58202 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Proposed Rules 

suggested actions and motivational 

counseling to enhance the chances of a 

successful quit attempt. When 

appropriate, quit line counselors will 

refer beneficiaries to a TRICAREauthorized provider for medical 

intervention. The quit line may, at the 

discretion of the Director, TMA, include 

the opportunity for the beneficiary to 

request individual follow-up contact 

initiated by quit line personnel; 

however, the beneficiary is not required 

to participate in the quit line initiated 

follow-up. Printed educational materials 

on the effects of tobacco use will be 

provided to the beneficiary upon 

request. This benefit may be made 

available to overseas Prime beneficiaries 

should the ASD(HA) exercise his 

authority to do so and provide 

appropriate notice in the Federal 

Register. 

(D) Web-based resources. 

Downloadable educational materials on 

the effects of tobacco use will be 

available through the Internet or other 

electronic media. This service may be 

made available to overseas Prime 

beneficiaries in all locations where Web 

based resources are available. There 

shall be no requirement to create Web 

based resources in any geographic area 

in order to make this service available. 

(iii) Limitations of smoking cessation 

program. Eligible beneficiaries are 

entitled to two quit attempts per year 

(consecutive 12 month period). A third 

quit attempt may be covered per year 

with physician justification and preauthorization. A quit attempt is defined 

as up to eighteen face-to-face counseling 

sessions over a 120 consecutive day 

period and/or 120 days of 

pharmacologic intervention for the 

purpose of smoking cessation. 

Counseling and pharmacological 

treatment periods that overlap by at 

least 60-days are considered a single 

quit attempt. 

* * * * * 

(g) Exclusions and limitations. 

* * * * * 

(39) Counseling. Educational, 

vocational, and nutritional counseling 

and counseling for socioeconomic 

purposes, stress management, and/or 

lifestyle modification purposes, except 

that the following are not excluded: 

(i) Services provided by a certified 

marriage and family therapist, pastoral 

or mental health counselor in the 

treatment of a mental disorder as 

specifically provided in paragraph 

(c)(3)(ix) of this section and in section 

199.6 of this Part. 

(ii) Diabetes self-management training 

(DSMT) as specifically provided in 

paragraph (d)(3)(ix) of this section. 

(iii) Smoking cessation counseling 

and education as specifically provided 

in paragraph (e)(28) of this section. 

(iv) Services provided by alcoholism 

rehabilitation counselors only when 

rendered in a CHAMPUS-authorized 

treatment setting and only when the 

cost of those services is included in the 

facility’s CHAMPUS-determined 

allowable cost rate. 

* * * * * 

(65) [Reserved] 

* * * * * 

3. Section 199.21 is amended by: 

a. Revising paragraph (a)(2); 

b. Revising paragraph (h)(2)(i); 

c. Adding a new paragraph (h)(2)(iii); 

and 

d. Adding a new (i)(2)(v)(D). 

The additions and revisions read as 

follows: 

§ 199.21 TRICARE—Pharmacy Benefits 

Program. 

(a) General. 

(1) * * * 

(2) Pharmacy benefits program. (i) 

Applicability. The pharmacy benefits 

program, which includes the uniform 

formulary and its associated tiered copayment structure, is applicable to all of 

the uniformed services. Geographically, 

except as specifically provided in 

paragraph (a)(2)(ii) of this section, this 

program is applicable to all 50 states 

and the District of Columbia, Guam, 

Puerto Rico, and the Virgin Islands. In 

addition, if authorized by the Assistant 

Secretary of Defense (Health Affairs) 

(ASD(HA)), the TRICARE pharmacy 

benefits program may be implemented 

in areas outside the 50 states and the 

District of Columbia, Guam, Puerto 

Rico, and the Virgin Islands. In such 

case, the ASD (HA) may also authorize 

modifications to the pharmacy benefits 

program rules and procedures as may be 

appropriate to the area involved. 

(ii) Applicability exception. The 

pharmaceutical benefit under the 

TRICARE smoking cessation program 

under section 199.4(e)(28) of this Part is 

available to TRICARE beneficiaries who 

are not entitled to Medicare benefits 

authorized under Title XVIII of the 

Social Security Act. Except as noted in 

section 199.4(e)(28) of this Part, the 

smoking cessation program, including 

the pharmaceutical benefit, is not 

applicable or available to beneficiaries 

who reside overseas, including the U.S. 

territories of Guam, Puerto Rico, and the 

Virgin Islands, except that under the 

authority of section 199.17 of this part 

active duty service members and active 

duty dependents enrolled in TRICARE 

Prime residing overseas, including the 

U.S. territories of Guam, Puerto Rico, 

and the Virgin Islands, shall have access 

to smoking cessation pharmaceuticals 

through either an MTF or the TMOP 

program where available. 

* * * * * 

(h) Obtaining pharmacy services 

under the retail network pharmacy 

benefits program. 

(1) * * * 

(2) Availability of formulary 

pharmaceutical agents. (i) General. 

Subject to paragraphs (h)(2)(ii) and 

(h)(2)(iii) of this section, formulary 

pharmaceutical agents are available 

under the Pharmacy Benefits Program 

from all points of service identified in 

paragraph (h)(1) of this section. 

(ii) * * * 

(iii) Pharmaceutical agents prescribed 

for smoking cessation are not available 

for coverage when obtained through a 

retail pharmacy. This includes network 

and non-network retail pharmacies. 

* * * * * 

(i) Cost-sharing requirements under 

the pharmacy benefits program. 

(1) * * * 

(2) * * * 

(v) For pharmaceutical agents 

obtained under the TMOP program 

there is a: 

(A) * * * 

(B) * * * 

(C) * * * 

(D) $0.00 co-payment for smoking 

cessation pharmaceutical agents covered 

under the smoking cessation program. 

* * * * * 

Dated: August 24, 2011. 

Patricia L. Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

[FR Doc. 2011–23764 Filed 9–19–11; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

32 CFR Part 199 

[Docket ID: DOD–2011–HA–0035] 

RIN 0720–AB49 

TRICARE; TRICARE Sanction 

Authority for Third-Party Billing Agents 

AGENCY: Office of the Secretary, 

Department of Defense. 

ACTION: Proposed rule. 

SUMMARY: The rule proposes to provide 

the Director, TRICARE Management 

Activity (TMA), or designee, with the 

authority to sanction third-party billing 

agents by invoking the administrative 

remedy of exclusion or suspension from 

the TRICARE program. Such sanctions 

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Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Proposed Rules 58203 

may be invoked in situations involving 

fraud or abuse on the part of third-party 

billing agents that prepare or submit 

claims presented to TRICARE for 

payment. 

DATES: Written comments received at 

the address indicated below by 

November 21, 2011 will be accepted. 

ADDRESSES: You may submit comments, 

identified by docket number and or 

Regulatory Information Number (RIN) 

number and title, by either of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Federal Docket Management 

System Office, 4800 Mark Center Drive, 

2nd Floor, East Tower, Suite 02G09, 

Alexandria, VA 22350–3100. 

Instructions: All submissions received 

must include the agency name and 

docket number or RIN for this Federal 

Register document. The general policy 

for comments and other submissions 

from members of the public is to make 

these submissions available for public 

viewing on the Internet at http:// 

www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Joy Saly, TRICARE Management 

Activity, Medical Benefits and 

Reimbursement Branch, telephone (303) 

676–3742. 

SUPPLEMENTARY INFORMATION: 

I. Background 

TRICARE has regulatory authority 

under 32 CFR 199.9 to invoke sanctions 

in situations involving fraud or abuse on 

the part of providers of TRICARE 

services. A provider is defined in 32 

CFR 199.2 as, ‘‘A hospital or other 

institutional provider, a physician, or 

other individual professional provider, 

or other provider of services or supplies 

as specified in Sec 199.6 of this part.’’ 

Third-party billing agents do not meet 

the definition of a provider as stated in 

32 CFR 199.2, nor do TRICARE 

regulations currently define third-party 

billing agents. 

Title 42 of the CFR subpart C— 

Exclusions at 42 CFR 402.200(b)(1) 

provides for the imposition of an 

exclusion from the Medicare and 

Medicaid programs (and, where 

applicable, other Federal health care 

programs) against persons that violate 

the provisions provided in Sec. 402.1(e) 

(and further described in Sec. 402.1(c)). 

However, TRICARE has to date 

established no independent regulatory 

authority to sanction or exclude thirdparty billing agents. 

When TRICARE identifies submission 

of improper claims by a third-party 

billing agent not identified by the 

Centers for Medicare and Medicaid 

Services (CMS), TRICARE must refer the 

case to another Federal agency (Defense 

Criminal Investigative Service, 

Department of Justice, etc.) for action. In 

addition, CMS’ authority extends only 

to those third-party billing agents in the 

United States because Medicare only 

covers care received in the U.S. or its 

territories. 

II. Department of Defense Inspector 

General Report on TRICARE Controls 

Over Claims Prepared by Third-party 

Billing Agents 

The Department of Defense, Office of 

Inspector General (DoD IG) initiated an 

audit in February 2008 to review 

TRICARE controls over claims 

submitted by third-party billing agents 

(Department of Defense Inspector 

General Report No. D–2009–037— 

‘‘TRICARE Controls Over Claims 

Prepared by Third-Party Billing 

Agencies’’). The DoD IG published a 

report on December 31, 2008. The report 

included a recommendation that the 

Director, TMA strengthen internal 

controls by initiating action to obtain 

statutory or regulatory authority to 

sanction billing agencies or any entities 

that prepare or submit improper health 

care claims to TRICARE contractors. 

Statutory authority already exists that 

provides the Secretary with the 

authority to administer the TRICARE 

program to ensure quality of care for 

program beneficiaries, including 

sanctioning entities determined to be 

involved fraud, abuse, or conflict of 

interest. TRICARE already has 

regulatory authority to invoke sanctions 

on providers under 32 CFR 199.9. Based 

on the existing statutory authority, TMA 

is pursuing a regulatory change that will 

provide the authority to ensure both 

providers and third-party billing agents 

are held accountable for the submission 

of correct and proper billings. The 

regulatory change proposes to 

implement the DoD IG recommendation 

by adding third-party billing agents as 

another entity under the regulation that 

can be sanctioned in situations where 

fraud and abuse are identified on the 

part of third-party billing agents that 

prepare or submit claims presented to 

TRICARE for payment. 

TRICARE program policy 

acknowledges a participating provider 

may arrange for a third-party to act on 

its behalf in the submission and the 

monitoring of third-party claims, 

including TRICARE claims. There must 

be an agency relationship established in 

which the third-party billing agent is 

reimbursed for the submission and 

monitoring of claims, but the claim 

remains that of the provider and the 

proceeds of any third-party payments, 

including TRICARE payments, are paid 

to the provider. TRICARE contractors 

may deal with these agents in much the 

same manner as they deal with the 

provider’s accounts receivable 

department. This proposed rule does 

not intend to change the current 

acknowledgment of a provider’s right to 

use a third-party billing agent as a 

separate billing resource. 

This rule seeks to establish that such 

entities, when acting on behalf of a 

provider, are held to an equal standard 

in regard to accuracy and honesty when 

filing claims for services and supplies 

under the TRICARE program. As such, 

these entities should be subject to the 

same administrative controls applied to 

providers in ensuring that funds are 

disbursed appropriately. This rule will 

allow TRICARE to sanction third-party 

billing agents to prevent the payment of 

false or improper billings. 

Regulatory Procedures 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review’’ 

Section (Sec.) 801 of title 5, United 

States Code, and Executive Order (E.O.) 

12866 require certain regulatory 

assessments and procedures for any 

major rule or 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. It 

has been certified that this rule is not a 

significant regulatory action. 

Public Law 104–4, Section 202, 

‘‘Unfunded Mandates Reform Act’’ 

Section 202 of Public Law 104–4, 

‘‘Unfunded Mandates Reform Act,’’ 

requires that an analysis be performed 

to determine whether any Federal 

mandate may result in the expenditure 

by State, local and tribal governments, 

in the aggregate, or by the private sector 

of $100 million in any one year. It has 

been certified that this proposed rule 

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, 

and thus this proposed rule is not 

subject to this requirement. 

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (RFA) (5 U.S.C. 601) 

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (RFA) (5 U.S.C. 601), 

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58204 Federal Register / Vol. 76, No. 182 / Tuesday, September 20, 2011 / Proposed Rules 

requires that each Federal agency 

prepare a regulatory flexibility analysis 

when the agency issues a regulation 

which would have a significant impact 

on a substantial number of small 

entities. This proposed rule is not an 

economically significant regulatory 

action, and it has been certified that it 

will not have a significant impact on a 

substantial number of small entities. 

Therefore, this proposed rule is not 

subject to the requirements of the RFA. 

Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

This rule does not contain a 

‘‘collection of information’’ 

requirement, and will not impose 

additional information collection 

requirements on the public under Public 

Law 96–511, ‘‘Paperwork Reduction 

Act’’ (44 U.S.C. Chapter 35). 

Executive Order 13132, ‘‘Federalism’’ 

E.O. 13132, ‘‘Federalism,’’ requires 

that an impact analysis be performed to 

determine whether the rule has 

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. It has been 

certified that this proposed rule does 

not have federalism implications, as set 

forth in E.O. 13132. 

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 

proposed to be 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 is amended by 

adding to paragraph (b), to appear in 

alphabetical order, a definition of 

‘‘Third-party billing agent,’’ to read as 

follows: 

§ 199.2 Definitions. 

* * * * * 

(b) * * * 

Third-party billing agent. Any entity 

that acts on behalf of a provider to 

prepare, submit and monitor claims, 

excluding those entities that act solely 

as a collection agency. 

* * * * * 

3. Section 199.9 is amended by 

adding paragraph (n) to read as follows: 

§ 199.9 Administrative Remedies for 

Fraud, Abuse, and Conflict of Interest. 

* * * * * 

(n) * * * Third-party billing agents as 

defined in § 199.2(b) of this part, while 

not considered providers, are subject to 

the provisions of this section to the 

same extent as such provisions apply to 

providers. 

* * * * * 

Dated: August 24, 2011. 

Patricia L. Toppings, 

OSD Federal Register Liaison Officer, 

Department of Defense. 

[FR Doc. 2011–23763 Filed 9–19–11; 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; Changes Included in the 

National Defense Authorization Act for 

Fiscal Year 2010; 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: Proposed rule. 

SUMMARY: The Department is publishing 

this proposed 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 proposed rule 

only impact eligibility for the period in 

which the beneficiary’s disability 

determination is pending before the 

Social Security Administration. Eligible 

beneficiaries would still be required to 

enroll in Medicare Part B in order to 

maintain their TRICARE coverage for 

future months, but would be considered 

to have coverage under the TRICARE 

program for the months retroactive to 

their entitlement to Medicare Part A. 

This proposed 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: Written comments received at 

the address indicated below by 

November 21, 2011 will be accepted. 

ADDRESSES: You may submit comments, 

identified by docket number or 

Regulatory Information Number (RIN) 

and title, by any of the following 

methods: 

The Web site http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Mail: Federal Docket Management 

System Office, 4800 Mark Center Drive, 

2nd Floor, East Tower, Suite 02G09, 

Alexandria, VA 22350–3100. 

Instructions: All submissions received 

must include the agency name and 

docket number or RIN for this Federal 

Register document. The general policy 

for comments and other submissions 

from members of the public is to make 

these submissions available for public 

viewing on the Internet at http:// 

www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Anne Breslin, TRICARE Management 

Activity (TMA), TRICARE Operations 

Branch, telephone (703) 681–0039. 

SUPPLEMENTARY INFORMATION: 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 

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