[Federal Register Volume 87, Number 180 (Monday, September 19, 2022)]
[Notices]
[Pages 57184-57186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20149]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE Expansion of the Department of Defense and Department of 
Veterans Affairs Hearing Aid Ordering Model to Private Sector Care for 
Active Duty Service Members Receiving Care Through the Supplemental 
Health Care Program

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

ACTION: Notice of demonstration project.

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SUMMARY: The Acting Assistant Secretary of Defense for Health Affairs 
(ASD(HA)) issues this notice of demonstration to authorize the Defense 
Health Agency (DHA) to expand the DoD and Department of Veterans 
Affairs (VA) Hearing Aid Program (HAP) utilized throughout the Military 
Health System to a limited segment of the private sector care network 
of the TRICARE Managed Care Support Contractors (MCSCs). The intent is 
to replicate, to the fullest extent possible, the VA's Community Care 
Network model for delivery of prescribed hearing aids and associated 
devices to Veterans, for Active Duty Service Members (ADSMs) receiving 
care through the Supplemental Health Care Program (SHCP) in designated 
states, as well as to qualifying Prime Active Duty Family Members 
(ADFMs) diagnosed with profound hearing loss. This demonstration will 
be effective for the period of two years and conducted in three tiered 
phases: Phase One covers ADSMs in the state of California from January 
1, 2023 until the completion of the demonstration; Phase Two covers 
ADSMs in the state of Texas from January 1, 2024 until the completion 
of the demonstration; and Phase Three covers qualifying Prime ADFMs in 
the states of California and Texas from July 1, 2024 through completion 
of the demonstration. These changes are intended to standardize the 
hearing aid ordering process and reduce the cost variability for 
hearing aids and associated devices prescribed for treatment under 
TRICARE by private sector care providers in network.

DATES: This demonstration has an effective and implementation date of 
the January 1, 2023. The demonstration authority will remain in effect 
until December 31, 2024, unless terminated or extended by the DoD via a 
subsequent Federal Register Notice. Phase One (ADSM in California) has 
a target effective date of care delivery of January 1, 2023. Phase Two 
(ADSM in Texas) has a target effective date of care delivery of January 
1, 2024. Phase Three (qualifying Prime ADFM in California and Texas) 
has a target effective date of care of July 1, 2024. If the Acting 
ASD(HA), in collaboration with VA leadership, determines it would be 
appropriate to make expansion of the DoD-VA HAP permanent, the Acting 
ASD(HA) will follow-up with interim and final rulemaking, if required.

FOR FURTHER INFORMATION CONTACT: 
    Amy Boudin-George, AuD, CCC-A, Defense Health Agency, (210) 215-
9200, [email protected].
    Joe Mirrow, Defense Health Agency, (571) 217-9470, 
[email protected].

SUPPLEMENTARY INFORMATION: 

A. Executive Summary

    This notice is to advise all parties of a DHA demonstration project 
under the authority of Title 10, United States Code (U.S.C.), Section 
1092, entitled ``TRICARE Expansion of the Department of Defense and 
Department of Veterans Affairs Hearing Aid Procurement Model to Private 
Sector Care for Active Duty Service Members Receiving Care through the 
Supplemental Health Care Program and qualifying Prime Active Duty 
Family Members.'' The demonstration will monitor whether cost 
variability can be decreased and efficiency increased using the DoD-VA 
HAP in the TRICARE MCSCs private sector care networks. The DoD Hearing 
Center of Excellence (HCE), in collaboration with the TRICARE Health 
Plan (THP) and the VA's Denver Logistics Center (DLC) and Central 
Audiology Office, will conduct and evaluate a demonstration of the use 
of the VA National Hearing Aid and Wireless Systems contract for the 
purchase of hearing aids and associated devices prescribed for ADSMs 
and qualifying Prime ADFMs seen by private sector care network 
audiologists in designated states. The proposed demonstration will help 
DHA assess whether use of these contracts will impact access to care, 
improve efficiency to care completion, decrease billing errors to 
increase cost avoidance for TRICARE and its beneficiaries, and improve 
patient experience in quality of care.
    The demonstration will develop and evaluate a system for TRICARE 
MCSCs private sector care network audiologists to request hearing aids 
for ADSMs and qualifying ADFMs through a centralized audiology team 
supported by the DoD HCE. The devices will be ordered through the VA 
Remote Order Entry System (ROES), purchased from the VA via a DHA 
Military Interdepartmental Purchase Request (MIPR), and delivered to 
the prescribing audiologist's practice for fitting and dispensing to 
the beneficiary. This demonstration will integrate the Military and 
civilian health care systems per Section 705(c) of the National Defense 
Authorization Act for Fiscal Year 2017. Conducted under the purview of 
the DHA, it will be administered through the MCSCs (Health Net Federal 
Services (HNFS) and Humana Government Business (HGB), Inc. at time of 
publication) in three phases, applicable to ADSM beneficiaries 
receiving care authorized under the SHCP and qualifying Prime ADFMs. 
The DoD HCE will measure several outcome metrics, including but not 
limited to:
     Access to care for ADSMs and Prime ADFMs impact, positive 
or negative, by delivering care through this model, which will be 
measured through appointment data and shifts in number of providers 
available in demonstration states (ADSMs in California, Phase One; 
ADSMs in California and Texas, Phase Two, and qualifying ADFMs in 
California and Texas, Phase Three) vs. similarly sized non-
demonstration states

[[Page 57185]]

(Texas and Florida, Phase One; Florida, Phase Two, Florida; Phase 
Three).
    Cost effectiveness will be measured by comparing:
     Financial costs incurred to THP for ADSMs and Prime ADFMs 
receiving audiology care in states excluded from Phases One, Two, and 
Three of the demonstration, to the cost incurred using this model, 
based on procedural coding and reimbursement data.
     Financial costs incurred to the VA under this model. The 
source of additional costs, opportunities for mitigation, and options 
for cost sharing between the Departments will be evaluated.
     Efficiency and convenience of the ordering system through 
the HCE centralized team and the VA DLC, by measuring the days elapsed 
between hearing aid evaluation visits, as billed, and the dispensing of 
hearing aids, as billed, in demonstration states vs non-demonstration 
states.
    Patient satisfaction will be evaluated to determine positive or 
negative impacts of this program. Metrics will be based on patient 
questionnaire data through the Joint Outpatient Experience Survey 
(JOES) in Phase One, Two, and Three demonstration states compared to 
the JOES in non-demonstration states.

B. Background

    Hearing aids and associated devices for ADSMs seen at military 
medical treatment facilities (MTFs) are more economically procured 
through interagency collaboration between the DoD HCE and the VA DLC. 
For ADSMs and qualifying Prime ADFMs receiving private sector care, 
audiologists order hearing aids and associated devices for these 
TRICARE beneficiaries directly from companies at a significant markup 
over the VA contract price.
    The purchase of the same devices for ADSMs treated at MTFs has been 
economically achieved through collaboration between the DoD HCE and VA 
per DoD policy established in 2013 to formalize the DoD-VA hearing aid 
procurement collaboration originating in the mid-1990s. In October 
2014, the DoD issued policy authorizing referral of ADSMs to network 
audiologists when the ADSM either resides outside the catchment area or 
the specific audiology service is unavailable at their assigned MTF. 
Private sector care network audiologists prescribe and order hearing 
aid devices and accessories, when indicated for treatment, for their 
ADSM and qualifying ADFM patients, directly from companies at a 
significant markup over the VA contract price. In April 2018, the 
Office of the Secretary of Defense Chief Management Officer-led Reform 
Management Group endorsed exploration of a DoD-VA hearing aid 
procurement expansion initiative as a component of the Acting ASD (HA) 
approved THP Reform Implementation Plan.

C. Authority

    Use of TRICARE private sector care providers for ADSMs is 
authorized by 10 U.S.C. 1074(c) (1), as implemented by 32 CFR 199.16 
through the SHCP. Subject to special rules specified in 32 CFR 
199.16(d) or waivers authorized in paragraph 199.16(f), neither of 
which apply to DoD providing hearing aids through the VA ROES, ADSM 
hearing aids are currently provided by TRICARE private sector care 
providers and reimbursed under the SHCP. Hearing aids for qualifying 
Prime ADFMs are currently provided by TRICARE private sector care 
providers and reimbursed under 32 CFR 199.4(e)(24). Authority under 10 
U.S.C. 1092 will have to be exercised to authorize this hearing aid 
pilot as a demonstration to test the efficient and economical delivery 
of hearing aids through the TRICARE private sector care program.

D. Description

    The two-year demonstration will be conducted in three phases (Phase 
One and Two expanding annually; Phase Three six months after 
commencement of Phase Two) for ADSMs and qualifying Prime ADFMs meeting 
the criteria for profound hearing loss according to TRICARE law and 
policy to receive hearing aids and associated devices through private 
sector care audiologists in network in the state of California (Phase 
One), followed by the addition of ADSMs in the state of Texas (Phase 
Two), and qualifying Prime ADFMs in both states in Phase Three. 
Mandatory participation in utilizing the procedures established with 
TRICARE MCSCs will be required of all private sector care network 
audiologists prescribing hearing aids and associated devices for ADSMs 
and Prime ADFMs during the timeframe of this demonstration, in 
accordance with the provider's geographical area of state licensure 
during the applicable phase. It will require no changes to the manner 
in which audiology services, hearing aids, and their associated 
accessories are delivered to the beneficiary. Approximately one-third 
of the audiology private sector care network providers in the states of 
California and Texas bundle the cost of a hearing aid and related 
services, while two-thirds bill for the hearing aid devices, and 
separately bill for the related services (e.g., hearing aid dispensing, 
fitting, and programming). Under this demonstration the providers will 
not be responsible for the cost of the hearing aids and associated 
devices that are a TRICARE benefit under the SHCP for ADSM 
beneficiaries, and special benefit for Prime ADFMs under 32 CFR 
199.4(e)(24); therefore, those who bundle their care episodes will be 
required to unbundle their billing. The contract changes will apply to 
the audiologists in the HNFS and HGB TRICARE networks. The MCSCs will 
provide education to, and receive acknowledgement of acceptance by, all 
network audiologists regarding process and reimbursement differences 
prior to the effective implementation date of each phase of the 
demonstration.
    Through the current process for ordering and reimbursement, the 
audiologist orders the prescribed hearing aids and associated 
accessories (hereafter referred to as ``devices'') directly through the 
device manufacturer and delivers the hearing aids to the ADSM or ADFM. 
The audiologist then bills HGB or HNFS a bundled fee that includes a 
markup for the devices and the estimated cost of services that will be 
required over the life of the hearing aid (e.g., follow-up visits, 
repairs). Through the DoD-VA HAP demonstration, the devices will be 
ordered by the dispensing audiologist through audiologists at the HCE, 
to the DLC, which processes all VA contract orders for these devices. 
During this demonstration, the HCE audiologists will use the existing 
centralized MIPR within DHA to commit funds to the order in the ROES. 
The devices will then be delivered directly to the dispensing 
audiologist's practice in order to dispense to the beneficiary and 
continue follow-up care. HGB and HNFS will continue to reimburse the 
in-network audiologists for all covered benefits for eligible ADSMs and 
Prime ADFMs. For all hearing aid services, prescribed Common Procedural 
Terminology (CPT) code will be provided for use by the audiologists to 
ensure appropriate reimbursement for the services rendered. Health care 
received within the demonstration will match the current TRICARE PRIME 
benefit for ADSMs authorized through the SHCP, and Prime ADFMs 
authorized in the Prime benefit.

E. Communications

    The DHA will proactively educate audiologists, beneficiaries, and 
other stakeholders about this change through the TRICARE MCSCs. 
Provider engagement will commence following the publication of this 
notice. Materials will explain the demonstration benefit

[[Page 57186]]

and the process changes to the network audiologists and beneficiaries 
as applicable.

F. Evaluation

    This demonstration will assist the DHA in determining the program's 
future course of action based on an in-depth analysis. This will 
include at a minimum: determination if the use of the existing VA 
hearing aid purchase contract by DoD is an effective approach for ADSMs 
and qualifying Prime ADFMs who receive hearing aid services in the 
TRICARE network; measurement of the program's effectiveness in reducing 
cost variation; the maintenance of access to care; Defense Health 
Program cost avoidance, with measured cost increases for the VA; and 
subjective quality of care assessment from patient feedback. Monthly 
reports and a full analysis of the demonstration outcomes will be 
conducted throughout and for each phase of the demonstration to monitor 
the access to care, financial costs incurred, and program 
effectiveness.
    Costs and performance will be analyzed by the DoD HCE and compared 
to previous periods of the demonstration. Additionally, to measure 
overall impact, the California and Texas markets will be compared to 
markets of similar size, such as Florida, taking into account 
previously fluctuating trends in all three markets with regard to the 
number of network audiologists, financial costs incurred, and number of 
ADSM and Prime ADFM patients fit with these devices.
    Access to care will be measured using encounter data, showing the 
time between the hearing aid evaluation and the dispensing of the 
devices to the patient, as billed through CPT Codes, comparing the 
average time per patient in California and Texas to average time per 
patient in the non-demonstration states of Texas and Florida (Phase 
One), and Florida (Phases Two and Three). Cost effectiveness will be 
measured by comparing: (1) financial costs incurred to DHP for ADSMs 
receiving audiology care in states excluded from Phases One, and Two, 
and ADFM in states excluded from Phase Three of the demonstration, to 
the cost incurred using this model, based on procedural coding and 
reimbursement data, and; (2) financial costs incurred to the VA under 
this model. The source of additional costs, opportunities for 
mitigation, and options for cost sharing between the Departments will 
be evaluated. Program effectiveness will be measured by the established 
workflow for the receipt of orders by the HCE audiologists, the 
continued service of the contracted audiologists (i.e., audiologists 
elected to continue as network audiologists even after implementation 
of this process), time between ordering and dispensing the device, and 
decrease in costs of billed devices. Quality of care will be assessed 
through patient satisfaction data from the JOES.
    The DHA Director reserves the right to terminate the demonstration 
early if the enrollment, cost, or quality do not support continuation 
of the demonstration. Based on the success of this program within MTFs 
and the VA Community Care Network, DHA will seek regulatory action to 
implement the program in the TRICARE private sector program concurrent 
with the demonstration. If the demonstration is successful, the DHA 
Director may recommend extension of the demonstration pending 
regulatory action. If regulatory action is successful and accomplished 
prior to the demonstration completion, the DHA Director reserves the 
right to terminate the demonstration and implement the program 
throughout the TRICARE private sector program.

G. Reimbursement

    Under this demonstration the providers will not be responsible for 
the cost of the hearing aids and associated devices that are a TRICARE 
benefit under the SHCP for ADSM beneficiaries and Prime benefit for 
qualifying Prime ADFMs; therefore, those who bundle their care episodes 
will be required to unbundle their billing. The contract changes will 
apply to the audiologists in MCSC TRICARE networks in the demonstration 
states. MCSCs will continue to reimburse the in-network audiologists 
for all covered benefits for eligible ADSMs and qualifying Prime ADFMs. 
For all hearing aid services, prescribed CPT codes will be provided for 
use by the audiologists to ensure appropriate reimbursement for the 
services rendered.

H. Implementation

    The demonstration is effective January 1, 2023, continuing for a 
duration of two years: Phase One (ADSM in California) has a target 
effective date of care delivery of January 1, 2023; Phase Two (ADSM in 
Texas) has a target effective date of care delivery of January 1, 2024; 
and Phase Three (ADFMs in California and Texas) has a target date of 
delivery of care of July 1, 2024. If successful, the Director, DHA, may 
recommend extension of the demonstration until appropriate necessary 
action has been taken to implement the program in the TRICARE private 
sector care program.

    Dated: September 13, 2022.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2022-20149 Filed 9-16-22; 8:45 am]
BILLING CODE 5001-06-P