Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85613 

Defense Services Proposed to be Sold: 

See Attached Annex 

(viii) Date Report Delivered to 

Congress: December 4, 2020 

* As defined in Section 47(6) of the 

Arms Export Control Act. 

POLICY JUSTIFICATION 

Government of Australia—155mm 

Ammunition and Accessories 

The Government of Australia has 

requested to buy M825A1 155mm White 

Phosphorous projectile munitions, 

M782 Multi-Option Fuze for Artillery, 

M762A1 electronic-timed fuzes, M231 

and M232A2 propelling charges, 

percussion primers, technical 

publications and books, technical data 

for operational maintenance, technical 

assistance and services, and other 

related elements of logistics and 

program support. The total estimated 

program cost is $132.2 million. 

This proposed sale will support the 

foreign policy and national security 

objectives of the United States. Australia 

is one of our most important allies in 

the Western Pacific. The strategic 

location of this political and economic 

power contributes significantly to 

ensuring peace and economic stability 

in the region. 

This purchase will enable effective 

training and extend the Australian 

Defence Force’s (ADF) capability to 

conduct combined operations. The ADF 

already has these rounds in service, and 

is trained and equipped to use them. 

Australia will not have any difficulty 

absorbing these weapons into its armed 

forces. 

The proposed sale of this equipment 

and support will not alter the basic 

military balance in the region. 

The principal contractor will be 

determined at a later date. The material 

could potentially be sourced from a 

combination of DoD stocks and new 

procurement. There are no known offset 

agreements proposed in connection 

with this potential sale. 

Implementation of this proposed sale 

will not require the assignment of U.S. 

Government or contractor 

representatives to Australia. 

There will be no adverse impact on 

U.S. defense readiness as a result of this 

proposed sale. 

Transmittal No. 20–78 

Notice of Proposed Issuance of Letter of 

Offer Pursuant to Section 36(b) of the 

Arms Export Control Act 

Annex 

Item No. vii 

(vii) Sensitivity of Technology: 

1. The M825A1 is a 155mm artillery 

projectile which utilizes a payload of 

white phosphorous impregnated felt to 

produce a smoke screen at a target 

location. The Government of Australia 

has stated their commitment to use 

these rounds exclusively for its 

intended purpose, which is to provide 

signaling and to obscure enemy 

visibility on the battlefield. 

2. The M782 Multi-Option Fuze for 

Artillery (MOFA). The M782 is a 

selectable multi-option fuze that 

provides height of burst capability to 

artillery rounds. The M782 is a sensitive 

military technology and has been 

approved for release to the Government 

of Australia. 

3. Also included in this case are 

propelling charges and other fuzes that 

enable the effective use of the M825A1 

end item. While these technologies are 

controlled military hardware they do 

not represent a significant technology 

transfer risk. 

4. The highest level of classified 

information associated with the sale of 

this equipment is SECRET. 

5. If a technologically advanced 

adversary obtains knowledge of the 

specific hardware and software 

elements, the information could be used 

to develop countermeasures or 

equivalent systems that might reduce 

weapon system effectiveness or be used 

in the development of a system with 

similar or advanced capabilities. 

6. A determination has been made 

that Australia can provide substantially 

the same degree of protection for the 

sensitive technology being released as 

the U.S. Government. This proposed 

sale is necessary to further the U.S. 

foreign policy and national security 

objectives outlined in the Policy 

Justification. 

7. All defense articles and services 

listed on this transmittal are authorized 

for release and export to the 

Government of Australia. 

[FR Doc. 2020–28633 Filed 12–28–20; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

TRICARE; Proposed Rates for 

Reimbursing Durable Medical 

Equipment, Prosthetics, Orthotics, and 

Supplies (DMEPOS) and Parenteral 

and Enteral Nutrition (PEN) Items Not 

on the Medicare DMEPOS and PEN Fee 

Schedule 

AGENCY: Office of the Secretary, 

Department of Defense (DoD). 

ACTION: Notice and request for 

comments. 

SUMMARY: This notice is to advise 

interested parties of a Military Health 

System reimbursement change to certain 

DMEPOS and PEN items not included 

in Medicare’s fee schedule. For these 

items, the Defense Health Agency (DHA) 

will create a TRICARE-specific fee 

schedule based on similar payment 

rules, to the extent practicable, as 

Medicare’s DMEPOS and PEN fee 

schedule. A TRICARE-specific fee 

schedule will allow DHA to control 

costs, reduce beneficiary out-of-pocket 

expenses, discourage potential fraud 

and abuse, and prevent excessive 

TRICARE reimbursement rates when 

compared to state Medicaid programs 

and private health insurance. Under this 

change, TRICARE will align its 

reimbursement of certain DMEPOS and 

PEN items with similar reimbursement 

rules established under Medicare’s 

DEMPOS and PEN fee schedule to the 

extent practicable, without 

incorporating any reimbursement rules 

associated with Medicare’s Competitive 

Bidding Program (CBP). 

DHA is soliciting comments on the 

proposed rates (located on the DHA 

website below) and other alternative 

payment options for reimbursing 

DMEPOS and PEN items without 

Medicare pricing. The comment period 

will end 30 days after the publication of 

this notice. DHA will receive and 

consider comments, but will not issue 

responses to comments unless such 

comments drive a substantive change to 

the methodology outlined in paragraphs 

A through C below, in which case a new 

notice will be published in the Federal 

Register. 

DATES: The comment period will end on 

January 28, 2021. This change will be 

effective July 1, 2021. 

ADDRESSES: Defense Health Agency, 

TRICARE, Medical Benefits and 

Reimbursement Section, 16401 East 

Centretech Parkway, Aurora, CO 80011– 

9066. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Jahanbakhsh Badshah, Medical Benefits 

and Reimbursement Section, TRICARE, 

telephone (303) 676–3881. Questions 

regarding payment of specific claims 

should be addressed to the appropriate 

TRICARE Managed Care Support 

Contractor in whose jurisdiction a claim 

would be filed. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Currently under TRICARE, DMEPOS 

and PEN items without Medicare 

pricing are reimbursed at the lower of 

the state prevailing charge or the billed 

charge. The state prevailing charge is 

calculated annually by TRICARE 

contractors on a statewide basis, using 

the 80th percentile of all qualified billed 


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85614 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

charges on actual claims paid for a given 

service or item, during the 12-month 

period ending June 30th of the previous 

year. This method is problematic in that 

it can lead to the generation of very 

high-fee schedule amounts without 

validation that these amounts are 

realistic and equitable relative to the 

cost of furnishing the item. Recent 

Department of Defense Office of 

Inspector General (DoD OIG) reports, as 

well as internal DHA analysis, have 

identified patterns of excessive billed 

charges for DMEPOS and PEN items. If 

the billed charges are abusive and 

excessive, this rolls into the calculation 

for state prevailing amounts. Setting 

payment rates too high creates 

incentives for higher volume, 

financially burdens beneficiaries whose 

cost-sharing is based on a percentage of 

the allowable amount, and encourages 

fraud and abuse. 

B. Description of the TRICARE 

DMEPOS and PEN Fee Schedule 

To control costs, reduce beneficiary 

out-of-pocket expenses, discourage 

potential fraud and abuse, and prevent 

excessive TRICARE reimbursement rates 

when compared to state Medicaid 

programs and private health insurance 

for equipment and supplies, DHA 

proposes to develop fee schedule 

amounts for certain DMEPOS and PEN 

items not identified on any Medicare fee 

schedules. This proposal falls under the 

authority of Title 32 Code of Federal 

Regulation (CFR) 199.14(j)(4), which 

allows the Director, DHA, subject to the 

approval of the Assistant Secretary of 

Defense for Health Affairs, to establish 

an alternative reimbursement method 

designed to produce reasonable control 

over health care costs. In response to 

recent DoD OIG audits of TRICARE’s 

overpayment of services and items 

without established fee schedule 

amounts, DHA will develop a fee 

schedule for these DMEPOS and PEN 

items on a statewide basis and create 

national ceilings and floors, utilizing a 

methodology similar to Medicare’s fee 

schedule reimbursement methodology. 

TRICARE’s fee schedule will not 

include Medicare’s CBP rules, which 

would require making adjustments 

based on bids submitted for certain 

items and localities. This would be 

impossible to incorporate, as TRICARE 

does not have a bidding program. 

Using Medicare’s DMEPOS and PEN 

payment rules established under 42 CFR 

part 414, subparts C and D, to the extent 

practicable, DHA will create a TRICARE 

fee schedule for certain DMEPOS and 

PEN items without Medicare pricing. 

Given the similar attributes of the two 

programs, the statutory requirement that 

TRICARE reimbursement follow 

Medicare’s methodology when 

practicable, and the fact that non-CBP 

payment rules are still used by Medicare 

for certain DMEPOS and PEN items, the 

adoption of these rules is appropriate 

for TRICARE reimbursement of 

DMEPOS and PEN items. Using a fee 

schedule is also consistent with the DoD 

OIG support of payment accuracy 

through the establishment of fee 

schedules. The resulting payment rates 

will be high enough to ensure 

beneficiary access to needed products 

and low enough to ensure sufficient 

provision of those products. DHA will 

also retain the flexibility to modify the 

payment rate for any procedure code 

when necessary to ensure access to care. 

C. Methodology 

TRICARE fee schedule rates will be 

established for services or items 

provided on or after July 1, 2021, and 

will be updated annually (January 1) by 

the same annual update factor Medicare 

uses to update its DMEPOS fee 

schedule. The update factor is based on 

the percentage increase in the Consumer 

Price Index for all Urban Consumers for 

the 12-month period ending June 30 of 

the previous year adjusted by the 

change in the economy-wide 

productivity equal to the 10-year 

moving average of changes in annual 

economy-wide private non-farm 

business multi-factor productivity. 

Healthcare Common Procedure Coding 

System (HCPCS) codes classified as 

unlisted, miscellaneous, not otherwise 

classified (NOC), custom, deluxe, or 

currently on the TRICARE No 

Government Pay List or the Medicare 

DMEPOS and PEN fee schedule will not 

be included on the TRICARE fee 

schedule. Any code added to Medicare’s 

fee schedule will also be removed from 

TRICARE’s fee schedule. Quarterly 

updates will occur as necessary (April 1, 

July 1, and October 1) so codes may be 

added, removed, and have their rates 

modified mid-year. Unlisted, 

miscellaneous, and NOC codes will be 

defined using Medicare’s HCPCS NOC 

Codes list published on the Centers for 

Medicare & Medicaid Services website 

at https://www.cms.gov/Medicare/ 

Coding/HCPCSReleaseCodeSets/AlphaNumeric-HCPCS.html. 

Codes will be assigned to a category 

(e.g., surgical dressings and certain 

durable medical equipment, prosthetics 

and orthotics, parenteral and enteral, 

etc.) based on long description and if 

the item meets TRICARE’s definition of 

DMEPOS and PEN as defined in 

regulation and policy. 

TRICARE will establish national and 

statewide rates for existing and new 

HCPCS codes defined as a DMEPOS and 

PEN code. The rate in each state will be 

calculated by (1) Establishing base years 

and minimum data requirements, (2) 

calculating national floors and ceilings, 

and (3) calculating the average billed 

amount of claims TRICARE paid in that 

state during each base year, subject to 

minimum data requirements and 

national floors and ceilings. The base 

year will vary for each code and will be 

defined as the first year (no earlier than 

1994) with at least enough charge data 

nationwide during a 12-month period 

beginning on July 1 and ending on June 

30. Minimum data will be defined as 

any code for which there were at least 

50 paid claims nationwide during the 

base year period; if there were fewer 

than 50 paid claims each year since 

1994, then TRICARE’s current 

reimbursement methodology will apply. 

Given the large number of codes and the 

lack of historical data, repricing based 

on 1986–87 levels (similar to Medicare) 

is not administratively feasible for 

TRICARE’s fee schedule. Although 

claims from that year are stored in DHA 

archives (claims are more readily 

available from 1994 and later), it would 

be difficult to extract the data and 

obtain proper documentation. Once the 

base year for a code has been 

established, a national ceiling and floor 

will be calculated using Medicare’s 

methodology. For example, for surgical 

dressings and certain Durable Medical 

Equipment, the national ceiling will be 

equal to the median of all paid claims 

nationwide during the base period, and 

the national floor will be equal to 85 

percent of the national ceiling. The 

state-wide fee schedule for states 

outside the continental United States 

(i.e., Alaska and Hawaii), as well as for 

United States territories and 

commonwealths, will not be subject to 

the ceilings and floors, in accordance 

with Medicare rules. When establishing 

the initial fee schedule amounts, the 

national floor and ceiling rates for any 

code cannot exceed the amount that 

would have been calculated using data 

during the 12-month period of July 1, 

2019 through June 30, 2020. It is 

believed this will result in fee schedule 

amounts more reflective of reasonable 

charges for DMEPOS items. Therefore, 

the DHA is capping national floors and 

ceiling rates based on the most current 

base year period which is July 1, 2019 

through June 30, 2020. 

After establishing a national ceiling 

and floor for a given code, then the rate 

for the code can be calculated at the 

state level. To calculate a statewide rate 

using the average billed amount, there 

must be at least eight paid claims 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85615 

(similar to state prevailing rates under 

the current TRICARE methodology) for 

a given code within that state during the 

base year. States without eight paid 

claims will be set at the national ceiling, 

unless stated otherwise in the TRICARE 

Reimbursement Manual or the TRICARE 

Policy Manual. The statewide rate must 

also fall within the national floor and 

ceiling. In states where the average 

billed amount of claims is lower than 

the national floor, then the statewide 

rate will be equivalent to the national 

floor. In states where the average billed 

amount of claims is higher than the 

national ceiling, then the statewide rate 

will be equivalent to the national 

ceiling. Rental items and equipment 

will be calculated based on 10 percent 

of the fee schedule amount for a 

purchased item and used items and 

equipment will be calculated based on 

75 percent of the fee schedule amount 

for a new item. 

There will be several deviations to the 

above methodology. For PEN items and 

items involving splints, casts, and interocular lenses, the fee schedule amounts 

will use a national rate (i.e. there will 

be no national floors or ceilings and no 

state-to-state variation), which will be 

equal to the mean, or average, charges 

of all paid claims nationwide during the 

base period (updated and trended 

forward by Medicare’s DMEPOS update 

factor). The base period for PEN items 

will use 2002 (or later) claims data, and 

2013 or later claims data for splints, 

casts, and inter-ocular lenses. DHA may 

also establish fee schedule amounts 

using a cross-walk method to establish 

statewide rates for items comparable to 

DMEPOS items with already established 

rates (this method is consistent with 

Medicare’s regulation to not pay more 

than a comparable item as identified in 

42 CFR 405.502). For items removed 

from Medicare’s fee schedule, DHA will 

use the last known Medicare fee 

schedule rate and trend it forward to the 

present using Medicare’s annual 

DMEPOS update factor. 

The following table provides a 

summary of methodologies for 

establishing rates in the TRICARE Fee 

Schedule: 

Current methodology Category Methodology 

Use the 80th percentile of all qualified billed 

charges within the state as the state prevailing rate.

Pay the claim using the state prevailing rate 

or billed charges, whichever is lower.

Surgical Dressings and 

Certain DME.

Set national ceiling at median of all paid claims nationwide during 

base year. 

Set national floor at 85% of national ceiling. 

Calculate average billed charge for a state during base year. 

Trend forward the base year state average, floor, and ceiling using 

Medicare’s update factor. 

—If state average is within the national floor and ceiling, it becomes 

the state rate. 

Prosthetics and Orthotics, 

including Therapeutic 

Shoes and Inserts.

Set national ceiling and floor at 90% and 120% respectively of the 

nationwide average of claims paid during base year. 

Calculate average billed charge for a state during base year. 

Trend forward the base year state average, floor, and ceiling using 

Medicare’s update factor. 

—If state average is within the national floor and ceiling, it becomes 

the state rate. 

Parenteral and Enteral .... Calculate average billed charge nationwide during base year and 

trend forward using Medicare’s update factor. 

Splints, Casts, and IOLs The national average becomes the state rate for every state (i.e., no 

variation between states). 

Codes that require use of 

cross-walk method.

Use the same rate as a comparable code with an existing rate. 

Codes removed from 

Medicare’s fee schedule.

Use the last rate from on Medicare’s fee schedule and trend it upwards using Medicare’s update factor. 

Codes with fewer than 50 

paid claims nationally 

each year since 1994.

There is an insufficient number of national claims to establish a ceiling and floor. Use current methodology for reimbursement, and 

code will not be added to the fee schedule. 

DHA will be responsible for 

establishing and updating and the 

accurate calculation of TRICARE’s 

DMEPOS and PEN fee schedule prices. 

Proposed statewide rates are available 

for review on the DHA website at 

https://health.mil/Military-HealthTopics/Business-Support/Rates-andReimbursement/Durable-MedicalEquipment-Prosthetics-Orthotics-andSupplies. 

Dated: December 22, 2020. 

Aaron T. Siegel, 

Alternate OSD Federal Register Liaison 

Officer, Department of Defense. 

[FR Doc. 2020–28762 Filed 12–28–20; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF EDUCATION 

[Docket No. ED–2020–SCC–0162] 

Agency Information Collection 

Activities; Submission to the Office of 

Management and Budget for Review 

and Approval; Comment Request; 

State Educational Agency and Local 

Educational Agency—School Data 

Collection and Reporting Under ESEA, 

Title I, Part A 

AGENCY: Office of Elementary and 

Secondary Education (OESE), 

Department of Education (ED). 

ACTION: Notice. 

SUMMARY: In accordance with the 

Paperwork Reduction Act of 1995, ED is 

proposing an extension without changes 

of a currently approved collection. 

DATES: Interested persons are invited to 

submit comments on or before January 

28, 2021. 

ADDRESSES: Written comments and 

recommendations for proposed 

information collection requests should 

be sent within 30 days of publication of 

this notice to www.reginfo.gov/public/ 

do/PRAMain. Find this particular 

information collection request by 

selecting ‘‘Department of Education’’ 

under ‘‘Currently Under Review,’’ then 

check ‘‘Only Show ICR for Public 

Comment’’ checkbox. 

FOR FURTHER INFORMATION CONTACT: For 

specific questions related to collection 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES