Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); TRICARE Program; Nonavailability Statement Requirements

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 199

[0720-AA35]

Civilian Health and Medical Program of the Uniformed Services

(CHAMPUS); TRICARE Program; Nonavailability Statement Requirements

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

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SUMMARY: This final rule revises certain requirements and procedures

for the TRICARE Program, the purpose of which is to implement a

comprehensive managed health care delivery system composed of military

medical treatment facilities and CHAMPUS. Issues addressed in this rule

include priority for access to care in military treatment facilities

and requirements for payment of enrollment fees. This rule also

includes provisions revising the requirement that certain beneficiaries

obtain a non-availability statement from a military treatment facility

commander prior to receiving certain health care services from civilian

providers.

EFFECTIVE DATE: This rule is effective March 26, 1998.

ADDRESSES: Office of the Civilian Health and Medical Program of the

Uniformed Services (OCHAMPUS), Program Development Branch, Aurora, CO

80045-6900.

FOR FURTHER INFORMATION CONTACT: Steve Lillie, Office of the Assistant

Secretary of Defense (Health Affairs), telephone (703) 695-3350.

Questions regarding payment of specific claims under the CHAMPUS

allowable charge method should be addressed to the appropriate CHAMPUS

contractor.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

A. Congressional Action

Section 712 of the National Defense Authorization Act for Fiscal

Year 1996 revised 10 U.S.C. 1097(c), regarding the role of military

medical treatment facilities in managed care initiatives, including

TRICARE. Prior to the revision, section 1097(c) read in part,

``However, the Secretary may, as an incentive for enrollment, establish

reasonable preferences for services in facilities of the uniformed

services for covered beneficiaries enrolled in any program established

under, or operating in connection with, any contract under this

section.'' The Authorization Act provision replaced ``may'' with

``shall'', which has the effect of directing access priority for

TRICARE Prime enrollees over persons not enrolled.

Another statutory provision relating to access priority is 10

U.S.C. 1076(a), which establishes a special priority for survivors of

sponsors who died on active duty: they are given the same priority as

family members of active duty members. This special access priority is

not time-limited, as is the special one-year cost sharing protection

given to this category under 10 U.S.C. 1079.

The National Defense Authorization Act of FY 1997, section 734

amended 10 U.S.C. 1080 to establish certain exceptions to requirements

for nonavailability statements in connection with payment of claims for

civilian health care services. First, the Act eliminates authority for

nonavailability statements for outpatient services; NASs have been

required for a limited number of outpatient procedures over the past

several years. Second, the Act eliminates authority for NAS

requirements for enrollees in managed care plans, which has the effect

of eliminating NAS requirements for TRICARE Prime enrollees. Finally,

the Act gives the Secretary authority to waive NAS requirements based

on an evaluation of the effectiveness of NAS in optimizing use of

military facilities.

The National Defense Authorization Act of FY 1996, section 713

requires that enrollees in TRICARE Prime be permitted to pay applicable

enrollment fees on a quarterly basis, and prohibits imposition of an

administrative fee related to the quarterly payment option.

B. Public Comments

The proposed rule was published in the Federal Register on April 7,

1997 (62 FR 16510). We received no public comments.

II. Provisions of the Rule

A. Access Priority (Revisions to Sec. 199.17(d)).

1. Provisions of the Proposed Rule

This paragraph explains that in Regions where TRICARE is

implemented, the order of access priority for services in military

treatment facilities is as follows: (1) Active duty service members;

(2) family members of active duty service members enrolled in TRICARE

Prime; (3) retirees, their family members and survivors enrolled in

TRICARE Prime; (4) family members of active duty service members who

are not enrolled in TRICARE Prime; and (5) all others based on current

access priorities. For purposes of access priority, but not for cost

sharing, survivors of sponsors who died on active duty are to be given

the same priority as family members of active duty service members.

This means that if they are enrolled in TRICARE Prime, they have the

same access priority as family members of active duty service members

who are enrolled in TRICARE Prime, or if not enrolled in TRICARE Prime,

they have the same access priority for military treatment facility care

as family members of active duty service members who are not enrolled

in TRICARE Prime.

The proposed rule also includes a provision explaining that

enrollment status does not affect access priority for some groups and

circumstances. This provision would allow the commander of a military

medical treatment facility to designate for access priority certain

individuals, for specific episodes of health care treatment. Such

individuals may include Secretarial designees, active duty family

members from outside the MTF's service area, foreign military and their

family members authorized care through international agreements, DoD

civilians with authorizing conditions, individuals on the Temporary

Disability Retired List, and Reserve and National Guard members.

Additional exceptions may be granted for other categories of

individuals, eligible for treatment in the MTF, whose access to care is

needed to provide a clinical case mix to support graduate medical

education programs, upon approval by the Assistant Secretary of Defense

(Health Affairs).

2. Provisions of the Final Rule

The final rule is consistent with the proposed rule. Minor

revisions emphasize that survivors of sponsors who died on active duty

have the same access priority as active duty family members. Access

priority for TRICARE Prime enrollees is not limited to military

facilities near their residence, but includes access priority when they

are traveling (although they are still required to access nonemergency

care through their primary care manager, pursuant to Sec. 199.17(o)).

B. Enrollment Fees (Revisions to Secs. 199.17(o) and 199.18(c))

1. Provisions of the Proposed Rule

These revisions would eliminate the requirement for a TRICARE Prime

enrollee to pay an additional maintenance fee of $5.00 per installment

for those TRICARE Prime enrollees who elect to pay their annual

enrollment fee on a quarterly basis. Additionally, these revisions

would permit waiver of enrollment fee

[[Page 9141]]

collection for retirees, their family members, and survivors who are

eligible for Medicare on the basis of disability. This group is

eligible for TRICARE/CHAMPUS as a secondary payor if they are enrolled

in Part B of Medicare, and pay the applicable monthly premium.

2. Provisions of the Final Rule

The final rule is consistent with the proposed rule.

C. Nonavailability Statements (Revisions to Sec. 199.4(a))

1. Provisions of the Proposed Rule

Revisions of this section modify our existing requirements for

beneficiaries to obtain nonavailability statements (NASs). The

requirement for beneficiaries to obtain an NAS for selected outpatient

procedures is eliminated. Beneficiaries who choose to obtain outpatient

care, including ambulatory surgery, from civilian sources remain

subject to current TRICARE/CHAMPUS cost sharing rules, but the

requirement that the beneficiary obtain an NAS prior to TRICARE/CHAMPUS

sharing in the civilian health care costs has been removed.

The requirement for beneficiaries enrolled in TRICARE Prime to

obtain an NAS for inpatient care is also eliminated. TRICARE was

designed so that the military treatment facility is the first source of

specialty care, with TRICARE Prime enrollees having access priority

before non-enrolled beneficiaries. In general, TRICARE Prime enrollees

obtain care from civilian network providers only when the military

treatment facility cannot provide the care because it does not have the

capability, or because the enrollee cannot be seen within time frames

required by TRICARE Prime access standards. Since the Health Care

Finder must authorize all non-emergency specialty care obtained from

civilian sources, the NAS requirement for this category of beneficiary

is redundant.

Lastly, the revisions would eliminate the requirement that a non-

enrolled beneficiary must obtain an NAS for inpatient hospital

maternity care before TRICARE/CHAMPUS shares in any costs for related

outpatient maternity care. Some diagnostic tests, procedures, or

consultations from civilian sources may be required during a course of

maternity care and this allows TRICARE/CHAMPUS to share in the costs of

the civilian care without requiring the beneficiary to obtain all

maternity related care in a civilian setting.

3. Provisions of the Final Rule

The final rule is consistent with the proposed rule. It should be

noted that requirements of Sec. 199.15 related to preauthorization of

services continue to apply. A key difference is that the responsibility

for compliance, and penalties for noncompliance with the requirements

of Sec. 199.15 fall on providers of care rather than on beneficiaries.

D. Revisions to the Uniform HMO Benefit (Revisions to Sec. 199.18(d))

1. Provisions of the Proposed Rule

We are contemplating minor changes in the copayment structure of

the Uniform HMO Benefit, which is used in TRICARE Prime. The proposed

rule included two revisions, which would eliminate copayments for

preventive services and for ancillary services. Current provisions

include copayments for ancillary services unless they are provided as

part of an office visit. This has resulted in multiple copayments in

cases where beneficiaries are sent to multiple sites for diagnostic

testing pursuant to a visit, which we regard as unfair.

2. Provisions of the Final Rule

The final rule is consistent with the proposed rule.

E. TRICARE Prime Catastrophic Cap (Revisions to Sec. 199.18(f))

1. Provisions of the Proposed Rule

The proposed rule included a provision regarding the

inapplicability of the TRICARE Prime annual catastrophic cap to out-of-

pocket costs incurred under the TRICARE Prime point-of-service option.

This is at Sec. 199.18(f)(2).

2. Provisions of the Final Rule

The final rule is consistent with the proposed rule.

F. Preemption of State Laws (Revisions to Sec. 199.17(a))

1. Provisions of the Proposed Rule

The proposed rule contained a restatement of current policy, at

Sec. 199.17(a)(7), recording DoD interpretation of two statutory

provisions preempting State and local laws in connection with TRICARE

contracts.

2. Provisions of the Final Rule

The final rule is similar to the proposed rule. The provision has

been expanded to also record DoD's interpretation of these statutes in

relation to State or local laws imposing premium taxes on health

insurance carriers or health maintenance organizations.

III. Regulatory Procedures

Executive Order 12866 requires certain regulatory assessments for

any ``significant regulatory action,'' defined as one which would

result in an annual effect on the economy of $100 million or more, or

have other substantial impacts.

The Regulatory Flexibility Act (RFA) requires that each Federal

agency prepare, and make available for public comment, a regulatory

flexibility analysis when the agency issues a regulation which would

have a significant impact on a substantial number of small entities.

This is not a significant regulatory action under the provisions of

Executive Order 12866, and it would not have a significant impact on a

substantial number of small entities.

This rule will impose no additional information collection

requirements on the public under the Paperwork Reduction Act of 1985

(44 U.S.C. Chapter 55).

List of Subjects in 32 CFR Part 199

Claims, Handicapped, Health insurance, and Military personnel.

Accordingly, 32 CFR part 199 is amended as follows:

PART 199--[AMENDED]

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

follows:

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

2. Section 199.2(b) is amended by revising the definition of

nonavailability statement to read as follows:

Sec. 199.2 Definitions.

* * * * *

(b) * * *

Nonavailability statement. A certification by a commander (or a

designee) of a Uniformed Services medical treatment facility, recorded

on DEERS, generally for the reason that the needed medical care being

requested by a non-TRICARE Prime enrolled beneficiary cannot be

provided at the facility concerned because the necessary resources are

not available in the time frame needed.

* * * * *

3. Section 199.4 is amended by removing paragraphs (a)(9)(i)(C) and

(a)(9)(v)(B) and the note following paragraph (a)(9)(vi), by

redesignating paragraph (a)(9)(i)(D) as paragraph (a)(9)(i)(C) and

paragraph (a)(9)(v)(A) as paragraph (a)(9)(v), and by revising

[[Page 9142]]

paragraphs (a)(9) introductory text, (a)(9)(i)(B), and (a)(9)(ii) and

by adding new paragraph (a)(10)(vi)(E) to read as follows:

Sec. 199.4 Basic program benefits.

* * * * *

(a) * * *

(9) Nonavailability statements within a 40-mile catchment area. In

some geographic locations, it is necessary for CHAMPUS beneficiaries

not enrolled in TRICARE Prime to determine whether the required

inpatient medical care can be provided through a Uniformed Services

facility. If the required care cannot be provided, the hospital

commander, or designee, will issue a Nonavailability Statement (DD form

1251). Except for emergencies, a Nonavailability Statement should be

issued before medical care is obtained from a civilian source. Failure

to secure such a statement may waive the beneficiary's rights to

benefits under CHAMPUS.

(i) * * *

(B) For CHAMPUS beneficiaries who are not enrolled in TRICARE

Prime, an NAS is required for services in connection with nonemergency

inpatient hospital care if such services are available at a facility of

the Uniformed Services located within a 40 mile radius of the residence

of the beneficiary, except that an NAS is not required for services

otherwise available at a facility of the Uniformed Services located

within a 40-mile radius of the beneficiary's residence when another

insurance plan or program provides the beneficiary primary coverage for

the services. This requirement for an NAS does not apply to

beneficiaries enrolled in TRICARE Prime, even when those beneficiaries

use the point-of-service option under Sec. 199.17(n)(3).

* * * * *

(ii) Beneficiary responsibility. A CHAMPUS beneficiary who is not

enrolled in TRICARE Prime is responsible for securing information

whether or not he or she resides in a geographic area that requires

obtaining a Nonavailability Statement. Information concerning current

rules and regulations may be obtained from the Offices of the Army,

Navy, and Air Force Surgeons General; or a representative of the

TRICARE managed care support contractor's staff, or the Director,

OCHAMPUS.

* * * * *

(10) * * *

(vi) * * *

(E) The beneficiary is enrolled in TRICARE Prime.

* * * * *

3. Section 199.17 is amended by adding paragraph (a)(7) and

revising paragraphs (d)(1) and (o)(3) to read as follows:

Sec. 199.17 TRICARE program.

* * * * *

(a) * * *

(7) Preemption of State laws. (i) Pursuant to 10 U.S.C. 1103 and

section 8025 (fourth proviso) of the Department of Defense

Appropriations Act, 1994, the Department of Defense has determined that

in the administration of 10 U.S.C. chapter 55, preemption of State and

local laws relating to health insurance, prepaid health plans, or other

health care delivery or financing methods is necessary to achieve

important Federal interests, including but not limited to the assurance

of uniform national health programs for military families and the

operation of such programs at the lowest possible cost to the

Department of Defense, that have a direct and substantial effect on the

conduct of military affairs and national security policy of the United

States.

(ii) Based on the determination set forth in paragraph (a)(7)(i) of

this section, any State or local law relating to health insurance,

prepaid health plans, or other health care delivery or financing

methods is preempted and does not apply in connection with TRICARE

regional contracts. Any such law, or regulation pursuant to such law,

is without any force or effect, and State or local governments have no

legal authority to enforce them in relation to the TRICARE regional

contracts. (However, the Department of Defense may by contract

establish legal obligations of the part of TRICARE contractors to

conform with requirements similar or identical to requirements of State

or local laws or regulations).

(iii) The preemption of State and local laws set forth in paragraph

(a)(7)(ii) of this section includes State and local laws imposing

premium taxes on health or dental insurance carriers or underwriters or

other plan managers, or similar taxes on such entities. Such laws are

laws relating to health insurance, prepaid health plans, or other

health care delivery or financing methods, within the meaning of the

statutes identified in paragraph (a)(7)(i) of this section. Preemption,

however, does not apply to taxes, fees, or other payments on net income

or profit realized by such entities in the conduct of business relating

to DoD health services contracts, if those taxes, fees or other

payments are applicable to a broad range of business activity. For

purposes of assessing the effect of Federal preemption of State and

local taxes and fees in connection with DoD health and dental services

contracts, interpretations shall be consistent with those applicable to

the Federal Employees Health Benefits Program under 5 U.S.C. 8909(f).

* * * * *

(d) * * *

(1) Military treatment facility (MTF) care.--(i) In general. All

participants in Prime are eligible to receive care in military

treatment facilities. Participants in Prime will be given priority for

such care over other beneficiaries. Among the following beneficiary

groups, access priority for care in military treatment facilities where

TRICARE is implemented as follows:

(A) Active duty service members;

(B) Active duty service members' dependents and survivors of

service members who died on active duty, who are enrolled in TRICARE

Prime;

(C) Retirees, their dependents and survivors, who are enrolled in

TRICARE Prime;

(D) Active duty service members' dependents and survivors of

service members who died on active duty, who are not enrolled in

TRICARE Prime; and

(E) Retirees, their dependents and survivors who are not enrolled

in TRICARE Prime. For purposes of this paragraph (d)(1), survivors of

members who died while on active duty are considered as among

dependents of active duty service members.

(ii) Special provisions. Enrollment in Prime does not affect access

priority for care in military treatment facilities for several

miscellaneous beneficiary groups and special circumstances. Those

include Secretarial designees, NATO and other foreign military

personnel and dependents authorized care through international

agreements, civilian employees under workers' compensation programs or

under safety programs, members on the Temporary Disability Retired List

(for statutorily required periodic medical examinations), members of

the reserve components not on active duty (for covered medical

services), military prisoners, active duty dependents unable to enroll

in Prime and temporarily away from place of residence, and others as

designated by the Assistant Secretary of Defense (Health Affairs).

Additional exceptions to the normal Prime enrollment access priority

rules may be granted for other categories of individuals, eligible for

treatment in the MTF, whose access to care is necessary to provide an

adequate clinical case mix to support graduate medical education

programs or

[[Page 9143]]

readiness-related medical skills sustainment activities, to the extent

approved by the ASD(HA).

* * * * *

(o) * * *

(3) Quarterly installment payments of enrollment fee. The

enrollment fee required by Sec. 199.18(c) may be paid in quarterly

installments, each equal to one-fourth of the total amount. For any

beneficiary paying his or her enrollment fee in quarterly installments,

failure to make a required installment payment on a timely basis

(including a grace period, as determined by the Director, OCHAMPUS)

will result in termination of the beneficiary's enrollment in Prime and

disqualification from future enrollment in Prime for a period of one

year. If enrollment in TRICARE Prime is terminated for failure to make

a required installment payment, services received after the due date of

the installment payment will be cost shared under TRICARE Extra.

* * * * *

4. Section 199.18 is amended by revising paragraphs (d)(2)(i) and

(f), and by adding paragraph (c)(3), to read as follows:

Sec. 199.18 Uniform HMO benefit.

* * * * *

(c) * * *

(3) Waiver of enrollment fee for certain beneficiaries. The

Assistant Secretary of Defense (Health Affairs) may waive the

enrollment fee requirements of this section for beneficiaries described

in 10 U.S.C. 1086(d)(2) (i.e., those who are eligible for Medicare on

the basis of disability or end stage renal disease and who maintain

enrollment in Part B of Medicare).

* * * * *

(d) * * *

(2) * * *

(i) For most physician office visits and other routine services,

there is a per visit fee for each of the following groups: dependents

of active duty members in pay grades E-1 through E-4; dependents of

active duty members in pay grades of E-5 and above; and retirees and

their dependents. This fee applies to primary care and specialty care

visits, except as provided elsewhere in this paragraph (d)(2) of this

section. It also applies to family health services, home health care

visits, eye examinations, and immunizations. It does not apply to

ancillary health services or to preventive health services described in

paragraph (b)(2) of this section, or to maternity services under

Sec. 199.4(e)(16).

* * * * *

(f) Limit on out-of-pocket costs under the uniform HMO benefit. (1)

Total out-of-pocket costs per family of dependents of active duty

members under the Uniform HMO Benefit may not exceed $1,000 during the

one-year enrollment period. Total out-of-pocket costs per family of

retired members, dependents of retired members and survivors under the

Uniform HMO Benefit may not exceed $3,000 during the one-year

enrollment period. For this purpose, out-of-pocket costs means all

payments required of beneficiaries under paragraphs (c), (d), and (e)

of this section. In any case in which a family reaches this limit, all

remaining payments that would have been required of the beneficiary

under paragraphs (c), (d), and (e) of this section will be made by the

program in which the Uniform HMO Benefit is in effect.

(2) The limits established by paragraph (f)(1) of this section do

not apply to out-of-pocket costs incurred pursuant to paragraph

(m)(1)(i) or (m)(2)(i) of Sec. 199.17 under the point-of-service option

of TRICARE Prime.

* * * * *

Dated: February 17, 1998.

L.M. Bynum,

Alternate OSD Federal Register Liaison Officer, Department of Defense.

[FR Doc. 98-4545 Filed 2-23-98; 8:45 am]

BILLING CODE 5000-04-M