GAO-01-543R

United States General Accounting Office

Washington, DC 20548

B-287429

March 30, 2001

The Honorable John W. Warner

Chairman

The Honorable Carl Levin

Ranking 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 Medical Benefits 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 Medical Benefits for Fiscal

Year 2001” (RIN: 0720-AA62). We received the rule on March 16, 2001. It was

published in the Federal Register as an interim final rule on February 9, 2001.

66 Fed. Reg. 9651.

The interim final rule implements several sections of the Floyd D. Spence National

Defense Authorization Act for Fiscal Year 2001. 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 cost-shares 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-01-543R

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-01-543R

ENCLOSURE

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

ISSUED BY

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

MEDICAL BENEFITS FOR FISCAL YEAR 2001"

(RIN: 0720-AA62)

(i) Cost-benefit analysis

The interim final rule will add over $200 million for the Department of Defense in

annual health care benefit costs. The estimate is based on historical TRICARE costs

and an assessment of potential users times average benefit costs per person for each

of the provisions.

The benefit is an increased level of health care, particularly pharmacy coverage for

Medicare-eligible beneficiaries of the DOD military health system.

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

607, and 609

DOD has determined that the interim 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 interim 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.

The Acting Assistant Secretary of Defense (Health Affairs) has determined the

issuance of the rule following normal notice and comment procedures would be

impracticable, unnecessary, and contrary to the public interest. The interim final

rule implements provisions of Public Law 106-398, which became effective on

October 30, 2000, or within 180 days thereafter. However, comments are solicited

and will be considered before the issuance of the final rule.
Page 2 GAO-01-543R

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

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

to review by the Office of Management and Budget (OMB) under the Paperwork

Reduction Act.

Statutory authorization for the rule

The interim 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, 758, and 759 of Pub. L.

106-398.

Executive Order No. 12866

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

significant” regulatory action under the order.