[Federal Register Volume 81, Number 68 (Friday, April 8, 2016)]
[Notices]
[Page 20626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08065]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE Demonstration Project for the Philippines

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

ACTION: Notice of an extension of the TRICARE demonstration project for 
the Philippines.

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SUMMARY: On Wednesday, September 28, 2011, the Department of Defense 
(DoD) published a notice of the Philippines Demonstration Project (PDP) 
(76 FR 60007-60008). This notice is to advise interested parties of an 
extension to 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. During the initial two years of the 
demonstration project, significant reductions in providers under Pre-
Payment Review has been observed, resulting in less fraudulent claim 
investigations. In addition, beneficiaries have been over 93% compliant 
with utilizing approved network providers in the Philippines 
demonstration areas. The DHA's intent is to extend the demonstration 
project for an additional three years in order to determine if the cost 
savings to the Government in terms of the average cost per paid claim 
along with the savings on fraudulent claims can exceed the 
administrative costs related to the project while ensuring Standard 
beneficiaries are able to access high quality medical care within 
TRICARE access standards.

DATES: Effective Date: Effective December 31, 2015.

ADDRESSES: Defense Health Agency (DHA), TRICARE Overseas Program 
Office, 16401 East Centretech Parkway, Aurora, CO 80011.

FOR FURTHER INFORMATION CONTACT: CAPT Bruno Himmler, Office of the ASD 
(HA)--DHA, (303) 676-3728.

SUPPLEMENTARY INFORMATION: 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 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.
    Initial results have shown some partial success with the PDP, but 
additional data needs to be gathered and assessed to be able to 
determine the long term implications of the PDP. Therefore, DHA 
proposes, utilizing the new overseas contract as the vehicle, to extend 
the demonstration for an additional three years in the Philippines to 
validate that use of a well-certified and limited set of approved 
providers in the Philippines 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, and average 
cost per claim paid by the Government, while ensuring beneficiaries 
have sufficient access to high quality care. The demonstration would 
continue to be conducted under 10 U.S.C. 1092.
    During the next three years, the Government will look to expand the 
demonstration areas to other locations/cities with a significant 
Standard population. Also, the contractor will be requested to look at 
including pharmacies as network providers to help control costs related 
to outpatient prescriptions.

    Dated: April 4, 2016.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-08065 Filed 4-7-16; 8:45 am]
 BILLING CODE 5001-06-P