[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Rules and Regulations]
[Pages 33001-33015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10545]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[Docket ID: DoD-2020-HA-0040; and DoD-2020-HA-0050]
RIN 0720-AB81; 0720-AB82; and 0720-AB83


TRICARE Coverage and Reimbursement of Certain Services Resulting 
From Temporary Program Changes in Response to the COVID-19 Pandemic

AGENCY: Office of the Assistant Secretary of Defense for Health 
Affairs, Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: The Assistant Secretary of Defense for Health Affairs 
(ASD(HA)) issues this final rule related to certain provisions of three 
TRICARE interim final rules (IFRs) with request for comments issued in 
2020 in response to the novel coronavirus disease 2019 (COVID-19) 
public health emergency (PHE). Temporary coverage of telephonic office 
visits is made permanent in this final rule, with its adoption expanded 
beyond the pandemic; the temporary telehealth cost-share waiver is 
terminated; and the temporary waiver of certain acute care hospital 
requirements and permanent adoption of Medicare New Technology Add-on 
Payments for new medical items and services are modified, as further 
discussed in the SUPPLEMENTARY INFORMATION section of this rule

DATES: This rule is effective July 1, 2022, except for instruction 4 
(the provision modifying temporary hospitals) which is effective on 
June 1, 2022. Effective July 1, 2022 the interim final rules amending 
32 CFR part 199, which were published at 85 FR 27921, May 12, 2020, and 
85 FR 54914, September 3, 2020, are adopted as final with changes, 
except for the note to paragraph 199.4(g)(15)(i)(A), published at 85 FR 
54923, September 3, 2020, which remains interim.

FOR FURTHER INFORMATION CONTACT: Erica Ferron, Defense Health Agency, 
Medical Benefits and Reimbursement Section, 303-676-3626 or 
[email protected]. Sharon Seelmeyer, Defense Health Agency, 
Medical Benefits and Reimbursement Section, 303-676-3690 or 
[email protected], Diagnosis Related Groups, Hospital 
Value Based Purchasing, Long Term Care Hospitals, and New Technology 
Add-On Payments.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of the Rule

    In response to the novel coronavirus (SARS-CoV-2), which causes 
COVID-19, and the President's declared national emergency for the 
resulting pandemic (Proclamation 9994, 85 FR 15337 (March 18, 2020)), 
the ASD(HA) issued three IFRs in 2020 to make temporary modifications 
to TRICARE regulations in order to better respond to the pandemic. The 
first IFR, published in the FR on May 12, 2020 (85 FR 27921), 
temporarily: (1) Modified the TRICARE regulations to allow for coverage 
of medically necessary telephonic (audio-only) office visits; (2) 
permitted interstate and international practice by TRICARE providers 
when such practice was permitted by state, federal, or host-nation law; 
and (3) waived cost-shares and copayments for covered telehealth 
services for the duration of the COVID-19 pandemic.
    The second IFR, published in the FR on September 3, 2020 (85 FR 
54914) temporarily: (1) Waived the three-day prior hospital qualifying 
stay requirement for skilled nursing facilities (SNFs); (2) added 
coverage for the treatment use of investigational drugs under expanded 
access authorized by the U.S. Food and Drug Administration (FDA) when 
indicated for the treatment of COVID-19; (3) waived certain provisions 
for acute care hospitals in order to permit TRICARE authorization of 
temporary hospital facilities and freestanding ambulatory surgical 
centers (ASCs) providing inpatient and outpatient services to be 
reimbursed; (4) revised the diagnosis related group reimbursement (DRG) 
at a 20 percent higher rate for COVID-19 patients; and (5) waived 
certain requirements for long term care hospitals (LTCHs). The second 
IFR also included two permanent provisions adopting Medicare's NTAPs 
adjustment to DRGs for new medical services and technologies and 
adopting Medicare's Hospital Value Based Purchasing (HVBP) Program.
    The third IFR, published in the FR on October 30, 2020 (85 FR 
68753) added coverage of National Institute of Allergy and Infectious 
Disease (NIAID)-sponsored clinical trials when for the prevention or 
treatment of COVID-19 or its associated sequelae.
    After publication of each IFR, DoD evaluated the appropriateness of 
each temporary measure for continued use throughout the national 
emergency for COVID-19, as well as to determine if it would be 
appropriate to make any of the provisions permanent within the

[[Page 33002]]

TRICARE program. After analysis of the risks, benefits, and costs of 
each provision, as well as a review of comments, the ASD(HA) issues 
this final rule to make the following changes:
    a. 32 CFR 199.4(g)(52) Telephone Services: The IFR temporarily 
modified this regulation provision which excluded telephone services 
(audio-only) except for biotelemetry. This final rule revises this 
regulatory exclusion and permanently modifies 32 CFR 199.4(c)(1)(iii) 
Telehealth Services to add coverage for medically necessary telephonic 
office visits, in all geographic areas where TRICARE beneficiaries 
reside. A telephonic office visit is a reimbursable telephone call 
between a beneficiary, who is an established patient, and a TRICARE-
authorized provider. This is considered a type of telehealth modality 
under the TRICARE program. Specifically, this change will allow 
providers to be reimbursed for medically necessary care and treatment 
provided to beneficiaries over the telephone, when a face-to-face, 
hands-on visit is not required, and a two-way audio and video 
telehealth visit is not possible. The telephonic office visit should be 
a valid medical visit in that there is an examination of the patient's 
history and chief complaint along with clinical decision making 
performed by a provider. Telephonic provider-to-provider consults which 
are audio-only, but otherwise meet the definition of a covered 
consultation service are also covered under this final rule. Telephone 
calls of an administrative nature (e.g., appointment scheduling), 
routine answering of questions, prescription refills, or obtaining test 
results are not medical services and are not reimbursable.
    DoD implemented temporary coverage of telephonic office visits 
effective May 12, 2020, in order to provide beneficiaries the option to 
obtain some medical services safely from home, reducing their exposure 
to COVID-19 and to minimize potential spread of the illness. In order 
to determine if telephonic office visits should be converted to a 
permanent telehealth benefit, DoD analyzed claims data from TRICARE 
private sector care and reviewed published industry information from: 
Medicare; health insurance plans; and physicians' professional 
organizations regarding telephonic office visits. The TRICARE claims 
data between mid-March and mid-September 2020 indicates beneficiary 
utilization of telephonic office visits is a small portion of all 
telehealth claims. Medicare and health insurance plans reported data 
indicating substantial utilization of telephonic office visits. 
Physicians' professional organizations including the American College 
of Physicians (ACP) and the American Medical Association (AMA) issued 
statements reporting physicians' favorable experiences with telephonic 
office visits. Furthermore, the DoD received positive public comments 
regarding telephonic office visits including multiple requests for the 
agency to consider it as a permanent benefit. After thoughtful 
consideration of these facts, and through this final rule revising the 
regulatory exclusion prohibiting reimbursement of telephonic (audio-
only) office visits, the DoD will revise the exclusion of audio-only 
telephonic services and add medically necessary telephonic office 
visits as a covered telehealth service under the TRICARE Basic Benefit. 
In addition, 32 CFR 199.2 Definitions will be amended by this final 
rule to include definitions of ``Biotelemetry,'' ``Telephonic 
consultations,'' and ``Telephonic office visits'' as related to the 
modified telehealth service regulation provision.
    b. 32 CFR 199.6(b)(4)(i)(I): The temporary waiver of certain acute 
care hospital requirements for temporary hospitals and freestanding 
ambulatory surgery centers during the COVID-19 pandemic from the second 
COVID IFR remains in effect, with modifications. The modification 
temporarily allows any entity that enrolled with Medicare as a hospital 
through Medicare's Hospitals Without Walls initiative to become a 
TRICARE-authorized hospital that may be considered to meet the 
requirements for an acute care hospital listed under paragraph 
199.6(b)(4)(i). These entities may provide any inpatient or outpatient 
hospital services, when consistent with the State's emergency 
preparedness or COVID-19 pandemic plan and when they meet the Medicare 
hospital Conditions of Participation (CoP), to the extent not waived. 
Under Medicare's Hospitals Without Walls initiative, Centers for 
Medicaid and Medicare Services (CMS) relaxed certain requirements to 
allow ASCs and other interested entities, such as licensed independent 
emergency departments, to temporarily enroll as Medicare-certified 
hospitals and receive reimbursement for hospital inpatient and 
outpatient services. Although CMS ceased accepting new enrollments into 
the Hospitals Without Walls initiative, effective December 1, 2021, 
those entities that were previously enrolled under the initiative 
continue to be enrolled and receive reimbursement for hospital 
inpatient and outpatient services. The CMS memorandum eliminating 
future enrollments into the Hospitals Without Walls initiative, does 
not impact any of the changes from the initial IFR or in this final 
rule, as both require a provider to first be enrolled with CMS as a 
hospital under the initiative to register with TRICARE as a hospital 
and receive reimbursement as a hospital.
    The ASD(HA) also recognizes the need for increased access to 
inpatient and outpatient care during the COVID-19 pandemic. In the IFR, 
we temporarily permitted temporary hospitals and freestanding ASCs that 
registered with Medicare as hospitals to be reimbursed as acute care 
hospitals (85 FR 54914). We are modifying this expanded coverage of 
inpatient and outpatient care by allowing any entity enrolled with 
Medicare as a hospital on a temporary basis to also be considered a 
TRICARE-authorized hospital and receive reimbursement for inpatient and 
outpatient institutional charges under the TRICARE DRG payment system, 
Outpatient Prospective Payment System (OPPS), or other applicable 
hospital payment system allowed under Medicare's Hospitals Without 
Walls initiative, to the extent practicable. In order to reduce burden 
on these providers during the pandemic, we are not developing any 
regulatory requirements for participation in TRICARE and will instead 
permit any entity that registers with Medicare as a hospital under 
their Hospitals Without Walls initiative to be considered a TRICARE-
authorized hospital. To further reduce the burden on providers and the 
TRICARE program, this final rule will allow the Defense Health Agency 
(DHA) to adopt any requirement related to Medicare's Hospital without 
Walls initiative through administrative policy, when determined 
practicable, without going through the lengthy regulatory process. This 
provision will be effective the date published in the FR through the 
expiration of Medicare's Hospitals Without Walls initiative. Upon 
conclusion of Medicare's initiative or when a facility loses its 
hospital status with Medicare, whichever occurs earlier, the entity 
will no longer be considered an authorized hospital under TRICARE and 
will not be reimbursed for institutional charges unless it otherwise 
qualifies as an authorized institutional provider under paragraph 
199.6(b)(4). While vaccination has slowed the spread of COVID-19 in 
many areas of the U.S., the virus remains a deadly threat for those 
patients who do contract it and require acute care treatment. 
Additionally,

[[Page 33003]]

access to acute care treatment for other injury and illnesses in areas 
where there is a COVID-19 resurgence remains essential. The ASD(HA) 
finds it necessary to make this provision of the final rule effective 
upon publication of the final rule.
    c. 32 CFR 199.14(a)(1)(iv): Special Programs and Incentive 
Payments. This final rule creates new paragraph 199.14(a)(1)(iv) to 
more appropriately categorize the NTAP and HVBP payments. It moves the 
NTAP provisions from paragraph 199.14(a)(1)(iii)(E)(5) to 
199.14(a)(1)(iv)(A), and moves the HVBP provision from paragraph 
199.14(a)(iii)(E)(6) to 199.14(a)(1)(iv)(B). For the NTAP provisions, 
TRICARE: (1) Shall apply Medicare NTAP adjustments to TRICARE covered 
services and supplies, except for pediatric (defined for NTAPs as 
pertaining to patients under the age of 18, or who are treated in a 
children's hospital or in a pediatric ward) services and supplies; (2) 
shall modify NTAP reimbursement adjustment rates for NTAPs at 100 
percent of the average cost of the technology or 100 percent of the 
costs in excess of the Medicare Severity-Diagnosis Related Group (MS-
DRG) payment for the case for pediatric beneficiaries; and (3) may 
create a reimbursement adjustment for TRICARE NTAPs, specific to the 
TRICARE beneficiary population under age 65 in the absence of a 
Medicare NTAP adjustment, using criteria similar to Medicare criteria 
for eligible new technologies outlined in 42 CFR 412.87 and the 
Medicare reimbursement criteria outlined in 42 CFR 412.88. Under the 
statutory authority to pay like Medicare for like services and items 
when practicable in 10 U.S.C. 1079(i)(2), the ASD(HA) has determined 
that, generally, the NTAP reimbursement methodology is practicable for 
TRICARE to adopt for any otherwise covered services and supplies with a 
Medicare NTAP, under the same conditions as approved by Medicare. 
However, the ASD(HA) finds it impracticable to use Medicare's NTAPs for 
TRICARE's pediatric patients due to the lack of a significant pediatric 
population within Medicare. To address the unique TRICARE beneficiary 
population of pediatric patients, this rule establishes reimbursement 
of pediatric NTAPs at 100 percent of the costs in excess of the MS-DRG 
payment. Lastly, when TRICARE covers new technologies that are not 
covered by Medicare or do not have a Medicare NTAP due to differing 
populations (e.g., biologics used solely by pediatric patients), the 
ASD(HA) finds it practicable to establish a TRICARE NTAP category and 
methodology whenever necessary. In these instances, the Director, DHA, 
may issue implementation instructions listing the specific TRICARE 
NTAPs on the website: www.health.mil/ntap.
    d. 32 CFR 199.17(l)(3): The cost-share and copayment waiver for 
telehealth services during the COVID-19 pandemic was implemented in 
TRICARE's first COVID-19 IFR in response to efforts by federal, state, 
and local governments to encourage individuals to stay at home, avoid 
exposure, and to reduce possible transmission of the virus. When the 
rule was published, there was a high degree of uncertainty surrounding 
the potential availability of a vaccine. With the approval or emergency 
use authorization of several vaccines by the U.S. Food and Drug 
Administration, the widespread availability of such vaccines throughout 
the United States, and the elimination of stay-at-home orders by most 
States and localities, this provision is no longer necessary. As such, 
the ASD(HA) is terminating the waiver of cost-shares and copayments for 
telehealth services on the effective date of this final rule, or upon 
expiration of the President's national emergency for COVID-19, 
whichever occurs earlier.
    e. The DoD continues to evaluate potential permanent adoption of 
the treatment use of investigational drugs under expanded access and 
NIAID-sponsored clinical trials and will publish a final rule at a 
future date; until such publication, the two benefits remain in effect 
without modification as temporarily implemented in the second and third 
IFRs. These two benefits remain in effect through the end of the 
President's national emergency for COVID-19, unless modified by future 
rulemaking. Comments received on those two provisions during the IFR 
comment periods will be addressed in that final rule.
    f. All temporary regulation changes made by the three COVID-19-
related IFRs not otherwise addressed in this final rule remain in 
effect as stated in the IFR under which they were implemented until 
such time as the conditions for their expiration are met.
    g. The HVBP Program is permanently adopted and is moved from 32 CFR 
199.14(a)(1)(iii)(E)(6) to 32 CFR 199.14(a)(1)(iv)(B); there are 
otherwise no modifications from the second IFR.

B. Summary of Major Provisions

a. Changes to the TRICARE Benefit
Telephonic Office Visits
    A telephonic office visit is an easy-to-use telehealth modality 
that has many benefits. A telephonic office visit consists of a 
beneficiary, who is an established patient, calling his/her provider to 
discuss an illness (including mental illness), injury, or medical 
condition. During the conversation the provider will ask questions 
regarding the symptoms and determine if they can proceed with the 
telephonic office visit or if based on the information he/she reported, 
a face-to-face, hands-on visit is in fact medically necessary. If they 
proceed with the telephonic office visit, typically the provider will 
have the beneficiary's medical record open for review during the call, 
offer medical advice, and may place an order for a prescription or lab 
tests. During the COVID-19 pandemic, telephonic office visits have been 
instrumental in keeping beneficiaries safer at home with less risk of 
exposure to COVID-19 for conditions which a face-to-face and hands-on 
visit is not medically necessary. Telephonic office visits are also 
highly desirable for beneficiaries who reside in rural areas and/or 
areas where health care services are scarce. Likewise, beneficiaries 
without access to the internet and/or computers, smartphones, or 
tablets to conduct two-way audio-video telehealth visits also greatly 
benefit from coverage of telephonic office visits. DoD will continue to 
offer coverage of telephonic office visits through the end of the 
pandemic and with this final rule DoD will revise the telephone 
services (audio-only) regulatory exclusion in order to make this a 
permanent telehealth benefit available to beneficiaries in all 
geographic locations, when such care is medically necessary and 
appropriate.
    To understand the use of telephonic office visits during the COVID-
19 pandemic, the DoD analyzed claims data from TRICARE private sector 
care and reviewed published industry information from: Medicare; health 
insurance plans; and physicians' professional organizations regarding 
telephonic office visits. TRICARE private sector claims data from mid-
March 2020 through mid-September 2020 indicates there were a total of 
80,541 telephonic office visits conducted. Telephonic office visits 
were an average 2.1 percent of all telehealth services provided. 
Telehealth services were 5.7 percent of all outpatient professional 
visits. In August 2020, a Medicare Advantage Issue Brief

[[Page 33004]]

reported, ``Three million telehealth visits with Medicare beneficiaries 
between mid-March and mid-June were conducted via telephone indicating 
the preference for [telephonic office visits].'' \1\ Health insurance 
plans including Security Health Plan and Kaiser Permanente reported 75 
percent and 85 percent respectively of their telehealth visits as 
telephonic office visits.\2\ The AMA stated, ``Doctors have reported 
that they have been able to conduct successful [telephonic office 
visits] with patients, in lieu of in-person or telehealth visits, 
obtaining about 90 percent of the information they would collect using 
audio and video capable equipment.'' \3\ In March 2020, the ACP began 
writing letters to CMS requesting pay parity for telephonic office 
visits. On April 30, 2020, CMS responded to the ACP's requests 
announcing that it was increasing payments for telephonic office visits 
to match payments of similar office and outpatient visits.\4\ TRICARE 
routinely updates its reimbursement rates in accordance with CMS 
updates, consistent with existing statutory requirements, when 
practicable. Note that CMS intends to only temporarily offer coverage 
for telephonic office visits for certain services during the public 
health emergency. However, although TRICARE is required to reimburse 
like Medicare to the extent practicable under the statute, TRICARE is 
not required to provide the exact same benefits as Medicare given the 
differences in populations served. Prior to the pandemic, DoD had a 
telehealth benefit that was more generous than what was offered under 
Medicare. Considering all of the data and industry information 
discussed, the DoD is finalizing its approach to permanently revise the 
telephone services (audio-only) regulatory exclusion and allow coverage 
of medically necessary and appropriate telephonic office visits for 
beneficiaries in all geographic locations.
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    \1\ ``Issue Brief: Audio-only Telehealth Visits Essential for 
Use in Medicare Advantage Risk Adjustment'', Better Medicare 
Alliance. August 2020. Web. Accessed 15 Dec. 2020.
    \2\ Ibid.
    \3\ ``Amid pandemic, CMS should level field for phone E/M 
visits'', Kevin B. O'Reilly, AMA Digital, April 20, 2020. Web. 
Accessed 15 Dec. 2020
    \4\ ``CMS Announcement of Pay Parity for Telephone Calls Answers 
a TOP ACP Priority'' American College of Physicians. Statement 
attributable to Jacqueline Fincher, President, American College of 
Physicians. April 30, 2020. Web. Accessed 15 Dec. 2020.
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    In converting medically necessary telephonic office visits to a 
permanent benefit, the DoD will issue policy guidance describing 
coverage of medically necessary and appropriate telephonic office 
visits to ensure best practices and protect against fraud.
Entities Temporarily Enrolling as Hospitals
    This final rule modifies the temporary waiver of certain acute care 
hospital requirements for TRICARE authorized hospitals in the IFR to 
allow any entity that has temporarily enrolled with Medicare as a 
hospital through their Hospitals Without Walls initiative (or enrolls 
in the future, should Medicare resume such enrollments) to temporarily 
become a TRICARE-authorized hospital under paragraph 199.6(b)(4)(i). 
These entities may provide any inpatient or outpatient hospital 
services, when consistent with the State's emergency preparedness or 
COVID-19 pandemic plan and when they meet the Medicare hospital CoP, to 
the extent not waived. While there are no direct corollaries in TRICARE 
regulation to the CoP being waived under Medicare, there do exist in 
TRICARE regulation certain requirements that would prevent allowing 
some facilities to be considered as acute care hospitals for the 
purposes of payment. Title 32 CFR 199.6(b)(3) and (4) list the 
requirements for providers to be considered TRICARE-authorized 
hospitals. It may not be possible for some entities to meet all of 
these requirements, such as providing primarily inpatient care or 
having Joint Commission (previously known as the Joint Commission on 
Accreditation of Hospitals) accreditation status or surveying of new 
facilities.
    We continue to assert, as we did in the IFR, that these 
institutional requirements are necessary for TRICARE-authorized acute 
care hospitals. We also note there is no requirement to have a TRICARE 
benefit that matches Medicare's benefit, or for TRICARE to authorize 
all providers that are providers under Medicare. Both TRICARE's 
statutory authority and population differ from Medicare's, so it is 
appropriate for TRICARE to continue to manage its authorized provider 
program separately from Medicare's. During the COVID-19 pandemic, 
however, it is important for TRICARE to ensure swift access to 
inpatient and outpatient care, to include leveraging Medicare's 
flexibilities for acute care facilities. Under Medicare's Hospitals 
Without Walls initiative, CMS relaxed certain requirements to allow 
ASCs and other interested entities, such as licensed independent 
freestanding emergency departments, to temporarily enroll as Medicare-
certified hospitals and to receive reimbursement for hospital inpatient 
and outpatient services. In the previously-published IFR, we extended 
coverage of acute care hospitals to include temporary hospitals and 
freestanding ASCs that registered with Medicare as hospitals to be 
reimbursed as hospitals under TRICARE. This final rule expands the 
original temporary hospital waiver by temporarily permitting any entity 
to qualify as an acute care hospital under TRICARE so long as it had 
enrolled with Medicare as a hospital under the Hospitals Without Walls 
initiative prior to the December 1, 2021 memorandum by which CMS 
terminated further enrollments (or enrolls in the future, should CMS 
resume enrollments).
    In the IFR, it was not our intent to maintain a regulatory list of 
qualifying providers in Sec.  199.6 that are eligible to enroll with 
Medicare under their Hospitals Without Walls initiative or to adopt 
such changes through the regulatory process, which imposes an 
unnecessary administrative burden on the DHA and delays coverage for 
providers and patients, as paragraph 199.6(b)(4)(i) may need to be 
continually updated to keep current with Medicare changes during the 
pandemic. Therefore, this final rule modifies the temporary regulation 
change from the IFR at paragraph 199.6(b)(4)(i) to allow any entity 
enrolled with Medicare as a hospital to temporarily become a TRICARE-
authorized acute care hospital, and receive reimbursement for inpatient 
and outpatient institutional charges under the TRICARE DRG payment 
system, OPPS, or other applicable hospital payment system allowed under 
Medicare's Hospitals Without Walls initiative (when determined 
practicable). The ASD(HA) will implement Medicare's requirements for 
such entities through administrative guidance (e.g., the TRICARE 
manuals) to ensure TRICARE requirements for such facilities are 
consistent with the most current Medicare requirements under the 
Hospitals Without Walls initiative.
    Under this provision, facilities that convert into hospitals and 
are Medicare-certified hospitals through an emergency waiver authority 
under Section 1135 of the Social Security Act and are operating in a 
manner consistent with their State's emergency plan in effect during 
the COVID-19 pandemic will be eligible for reimbursement by TRICARE for 
covered inpatient and outpatient services under the applicable hospital 
payment system. Once an entity ends, terminates, or loses its hospital 
status under Medicare, the facility will no longer be considered a 
TRICARE-authorized acute care hospital effective the date when Medicare

[[Page 33005]]

deactivated the entity's hospital billing privileges. While we are 
temporarily amending the institutional provider requirements under 
paragraph 199.6(b)(4)(i), we are still requiring that these facilities 
meet Medicare's CoP (to the extent not waived) established for this 
Presidential national emergency. This change will improve beneficiary 
access to medically necessary care and may mitigate hospitals' lack of 
capacity and shortages of resources during the pandemic. This change is 
temporary for the duration of Medicare's ``Hospitals Without Walls'' 
initiative.
b. Reimbursement Modifications Consistent With Medicare Requirements
NTAPs
NTAP Reimbursement
    As stated in the second IFR (85 FR 54914), for care rendered in an 
inpatient setting, TRICARE shall reimburse services and supplies with 
Medicare NTAPs using Medicare's NTAP payment adjustments for only those 
services and supplies that are an approved benefit under the TRICARE 
Program. Title 10 U.S.C. 1079(i)(2) requires TRICARE to reimburse 
covered services and supplies using the same reimbursement rules as 
Medicare, when practicable. However, this provision is not self-
executing, so this FR permanently adopts the Medicare NTAP methodology. 
TRICARE shall also adopt future NTAP modifications published by CMS, 
including modifications to the NTAP methodology and the list of new 
technologies to which NTAPs are applied.
Pediatric Reimbursement
    Per the authority provided in 10 U.S.C. 1079(i)(2), the ASD(HA) may 
determine that the Medicare NTAP methodology is not practicable for 
certain populations. One such population is TRICARE's pediatric 
population, which, as used in relation to the NTAP provisions in this 
final rule, is defined as individuals under the age of 18, or who are 
being treated in a children's hospital or in a pediatric ward. Since 
Medicare does not have a pediatric population to consider when 
establishing alternative reimbursements for new high-dollar 
technologies, the ASD(HA) has therefore determined it is not 
practicable to use Medicare's NTAPs for pediatric patients; instead, 
the NTAP adjustment should be modified to address the unique TRICARE 
beneficiary population of pediatric patients. Under this modification, 
TRICARE shall reimburse pediatric NTAP claims at 100 percent of the 
costs in excess of the MS-DRG. Paying these claims at 100 percent of 
the costs in excess of the MS-DRG increases the likelihood that all 
pediatric beneficiaries will receive medically necessary and 
appropriate treatment, especially pediatric beneficiaries with serious, 
life-threatening, and costly diseases.
High-Cost Treatments Without an NTAP
    Some new, high-cost treatments are not identified as requiring an 
NTAP by CMS. This primarily occurs when a treatment for a rare, fatal 
disease may be appropriate for a beneficiary in TRICARE's population 
but is not appropriate for Medicare's population, which is typically 
age 65 and above. For example, Spinraza is a treatment for Spinal 
Muscular Atrophy, a rare genetic neuromuscular disease that primarily 
impacts infants and young children. Spinraza has a high-cost per 
treatment, but is reimbursed at substantially lower cost when 
administered in a hospital because it is included in the DRG 
reimbursement. CMS does not include Spinraza in its list of new 
technologies receiving an NTAP.
    The ASD(HA) therefore finds it impracticable to reimburse such 
technologies using existing reimbursement methodologies, which do not 
allow sufficient rates for new, high-cost technologies during the first 
two or three years following FDA approval, after which, they are 
absorbed into the core DRG through the annual DRG update and 
calibration process. The ASD(HA) finds it practicable to establish a 
category of TRICARE NTAPs. This category may include services and 
supplies that are otherwise covered by TRICARE and that meet certain 
CMS eligibility criteria under 42 CFR 412.87. These eligibility 
criteria will ensure that DHA consistently and comprehensively 
evaluates new treatments when selecting which treatments may be 
approved for a TRICARE NTAP. Likewise, the reimbursement methodology 
for these TRICARE NTAPs shall follow the CMS reimbursement 
methodologies for Medicare NTAPs outlined in 42 CFR 412.88.
    For these high-cost, new, life-saving treatments that do not 
qualify or otherwise have an NTAP designation from CMS but for which 
the existing Medicare reimbursement is not practicable for the TRICARE 
population, the Director, DHA, shall establish internal guidelines and 
policy for approving TRICARE NTAPs and adopting such adjustments 
together with any variations deemed necessary to address unique issues 
involving the beneficiary population or program administration. These 
include, but are not limited to the exact reimbursement methodology, 
the eligibility criteria, and the method for approving or denying a 
TRICARE specific NTAP. The approved TRICARE NTAPs shall be published at 
least annually on the website: www.health.mil/ntap.
c. Beneficiary Cost-Shares and Copayments
Termination of Cost-Share and Copayment Waivers for Telehealth During 
the COVID-19 Pandemic
    The first IFR implemented a waiver of cost-shares and copayments 
(including deductibles) for all in-network authorized telehealth 
services for the duration of the COVID-19 pandemic (ending when the 
President's national emergency for COVID-19 is suspended or terminated, 
in accordance with applicable law and regulation). The purpose was to 
incentivize TRICARE beneficiaries to use telehealth services and avoid 
unnecessary in-person TRICARE-authorized provider visits, which could 
potentially bring them into contact with or aid the spread of COVID-19. 
The implementation of this provision was highly successful, with a 
significant number of beneficiaries shifting to the use of telehealth 
visits. Since this provision was enacted, however, several vaccines 
have been approved or granted emergency use authorization by the FDA 
and are now widely available throughout the United States. While 
concerns remain surrounding variants of the SARS-CoV-2 virus and herd 
immunity may not yet have been reached, states and localities are no 
longer enacting strict stay-at-home orders.
    TRICARE spent approximately $20.6M on waived telehealth cost-shares 
and copayments in FY20 and another $71.4M through the end of September 
2021. Due in part to flexibilities introduced in the IFRs discussed in 
this rule, and other program changes implemented via policy, the 
Defense Health Plan faces significant budget shortfalls. Termination of 
this provision will save the DoD $4.8M for every month it expires prior 
to the end of the national emergency, allowing DoD to focus resources 
on testing, vaccination efforts, and treatment for COVID-19-positive 
patients. We do not expect termination of this provision to have any 
impact on access to care, as beneficiaries will continue to have access 
to telehealth services and will be able to choose to continue using 
such services, or to visit their provider in-person, with the same 
cost-share applied to the service regardless of the

[[Page 33006]]

modality through which it was delivered.
    Given the availability of vaccines, the reduction of stay-at-home 
orders, and the cost of waiving telehealth cost-sharing, the ASD(HA) 
finds it appropriate to expire the waiver on the effective date of this 
rule or the date of expiration of the President's national emergency 
for COVID-19, whichever is earlier. Telehealth services remain a 
covered benefit for TRICARE beneficiaries after the expiration of the 
cost-share/copayment waiver.

C. Legal Authority for This Program

    This rule is issued under 10 U.S.C. 1073(a)(2) giving authority and 
responsibility to the Secretary of Defense to administer the TRICARE 
program. The text of 10 U.S.C. chapter 55 can be found at https://manuals.health.mil/.

II. Regulatory History

    Each of the sections under which TRICARE is administered are 
revised every few years to ensure requirements continue to align with 
the evolving health care field. Title 32 CFR 199.4 was most recently 
updated on November 17, 2020 (85 FR 73193) by a final rule that added 
coverage of physical therapy and occupational services prescribed by a 
podiatrist.
    The telephone services paragraph being modified by this final rule, 
paragraph 199.4(g)(52), was last temporarily modified with publication 
of the COVID-19-related IFR published on May 12, 2020 (85 FR 27921-
27927), which temporarily permitted coverage of telephonic office 
visits for the duration of the President's national emergency for the 
COVID-19 pandemic. The telephone services regulatory exclusion was 
first published in the FR on April 4, 1977, with the comprehensive 
regulations implementing the ``Civilian Health and Medical Program of 
the Uniformed Services'' (42 FR 17972). Then, in 1984, the final rule, 
``Civilian Health and Medical Program of the Uniformed Services 
(CHAMPUS); Cardiac Pacemaker Telephonic Monitoring'' (49 FR 35934) 
revised the exclusion to allow coverage of transtelephonic monitoring 
(a type of biotelemetry) of cardiac pacemakers. No other permanent 
revisions have been made to the telephone services paragraph.
    Title 32 CFR 199.6 was last modified November 17, 2020 (85 FR 
73196). This change updated terminology from doctors of podiatry or 
surgical chiropody to doctors of podiatric medicine or podiatrists and 
added podiatrists to the list of providers authorized to prescribe and 
refer beneficiaries to physical therapists and occupational therapists.
    Title 32 CFR 199.14 was last permanently revised on September 3, 
2020 (85 FR 54914-54924) with the addition of NTAPs and the HVBP 
Program under paragraph 199.14(a)(1)(iii)(E), which are being modified 
by this final rule.
    Title 32 CFR 199.17 was last temporarily modified on May 12, 2020 
(85 FR 27921-27927), with publication of the telehealth cost-share and 
copayment waiver being terminated by this final rule. This section was 
last permanently modified on February 15, 2019 (84 FR 4333), as part of 
the final rule implementing the TRICARE Select benefit plan. The 
revisions to Sec.  199.17 included adding high-value services as a 
benefit under the TRICARE program, as well as copayment requirements 
for Group B beneficiaries. The 32 CFR 199.17(l) paragraph being 
modified by this IFR was created as part of the IFR that established 
the TRICARE Select benefit (82 FR 45438) during which a comprehensive 
revision of Sec.  199.17 occurred. This paragraph did not exist prior 
to that revision and has only been modified once, with the addition of 
temporary telehealth cost-shares and copayment waivers.

III. Discussion of Comments & Changes

    DoD sincerely appreciates all comments received on the IFRs 
published in response to the COVID-19 pandemic. We respond to comments 
for two of the IFRs below, separated by rule and impacted provision, 
except for comments on the treatment use of investigational new drugs, 
which will be discussed in a future final rule. We will also respond to 
comments related to TRICARE's third IFR published in 2020 in a future 
final rule. Except where otherwise modified in this final rule, we 
reaffirm the policies and procedures incorporated in the IFRs and 
incorporate the rationale presented in the preambles of the IFRs into 
this final rule.

A. IFR--TRICARE Coverage and Payment for Certain Services in Response 
to the COVID-19 Pandemic

    This IFR was published in the FR (85 FR 27921) on May 12, 2020. 
Comments were accepted for 30 days until June 11, 2020. A total of 16 
comments were received. Below is a summary of the comments and the 
Department's responses. Some commenters provided detailed feedback 
concerning the overall telehealth program, including its applicability 
to autism services, partial hospitalization programs, and behavioral 
health services, or regarding benefits outside of the scope of this 
rule, such as care provided in patients' homes. We thank the commenters 
for their feedback however, because these comments did not relate to 
telephonic office visits, provider licensing, or telehealth copays, we 
are unable to respond in detail to these comments. One commenter 
expressed concern about the use of nine months in the cost estimate and 
that provisions would expire after nine months. We note that the 
timeframe used for the cost estimates was based on early estimates for 
the pandemic and that each provision of the IFR only expires when the 
President's national emergency expires, except where modified by this 
final rule. There was no automatic expiration at nine months.
a. Telephonic Office Visits
1. Provisions of the IFR
    The IFR allowed TRICARE beneficiaries to obtain telephonic office 
visits with providers for otherwise-covered, medically necessary care 
and treatment and allowed reimbursement to those providers during the 
COVID-19 pandemic. It provided a temporary exception to the regulatory 
exclusion prohibiting telephone services.
2. Analysis of Public Comments
    The public comments regarding the temporary exception to the 
regulatory exclusion prohibiting telephone services were minimal. 
Commenters requested that DoD continue coverage of telephonic office 
visits after the COVID-19 pandemic and commenters requested telephonic 
office visits be expanded to a range of providers. This final rule 
includes regulatory text revising the prohibition on telephone services 
thereby allowing coverage of telephonic office visits permanently. This 
will include mental health and addiction treatment services when 
medically necessary and appropriate. Regarding the request to expand 
the range of providers who can provide telephonic office visits, there 
is nothing in TRICARE regulation or policy excluding specific provider 
types such as physical therapists, occupational therapists, registered 
dieticians, or diabetes counselors (note: Diabetes counselors must be 
registered dieticians to be TRICARE-authorized providers) from 
providing their services via telehealth, including telephonic office 
visits, so long as they otherwise meet program requirements, including 
that all care be medically necessary and appropriate.
    Two commenters requested DoD make implementation of the telephonic 
office

[[Page 33007]]

visits retroactive, to either January 1, 2020, or March 1, 2020. The 
commenters noted that CMS adopted their allowance of telephonic office 
visits with a retroactive date. While DoD acknowledges that some 
providers may have provided telephonic office visits prior to the 
effective date of the IFR, DoD lacks the statutory authority to make 
the implementation retroactive. One commenter suggested DoD evaluate 
provider and patient satisfaction and health outcomes in determining 
whether to permanently adopt telephonic office visits. We agree that 
this information would be valuable but ultimately determined there was 
sufficient information from other sources to make a decision without 
it.
3. Provisions of Final Rule
    No changes were made in response to public comments; however, this 
provision has been revised for the final rule (see next section for 
details).
b. Interstate and International Licensing of TRICARE-Authorized 
Providers
1. Provisions of the IFR
    The IFR allowed providers to be reimbursed for interstate practice, 
both in person and via telehealth, during the global pandemic so long 
as the provider met the requirements for practicing in that State or 
under Federal law. It removed the requirement that the provider must be 
licensed in the state where practicing, even if that license is 
optional. For providers overseas, this allowed providers, both in 
person and via telehealth, to practice outside of the nation where 
licensed when permitted by the host nation.
2. Analysis of Public Comments
    Comments received on the relaxation of licensing requirements for 
providers during the pandemic were generally supportive, with no 
comments received opposed. Several commenters suggested implementing 
the relaxed licensing requirement permanently for telehealth. DoD notes 
that licensing remains the purview of the States and that States 
generally require licensure in each State where practicing. DoD will 
continue to evaluate trends in licensing requirements for telehealth 
following the COVID-19 pandemic but will not be permanently adopting 
this provision at this time. We note that we continue to recognize (and 
recognized prior to the COVID-19 pandemic) interstate licensing 
agreements and reciprocal license agreements between states where a 
state considers a provider to be licensed at the full clinical practice 
level based on such an agreement.
3. Provisions of Final Rule
    The final rule is consistent with the IFR.
c. Waiver of Copayments and Cost-Sharing for Telehealth Services
1. Provisions of the IFR
    The IFR waived cost-shares and copayments for telehealth services 
for TRICARE Prime and Select beneficiaries utilizing telehealth 
services with an in-network, TRICARE-authorized provider during the 
President's declared national emergency for COVID-19.
2. Analysis of Public Comments
    We received four comments regarding the waiving of telehealth cost-
shares and copays, all of them supportive of the waiver, with one 
commenter also noting the negative effect of loss copay revenue for the 
DoD. Of the comments we received, three of them encouraged the DoD to 
continue to evaluate cost-sharing policies, and one comment also 
encouraged the DoD to make the telehealth copay and cost-share waiver 
permanent. One commenter recommended we apply the waiver of telehealth 
copays to copays associated with remote physiologic monitoring (RPM). 
RPM services of physiologic parameters including, but not limited to, 
monitoring of weight, blood pressure, pulse oximetry and respiratory 
flow rate shall be covered. RPM is considered an ancillary service and 
therefore ancillary copays and cost-shares shall apply.
    We thank all the commenters for their support and feedback. 
TRICARE's temporary waiving of cost-shares and copays for all 
telehealth services was in line with initiatives by commercial insurers 
to incentivize telehealth care to help prevent the spread of COVID-19 
and to reduce financial burdens on patients. TRICARE's cost-shares and 
copayments are set by law and require copayments and cost-sharing for 
telehealth services to be the same as if the service was provided in 
person. Section 718(d) of the National Defense Authorization Act of 
2017 authorized the Secretary of Defense to reduce or eliminate 
copayments or cost-shares when deemed appropriate for covered 
beneficiaries in connection with the receipt of telehealth services 
under TRICARE. Given the national emergency caused by the COVID-19 
pandemic, it was deemed appropriate to remove cost-shares and 
copayments for telehealth services during the pandemic, until there was 
no longer an urgent need to incentivize telehealth visits.
3. Provisions of Final Rule
    The final rule is consistent with the IFR, except that this 
provision may terminate early. This provision of the final rule is 
being terminated early due to both the cost of waiving cost-shares and 
because there remain few, if any, stay-at-home orders for this 
provision to support. Defense Health Program dollars are better spent 
on testing, vaccination, and treatment for COVID-19, including a waiver 
of cost-shares for medically necessary COVID-19 testing, which remains 
in effect as a result of the CARES Act.

B. IFR--TRICARE Coverage of Certain Medical Benefits in Response to the 
COVID-19 Pandemic

    This IFR was published in the FR on September 3, 2020 (85 FR 
54914). Comments were accepted for 60 days until November 2, 2020. A 
total of four comments were received. Two were generally supportive of 
the provisions implemented in the IFR; we are grateful to the public 
for their support. Please see a summary of the comments and the DoD's 
responses below. Comments related to the treatment use of 
investigational drugs under expanded access will be discussed in a 
future final rule.
a. SNF 3-Day Prior Stay Waiver
1. Provisions of the IFR
    The IFR temporarily waived the regulatory requirement that an 
individual be an inpatient of a hospital for not less than three 
consecutive calendar days before discharge from the hospital (three-day 
prior hospital stay) for coverage of a SNF admission for the duration 
of the COVID-19 public health emergency, consistent with a similar 
waiver under Medicare and TRICARE's statutory requirement to have a SNF 
benefit like Medicare's. The waiver will terminate when the Health and 
Human Services (HHS) PHE terminates.
2. Analysis of Public Comments
    We received one comment on this provision of the IFR that was 
supportive of the waiver, but requested the DoD adopt another Medicare 
waiver; that is, the waiver of a 60-day wellness period.
    We thank the commenter for their support and feedback. TRICARE is 
primary payer for Medicare/TRICARE dual eligible beneficiaries that 
have exhausted the Medicare 100-day SNF benefit (meeting TRICARE 
coverage requirements without any other forms of other health insurance 
(OHI)), and TRICARE is also primary payer for non-Medicare TRICARE 
beneficiaries who have no OHI and who meet the

[[Page 33008]]

TRICARE SNF coverage requirements. Because TRICARE covers patients 
immediately after benefits are exhausted, there is no current 
requirement for a 60-day wellness period under TRICARE.
3. Provisions of Final Rule
    The final rule is consistent with the IFR.
b. Waiving of Acute Care Hospital Requirements for Temporary Hospital 
Facilities and Freestanding ASCs
1. Provisions of the IFR
    The IFR temporarily exempted temporary hospital facilities and 
freestanding ASCs that enrolled as hospitals with Medicare from the 
institutional provider requirements for acute care hospitals described 
in paragraph 199.6(b)(4)(i). This allowed these facilities to provide 
inpatient and outpatient hospital services to improve the access of 
beneficiaries to medically necessary care. This change was consistent 
with 10 U.S.C. 1079(i)(2) to reimburse hospitals and other 
institutional providers in accordance with the same reimbursement 
methodology as Medicare, when practicable. This waiver remains in 
effect through the end of Medicare's ``Hospitals Without Walls'' 
initiative.
2. Analysis of Public Comments
    No public comments were received on this provision.
3. Provisions of Final Rule
    No changes were made in response to public comments; however, this 
provision has been modified for the final rule (see next section for 
details).
c. 20 Percent Increase in DRG Rates for COVID-19 Patients
1. Provisions of the IFR
    The IFR temporarily adopted the Medicare Hospital Inpatient 
Prospective Payment Add-On Payment for COVID-19 patients during the 
COVID-19 PHE period. The add-on payment for COVID-19 patients increased 
the weighting factor that would otherwise apply to the DRG to which the 
discharge is assigned by 20 percent.
2. Analysis of Public Comments
    We received one comment regarding this provision of the IFR. The 
commenter noted that sole community hospitals (SCHs) are not subject to 
reimbursement under the DRG system and, as such, would not be eligible 
for the 20 percent increased reimbursement rate in the IFR. The 
commenter requested TRICARE modify reimbursement for SCHs to make them 
eligible for the 20 percent increased payment.
    We appreciate the feedback from the commenter regarding a 20 
percent increase for acute inpatient reimbursement for SCHs treating 
COVID-19 patients. We would note that while SCHs are not eligible for 
the 20 percent increased DRG reimbursement, we do an aggregate 
comparison of SCH claims paid with what we would have paid under the 
DRG methodology (which would include the 20 percent DRG increase) and 
if the SCH payments are lower than what would have been paid under the 
DRG methodology, we then pay the SCH the difference. So, while we are 
not adding 20 percent to the SCH calculation, it is added to the DRG 
and then used in the annual adjustment payment calculation.
3. Provisions of Final Rule
    The final rule is consistent with the IFR.
d. LTCH Reimbursement at the Federal Rate
1. Provisions of the IFR
    The IFR adopted the Medicare waiver of site neutral payment 
provisions for LTCHs during the COVID-19 PHE period, waiving the site 
neutral payment provisions and reimbursing all LTCH cases at the LTCH 
PPS standard Federal rate for claims within the COVID-19 PHE period.
2. Analysis of Public Comments
    No public comments were received on this provision.
3. Provisions of Final Rule
    The final rule is consistent with the IFR.
e. Adoption of Medicare's NTAPs for New Medical Services
1. Provisions of the IFR
    The IFR permanently added coverage of Medicare's NTAP payments for 
new medical services, adding an additional payment to the DRG payment 
for new and emerging technologies approved by Medicare.
2. Analysis of Public Comments
    No public comments were received on this provision.
3. Provisions of Final Rule
    No changes were made in response to public comments; however, this 
provision has been revised in the final rule (see next section for 
details).
f. Adoption of Medicare's HVBP Program
1. Provisions of the IFR
    The IFR permanently added coverage of Medicare's HVBP Program. The 
HVBP Program provides incentives to hospitals that show improvement in 
areas of health care delivery, process improvement, and increased 
patient satisfaction.
2. Analysis of Public Comments
    No comments were received on this provision.
3. Provisions of Final Rule
    The final rule content is consistent with the IFR content; however 
the HVBP provision has been moved from 199.14(a)(1)(iii)(E)(6) to 
199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions.

IV. Summary of Changes From IFRs

A. Telephonic Office Visits

    Telephonic office visits temporarily adopted in the IFR are 
permanently adopted in this final rule. The Director, DHA shall issue 
subsequent policy guidance of medically necessary and appropriate 
telephonic office visits to ensure best practices and protect against 
fraud.

B. Temporary Hospitals

    The final rule modifies the waiver of acute care hospital 
requirements at paragraph 199.6(b)(4)(i) by expanding the waiver to 
include any facility registered with Medicare under its Hospitals 
Without Walls initiative, not just temporary hospitals and freestanding 
ASCs as were authorized by the IFR.

C. NTAPs

    This final rule permanently adopts the Medicare NTAP methodology 
and future NTAP modifications published by CMS, for those otherwise 
approved benefits under the TRICARE Program. This rule also creates a 
pediatric NTAP reimbursement methodology based on 100 percent of the 
costs in excess of the MS-DRG. Finally, this rule provides a mechanism 
to establish a TRICARE-specific NTAP for those high-cost treatments 
that do not have an NTAP designation because the population affected 
and treated by these new technologies are outside of Medicare's 
beneficiary population.

D. Adoption of Medicare's HVBP Program

    This final rule moves the HVBP provision from 32 CFR 
199.14(a)(1)(iii)(E)(6) to 32 CFR

[[Page 33009]]

199.14(a)(1)(iv)(B) to account for the changes to the NTAP provisions; 
there are no changes to the content of the HVBP provision.

E. Telehealth Cost-Share/Copayment Waiver

    This final rule finalizes the cost-share/copayment waiver provision 
as written in the IFR, except that it now terminates on the effective 
date of this rule, or the date of termination of the President's 
national emergency for COVID-19, whichever is earlier.

V. Regulatory Analysis

A. Regulatory Planning and Review

a. Executive Orders
Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. Accordingly, the rule has been reviewed by the Office of 
Management and Budget (OMB) under the requirements of these Executive 
Orders. This rule has been designated a significant regulatory action, 
although, not determined to be economically significant, under section 
3(f) of Executive Order 12866.
b. Summary
    The modifications to paragraph 199.4(g)(52) in this FR will revise 
the regulatory exclusion prohibiting coverage of telephone services and 
thereby allow permanent coverage of medical necessary and appropriate 
telephonic office visits for all TRICARE beneficiaries in all 
geographic locations.
    The modification to paragraph 199.6(b)(4)(i) in this FR will allow 
any entity that temporarily enrolled with Medicare as a hospital 
through the Hospitals Without Walls initiative to be deemed to meet the 
requirements for acute care hospitals established under TRICARE for the 
duration of the COVID-19 pandemic. This will allow more entities to 
provide inpatient and outpatient hospital services, increasing access 
to medically necessary care for beneficiaries.
    The modifications to paragraph 199.14(a)(1)(iv)(A) (previously 
199.14(a)(1)(iii)(E)(5) in the IFR and re-designated in this final 
rule) will: (1) Adopt the Medicare NTAP methodology and future NTAP 
modifications published by CMS, (2) create a pediatric NTAP 
reimbursement methodology based on 100 percent of the costs in excess 
of the MS-DRG, and (3) provide a mechanism to reimburse high-cost 
treatments that do not have a Medicare NTAP designation (due to 
beneficiary population differences).
    The modifications to paragraph 199.17(l)(3) in this rule will 
provide for an earlier termination of the temporary waiver of cost-
sharing and copayments for telehealth.
c. Affected Population
    The modifications in this rule impact all TRICARE beneficiaries, 
TRICARE-authorized providers, the TRICARE program staff and 
contractors. Beneficiaries will be impacted by the permanent addition 
of telephonic office visits, the elimination of the telehealth cost-
share/copayment waivers, increased access to new technologies afforded 
by the pediatric NTAPs reimbursement methodology, and increased access 
to acute care in temporary hospitals. TRICARE-authorized providers will 
be minimally impacted in that telephonic office visit will give them a 
new means to provide care and treatment to beneficiaries and generate 
revenue. TRICARE-authorized providers who administer Medicare approved 
NTAPs to pediatric patients will be reimbursed at a higher rate. Acute 
care facilities that qualify under Medicare's Hospitals Without Walls 
initiative will benefit by automatically qualifying as a TRICARE-
authorized provider for the duration of the pandemic. TRICARE program 
staff and contractors who administer the TRICARE benefit will be 
minimally impacted as this change will require them to update their 
systems to accommodate the change.
d. Costs 5
---------------------------------------------------------------------------

    \5\ Most costs associated with this final rule are technically 
considered to be transfers, i.e., an income transfer between 
taxpayers and program beneficiaries. The only true ``costs'' of this 
rule are administrative costs, and all other costs should be 
considered to be transfer payments.
---------------------------------------------------------------------------

    The new incremental costs associated with this final rule are 
$20.88M through FY24, not including savings resulting from early 
termination of the telehealth cost-share/copayment waiver 
(approximately $4.8M savings per month). For context, this section also 
provides updated cost estimates for temporary benefit and reimbursement 
changes implemented in prior IFRs that are finalized in this FR 
($278.0M through September 30, 2022), including the telehealth cost-
share/copayment waiver being terminated by the FR (estimated cost 
$149.7M through September 30, 2022), and updated cost estimates 
associated with permanent reimbursement changes implemented in prior 
IFRs that are finalized in this FR ($13.0M through FY24). 
Administrative costs to implement all provisions are $0.67M in one-time 
costs for both previously implemented provisions and modifications in 
this final rule.
    This estimate assumes the President's national emergency for COVID-
19 would expire by September 2022. The number and severity of COVID-19 
cases for TRICARE patients, along with the length of the President's 
declared national emergency for COVID-19 and the associated HHS PHE 
would impact the estimates provided in this section.
1. New Incremental Costs
    The incremental health care impact of new permanent benefit and 
reimbursement changes implemented in the final rule is $20.88M through 
FY24, and includes coverage of telephonic office visits, expanded 
coverage of temporary hospitals, the reimbursement methodology for 
pediatric NTAP cases, and the addition of TRICARE NTAPs. These amounts 
are the only new costs associated with the FR (i.e., costs for benefits 
and reimbursement changes that have not already been implemented).

        Table 1--New Costs Due to Modifications in the Final Rule
------------------------------------------------------------------------
                       Provision                         Through FY2024
------------------------------------------------------------------------
Paragraph 199.4(g)(52)--Permanent Coverage of                     $19.6M
 Telephonic Office Visits.............................
Paragraph 199.6(b)(4)(i)--Expanded Coverage for                       0M
 Temporary Hospitals..................................
Paragraph 199.14(a)(1)(iv)(A)(2)--Methodology for                  0.04M
 Pediatric NTAPs Cases................................

[[Page 33010]]

 
Paragraph 199.14(a)(1)(iv)(A)(3)--Addition of TRICARE               1.2M
 NTAPs................................................
                                                       -----------------
    Total.............................................            20.88M
------------------------------------------------------------------------

    Telephonic Office Visits. Government expenditures for TRICARE 
first-pay and second pay claims for identifiable telephonic office 
visits amounted to approximately $7.6 million in Fiscal Year (FY) 2020 
and $15.4 million in FY21. Also, the average government cost per 
service for telephonic office visits was $56, which is 19 percent less 
than the overall telehealth average of $81. This estimate assumes 
telephonic office visits will decrease after the pandemic, as 
beneficiaries become more comfortable or even prefer in-person visits. 
Additionally, the elimination of the telehealth cost-share/copayment 
waiver may shift some visits that could have been performed virtually 
to in-person as there will no longer be a financial incentive to obtain 
services virtually. After the drop in visits following the pandemic, we 
assume a modest (5 percent) increase in cost for telephonic office 
visits each subsequent FY. Lastly, as this provision was originally set 
to expire upon the expiration of the national emergency, and this 
estimate assumes that the national emergency declaration will terminate 
September 30, 2022, the incremental costs of this provision include 
only the costs in FY23 and FY24.
    Expanded Coverage of Temporary Hospitals. This estimate assumes 
that care received at facilities that register with Medicare as 
hospitals would have been provided in other TRICARE-authorized 
hospitals but for the regulation change. We do not anticipate any 
induced demand for hospital care due to the authorization of new 
facilities. As such, there are no incremental costs associated with 
expanding coverage of temporary hospitals.
    NTAP Pediatric Reimbursement Methodology. An analysis of claims 
data for FY20 and FY21 found 23 pediatric cases which would have 
qualified under this methodology. This estimate is based on an average 
of what would have been paid for those cases, along with calculations 
for increases in health care costs each year. This estimate includes 
only the difference between the standard NTAP rate (65 percent of the 
cost of treatment) and the NTAP Pediatric reimbursement rate (100 
percent). This estimate is highly uncertain as the number of pediatric 
patients receiving an NTAP each year will vary (we assumed 15 cases or 
fewer per year), the costs of those NTAPs are unknown, and because the 
number of NTAPs approved by Medicare increases each year.
    TRICARE NTAP Approval Process and Reimbursement Methodology. The 
costs of this provision were estimated by identifying one drug without 
a Medicare NTAP due to their use by the 64 and younger population, 
calculating the treatment costs for that drug, applying the TRICARE 
NTAP adjustment methodology, and identifying how many TRICARE 
beneficiaries were treated with that drug each year. This estimate is 
highly uncertain and is dependent on the number of TRICARE NTAPs 
approved each year by the Director, DHA, the cost of each of those 
technologies, and the number of TRICARE beneficiaries receiving each 
technology.
2. Costs Associated With Previously-Implemented Temporary Regulatory 
Provisions
    Provisions under this portion of the estimate have already been 
implemented; cost estimates provided here are updates from estimates 
published in the associated IFR under which they were implemented. 
These amounts are estimated through the end of September 2022, when we 
assume the President's national emergency and the HHS PHE will end. An 
earlier or later termination of the national emergency or HHS PHE will 
impact the estimates for this portion of the final rule.

                      Table 2--Costs Due to Temporary Provisions Implemented in Prior IFRs
----------------------------------------------------------------------------------------------------------------
                                         Through
                                      September 30,
             Provision                    2022               Implementation  date           Planned expiration
                                        (million)
----------------------------------------------------------------------------------------------------------------
Paragraph 199.4(b)(3)(xiv)--SNF                $1.9  March 1, 2020......................  Termination of
 Three-Day Prior Stay Waiver.                                                              President's national
                                                                                           emergency for COVID-
                                                                                           19.
Paragraph 199.4(g)(52)--Temporary              32.1  May 12, 2020.......................  Termination of
 Waiver of the Exclusion on Audio-                                                         President's national
 only Telehealth.                                                                          emergency for COVID-
                                                                                           19.
Paragraph 199.6(b)(4)(i)--Temporary               0  September 3, 2020..................  Expiration of
 Hospitals and Freestanding ASCs                                                           Medicare's Hospitals
 Registering as Hospitals (as                                                              Without Walls
 implemented in the IFR).                                                                  Initiative.
Paragraph 199.6(c)(2) Waiver of                   0  May 12, 2020.......................  Termination of
 provider licensing requirements                                                           President's national
 for interstate and international                                                          emergency for COVID-
 practice.                                                                                 19.
Paragraph 199.14(a)(1)(iii)(E)(2)--            76.5  January 27, 2020...................  Termination HHS PHE.
 20 Percent DRG Increase for COVID-
 19 Patients.
Paragraph 199.14(a)(9)--LTCH Site              17.8  January 27, 2020...................  Termination HHS PHE.
 Neutral Payments.
Paragraph 199.17(l)(3) Temporary              149.7  May 12, 2020.......................  Effective date of this
 Telehealth Cost-Share/Copayment                                                           final rule or
 Waiver.                                                                                   termination of
                                                                                           President's national
                                                                                           emergency for COVID-
                                                                                           19, whichever is
                                                                                           earlier.
                                    ----------------------------------------------------------------------------
    Total..........................           278.0  ...................................  ......................
----------------------------------------------------------------------------------------------------------------


[[Page 33011]]

    SNF Three-Day Prior Stay Waiver. The nominal cost associated with 
this provision is due to an assumption that, as a result of the waiver, 
SNF admissions will increase by three percent. This estimate is 
consistent with the estimate in the IFR.
    Temporary Waiver of the Exclusion of Audio-only Telehealth Visits. 
This estimate accounts for amounts related to the temporary waiver of 
the exclusion of audio-only telehealth visits from the first IFR, and 
is consistent with the factors discussed above for telephonic office 
visits. Included are amounts for FY20 through the end of FY22. These 
amounts reflect the costs had the ASD(HA) not made telephonic office 
visits permanent, but continued to let them expire at the end of the 
national emergency. If the President's national emergency expires prior 
to the end of September 2022, these amounts will shift to the above 
permanent coverage of telephonic office visits.
    Temporary Hospitals and Freestanding ASCs. This zero cost estimate 
assumes that inpatient care provided in these alternate sites is care 
that would have been reimbursed under TRICARE but for a lack of acute 
care hospital facility space (i.e., we do not estimate that there would 
be any induced demand because of an increase in facilities). 
Additionally, it assumes that while reimbursement for outpatient 
procedures in freestanding ASCs would be higher than had those 
procedures been reimbursed under the traditional reimbursement rates 
for freestanding ASCs, the number of facilities choosing to register as 
hospitals is likely to be small enough to have a negligible impact on 
the budget. This estimate is consistent with the estimate in the IFR.
    Waiver of Interstate and International Licensing for Providers. The 
zero cost estimate assumes patients who are seeing providers under 
relaxed licensing requirements would have either seen a different 
provider or the same provider in a different setting (i.e., in-person 
as opposed to via telehealth) were it not for the waiver. This estimate 
is consistent with the estimate in the IFR.
    20 Percent DRG Increase. In the second IFR, we estimated that in an 
eighteen-month period, we would spend $37.1M to 51.4M on the 20 percent 
DRG increase. Actual spending through the end of FY21 was $41.5M, 
consistent with and on the low end of that estimate. This is primarily 
due to a lower average hospitalization cost for COVID-19 patients. This 
estimate extends actual costs through the end of September 30, 2022. 
Additional costs would be incurred beyond that date if the HHS PHE 
continues to be in effect. This estimate is consistent with the lower 
end of the estimate in the IFR.
    LTCH Site Neutral Payments. TRICARE is in the process of phasing in 
Medicare's site-neutral payment rates. The phase-in has been halted as 
a result of the IFR; this estimate assumes TRICARE LTCH claims will be 
paid at the full LTCH PPS rate through the end of the HHS PHE. This 
estimate is consistent with the estimate in the IFR.
    Temporary Waiver of Cost-Shares and Copayments for Telehealth 
Services. The largest cost-driver for provisions in the previously 
published IFRs is the temporary waiver of cost-shares and copayments 
for telehealth, which is expected to cost $149.7M from implementation 
on May 12, 2020, through September 30, 2022. These costs are associated 
with the benefit as implemented in the previous IFR; because we are 
terminating the benefit early in the final rule, we expect to realize a 
cost savings of approximately $4.8M per month prior to the end of the 
President's national emergency for COVID-19. The IFR only estimated a 
9-month cost ($66M). The estimate in this IFR is largely consistent 
with the original estimate (approximately $7.3M per month), with an 
expected decrease in per-month spend further from the initial days of 
the pandemic and the stay-at-home orders that prompted this provision.
3. Costs Associated With Previously-Implemented Permanent Regulatory 
Provisions
    The second COVID-19 IFR implemented two permanent provisions, NTAPs 
and HVBP. Both are finalized in this FR. The costs associated with the 
changes to NTAPs implemented in this FR are provided in the first 
section of the cost estimate. This section provides costs associated 
with NTAPs as implemented in the IFR, as well as costs associated with 
the HVBP Program.

Table 3--Costs Due to Permanent Reimbursement Changes Implemented in the
                               Second IFR
------------------------------------------------------------------------
                       Provision                         Through FY2024
------------------------------------------------------------------------
Paragraph 199.14(a)(1)(iv)(A)--NTAPs (not including                $9.1M
 the new pediatric reimbursement methodology provided
 in table 1)..........................................
Paragraph 199.14(a)(1)(iv)(B)--HVBP Program...........              3.9M
                                                       -----------------
    Total.............................................             13.0M
------------------------------------------------------------------------

    NTAPs. The IFR included the cost estimate through September 30, 
2021 (a range of $5.7M to $11.6M), while this estimate provides an 
updated five-year costing using actual TRICARE claims data for 
utilization and reimbursement of NTAPS. In creating this estimate, we 
identified TRICARE claims containing a treatment with a Medicare NTAP 
in either FY2020 or FY2021 and identified the total estimated add-on 
payment amounts and the total estimated Medicare cases each year, as 
published in the Federal Register. In FY2020, there were 18 treatments 
with NTAPs and 78 TRICARE claims containing one of these treatments; in 
FY2021, there were 23 NTAP treatments and 145 TRICARE claims with 
NTAPs, although the average NTAP maximum add-on amount decreased 
dramatically from FY2020 to FY2021 due to the average costs of the 
respective treatments.
    For FY2022, there are a total of 38 Medicare treatments with NTAPs, 
15 of which are new and represent a new traditional technology, 
Qualified Infectious Disease Products, or breakthrough technology. 
Consistent with the IFR, this estimate assumes TRICARE NTAPs would 
continue to be a similar percentage of inpatient spending to Medicare's 
NTAP usage and that TRICARE would adopt all of Medicare's NTAPs. This 
amount will vary depending on the number of new NTAPs adopted by 
Medicare each year, the extent to which Medicare-identified emerging 
technologies are covered under TRICARE's statutory and regulatory 
requirements, and the extent to which TRICARE's population utilizes 
these technologies. The costs for this provision may overestimate the 
incremental costs of this regulatory change, because many of these 
claims were being approved on a case-by-case basis by the Director, 
DHA, under waiver authority. In those cases, adopting NTAPs was likely 
to reflect a cost savings compared to the estimated costs, as waivers 
are typically paid at billed charges.

[[Page 33012]]

    HVBP Program. The HVBP Program was implemented retroactive to 
January 1, 2020; we anticipated that those hospitals qualifying for a 
positive adjustment for prior claims would do so, while those with 
negative adjustments or adjustments close to zero dollars would not. 
This would result in a cost in the first year, with claims in following 
years assumed to be budget neutral. This cost estimate is higher than 
the cost estimate published in the IFR ($2.5M), as there was more real-
world data available to us on hospitals eligible for a positive 
adjustment for the initial implementation year.
e. Benefits
    The addition of telephonic office visits as a permanent benefit 
will positively impact beneficiaries, particularly beneficiaries with 
limited access to broadband and other technology required for video 
telehealth visits, as this change will provide them better access to 
the existing telehealth benefit. This will result in avoided travel 
time and time spent in the provider's waiting room (a benefit of 
approximately one hour per beneficiary per visit, at a monetized value 
to the beneficiary of $20.00 per hour). Providers will benefit from 
telephonic office visits by being able to better treat their patients, 
particularly patients who might not come into the office for regular 
office visits. The implementation of a distinct pediatric reimbursement 
methodology for pediatric NTAPs will positively impact beneficiaries 
and providers, as providers will be able to offer beneficiaries access 
to new treatments knowing full reimbursement will be provided. 
Expansion of coverage of temporary hospitals will benefit 
beneficiaries, who will have access to more acute care facilities 
during the pandemic.
f. Alternatives
    DoD considered several alternatives to this rulemaking. The first 
option considered not publishing a final rule or publishing a final 
rule finalizing the IFR provisions listed without any changes. The 
temporary changes would have expired as planned without modification. 
Under this option: Telephonic office visits would not have become a 
permanent benefit, the coverage of hospitals under Medicare's Hospitals 
Without Walls initiative benefit would have remained as published in 
the IFR (meaning facilities other than temporary hospitals and 
freestanding ambulatory surgical centers, such as freestanding 
emergency rooms, would have continued to be ineligible for temporary 
status as an acute care facility), a new pediatric reimbursement 
methodology for NTAPs would not have been implemented, and the 
temporary waiver of telehealth cost-shares and copayments would not 
have been potentially terminated early (at a potential cost of around 
$4.8M per month). Each of the modifications in this final rule 
addresses a concern or further develops the benefit based on 
information we have gathered since the IFRs were published. This option 
was determined to be insufficient to meet the needs of the TRICARE 
Program.
    DoD also considered publishing this final rule as is, but 
restricting telephonic office visits to only those TRICARE 
beneficiaries without access to conventional two-way audio-video 
equipment. We determined such a restriction would be impractical, 
unnecessary, and difficult and costly to administer. This option would 
have been inconsistent with modern practices in the health care field 
and would have placed an unnecessary burden on providers and 
beneficiaries. This option was not selected because its benefits did 
not outweigh the administrative burden on DHA, providers, and the 
potential cost of reduced access on beneficiaries.
Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
    The Assistant Secretary of Defense for Health Affairs certifies 
that this final 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. Therefore, 
the Regulatory Flexibility Act, as amended, does not require us to 
prepare a regulatory flexibility analysis.
    DoD anticipates that permanent coverage of telephonic office visits 
will impact approximately 133,000 individual professional providers. 
The provisions impacting inpatient facilities (the 20 percent DRG 
increase for COVID-19 patients, NTAPs, and the HVBP Program) will 
impact between 3,400 and 3,800 hospitals. The number of LTCHs impacted 
by site neutral payments will be between 200 and 300. 1,300 SNFs will 
be impacted by the three-day prior hospital stay waiver. We are unable 
to estimate the number of providers impacted by the interstate and 
international licensing waiver, but expect it will be fairly small as a 
percentage of total TRICARE providers. We are similarly unable to 
estimate how many facilities will be eligible as TRICARE-authorized 
acute care facilities by registering with Medicare's Hospitals Without 
Walls initiative who would not have been otherwise eligible under 
TRICARE, but expect this to be a small number as well.
    The provisions of this IFR that are most likely to have an economic 
impact on hospitals and other health care providers are the 
reimbursement provisions adopted to meet the statutory requirement that 
TRICARE reimburse like Medicare. As its measure of significant economic 
impact on a substantial number of small entities, HHS uses an adverse 
change in revenue of more than 3 to 5 percent. While TRICARE is not 
required to follow this guidance in the issuance of our rules, we 
provide this metric for context, given that these temporary and 
permanent changes align with similar changes made by Medicare.
    Given that the temporary reimbursement provisions of this IFR 
increase reimbursement for hospitals and LTCHs, we find that these 
provisions would not have an adverse impact on revenue for hospitals 
and, therefore, would not have a significant impact on these hospitals 
and other providers meeting the definition of small businesses. We also 
find that NTAPs, given that they increase revenue under the DRG system, 
would not have an adverse impact on hospitals and providers. The HVBP 
program would not reduce revenue for a hospital being penalized under 
the system beyond the HHS threshold. Lastly, coverage of telephonic 
office visits and temporary hospitals are not expected to result in any 
adverse economic impact on hospitals or other health care providers.

C. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

D. Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1532) requires agencies to assess anticipated costs and benefits 
before issuing any rule whose mandates require spending in any 1 year 
of $100 million in 1995 dollars, updated annually for inflation. This 
final rule will not mandate any requirements for State, local, or 
tribal governments, nor will it affect private sector costs.

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

    It has been determined that 32 CFR part 199 does not impose 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act of 1995.

[[Page 33013]]

F. Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final rule will not have a substantial effect on 
State and local governments.

G. Executive Order 13175, ``Consultation and Coordination With Indian 
Tribal Governments''

    It has been determined that this rule does not have a substantial 
effect on Indian tribal governments. This rule does not impose 
substantial direct compliance costs on one or more Indian tribes, 
preempt tribal law, or effect the distribution of power and 
responsibilities between the federal government and Indian tribes.

List of Subjects in 32 CFR Part 199

    Administrative practice and procedure, Claims, Dental, Fraud, 
Health care, Health insurance, Individuals with disabilities, Mental 
health programs, and Military personnel.

    For the reasons stated in the preamble, the interim final rules 
amending 32 CFR part 199, which were published at 85 FR 27921-27927, 
May 12, 2020, and 85 FR 54914-54924, September 3, 2020, are adopted as 
final with changes, except for the note to paragraph 
199.4(g)(15)(i)(A), published at 85 FR 54923, September 3, 2020, which 
remains interim, and DoD further amends 32 CFR part 199 as follows:

PART 199--CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED 
SERVICES (CHAMPUS)

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.  199.2 by adding definitions for ``Biotelemetry,'' 
``Telephonic consultations'' and ``Telephonic office visits'' in 
alphabetical order to read as follows:


Sec.  199.2  Definitions.

* * * * *
    Biotelemetry. A diagnostic or monitoring procedure for the 
detection or measurement of human physiologic functions from a distance 
using a biotelemetry device to remotely monitor various vital signs of 
ambulatory patients. Biotelemetry may also be referred to as remote 
physiologic monitoring of physiologic parameters. See Sec.  199.4.
* * * * *
    Telephonic consultations: A covered consultation service conducted 
via telephone call between TRICARE-authorized providers, including a 
verbal and written report to the patient's treating/requesting 
physician or other TRICARE-authorized provider.
    Telephonic office visits. A covered service provided via a 
telephone call between a beneficiary who is an established patient and 
a TRICARE-authorized provider. See Sec.  199.4.
* * * * *

0
3. Amend Sec.  199.4 by revising paragraphs (c)(1)(iii), (g)(52) 
introductory text and (g)(52)(i) to read as follows:


Sec.  199.4  Basic program benefits.

* * * * *
    (c) * * *
    (1) * * *
    (iii) Telehealth services. Health care services covered by TRICARE 
and provided through the use of telehealth modalities including 
telephone services for: telephonic office visits; telephonic 
consultations; electronic transmission of data or biotelemetry or 
remote physiologic monitoring services and supplies, are covered 
services to the same extent as if provided in person at the location of 
the patient if those services are medically necessary and appropriate 
for such modalities. The Director will establish special procedures for 
payment for such services. Additionally, where appropriate, in order to 
incentive the use of telehealth services, the Director may modify the 
otherwise applicable beneficiary cost-sharing requirements in paragraph 
(f) of this section which otherwise apply.
* * * * *
    (g)(52) Telephone services. Services or advice rendered by 
telephone are excluded. Exceptions:
    (i) Medically necessary and appropriate Telephonic office visits 
are covered as authorized in paragraph (c)(1)(iii) of this section.
* * * * *

0
4. Effective June 1, 2022 amend Sec.  199.6 by revising the note to 
paragraph (b)(4)(i)(I) to read as follows:


Sec.  199.6  TRICARE-authorized providers.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (I) * * *

    Note to paragraph (b)(4)(i)(I): For the duration of Medicare's 
``Hospitals Without Walls'' initiative for the coronavirus disease 
2019 (COVID-19) outbreak, any entity that temporarily enrolls with 
Medicare as a hospital may be temporarily exempt from certain 
institutional requirements for acute care hospitals under TRICARE. 
To the extent practicable, the Director, Defense Health Agency 
(DHA), will adopt by administrative policy any process requirement 
related to Medicare's Hospitals Without Walls initiative.

* * * * *

0
5. Amend Sec.  199.14 by:
0
a. Adding a sentence at the end of paragraph (a)(1)(iii)(E) 
introductory text;
0
b. Adding paragraph (a)(1)(iv);
0
c. Redesignating paragraph (a)(1)(iii)(E)(5) as paragraph (a)(1)(iv)(A) 
and revising newly redesignated paragraph (a)(1)(iv)(A);
0
d. Redesignating paragraph (a)(1)(iii)(E)(6) as paragraph 
(a)(1)(iv)(B).
    The revision and addition read as follows:


Sec.  199.14  Provider reimbursement methods.

    (a) * * *
    (1) * * *
    (iii) * * *
    (E) *** Additional adjustments to DRG amounts are included in 
paragraph (a)(1)(iv) of this section.
* * * * *
    (iv) Special Programs and Incentive Payments. (A) Additional 
payment for new medical services and technologies. TRICARE will make 
New Technology Add On Payments (NTAPs) adjustments to DRGs as provided 
in paragraphs (a)(1)(iv)(A)(1) through (a)(1)(iv)(A)(11) of this 
section. The Director, Defense Health Agency (DHA), shall provide 
notice of the issuance of policies and guidelines adopting such 
adjustments together with any variations deemed necessary to address 
unique issues involving the beneficiary population or program 
administration.
    (1) Adoption of Medicare NTAPs. For TRICARE covered services and 
supplies, TRICARE will adopt Medicare NTAPs as implemented under 42 CFR 
412.87 under the same conditions as published by the Centers for 
Medicare & Medicaid Services, except for pediatric cases.
    (2) Pediatric cases. For pediatric NTAP DRGs, the TRICARE NTAP 
adjustment shall be modified to be set at 100 percent of the costs in 
excess of the Medicare Severity-Diagnosis Related Group (MS-DRG) 
payment. As used in this paragraph, pediatric is defined as services 
and supplies provided to individuals under the age of 18, or who are 
being treated in a children's hospital or in a pediatric ward.

[[Page 33014]]

    (3) TRICARE designated NTAP adjustments. For categories of TRICARE 
covered services and supplies for which Medicare has not established an 
NTAP adjustment for DRGs, the Director, DHA may designate a TRICARE 
NTAP adjustment through a process using criteria to identify and select 
such new technology services/supplies similar to that utilized by 
Medicare under 42 CFR 412.87. The Director, DHA may then designate a 
TRICARE NTAP reimbursement adjustment through a process using a 
methodology similar to the Medicare methodology outlined in 42 CFR 
412.88. This discretionary authority to designate TRICARE NTAP 
adjustments shall apply to services and supplies typically provided to 
TRICARE beneficiaries age 64 or younger when Medicare has not 
established an NTAP adjustment for such services/supplies. As with 
other discretionary authority under this part, a decision to designate 
a TRICARE category of services/supplies for an NTAP adjustment to DRGs 
and the amount of such an adjustment are not subject to the appeal and 
hearing procedures of Sec.  199.10. The Director, DHA, shall select 
which new technologies may be designated as TRICARE NTAPs and will 
publish this list based on the eligibility criteria and reimbursement 
methodology provided in paragraphs (a)(1)(iv)(A)(4) through 
(a)(1)(iv)(A)(11) of this section.
    (4) Eligibility requirements and reimbursement methodology for 
TRICARE designated NTAP adjustments. A new medical service or 
technology represents an advance that substantially improves, relative 
to technologies previously available, the diagnosis or treatment of 
TRICARE beneficiaries. The totality of the circumstances is considered 
when making a determination that a new medical service or technology 
represents an advance that substantially improves, relative to services 
or technologies previously available, the diagnosis or treatment of 
TRICARE beneficiaries.
    (5) Criteria for improvement. A determination that a new medical 
service or technology represents an advance that substantially 
improves, relative to services or technologies previously available, 
the diagnosis or treatment of TRICARE beneficiaries means one or more 
of the following:
    (i) The new medical service or technology offers a treatment option 
for a patient population unresponsive to, or ineligible for, currently 
available treatments.
    (ii) The new medical service or technology offers the ability to 
diagnose a medical condition in a patient population where that medical 
condition is currently undetectable, or offers the ability to diagnose 
a medical condition earlier in a patient population than allowed by 
currently available methods and there must also be evidence that use of 
the new medical service or technology to make a diagnosis affects the 
management of the patient.
    (iii) The use of the new medical service or technology 
significantly improves clinical outcomes relative to services or 
technologies previously available as demonstrated by one or more of the 
following seven outcomes: A reduction in at least one clinically 
significant adverse event, including a reduction in mortality or a 
clinically significant complication; A decreased rate of at least one 
subsequent diagnostic or therapeutic intervention; A decreased number 
of future hospitalizations or physician visits; A more rapid beneficial 
resolution of the disease process treatment including, but not limited 
to, a reduced length of stay or recovery time; An improvement in one or 
more activities of daily living; An improved quality of life; or A 
demonstrated greater medication adherence or compliance.
    (iv) The totality of the information otherwise demonstrates that 
the new medical service or technology substantially improves, relative 
to technologies previously available, the diagnosis or treatment of 
TRICARE beneficiaries.
    (6) Evidence. Evidence from scientific literature may be sufficient 
to establish that a new medical service or technology represents an 
advance that substantially improves, relative to services or 
technologies previously available, the diagnosis or treatment of 
TRICARE beneficiaries.
    (7) Prevalence. The medical condition diagnosed or treated by the 
new medical service or technology may have a low prevalence among 
TRICARE beneficiaries.
    (8) Subpopulation. The new medical service or technology may 
represent an advance that substantially improves, relative to services 
or technologies previously available, the diagnosis or treatment of a 
subpopulation of patients with the medical condition diagnosed or 
treated by the new medical service or technology.
    (9) Newness criteria. A medical service or technology may be 
considered new within 2 or 3 years after the point at which data begin 
to become available reflecting the inpatient hospital code assigned to 
the new service or technology (depending on when a new code is assigned 
and data on the new service or technology becomes available for DRG 
recalibration). After TRICARE has recalibrated the DRGs, based on 
available data, to reflect the costs of an otherwise new medical 
service or technology, the medical service or technology will no longer 
be considered ``new'' under the criterion of this section.
    (10) Payment methodology. For discharges involving new medical 
services or technologies that meet the criteria specified in paragraphs 
(a)(1)(iv)(A)(4) through (a)(1)(iv)(A)(9) and that are approved as 
TRICARE NTAPs per paragraph (a)(1)(iv)(A)(11) of this section, TRICARE 
payment will be the lesser of:
    (i) The CMS designated percentage of the estimated costs of the new 
technology or medical service, as published in 42 CFR 412.88; or
    (ii) The CMS designated percentage of the difference between the 
full DRG payment and the hospital's estimated cost for the case, as 
published in 42 CFR 412.88.
    (11) Publication and timing. TRICARE may consider whether a new 
medical service or technology meets the eligibility criteria specified 
in paragraphs (a)(1)(iv)(A)(4) through (a)(1)(iv)(A)(9) of this section 
and announce the results on the NTAP website. In doing so, TRICARE only 
considers, for add-on payments for a particular fiscal year, an 
application for which the new medical device or product has received 
FDA marketing authorization by July 1 prior to the particular fiscal 
year; or the application is submitted under an alternative pathway to 
the FDA for which conditional NTAP approval for FDA marketing 
authorization is granted before July 1 of the fiscal year for which the 
applicant applied for new technology add-on payments.
* * * * *

0
6. Amend Sec.  199.17 by adding a second sentence at the end of 
paragraph (l)(3)(iii) to read as follows:


Sec.  199.17  TRICARE program.

* * * * *
    (l) * * *
    (3) * * *
    (iii) * * * This temporary waiver provision terminates July 1, 2022 
or the date of termination of the President's declared national 
emergency for COVID-19, whichever is earlier.
* * * * *


[[Page 33015]]


    Dated: May 12, 2022.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2022-10545 Filed 5-31-22; 8:45 am]
BILLING CODE 5001-06-P