Federal Register / Vol. 77, No. 124 / Wednesday, June 27, 2012 / Rules and Regulations 38175 

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 199.4 is amended by 

revising paragraph (e)(19)(v) to read as 

follows: 

§ 199.4 Basic program benefits. 

* * * * * 

(e) * * * 

(19) * * * 

(v) Periods of care. Hospice care is 

divided into distinct periods of care. 

The periods of care that may be elected 

by the terminally ill CHAMPUS 

beneficiary shall be as the Director, 

TRICARE determines to be appropriate, 

but shall not be less than those offered 

under Medicare’s Hospice Program. 

* * * * * 

■ 3. Section 199.14 is amended by 

revising paragraphs (a)(1)(ii)(C)(3), 

(a)(1)(iii)(A)(2), and (j)(1)(ix) to read as 

follows: 

§ 199.14 Provider reimbursement 

methods. 

* * * * * 

(a) * * * 

(1) * * * 

(ii) * * * 

(C) * * * 

(3) All services related to heart and 

liver transplantation for admissions 

prior to October 1, 1998, which would 

otherwise be paid under the respective 

DRG. 

* * * * * 

(iii) * * * 

(A) * * * 

(2) Remove DRGs. Those DRGs that 

represent discharges with invalid data 

or diagnoses insufficient for DRG 

assignment purposes are removed from 

the database. 

* * * * * 

(j) * * * 

(1) * * * 

(ix) The allowable charge for 

physician assistant services other than 

assistant-at-surgery shall be at the same 

percentage, used by Medicare, of the 

allowable charge for a comparable 

service rendered by a physician 

performing the service in a similar 

location. For cases in which the 

physician assistant and the physician 

perform component services of a 

procedure other than assistant-atsurgery (e.g., home, office, or hospital 

visit), the combined allowable charge 

for the procedure may not exceed the 

allowable charge for the procedure 

rendered by a physician alone. The 

allowable charge for physician assistant 

services performed as an assistant-atsurgery shall be at the same percentage, 

used by Medicare, of the allowable 

charge for a physician serving as an 

assistant surgeon when authorized as 

CHAMPUS benefits in accordance with 

the provisions of § 199.4(c)(3)(iii). 

Physician assistant services must be 

billed through the employing physician 

who must be an authorized CHAMPUS 

provider. 

* * * * * 

Dated: June 20, 2012. 

Patricia L. Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

[FR Doc. 2012–15509 Filed 6–26–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[DOD–2011–HA–0058] 

RIN 0720–AB51 

TRICARE; Constructive Eligibility for 

TRICARE Benefits of Certain Persons 

Otherwise Ineligible Under Retroactive 

Determination of Entitlement to 

Medicare Part A Hospital Insurance 

Benefits 

AGENCY: Office of the Secretary, 

Department of Defense. 

ACTION: Final rule. 

SUMMARY: The Department is publishing 

this final rule to implement section 706 

of the National Defense Authorization 

Act (NDAA) for Fiscal Year 2010, Public 

Law 111–84. Specifically, section 706 

exempts TRICARE beneficiaries under 

the age of 65 who become disabled from 

the requirement to enroll in Medicare 

Part B for the retroactive months of 

entitlement to Medicare Part A in order 

to maintain TRICARE coverage. This 

statutory amendment and final rule only 

impact eligibility for the period in 

which the beneficiary’s disability 

determination is pending before the 

Social Security Administration. Eligible 

beneficiaries are still required to enroll 

in Medicare Part B in order to maintain 

their TRICARE coverage for future 

months, but are considered to have 

coverage under the TRICARE program 

for the retroactive months of their 

entitlement to Medicare Part A. This 

final rule also amends the eligibility 

section of the TRICARE regulation to 

more clearly address reinstatement of 

TRICARE eligibility following a gap in 

coverage due to lack of enrollment in 

Medicare Part B. 

DATES: Effective Date: This final rule is 

effective July 27, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Anne Breslin, TRICARE Operations 

Branch, TRICARE Management Activity 

(TMA), 5111 Leesburg Pike, Suite 810, 

Falls Church, VA 22041, telephone 

(703) 681–0039. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Prior to the enactment of section 706 

of the National Defense Authorization 

Act for Fiscal Year 2010 (Pub. L. 111– 

84), 10 U.S.C. 1086(d) provided that a 

person who would otherwise receive 

benefits under section 1086 who is 

entitled to Medicare Part A hospital 

insurance is not eligible for TRICARE 

unless the individual is enrolled in 

Medicare Part B. When a TRICARE 

beneficiary becomes eligible for 

Medicare, Medicare becomes the 

primary payer and TRICARE is the 

secondary payer. Retroactive Medicare 

eligibility determinations therefore 

caused DoD and Medicare to reprocess 

claims. Section 706 of the Fiscal Year 

2010 National Defense Authorization 

Act amended 10 U.S.C. 1086(d) to 

exempt TRICARE beneficiaries under 

the age of 65 who became Medicare 

eligible due to a retroactive disability 

determination from the requirement to 

enroll in Medicare Part B for the 

retroactive months of entitlement to 

Medicare Part A in order to maintain 

TRICARE coverage. This statutory 

amendment became effective upon 

enactment of the Fiscal Year 2010 

National Defense Authorization Act on 

October 28, 2009. Prior to this 

amendment, beneficiaries who did not 

purchase Medicare Part B to cover the 

retroactive period lost their TRICARE 

eligibility during that period of time. As 

a result, beneficiaries and providers 

were then subject to TRICARE 

recoupment action for care provided 

during the period of retroactive 

disability. Pursuant to this amendment, 

TRICARE remains first payer for any 

claims filed during the retroactive 

months and disabled TRICARE 

beneficiaries are relieved of the 

financial burden of making retroactive 

payments to avoid a gap in coverage. 

This final rule amends the Code of 

Federal Regulations to conform to 

current statutory authority regarding 

TRICARE eligibility. 

Additionally, due to an earlier 

administrative omission, this final rule 

also amends 32 CFR 199.3 to more 

clearly address reinstatement of 

TRICARE eligibility following a gap in 

coverage due to lack of enrollment in 

Part B. While most TRICARE 


emcdonald on DSK67QTVN1PROD with RULES
38176 Federal Register / Vol. 77, No. 124 / Wednesday, June 27, 2012 / Rules and Regulations 

beneficiaries who become eligible for 

Medicare Part A maintain TRICARE 

coverage through prompt acceptance of 

Part B coverage, there are a number of 

beneficiaries that for one reason or 

another decline Part B and lose their 

TRICARE eligibility. For those 

individuals, they can have that 

eligibility reinstated at a later date if 

they re-enroll in Part B. This final rule 

amends the section on reinstatement of 

TRICARE eligibility to include 

beneficiaries who elect to enroll in 

Medicare Part B following a gap in 

TRICARE coverage. 

II. Public Comments 

We provided a 60-day public 

comment period following publication 

of the Proposed Rule in the Federal 

Register (76 FR 58204–58206) on 

September 20, 2011. We received no 

public comments. 

III. Regulatory Procedures 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’; Executive Order 

13563, ‘‘Improving Regulation and 

Regulatory Review’’; and Public Law 96– 

354, ‘‘Regulatory Flexibility Act’’ (5 

U.S.C. 601) 

Executive Orders 12866 and 13563 

require that a comprehensive regulatory 

impact analysis be performed on any 

economically significant regulatory 

action, defined as one that would result 

in an annual effect of $100 million or 

more on the national economy or which 

would 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 rule is 

not an economically significant 

regulatory action and will not have a 

significant impact on a substantial 

number of small entities for purposes of 

the RFA, thus this final rule is not 

subject to any of these requirements. 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3511) 

This rule will not impose additional 

information collection requirements on 

the public. OMB previously cleared the 

collection requirements under OMB 

Control Number 0704–0364. 

Executive Order 13132, ‘‘Federalism’’ 

We have examined the impact(s) of 

the rule under Executive Order 13132, 

and it does not have policies that have 

federalism implications that would have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, therefore, 

consultation with State and local 

officials is not required. 

Sec. 202, Public Law 104–4, ‘‘Unfunded 

Mandates Reform Act’’ 

This rule does not contain unfunded 

mandates. It does not contain a Federal 

mandate that may result in the 

expenditure by State, local, and tribal 

governments, in aggregate, or by the 

private sector, of $100 million or more 

in any one year. 

List of Subjects in 32 CFR Part 199 

Claims, Dental health, Health care, 

Health insurance, Individuals with 

disabilities, 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 199.3 is amended by: 

■ a. Adding paragraph (f)(2)(iii); 

■ b. Revising paragraph (f)(3)(ix)(C); and 

■ c. Adding paragraph (g)(3) to read as 

follows: 

§ 199.3 Eligibility. 

* * * * * 

(f) * * * 

(2) * * * 

(iii) Attainment of entitlement to 

hospital insurance benefits (Part A) 

under Medicare except as provided in 

paragraphs (b)(3), (f)(3)(vii), (f)(3)(viii) 

and (f)(3)(ix) of this section. 

(3) * * * 

(ix) * * * 

(C) The individual is enrolled in Part 

B of Medicare except that in the case of 

a retroactive determination of 

entitlement to Medicare Part A hospital 

insurance benefits for a person under 65 

years of age there is no requirement to 

enroll in Medicare Part B from the 

Medicare Part A entitlement date until 

the issuance of such retroactive 

determination; and 

* * * * * 

(g) * * * 

(3) Enrollment in Medicare Part B. For 

individuals whose CHAMPUS eligibility 

has terminated pursuant to paragraph 

(f)(2)(iii) or (f)(3)(vi) of this section due 

to beneficiary action to decline Part B of 

Medicare, CHAMPUS eligibility 

resumes, effective on the date Medicare 

Part B coverage begins, if the person 

subsequently enrolls in Medicare Part B 

and the person is otherwise still eligible. 

■ 3. Section 199.8 is amended by: 

■ a. Revising paragraph (d)(1)(i); 

■ b. Redesignating paragraphs (d)(1)(vi), 

(d)(1)(vii) and (d)(1)(viii) as (d)(1)(vii), 

(d)(1)(viii), and (d)(1)(ix) respectively; 

and 

■ c. Adding new paragraph (d)(1)(vi) to 

read as follows. 

§ 199.8 Double coverage. 

* * * * * 

(d) * * * 

(1) * * * 

(i) General rule. In any case in which 

a beneficiary is eligible for both 

Medicare and CHAMPUS received 

medical or dental care for which 

payment may be made under Medicare 

and CHAMPUS, Medicare is always the 

primary payer except in the case of 

retroactive determinations of disability 

as provided in paragraph (d)(1)(v) of this 

section. For dependents of active duty 

members, payment will be determined 

in accordance to paragraph (c) of this 

section. For all other beneficiaries 

eligible for Medicare, the amount 

payable under CHAMPUS shall be the 

amount of actual out-of-pocket costs 

incurred by the beneficiary for that care 

over the sum of the amount paid for that 

care under Medicare and the total of all 

amounts paid or payable by third party 

payers other than Medicare. 

* * * * * 

(vi) Retroactive determinations of 

disability. In circumstances involving 

determinations of retroactive Medicare 

Part A entitlement for persons under 65 

years of age, Medicare becomes the 

primary payer effective as of the date of 

issuance of the retroactive 

determination by the Social Security 

Administration. For care and services 

rendered prior to issuance of the 

retroactive determination, the 

CHAMPUS payment will be determined 

consistent with paragraph (d)(1)(iii)(B) 

of this section notwithstanding the 

beneficiary’s retroactive entitlement for 

Medicare Part A during that period. 

* * * * * 

■ 4. Section 199.11 is amended by 

revising paragraph (f)(3) to read as 

follows: 

§ 199.11 Overpayments recovery. 

* * * * * 

(f) * * * 

(3) Claims arising from erroneous 

TRICARE payments in situations where 

the beneficiary has entitlement to an 

insurance, medical service, health and 

medical plan, including any plan 

offered by a third party payer as defined 

in 10 U.S.C. 1095(h)(1) or other 

government program, except in the case 

of a plan administered under Title XIX 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 77, No. 124 / Wednesday, June 27, 2012 / Rules and Regulations 38177 

of the Social Security Act (42 U.S.C. 

1396, et seq.) through employment, by 

law, through membership in an 

organization, or as a student, or through 

the purchase of a private insurance or 

health plan, shall be recouped following 

the procedures in paragraph (f) of this 

section. If the other plan has not made 

payment to the beneficiary or provider, 

the contractor shall first attempt to 

recover the overpayment from the other 

plan through the contractor’s 

coordination of benefits procedures. If 

the overpayment cannot be recovered 

from the other plan, or if the other plan 

has made payment, the overpayment 

will be recovered from the party that 

received the erroneous payment from 

TRICARE. Nothing in this section shall 

be construed to require recoupment 

from any sponsor, beneficiary, provider, 

supplier and/or the Medicare Program 

under Title XVIII of the Social Security 

Act in the event of a retroactive 

determination of entitlement to SSDI 

and Medicare Part A coverage made by 

the Social Security Administration as 

discussed in § 199.8(d) of this part. 

* * * * * 

Dated: June 20, 2012. 

Patricia L. Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

[FR Doc. 2012–15508 Filed 6–26–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[DOD–2008–HA–0090] 

RIN 0720–AB23 

TRICARE; Off-Label Uses of Devices; 

Partial List of Examples of Unproven 

Drugs, Devices, Medical Treatments, or 

Procedures 

AGENCY: Office of the Secretary, 

Department of Defense (DoD). 

ACTION: Final rule. 

SUMMARY: The Department of Defense is 

publishing this final rule to revise the 

definition of ‘‘unlabeled or off-label 

drug’’ to ‘‘off-label use of a drug or 

device.’’ This provision codifies the 

coverage of those medically necessary 

indications for which there are 

demonstrations from medical literature, 

national organizations, or technology 

assessment bodies that the off-label use 

is safe and effective and in accordance 

with nationally accepted standards of 

practice in the medical community. 

Additionally, this rule removes the 

partial list of examples of unproven 

drugs, devices, and medical treatments 

or procedures proscribed in TRICARE 

regulations. We are removing the partial 

list from the regulation but will 

maintain the partial list in the TRICARE 

Policy Manual at www.tricare.mil. 

DATES: Effective Date: This rule is 

effective July 27, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Elan Green, TRICARE Management 

Activity, Medical Benefits and 

Reimbursement Branch, telephone (303) 

676–3907. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of August 31, 

2009 (74 FR 44797–44798), the Office of 

the Secretary of Defense published for 

public comment a proposed rule that 

revised the definition of ‘‘unlabeled or 

off-label drug’’ to ‘‘off-label use of a drug 

or device.’’ In addition this proposed 

rule removed the partial list of examples 

of unproven drugs, devices, and medical 

treatments or procedures proscribed 

under Section 199.4(g)(15). 

Off-Label Uses of Devices 

On January 6, 1997, the Office of the 

Secretary of Defense published a final 

rule in the Federal Register (62 FR 627– 

631) clarifying the TRICARE exclusion 

of unproven drugs, devices, and medical 

treatments or procedures and adding the 

TRICARE definition of unlabeled or offlabel drugs. This rule also added the 

provision for coverage of unlabeled or 

off-label uses of drugs that are Food and 

Drug Administration (FDA) approved 

drugs that are prescribed or 

administered by a health care 

practitioner and are used for indications 

or treatments not included in the 

approved labeling. We are now 

modifying the definition of ‘‘unlabeled 

or off-label drug’’ to ‘‘off-label use of a 

drug or device,’’ which includes a drug, 

biologic or device under the regulatory 

authority of the FDA. However, this 

proposed rule does not present new 

agency policy. Rather, it corrects an 

error and omission from the current 

rule. Coverage is limited to those 

indications for which there are 

demonstrations from medical literature, 

national organizations, or technology 

assessment bodies that the off-label use 

is safe and effective and in accordance 

with nationally accepted standards of 

practice in the medical community. In 

addition, the off-label use must be 

reviewed for medical necessity. 

In general, good medical practice and 

the best interests of the patient require 

that physicians use legally available 

drugs, biologics, and devices, including 

combination products, according to 

their best knowledge and judgment. 

When providers use a product for an 

indication not in the approved labeling, 

they have a responsibility to be well 

informed about the product, to base its 

use on firm scientific rationale and on 

sound medical evidence. Limiting 

CHAMPUS cost-sharing to those offlabel uses for which there are 

demonstrations from medical literature, 

national organizations, or technology 

assessment bodies that the off-label use 

is safe, effective, and in accordance with 

nationally accepted standards of 

practice in the medical community will 

help to ensure there is sufficient 

scientific evidence supporting the offlabel use, without being overly onerous, 

while still promoting innovations in 

medical practice that benefit patients. 

In reviewing the proposed rule, we 

discovered that we had inadvertently 

incorporated the TRICARE reliable 

evidence standard (as defined in 32 CFR 

199.2) as the threshold for reviewing 

coverage for off-label or unlabeled use. 

The intent was not to make the standard 

of review more onerous but rather to 

expand the application of the existing 

provision regarding the cost-sharing of 

off-label use of drugs to also include the 

off-label use of devices and biologics. As 

a result, we are withdrawing the 

changes to the third paragraph of the 

Note to paragraph (g)(15)(i)(A) in section 

199.4 with the exception of replacing 

the term ‘‘unlabeled or off-label uses of 

drugs’’ with ‘‘off-label uses of drugs and 

devices,’’ with an appropriate reference 

back to the definition of the term in 

199.2. ‘‘Off-label uses of drugs and 

devices’’ includes off-label uses of 

drugs, biologics, devices, and 

combination products. 

Although most biological products 

meet the definition of ‘‘drugs’’ under the 

Federal Food, Drug and Cosmetic Act, 

and are also regulated under that law, 

biological products are approved for 

marketing under the Public Health 

Services Act by means of a biologics 

license application. Thus, the definition 

of ‘‘off-label use of a drug or device’’ has 

been revised to acknowledge both the 

Federal Food, Drug and Cosmetic Act 

and the Public Health Services Act as 

sources of the FDA’s regulatory 

authority over the marketing of these 

products. 

Partial List of Examples of Unproven 

Drugs, Devices, and Medical Treatments 

or Procedures 

By law, TRICARE can cost-share only 

medically necessary supplies and 

services. Any drug, device, and medical 

treatment or procedure, the safety and 

efficacy of which have not been 


emcdonald on DSK67QTVN1PROD with RULES