whether or not approval of the 
requested care is necessary to assure the adequate availability of 
health care to the member. Currently, Service members are counseled 
that the treatment remains a non-covered TRICARE benefit, and that any 
follow-on care, including care for complications, will not be covered 
by TRICARE once the member separates or retires. Members are left to 
make a difficult choice between pursuing a SHCP waiver in an effort to 
remain fit for full duty while assuming the financial risk of any 
necessary follow-on care after discharge, or, electing not to receive 
the care and risk separation from the Service.
    Like the existing exception at 32 CFR199.4(e)(9)(ii) for non-
covered care provided in a MTF, this proposed exception is narrowly 
tailored to serve a similar government interest; namely, protecting 
former active duty members who have received private sector care 
pursuant to a SHCP waiver in an effort to ensure their fitness for duty 
and continued service.
    Additionally, some confusion has arisen regarding the terms 
`complication'' and ``unfortunate sequelae'' as these terms are not

[[Page 62507]]

currently defined in regulation. Questions have arisen with respect to 
whether necessary follow-on care resulting from a non-covered procedure 
or treatment in an MTF is covered in situations where the MTF is unable 
to provide the necessary treatment. The intent of the original 
September 16, 2011, final rule, as well as the current proposal, is to 
protect TRICARE beneficiaries from incurring financial hardships in 
limited circumstances, which serve valid governmental purposes. Absent 
an exception to the general exclusion from coverage, treatment of 
adverse outcomes, both expected and unexpected, as well as any 
necessary follow-on care that is a direct result of the initial non-
covered treatment, are excluded and could result in less than optimal 
care (e.g., not receiving necessary physical therapy following surgery) 
and/or a significant financial hardship for the beneficiary. The Agency 
did not intend to prevent coverage of necessary follow-on private 
sector care in situations where an MTF is unable to provide that care 
but the current regulatory language is subject to such a narrow 
interpretation absent additional clarification. This proposal would 
permit coverage of necessary continued treatment, such as physical 
therapy following a non-covered surgical procedure in an MTF. It would 
also cover medically necessary follow-on care, including, for example, 
anti-rejection medications for former members who have received face 
and hand transplants. This proposal will eliminate the need to try to 
determine whether the medically necessary and appropriate care the 
patient is seeking from the private sector is considered to be 
treatment of an expected complication, an unexpected complication or 
routine follow-on care, because it will be clearly covered.
b. Legal Authority for the Regulatory Action
    This regulation is proposed under the authority of 10 U.S.C. 
section 1073, which authorizes the Secretary of Defense to administer 
the medical and dental benefits provided in chapter 55 of title 10, 
United States Code. The Department is authorized to provide medically 
necessary and appropriate treatment for mental and physical illnesses, 
injuries and bodily malfunctions, including hospitalization, outpatient 
care, drugs, treatment of medical and surgical conditions and other 
types of health care outlined in 10 U.S.C. 1077(a). Although section 
1077 defines benefits to be provided in the MTFs, these benefits are 
incorporated by reference for the benefits provided in the civilian 
health care sector to active duty family members and retirees and their 
dependents through section 1079 and 1086 respectively.

2. Summary of Major Provisions of the Regulatory Action

    The proposed rule amends the existing special benefit provision 
regarding complications (unfortunate sequelae) resulting from non-
covered initial surgery, to more clearly address what services and 
supplies will be covered by TRICARE and under what circumstances they 
will be covered. The provision itself is relabeled ``Care related to 
non-covered initial surgery or treatment'' to eliminate any confusion 
regarding what constitutes a complication or unfortunate sequelae and 
how broadly or narrowly the exclusion and exceptions to the exclusion 
should be applied. As amended, the regulatory section will specifically 
address coverage of otherwise covered medically necessary treatment, to 
include (i) coverage of complications that represent a separate medical 
condition; (ii) treatment of complications and necessary follow-on care 
resulting from a non-covered incident of treatment provided in an MTF; 
and (iii) treatment of complications and necessary follow-on care 
resulting from a non-covered incident of treatment provided pursuant to 
an approved SHCP waiver. Inclusion of the third prong will support the 
provision of care necessary to allow members to return to full duty 
and/or reach their maximum rehabilitative potential without requiring 
the member to bear the sole financial risk for unfortunate sequelae 
once they are no longer on active duty. This amendment provides 
consistent treatment of unfortunate sequelae and necessary follow-on 
care when an original episode of non-covered care is provided for a 
valid governmental purpose, whether to support Graduate Medical 
Education (GME) and maintain provider skill levels within an MTF or an 
ADSM's fitness for duty through authorization of the purchase of 
otherwise non-covered care via an SHCP waiver. Additionally, the 
regulatory exclusion at 32 CFR 199.4(g)(63) is amended to clearly state 
that all services and supplies related to a non-covered condition or 
treatment, including any necessary follow-on care and treatment of 
complications, are excluded from coverage except as provided in 32 CFR 
199.4(e)(9).

3. Summary of Costs and Benefits

    This proposed rule is not anticipated to have an annual effect on 
the economy of $100 million or more; therefore, it is not an 
economically significant rule under Executive Order 12866 and the 
Congressional Review Act. All services and supplies authorized under 
the TRICARE Basic Program must be determined to be medically necessary 
in the treatment of an illness, injury or bodily malfunction before the 
care can be cost shared by TRICARE. For this reason, DoD anticipates 
that TRICARE will have a marginal increase in cost associated with the 
inclusion of coverage for treatment of complications and necessary 
follow-on care for TRICARE beneficiaries who received previously 
authorized non-covered treatment pursuant to a SHCP waiver while on 
active duty.

II. Background

    Members of the uniformed services on active duty are entitled to 
medical and dental care pursuant to 10 U.S.C. 1074, including the 
provision of such care in private facilities. 32 CFR199.16 implements, 
with respect to the purchase of private sector health care services for 
ADSMs under the SCHP, the statutory authority at 10 U.S.C. 1074(c). As 
a general rule, the same rules that govern payment and administration 
of private sector health care claims under TRICARE apply to the SHCP 
and the care that members receive in private facilities is comparable 
to coverage for medical care under the TRICARE Prime program. 32 CFR 
199.16(f) authorizes the Director of TRICARE Management Activity (TMA) 
discretionary authority to waive any requirements of TRICARE 
regulations, including any restrictions or limitations under the 
TRICARE Basic Program benefits, except those specifically set forth in 
statute, based on ``a determination that such waiver is necessary to 
assure adequate availability of health care to Active Duty members.'' 
ADSMs have access to non-covered care including experimental or 
unproven medical care and treatments in the purchased care sector on a 
case-by-case basis using the SHCP waiver process. These case-by-case 
treatment decisions are specifically approved by the Director or Deputy 
Director of the TRICARE Management Activity, resulting in a number of 
ADSMs receiving otherwise non-covered private sector care while 
serving.
    If an ADSM is granted a waiver under the SCHP to receive an 
otherwise non-covered incident of treatment by a private sector 
provider, rather than in an MTF, and suffers complications from the 
care, SHCP funds can be used to cover necessary follow-on care and 
treatment of complications in the purchased care system as long as the 
member remains on active duty. Once

[[Page 62508]]

the member retires, however, SHCP coverage no longer exists and TRICARE 
does not cover unfortunate sequelae of non-covered care done in the 
purchased care sector except in limited circumstances (e.g. later 
complications that represent a separate medical condition separate from 
the condition that the non-covered treatment or surgery was directed 
toward, and the treatment of the complication is not essentially 
similar to the covered procedures. This may include a systemic 
infection, cardiac arrest, or acute drug reaction). Additionally, once 
retired, existing regulations would not allow the continuation of any 
needed follow-on care such as rehabilitative care or drug therapy. When 
these beneficiaries require such treatment, they are responsible for 
the payment for this necessary treatment resulting in significant 
financial hardship. This rule will address that unfortunate situation 
by allowing coverage of treatment for necessary follow-on care, 
including complications, resulting from the non-covered treatment 
provided to beneficiaries pursuant to a SHCP waiver while they were on 
active duty. The specific procedures for approval of this treatment 
will be addressed in the TRICARE Policy Manual rather than in the 
regulation to ensure that this information is current and easily 
accessible. TRICARE manuals may be accessed at http://www.tricare.mil.

III. Regulatory Procedure

Executive Order 12866, ``Regulatory Planning and Review'' and E.O. 
13563, ``Improving Regulation and Regulatory Review''

    It has been determined that this proposed rule is not a significant 
regulatory action. This rule does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribunal 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 
these Executive Orders.

Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)

    It has been certified that this proposed rule does not contain a 
Federal mandate that may result in the expenditure by State, local and 
tribal governments, in aggregate, or by the private sector, of $100 
million or more in any one year.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that this proposed rule is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. Set forth in the proposed rule are minor revisions 
to the existing regulation. The DoD does not anticipate a significant 
impact on the Program.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that this proposed rule does not impose 
reporting or recordkeeping requirements under the Paperwork Act of 
1995.

Executive Order 13132, Federalism

    It has been certified that this proposed rule does not have 
federalism implications, as set forth in Executive Order 13132. This 
rule does not have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 199

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

    Accordingly, 32 CFR part 199 is proposed to be amended to read as 
follows:

PART 199-- [AMENDED]

0
1. The authority citation for part 199 continues to read as follows:

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

0
2. Amend Sec.  199.4 by revising paragraphs (e)(9) and (g)(63) to read 
as follows:


Sec.  199.4  Basic Program Benefits.

* * * * *
    (e) * * *
    (9) Care related to non-covered initial surgery or treatment. (i) 
Benefits are available for otherwise covered services and supplies 
required in the treatment of complications resulting from a non-covered 
incident of treatment (such as nonadjunctive dental care or cosmetic 
surgery) but only if, the later complication represents a separate 
medical condition such as a systemic infection, cardiac arrest, and 
acute drug reaction. Benefits may not be extended for any later care or 
a procedure related to the complication that essentially is similar to 
the initial non-covered care. Examples of complications similar to the 
initial episode of care (and thus not covered) would be repair of 
facial scarring resulting from dermabrasion for acne.
    (ii) Benefits are available for otherwise covered services and 
supplies required in the treatment of complications (unfortunate 
sequelae) and any necessary follow-on care resulting from a non-covered 
incident of treatment provided in an MTF, when the initial non-covered 
service has been authorized by the MTF Commander and the MTF is unable 
to provide the necessary treatment of the complications or required 
follow-on care, according to the guidelines adopted by the Director, 
TMA, or a designee.
    (iii) Benefits are available for otherwise covered services and 
supplies required in the treatment of complications (unfortunate 
sequelae) and any necessary follow-on care resulting from a non-covered 
incident of treatment provided in the private sector pursuant to a 
properly granted waiver under Sec.  199.16(f) of this chapter. The 
Director, TMA, or designee, shall issue guidelines for implementing 
this provision.
* * * * *
    (g) * * *
    (63) Non-covered condition/treatment, unauthorized provider. All 
services and supplies (including inpatient institutional costs) related 
to a non-covered condition or treatment, including any necessary 
follow-on care or the treatment of complications, are excluded from 
coverage except as provided in under paragraph (e)(9) of this section. 
In addition, all services and supplies provided by an unauthorized 
provider are excluded.
* * * * *

    Dated: September 26, 2013.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2013-24233 Filed 10-21-13; 8:45 am]
BILLING CODE 5001-06-P