[Federal Register Volume 90, Number 80 (Monday, April 28, 2025)]
[Notices]
[Pages 17582-17585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-07258]
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DEPARTMENT OF DEFENSE
Office of the Secretary
TRICARE: TRICARE Competitive Plans Demonstration (CPD)
AGENCY: Office of the Secretary, Department of Defense (DoD).
ACTION: Notice of demonstration.
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SUMMARY: The Assistant Secretary of Defense for Health Affairs
(ASD(HA)) issues this notice announcing the creation of a demonstration
to offer additional opportunities for contractors of local, regional,
and national plans to compete with managed care support contractors
(MCSCs) under the TRICARE program and to evaluate impacts of
competition in these designated markets on costs, outcomes and
satisfaction. The Defense Health Agency (DHA) has awarded contracts to
CareSource Military & Veterans (CSMV)
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in both the Atlanta, Georgia market and the Tampa, Florida market and
intends to evaluate the impact of having two MCSCs (the Competitive
Plans Demonstration (CPD) contractors and Humana Government Business
(HGB), the current East region MCSC) providing services in these
markets. Eligible beneficiaries will be provided with the opportunity
to enroll in TRICARE Prime with CSMV in these markets. This
demonstration will also help the DHA assess the efficacy of paying a
TRICARE MCSC using a risk-adjusted, population-based capitation
methodology for non-pharmacy health care and variable ongoing
administrative costs and the efficacy of separately contracting for
certain health care administrative tasks (e.g., eligibility,
enrollment, and encounter data management functions) rather than
including such requirements in the MCS contract.
DATES: This demonstration project will commence January 1, 2026. This
demonstration authority will remain in effect until December 31, 2028,
unless terminated earlier or extended by the Director, DHA via a
subsequent Federal Register notice. CSMV may begin marketing and
beneficiary education activities on or after the date this notice is
published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: LTJG Brandon Andriot, Defense Health
Agency, (703) 275-6166, brandon.m.andriot.mil@health.mil">brandon.m.andriot.mil@health.mil.
SUPPLEMENTARY INFORMATION: This notice is to advise all parties of a
demonstration project under the authority of Title 10, United States
Code (U.S.C.), Section 1092, entitled the ``Competitive Plans
Demonstration.'' DHA has competitively awarded two contracts to CSMV
which will compete against the East region MCSC (HGB) in delivering
health, medical, and administrative support services to eligible
TRICARE beneficiaries in the Atlanta, GA and Tampa, FL markets. CSMV,
in conjunction with the DHA's eligibility, enrollment, and encounter
(EEE) pilot program contractor (MicroHealth), and Express Scripts
(current TRICARE pharmacy benefits manager) will administer the CPD
under the purview of the DHA. The CPD project will monitor whether
paying a MCSC using a risk adjusted, population-based capitated
methodology results in better beneficiary access to care, better
beneficiary health outcomes, and increased beneficiary satisfaction
without increasing the Department's health care costs. The DHA will
monitor several areas of the CPD including, but not limited to, the
following:
The effects of competition among MCSCs operating in the
same geographic areas (overlapping networks).
Beneficiary access to care and whether it is impacted by
paying a MCSC on a risk adjusted, population-based Per Member Per Month
(PMPM) basis.
Quality of care (and health outcomes) and whether they are
impacted by paying a MCSC on a risk adjusted population-based PMPM
basis.
Overall cost impact of paying a MCSC using a risk adjusted
population-based PMPM payment model (accounting for the costs incurred
under the separate EEE contract) as compared to paying the contractor
under the traditional TRICARE MCS model.
Impact of dividing responsibility (and separately
contracting) for EEE data management administrative functions and
patient care functions.
Beneficiary experience and whether it is impacted
(positively or negatively) by delivering care under a capitated payment
model. DHA will measure beneficiary experience through existing tools
(e.g., the Joint Outpatient Experience Survey) and re-enrollment rates.
A. Background
Section 705(c) of the National Defense Authorization Act for Fiscal
Year 2017 (NDAA-2017), Public Law 114-238, December 23, 2016, directed
the Secretary of Defense to ``ensure that local, regional, and national
health plans have an opportunity to participate in the competition for
managed care support contracts under the TRICARE Program. NDAA-2017,
Section 705(c) also directed the Secretary to implement a strategy to
ensure that future MCS contracts under the TRICARE program incorporate
various elements related to improving health care delivery. In an
effort to mitigate rising health care costs and develop higher-quality
patient care, the DHA intends to conduct the CPD to determine if it can
achieve improved beneficiary satisfaction, better access to care,
better care outcomes, and cost containment, by employing ongoing
competition between MCSCs performing in the same markets and by using a
capitated payment model. To achieve this goal, the DHA will conduct a
three-year demonstration program that will address the NDAA-2017,
Section 705(c) requirements.
The DHA introduced the CPD concept in the request for proposals
(RFP) for the TRICARE Fifth generation (T-5) MCS contracts in April
2021. The T-5 RFP advised vendors competing for the T-5 requirement
that the DHA intended to carry out the CPD during the period of
performance of the resulting T-5 contracts--and that it would do so at
one or more of the 23 sites listed in the RFP. In 2023, the Director,
DHA determined that, based on various factors, the most suitable
initial sites for the CPD were Atlanta, GA and Tampa, FL. The threshold
analysis of these initial selected markets projected potential
enrollments of 3,000-5,000 members in each market. In July 2023, the
DHA solicited proposals for vendors to provide TRICARE MCS services
(but minus the eligibility, enrollment, and encounter functions) in
Atlanta, GA and Tampa, FL. After receiving and evaluating proposals,
the DHA awarded contracts for both markets to CSMV in November 2024.
CSMV will provide, among other things, accredited networks of
individual and institutional providers; customer service and
beneficiary education services; medical management, case management,
referral management, utilization management, population health, and
clinical quality management services; telehealth; and nurse advice line
services.
B. Description of the Demonstration Project
TRICARE's three-year demonstration project will be voluntary for
most TRICARE-eligible active duty family members (ADFM), retirees, and
retiree family members who reside within specified ZIP Codes in the
metro Atlanta, GA and metro Tampa, FL areas, regardless of whether they
currently are enrolled in TRICARE Prime or TRICARE Select. Active duty
service members; beneficiaries participating in the TRICARE Reserve
Select, TRICARE Retired Reserve, and TRICARE Young Adult programs; and
beneficiaries with Medicare coverage are not eligible to participate in
the demonstration. In addition, beneficiaries receiving services under
the TRICARE Extended Care Health Option program, Autism Care
Demonstration, and Continued Health Care Benefit Program are not
eligible to participate in the demonstration. Qualifying beneficiaries
who reside within the specified ZIP Codes in the Atlanta, GA and Tampa,
FL areas will be invited to participate in any of the three years
during the demonstration period by enrolling in TRICARE Prime with
CSMV. From the demonstration-enrolled beneficiary's perspective, this
will be a TRICARE Prime option, with CSMV serving as the MCSC and
assigning beneficiaries primary care managers, supported by MicroHealth
providing EEE and associated customer service operational
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support. Beneficiaries who are participating in the CPD will fill their
outpatient pharmacy prescriptions through the TRICARE Pharmacy Program
managed by the TRICARE Pharmacy (TPharm) contractor (ESI) or at
Military Medical Treatment Facility (MTF) pharmacies.
CSMV will provide enrollees access to all of its network primary
care and specialty care providers (both inpatient and outpatient) in
the Atlanta, GA and Tampa, FL markets as well as virtual and video
visits and consults. CSMV will be authorized to provide enrollees with
value added items and services and may offer a beneficiary access to a
program with rewards and incentives. CSMV will provide education to all
interested beneficiaries, at the time of enrollment, regarding any
differences between their plans and the traditional TRICARE Prime plan
provided by the regional MCSC (HGB). Under this demonstration, TRICARE
beneficiaries will be subject to current Open Season enrollment
requirements and the rules governing enrollments based on Qualifying
Life Events.
In providing the TRICARE Prime benefit, CSMV will apply standard
TRICARE Prime enrollment fees, copays, cost shares, deductibles, and
catastrophic caps--except that the applicable annual TRICARE enrollment
fee will be waived for TRICARE beneficiaries who elect to participate
in the demonstration, for the first year in which they enroll. Standard
preauthorization requirements will apply; however, the TRICARE Prime
referral requirements will not apply. The TRICARE point-of-service
(POS) option, with its associated cost-sharing requirements, will be
available to CPD-enrolled beneficiaries. CSMV will educate
beneficiaries on how they may access health care when traveling outside
of the CPD market areas. Demonstration enrollees will be locked out of
all MTFs for all routine and urgent care. Care at MTFs will be limited
to emergency services and pharmacy services only. If a CPD enrollee
accesses an MTF for emergency services, then CSMV will be responsible
for reimbursing the MTF. An enrollee's violation of the direct care
system/MTF lockouts could result in disenrollment of such enrollee.
C. Communication
The DHA will proactively educate beneficiaries and other
stakeholders about the Demonstration through its Strategic
Communications Office and through marketing materials prepared by the
CPD contractors and the EEE Pilot contractor. Marketing materials will
explain the Demonstration benefit to eligible beneficiaries. This will
allow TRICARE sponsors and beneficiaries to make the best choice for
their families in a timely fashion in the selected markets. Marketing
efforts may begin after publication of this notice. CSMV will market
its plan for each market and inform beneficiaries of any benefit or
process differences from the traditional TRICARE Prime program.
D. Evaluation
This demonstration project will assist the DHA in evaluating
whether delivery of the TRICARE Prime health care option under the
framework of the CPDs (as described above) will result in improvements
in health care quality for TRICARE Prime beneficiaries and/or a
reduction in health care spending for the DoD. This program is intended
to determine if the presence of local, regional or national level CPD-
like health plans will generate beneficial competition between the CPD-
like plans and the regional MCSCs for the enrollment of TRICARE
beneficiaries. In addition to expanding DHA's body of knowledge with
regard to beneficiary choice and competition in the TRICARE space, this
demonstration will observe the effects on patient satisfaction,
clinical outcome measures, overall cost (using risk-adjusted capitation
payment models and risk sharing), and data interactions among the
responsible contractors.
Regular evaluations of health care encounters, patient
satisfaction, and cost of care (for the CPD beneficiaries and a
comparison group) will provide data relating to the impact of health
care spending in order to ascertain whether care provided by the CPD
providers results in positive changes in cost trends and/or if there
has been an improvement in health care outcomes such as decreased
mortality rates and shorter lengths of stay. At the conclusion of each
demonstration year, DHA will analyze costs and performance and compare
it to costs and performance under previous years of the demonstration
(as applicable) as well as to care received across the TRICARE program
to determine whether CPD care options were effective in reducing health
care spending and/or improving quality of health care. The Department
reserves the right to terminate the demonstration early if the
participation, cost, or quality do not support the continuation of the
demonstration.
E. Reimbursement
The DHA will pay CSMV a full-risk capitation rate (PMPM) for non-
pharmacy health care and the variable portion of ongoing administrative
costs. The DHA will also pay CSMV's fixed administrative costs. The DHA
will establish the PMPM rates based on the projected average government
health care cost for TRICARE Prime beneficiaries enrolled to the East
region MCSC (i.e., ``network Prime'' enrollees) in the same market.
These costs will be derived from TRICARE Encounter Data records and
historical MTF-delivered care records, with the MTF-delivered care
valued at approximately private-sector-care rates.
DHA will develop separate rates for two broad beneficiary
categories: ADFM and others (referred to as ``non-ADFMs''). Certain
other differences among beneficiaries (e.g., age, gender, health risk)
will be accounted for using a risk adjustment methodology, described
hereafter. Beneficiaries with other health insurance (other than
Medicare) will be allowed to participate in the CPD if they otherwise
meet the CPD enrollment criteria.
As noted above, beneficiaries enrolled in the CPD who visit a
provider outside of the demonstration may be subject to POS charges
consistent with TRICARE claims processing rules. If a beneficiary
repeatedly seeks care outside of the demonstration and/or does not
follow CSMV processes, the DHA may remove the beneficiary from the
demonstration (or decline to re-enroll them) and require the
beneficiary to make a new plan election (e.g., TRICARE Prime or Select)
in accordance with TRICARE procedures.
This demonstration is intended to be patient-centered, and changes
in health plan enrollment are disruptive to beneficiaries. Therefore,
the DHA will remove a beneficiary from the demonstration only in the
most extraordinary of cases, with the Director, DHA (or designee) being
the decision authority in such cases. When CSMV believes there is cause
to remove a beneficiary from the demonstration, it will provide DHA
with a written justification addressing the beneficiary's unwillingness
to follow program rules that includes the following information: a
description of the specific efforts made by the contractor to engage
the beneficiary in care and care decisions; a description of
beneficiary and/or caregiver education efforts; data showing that the
beneficiary's failure to follow such rules has resulted in significant
impact to the beneficiary's health, quality of care, or total cost of
care to the Government or beneficiary. The Director, DHA, shall be the
final authority on beneficiary disenrollment, and decisions shall be
made on the basis of the best interest of the specific
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beneficiary (health, quality of care, and cost to the Government/
beneficiary), and not on a basis that disenrollment will be beneficial
to CSMV.
F. Implementation
Care for CPD enrolled beneficiaries will begin effective January 1,
2026 and will continue for a period of three years unless terminated
early by the Director, DHA. CSMV and MicroHealth may begin patient
education efforts regarding this demonstration after publication of
this notice.
Dated: April 23, 2025.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2025-07258 Filed 4-25-25; 8:45 am]
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