GAO-02-686R 

United States General Accounting Office

Washington, DC 20548 

B-290362 

April 30, 2002 

The Honorable Carl Levin 

Chairman 

The Honorable John Warner 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Bob Stump 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

Subject: Department of Defense, Office of the Secretary: Civilian Health and Medical 

Program of the Uniformed Services (CHAMPUS)/TRICARE; Partial 

Implementation of Pharmacy Benefits Program; Implementation of National 

Defense Authorization Act for Fiscal Year 2001

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a 

major rule promulgated by the Department of Defense (DOD), Office of the 

Secretary, entitled “Civilian Health and Medical Program of the Uniformed Services 

(CHAMPUS)/TRICARE; Partial Implementation of Pharmacy Benefits Program; 

Implementation of National Defense Authorization Act for Fiscal Year 2001” (RIN: 

0720-AA62). We received the rule on April 23, 2002. It was published in the Federal 

Register as a final rule on April 3, 2002. 67 Fed. Reg. 15721. 

The final rule is being published as a follow-up to an interim final rule that DOD 

published on February 9, 2001, implementing various sections of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001. 66 Fed. Reg. 9651. Among 

other items, the rule allows coverage of physical examinations for beneficiaries ages 

5 through 11 that are required in connection with school enrollment and partially 

implements the Pharmacy Benefits Program establishing revised copays and costshares for the prescription drug benefit. 

Enclosed is our assessment of the DOD’s compliance with the procedural steps 

required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. 

Our review indicates that the DOD complied with the applicable requirements. 
Page 2 GAO-02-686R 

If you have any questions about this report, please contact James W. Vickers, 

Assistant General Counsel, at (202) 512-8210. The official responsible for GAO 

evaluation work relating to the subject matter of the rule is William Scanlon, 

Managing Director, Health Care. Mr. Scanlon can be reached at (202) 512-7114. 

 signed 

Kathleen E. Wannisky 

Managing Associate General Counsel 

Enclosure 

cc: L.M. Bynum 

Alternate OSD Federal 

 Register Liaison Officer 

Department of Defense 
GAO-02-686R 

ENCLOSURE 

ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE 

ISSUED BY THE 

DEPARTMENT OF DEFENSE, 

OFFICE OF THE SECRETARY 

ENTITLED 

"CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE 

UNIFORMED SERVICES (CHAMPUS)/TRICARE; PARTIAL IMPLEMENTATION 

OF PHARMACY BENEFITS PROGRAM; IMPLEMENTATION OF NATIONAL 

DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2001" 

(RIN: 0720-AA62) 

(i) Cost-benefit analysis

The final rule will add over $200 million in annual health care benefit costs. The 

estimate is based on historical TRICARE costs and an assessment of potential users 

times the average benefit costs per person for each of the provisions. 

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605, 

607, and 609

DOD has determined that the final rule will not have a significant economic impact 

on a substantial number of small entities. 

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform 

Act of 1995, 2 U.S.C. §§ 1532-1535

The final rule does not contain an intergovernmental or private sector mandate, as 

defined in title II, of more than $100 million in any one year. 

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. 

In the publication of the interim rule in the Federal Register on February 9, 2001, 

DOD requested comments for consideration before the rule became final. DOD 

received comments from one commenter, and they are discussed in the preamble to 

the final rule. 

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520 

The final rule does not contain any information collections that are subject to review 

by the Office of Management and Budget under the Paperwork Reduction Act. 
Page 2 GAO-02-686R 

Statutory authorization for the rule 

The final rule is promulgated under the authority contained at 5 U.S.C. 301; 10 U.S.C. 

chapter 55; and sections 703, 704, 706, 711, 722, 752, and 759 of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001 (Pub. L. 106-398, Oct. 30, 

2000). 

Executive Order No. 12866 

The final rule was reviewed by OMB and found to be an “economically significant”

regulatory action under the order.