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###### Department of Defense

###### Office of the Secretary

          - 32 CFR Part 199
          - RIN 0720-AA92

# AGENCY:

Office of the Secretary, DoD.

# ACTION:

Proposed rule.

# SUMMARY:

The Department is publishing this proposed rule to revise the requirements and procedures for the reimbursement of TRICARE Dental Program participating providers. Participating providers will no longer be reimbursed at the equivalent of a percentile of prevailing charges sufficiently above the 50th percentile of prevailing charges made for similar services in the same locality (region) or state, or the provider's actual charge, whichever is lower, less any cost-share amount due for authorized services. Specifically, the revision will require TRICARE Dental Program participating providers to be reimbursed in accordance with the contractor's network agreements, less any cost-share amount due for authorized services.

Public comments are invited and will be considered for possible revisions to the final rule.

# DATES:

Written comments received at the address indicated below by October 31, 2005 will be accepted.

# ADDRESSES:

                        Because of staff and resource limitations, we can only accept comments by mail or electronic bill (e-mail). We are unable to accept comments by facsimile (FAX) transmission. Send e-mail comments to                         *TDP.rule@tma.osd.mil*. Mail written comments to the following address only: TRICARE Management Activity, TRICARE Operations/Dental Division, Skyline 5, Suite 810, 5111 Leesburg Pike, Falls Church, VA 22041-3206; Attention: Col. Gary C. Martin, Director. Please allow sufficient time for mailed                               ( print page 51693)                            comments to be timely received in the event of delivery delays.                    

# FOR FURTHER INFORMATION CONTACT:

Col. Gary C. Martin, Office of the Assistant Secretary of Defense (Health Affairs)/TRICARE Management Activity, telephone (703) 681-0039.

# SUPPLEMENTARY INFORMATION:

## I. Background

Revision of Participating Providers Reimbursement Rate. Currently, 32 CFR 199.13 requires the TRICARE Dental Program contractor to reimburse participating providers at the equivalent of a percentile of prevailing charges sufficiently above the 50th percentile of prevailing charges made for similar services in the same locality (region) or state, or the provider's actual charge, whichever is lower, less any cost-share amount due for authorized services. This provision was included in the regulation to constitute a significant financial incentive for participation of providers in the contractor's network and to ensure a network of quality providers through use of a higher reimbursement rate. This provision, however, places an unnecessary restriction on contractors that already have established, high quality provider networks with reimbursement rates below the 50th percentile that are of sufficient size to meet the access requirements of the TRICARE Dental Program. The reimbursement rates that have been negotiated over the life of the dental contract represent the general market rates for dental insurance reimbursement, and the proposed rule change would bring DoD reimbursement rates into line with the broader insurance market. Elimination of the 50th percentile requirement will afford the Government and enrollees significant cost savings through lower provider reimbursement costs by the contractor. Additionally, contractors have other methods available to ensure the TDP members receive high quality dental services. These quality assurance methods include, but are not limited to, licensing and credentialing standards, patient satisfaction assessments, and provider trend analyses.

## II. Regulatory Procedures

The Department of Defense (DoD) has examined the economic implications of this proposed rule as required by Executive Order 12866. Executive Order 12866 directs agencies to assess costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Executive Order 12866 classifies a rule as significant if it meets any one of a number of specified conditions, including: having an annual effect on the economy of $100 million or more, adversely affecting a sector of the economy in a material way, adversely affecting competition, or adversely affecting jobs. A regulation is also considered a significant regulatory action if it raises novel legal or policy issues.

DoD concludes that this proposed rule is a significant regulatory action under the Executive Order since it raises novel policy issues under Section 3(f)(4). DoD concludes, however, that this proposed rule does not meet the significance threshold of $100 million effect on the economy in any one year under Section 3(f)(1), with an estimated annual impact on the economy of $5 million (See attachment for details). The estimate annual impact was determined by comparing the current level of reimbursement for network dental providers in the TDP with the expected level of reimbursement under this Proposed Rule. The current rate of reimbursement was assessed by independent actuarial advisers. This rate is consistent with a market-driven level of payments that is necessary, on average, to maintain a large and stable network of dentists. The difference was multiplied by the projected level of utilization for network providers in 2006. In the aggregate, for all network TDP providers, the Proposed Rule is estimated to reduce network dental provider payments by $0-5 million in 2006. For the approximately 70,000 network dental providers, this impact averages $0-$70 per year per network dentist, which is less than 0.1 percent of the net income for the dentists in the U.S. (according to the American Dental Association's 2002 Survey of Dental Practice). Although the average impact is minimal, the upper end of the range for a network dentist is estimated to be as much as $1,700 per year. This assumes a decline of 2 percent in the reimbursement level for a network dentist whose practice consists of 15 percent TDP patients. The level of reimbursement required to have a stable network of providers is a percentile less than the current percentile of billed charges.

The Congressional Review Act establishes certain procedures for major rules, defined as those with similar major 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 that would have significant impact on a substantial number of small entities. This is not a major rule under 5 U.S.C. 801. It is a significant regulatory action but not economically significant. In addition, we certify that this proposed rule will not significantly affect a substantial number of small entities for the reasons stated above. This rule has been designated and has been reviewed by the Office of Management and Budget as required under the provision of E.O. 12866.

### Paperwork Reduction Act

This proposed rule contains a new information collection requirement. DoD has submitted the following proposal to OMB under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35). Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of DoD, including whether the information will have practical utility; (b) the accuracy of the estimate of the burden of the proposed information collection; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology.

*Title:*                     Claim Form.                

*Type of Request:*                     New requirement.                

*Number of Respondents:*                     56,512.                

*Responses Per Respondent:*                     62.                

*Annual Responses:*                     3,503,744.                

*Average Burden Per Response:*                     15 minutes.                

*Annual Burden Hours:*                     875,936.                

*Needs and Uses:*                     The TRICARE Management Activity (TMA) under the authority of the Office of the Assistant Secretary of Defense (Health Affairs)/TMA Office of the Deputy Assistant Secretary of Defense has the responsibility for management of the TRICARE dental program as established in Title X, United States Code, section 1076a. The TDP claim form is required to gather information to make payment for legitimate dental claims, to assist in contractor surveillance and program integrity investigations and to audit financial transactions where the Department of Defense has a financial stake. The information from the claim form is also used to provide important cost share explanations to the beneficiary.                

*Affected Public:*                     Business or other for-profit.                

*Frequency:*                     5 per month.                          ( print page 51694)    

*Respondent's Obligation:*                     Voluntary.                

Written comments and recommendations on the proposed information collection should be sent to the TRICARE Management Activity, Attn: Col Gary Martin, 5111 Leesburg Pike, Suite 810, Falls Church, VA 22041-3206 (703-681-0039). Comments should be received within 60 days of publication of this notice.

To request more information on this proposed information collection or to obtain a copy of the proposed and associated collection instruments, please write to TRICARE Management Activity, Attn: Col Gary Martin, 5111 Leesburg Pike, Suite 810, Falls Church, VA 22041-3206, or telephone Col Martin at 703-681-0039.

# List of Subjects in 32 CFR Part 199

      - Claims
      - Dental health
      - Health care
      - Health insurance
      - Individuals with disabilities
      - Military personnel

For the reasons set out in the preamble, 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 199.13(g)(2)(ii) is proposed to be revised to read as follows:

§ 199.13

* * * * *

(g) * * *

(2) * * *

(ii) Participating providers shall be reimbursed in accordance with the contractor's network agreements, less any cost-share amount due for authorized services.

* * * * *

Dated: August 25, 2005.

Jeannette Owings-Ballard,

Alternate OSD Federal Register Liaison Officer, Department of Defense.

[FR Doc. 05-17299 Filed 8-30-05; 8:45 am]

BILLING CODE 5001-06-M